Crypto Market Cools: Bitcoin Holds Steady, Ethereum and Solana Surge
Bitcoin (BTC) and other cryptocurrurrencies experienced price changes and strategic shifts last week, from Friday 9 May to Thursday 16 May. The stock market showed signs of cooling momentum, with a well-performing strategy that balanced risk and return effectively.
The strategy saw BTC overweight and reinforced, with a price change of 0.2% from $103,750 to $104,000. This move was initiated due to Bitcoin's status as the most established cryptocurrency, perceived as a safer asset in the stock market. Meanwhile, analysts and market researchers provided evidence of the overvaluation of Ethereum (ETH) and Solana (SOL) during this period, often based on metrics like price-to-earnings ratios and on-chain activity.
SOL was overweight and trimmed, with a price change of 5.2% from $164 to $172.5. ETH also experienced a significant price change, increasing by 15.6% from $2,250 to $2,600. The strategy increased exposure to both ETH and SOL ahead of their breakout moves, proving to be perfectly timed. However, keeping 15% in cash limited the total upside despite well-timed allocation shifts. Rebalancing into BTC ahead of altcoin pullback was also a strategic move that contributed to the strategy's resilience.
The strategy outperformed the benchmark, a market-cap weighted index composed of BTC, ETH, and SOL, despite holding back some capital. The stock market is now showing signs of cooling momentum, with the strategy positioned for resilience. The strategy's ability to balance risk and return effectively, along with well-timed allocation shifts, contributed to its successful performance during this period.
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