After a volatile price action in the first four months of 2020, the market has been without a clear direction. It gained 8.4% in May, then lost 7.0% in June, delivering a flat performance of 0.8% over the last two months.

Bitcoin is consolidating in the range between $8,900 and $9,900, with occasional fake breakouts on both sides, causing headaches to many traders. Once the actual breakout finally occurs, we can expect a decisive move in either direction.

In June, Solidum Crypto Quant strategy performed on par with the crypto market and its peers. The Solidum Crypto Quant strategy recorded a negative monthly performance of 6.57%, the crypto market ended the month with a loss of 6.98% and our competition (according to the Barclayhedge Cryptocurrency Index – there are eight funds included in the index at the time of writing.) recorded a monthly loss of 6.53%.

Chart 1 - Solidum Crypto Quant Performance (2020-06)

While it’s impossible to predict future price movements, the market’s trajectory indicates a short-term consolidation period for cryptocurrencies. However, as we have experienced many times in the past, a fast breakout in either direction is also probable. Our focus in uncertain times is always to protect the portfolio from downside risk; therefore, on 15 June, our Investment Committee decided to allocate 100% of the portfolio to stablecoins.

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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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