Last month started off strong, with Bitcoin breaking through the $9,000 price level and gaining 3.6% by the end of the first week. Our strategy generated a sell signal on 8 March, and therefore, we allocated 100% of the portfolio to stablecoins in an effort to hedge against a potential market downturn. On the morning of 12 March, the Solidum Bitcoin Momentum Strategy displayed a »short signal«. By acting immediately, we were able to place a sell order an hour before Bitcoin started to decline, and by the end of the day, Bitcoin lost 20% of its value, whereas we managed to close the position with a gain of +13.3%.

Just before 12 March, the WHO declared COVID-19 to be a pandemic, and the magnitude of the outbreak became clear, as it started to affect the global economy. The crypto market was not sheltered from the economic turmoil; on the contrary, the case for Bitcoin and other crypto assets worsened due to the high leverage used in the crypto markets.

On 12 March and 13 March Bitcoin displayed exorbitant volatility, piercing through all support lines down to $3,800 and recording one of its worst daily price falls at -48.2%. In the aftermath, Bitcoin managed to strongly rebound, gaining 31.5% in two hours after the initial drop. After a few days of exorbitant volatility, the price of BTC started to stabilize, and on 19 March we reentered the market conservatively, with 50% of the portfolio. By the end of the month, Bitcoin managed to gradually recover 56.8% of its losses, since its lowest price point in March. Regardless, it finished the month with a negative performance of -25.1%.

We are proud to report the performance of the Solidum Bitcoin Momentum Strategy in March. Our strategy generated a sell signal days before the market selloff, and we were able to hedge against the majority of the market losses. Furthermore, the strategy also displayed a »short« signal on 12 March, and by acting swiftly, we managed to record a gain in a sharply declining market. While Bitcoin reported one of its worst monthly performances at -25.1%, the Solidum Bitcoin Momentum Strategy recorded a +12.1% gain during the same period.

SOBM Performance (2020-03)

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DISCLAIMER: This article is for informational and discussion purposes only and does not constitute a marketing message, an investment survey, an investment recommendation, or investment advice. The article was prepared exclusively for a better understanding of market dynamics.

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