Zignaly Providers Monthly Recap (January)
TL;DR
BTC steaming up after the initial ETF “sell-the-news” effect
Altcoin Spor Provider doing well despite a period of lower activity among alts
ETH Futures Provider still lagging due to weak price-action in ETH but with the potential to start performing as the market starts moving
First Impression on Zignaly’s Z-Score
Intro
Many hypotheses have been formulated regarding the sell-off in bitcoin immediately following the ETF approval, and while we don’t concern ourselves with any of that, what we know is that the last few days' price action in BTC is looking good for some up-side, and hopefully for a more sustained move.
While on the higher time frames, BTC has been giving some contrasting signals, which is both typical of important asset-related events that bring higher volatility to the market (ETF approval) but also of bull markets in their early stage, for a few months now the overall direction has been up, and considering the current price action and the fact that we have not seen any meaningful acceleration yet, we assume for now that this is likely to continue.
Although we have seen and keep seeing the BTC dominance increasing during last year, in the past months the altcoins have also been on the move, although not in full bull mode just yet if we don’t consider a few outliers.
Remains to be seen what the role of ETH will be during the eventual next bull market, and if it will remain the “alternative to bitcoin”, or if the second place will be taken by some contender.
Remains to be seen what the role of ETH will be during the eventual next bull market, and if it will remain the “alternative to bitcoin”, or if the second place will be taken by some contender.
Just a few days ago we witnessed the launch of Zignaly’s Z-Score, something Zignaly has been working on for a long time. If it will deliver the expected results, however, is yet to be seen.
Aside from a few critiques, such as the use of the Sharpe ratio which threats both the upside and downside portfolio’s volatility as negative, and the tracking of some parameters that are not that “objective” (i.e. the “beats the market” parameter will depend almost entirely on the reference period), I would say that the score looks good and I can see the effort Zignaly put into it, but at least a few months will be needed to see if it can filter out traders that take on unsuitable amounts of risk, and save the most gullible investors from the get-rich-quick schemes that we have unfortunately seen many times on Zignaly before.
For those of you who are interested, more info about the Z-Score can be found at this link: https://help.zignaly.com/en/articles/8871747-z-score-metrics
Providers
BTC Futures
After some uncertainty and chopping last month, the BTC Futures Provider has been performing very well lately, thanks to a long position that the system has been able to build just before BTC decided to finally make a move.
Considering what I have mentioned in the intro, it looks like the market is setting up for a new bull potentially, which would also put it in sync with all the major US indexes that are currently at new ATH. If this happens, we will certainly reap the rewards of this position.
ETH Futures
The ETH Futures Provider has unfortunately not been showing any surprising results this month and continues with its drawdown as ETH keeps moving sideways, lagging behind the rest of the market.
This past month I have thoroughly analyzed this Provider's performance, and have concluded that they have mostly been dependent on two factors: the bad timing in terms of the Provider’s launch; the fact that this system is currently limited to one asset which, as unfortunately seems to be the case so far, would have affected the Provider’s performance in the case of a lack of interest in the underlining asset from the market.
If we look at the ETH price action since the Provider’s launch we can see that immediately after the bear market dump, that was managed very well by the Provider by generating substantial profits (although with high volatility which however is to be expected with this system), ETH has gone through an almost two years long sideways, which has inevitably hindered the Provider’s performances for a long time.
So I am still confident regarding the potential of this Provider, but I am also studying viable ways to solve the above-mentioned issues in the future.
Altcoins Spot Provider
The Altcoins Spot Provider keeps performing quite well despite the altcoins as a whole taking a short break after the strong push of the past months, which has also led to the re-activation of the Provider after a long shut-down phase.
During the past 30 days, this Provider has generated profits of +11.57%, and +25.88% since its reactivation back in December.
By selecting the assets with the most potential this Provider can perform even when the overall market is not performing too well, so not much to say about it if not that I look forward to riding the next alts-season as soon as this presents itself (which might happen sooner than later), maybe one just like the 2017 alts-season pictured above here, that would be nice.
Conclusions
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