Academy Trading Ideas Article

Post-Crypto Market Rally: Intermediation and Leftover

2020.03.05

Highlights

1. Overall market adjustment with two exception

  • Compared to the last 3-4 months, Feb data shows the decoupling of OKB, ETH from all major currencies.
  • This is coming from the overall market suffering market adjustments while OKB got 60%, ETH 22% of monthly return, respectively.
  • Especially, ETH, its usage on DeFi ecosystem, and miner’s holdings plugged into the continued-upstream trend contrast to other majors. This is aligned with many market experts’ prediction on 2020 trends and explain OKB’s price movements similarly.

2. Adding NEO to correlation analysis, with the listing of NEO Perpetual Swap

  • As uncompromising efforts on product innovation and market-leading activities on OKEx, we are adding new trading pairs, both Coin-margined and USDT-margined perpetual swap from Mar 5, 2020.
  • Please enjoy a new flow of products, NEO swap as well as bi-quarterly futures, and following market movements.

1. Correlation of OKEx Major Tokens

  • As shown above, one whitish line of [Feb 2020] table, OKB’s correlation to other currencies, is notable. This significant drop of correlation figures compared to previous periods is coming from 60% monthly return, a contrast to others, showing mostly losses, during the market adjustment period after year-start bullish time.
  • Compared to last month, ETC shows positively improved correlation during market adjustment. This is an interesting fact that has been pointed out several times in this series of articles. If you check ETC’s correlation figures at the time of bullish last month, it shows negative mostly.           

    Can we plug this observation into a relative trading strategy?
  • The average monthly return on Jan was 46.73%, where BSV and ETC got 100% up. During Feb, -5.61% down overall with ETC back by -43%, and BSV, -27% while OKB, ETH continued the upstream by 60%, 22%, respectively. We can see the resistance line kept from year-start.

2. Microscope on Correlations

  • Getting into details, we could see the first two weeks’ changes as a significant decoupling trend of OKB. Almost ‘NOT’ related to other currencies’ price movements during the second week of Feb. This is mainly due to the announcement of OKDEX, decentralized exchange at OKEx.
  • We also see those two weeks’ correlation down trend at the time of no direction, till week 3.

BSV and OKB gained their relationship to others relatively, but actual level of ‘relatedness’ is below average for OKB.

EOS showed postive correlation trends over the last two week, though the strength is so so.


Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involves significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.


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