Daily Crypto Report - 11/26/2023

Comprehensive Daily Report: Analyzing Crypto Sentiment, Strategic Portfolio Allocations, and Key Risk Factors

Introduction

Good afternoon everyone!

I hope you’ve been enjoying these daily reports. This is the work I do on a daily basis to get a general sense of the market and to track which positions I am looking to open or close. I’ve never did them in a written format but people have been asking me to do it publicly for a while and so I’ve decided to give it a try.

We’ll stick to the usual agenda below:

1. Update on my Own Portfolio Allocations

   1. Current Exposure Status

   2. Summary

2. Potential New Trades For my Portfolio

   1. Market Scanning

   2. Commentary on Potential Trades

3. Sentiment and Momentum report

   1. Percentage of coins above their moving averages

   2. Measurement of Current Momentum Extension

   3. Analysis of Bitcoin and Alts performance

   4. Seasonality Charts

4. Overview of the most relevant news in the crypto sector (if there’s any)

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Update on my Own Portfolio Allocations

The portfolio has had no major changes. We’ve added a few more allocations here and there, but other than that, it has remained relatively stable. Trading in this environment has been rather uneventful—a few small up days, a few small down days—and we carry on. As a trader that focuses on trend/momentum, I’ve had to build up this patience to go through months of stagnation and be exposed to periods of outsized returns once the market really gains a bid.

It is imperative that you think long-term in this game. Thinking that you can take a stable monthly salary trading your own portfolio is very optimistic at best and pure naivety at worst. I never say that something is impossible, there’s a few strategies where you can get reasonable consistent, high sharpe returns such as:

• Day Trading - Hard to do, extremely rare to find good traders at it, and you need a very specific edge. Only place I’ve seen it be done well is in small cap equities, where the edge is “protected” and there’s a fundamental reason to do well there. Usually these edges are fleeting and a lot of work is needed to find new short-term edges to keep yourself in the game.

• Market Making and HFT Strategies - Extremely hard to compete, the best funds and quants are all trying to do it and optimizing for every single millisecond of latency. You are either extremely good at math and engineering to compete in this field or you are in a market where there’s little competition due to hard access like shady crypto exchanges. But there’s a lot of counterparty risk there.

We need to think that EVERYONE , including myself, would love to have an edge that produces consistent returns on a daily basis with a high degree of frequency. That makes it highly competitive and thus reduces the overall success rate of trying to compete at these games. I focus on games where I can compete and I understand.

Commentary on Today’s Most Interesting Position in my Portfolio

Bitcoin is definitely one of my best open trades at the moment. I opened it back in October 1st at an average cost of 27.9k and I haven’t closed it since. This is the importance of having a systematic approach to how you make decisions in this business. Most people without a system, if I dropped this position on their portfolio one month ago, they would have closed it. When there’s no strategic approach, all that is left is randomness.

Of course not all types of trading models are built to hold so long to these positions. There are definitely short-term systems, like we’ve talked about, that can indeed produce decent returns that do not require being in a position for months like this. Holding on to positions until their trend reverses, is a specific aspect of trend strategies and that is my focus right now.

My Current Portfolio Exposure

• USDT: 31.02%

• BTC: 9.49%

  • The picture is in the section above. As we talked about this is one of the top allocations in my portfolio at the moment. These often shift depending on how much they moved. My allocations are varied and are dependent on volatility of the asset.

  I will comment on the remaining of my exposure and what other trades I am looking to add in the remaining of the article. If you’d like to support our research, consider joining the newsletter.