MWU 15 july HAL

What happened in the crypto market this week?

The crypto market initially corrected in anticipation of inflation figures, before rebounding. On Wednesday, US CPI inflation data for June was released, standing at 9.1%, which is higher than what was expected. BTC dropped below $19,500 but bounced back over the lower line of the new channel formed in June. This parallel channel indicates that the market hesitates on which direction to take.

These doubts also affect other risky assets, especially equities. Investors are waiting for the results season and easing their anticipations of interest rate hikes following statements by Fed officials.

graph Tradingview BTC

Source : TradingView

ETH is facing the same pattern, bouncing back from $1,000 lows to $1,200. Its value could further rise to reach the upper $1,350 bounds of the range in the coming days. The ETHBTC pair is in the 0.058 highs.

Which coin has performed best this week? 

Let’s focus this week on the Aave Protocol and its token AAVE, which marks a 18.9% performance over the last 7 days. 

The Aave protocol is one of the so-called “blue-chip protocols” of the DeFi universe. It is one of the most important players in the DeFiecosystem, like Curve Finance or Uniswap.

The protocol is specialized in the activity of lending, with the platform putting in relation borrowers and lenders.  Aave has gathered nearly $6bn within its protocol. In these last few weeks of turmoil for the crypto markets,  DeFi protocols showed their strength, in contrast to centralized lending platforms such as Celsius that  collapsed because they were under-collateralized. Aave ensures its solidity by over-collateralized loans and  liquidation mechanisms to avoid any bad debts in the protocols and losses to the platform’s loan providers.

Aave is one of the most innovative protocols in DeFi. It features flash loans, and created a decentralized social media platform with lens.protocol. On July 11, Aave CEO Stani Kulechov announced the creation of their own stablecoin, the GHO, to be used within the Aave protocol.

GHO will be an over-collateralized stablecoin. Users will have to deposit other cryptos to borrow GHO. This announcement has been well received by the crypto community, who used to say the AAVE token had no market use. This justifies the appreciation of its price over the last seven days.

What about our strategies? 

This week, the best performing bots are Artificial Intelligence (AI) Pick and Wise MATIC, with positive returns of 3,36% and 3,3% respectively.

Artificial Intelligence (AI) Pick caught the bounce at the end of the week, quickly reversing its short exposure to benefit from the rebound.

MATIC token experienced a strong 26% performance in the past 7 days. Wise MATIC caught the trend on Tuesday, after the daily long signal had been triggered. The bot allocated funds with a 50% long exposure, betting on the acceleration of the trend. It’s important to know that Wise strategies are daily or weekly, so they are not reactive to violent market changes, unlike hourly strategies.

The worst performers are BTC AR 4 and Wise DOGE. 

BTC AR Bot 4 (-11.50%) is still suffering from false signals and a lack of persistent intraday trends. This bot is designed to perform best when the intraday trend is confirmed and accelerates. However, BTC experienced short repeated reversals this past week,  leading the bot’s performance to suffer from many costly unwinds.

Last week, Wise DOGE took a full exposure with the successive triggers of the daily and weekly signals. But Wise DOGE reverted and dropped -11.5%. In response, the bot cut 50% of its exposure (daily signal) while keping 50% long exposure (weekly signal), waiting for the pullback to stop. The bot ends the week with a -6.7% underperformance.

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Investing involves risk, including the possible loss of all the money you invest. In particular, crypto-assets are a highly volatile and speculative asset class. HAL is only suitable for traders who are willing to bear the risk of loss and experience sharp drawdowns. Past performance is not necessarily a guide to future performance.

The purpose of this material is to provide objective, educational and interesting commentary and analysis on developments in the crypto-assets sector. Nothing in this material should be interpreted as constituting an offer of (or any solicitation in connection with) any investment products or services by any member of the CoinShares Group where it may be illegal to do so. Access to any investment products or services of the CoinShares Group is in all cases subject to the applicable laws and regulations relating thereto.