Respecting the Seasonality (Core Strategy Rebalance)

Sep 12, 2023 • 7 Min Read

Tactical Caution

Throughout this year, we've been navigating a complex interplay between overarching macro influences and crypto-specific events. Milestones such as BlackRock's ETF application, Ripple's legal win over the SEC, and Grayscale's similar success have been promising, yet they've occurred amidst a peak in global liquidity.

This timing has effectively curtailed any long-lasting bullish momentum in the crypto markets. While we've been vocal proponents of maintaining risk exposure, the convergence of today’s rally, persistent seasonal headwinds, and a strengthening U.S. dollar make this an opportune time to reconsider. Scaling back on crypto assets (particularly alts) at this juncture could serve as a prudent strategy, allowing for better positioning once these transient market conditions subside.

Momentum Failing to Turn Higher

As we have covered in prior analyses, SOPR is an excellent indicator of momentum for bitcoin. The Spent Output Profit Ratio (SOPR) gauges the profitability of coins moved on-chain. It is calculated as the ratio of the coin's current value at the time it is spent to its original acquisition cost.

A SOPR value of 1 signifies a market at breakeven, indicating that people are neither making nor losing money on their investments. When...

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