Algorithmic Crypto Trading in Sideways Markets
119% Returns 👀 Using Algorithmic Trading on Zignaly, Introducing the Ethereum Transaction Value Model (TVM), Crypto News Roundup, 7 Key Crypto Stats, Getting Started in Crypto
This issue covers how to earn returns from algorithmic trading in sideways markets. This issue we are also celebrating passing 5,000 subscribers.
In This Week’s Issue:
Weekly Crypto News Roundup
Earning Returns from Algorithmic Trading in Sideways Markets
Best & Worst Crypto Investments - Last 30 Days
Introducing the Ethereum Transaction Value Model (TVM)
Seven Key Crypto Stats We’re Following
The Old vs. The New (TradFi vs. DeFi)
A Long-Term Crypto Portfolio
Tuesday Crypto Community Calls
Join Our Telegram Channel for Early Access
Featured NFTs by Mrs. Bubble
Who We’re Following Closely on Crypto Twitte
How to Get Started in Crypto Learning
Grayscale has announced the addition of 13 new crypto projects to their list of assets under consideration, including newer chains like Polygon (MATIC) and Solana (SOL).
Paraguay is set to unveil a crypto bill on the back of Bitcoin’s success story in El Salvador, a government official said this week.
Crypto financial services firm Amber Group has raised $100 million in a Series B round led by Chinese investment firm China Renaissance. The firm scored a pre-money valuation of $1 billion, Amber said Sunday.
Mark Cuban, who became known as a decentralized finance (DeFi) enthusiast, invested in DeFi project, Iron Finance which witnessed a “historic bank run” as their stablecoin IRON moved off peg and plummeted the price of the project’s share token TITAN by almost 100%.
China continues closing down Bitcoin miners in Sichuan province, part of a continued effort by the CCP to centralize monetary control as they expand the rollout of their digital yuan.
Microstrategy has acquired an additional 13,005 bitcoins for $489 million in cash at an average price of $37,617 per Bitcoin. As of June 21 they hold 105,085 Bitcoins and an average price of $26,080 per BTC.
EIP-1559 is going live on Ethereum’s testnet this week on June 24 and is scheduled to go live on mainnet on July 28. This upgrade will begin burning transaction fees in order to reduce Ethereum net issuance.
France is now experimenting with CBDCs. According to a release from France’s central bank, the experiment was facilitated between itself, Banque Internationale à Luxembourg, LuxCSD, and SEBA bank — a Switzerland-based bank that deals with cryptocurrencies.
ByBit is making a $1.2 billion investment into DeFi, via BitDAO. They plan to use about half of their profits to fund the DAO, which also received $230M from Founders Fund, Pantera Capital, DragonFly Capital, Jump Capital, and Spartan Ground. According to CEO Ben Zhao, BitDAO will operate as a decentralized treasury with funds being used for De-Fi project venture investments and R&D into DeFi challenges like liquidity, smart contracts, and multi-chain coordination.
Cheap trades on Uniswap? Uniswap v3 is rumored to be launching on Arbitrum near the end of June, potentially bringing the cost per Uniswap trade down from $15 today to about $0.35 within a couple weeks.
Earning Returns from Algorithmic Trading in Sideways Markets
Prices are down about 50%-60% off their ATHs for most top cryptoassets over the last five weeks.
Regardless of what crypto markets do the next few months, there’s no doubt we’re in a sideways phase currently. It seems we’re in a period of consolidation and accumulation within the price bands of $30k to $40k for BTC and $2k to $2500 for ETH. In sideways times, long-term passive investors simply continue to dollar cost average (DCA) into the space, knowing that their investment horizon is 5-10 years.
Active investors, however, always want to find an edge.
If you’re willing to put in the time -- and risk the capital -- you can sometimes find an edge and identify a strategy that works even when market conditions change.
As part of my own research into finding a working trading strategy, this week I looked into the best performing strategies over the last 30 days on both Zignaly and Shrimpy -- two copy-trading platforms that allow investors to allocate capital to instantly copy other traders and get the same returns.
Ultimately, we want you to be able to do well regardless of whether markets are going up our down. That’s where these two platforms come in.
There are currently 246 traders on Zignaly that you can copy, of which 56 have had positive returns the 30 days. On Shrimpy, there are 768 traders total, with 108 traders with positive returns the last 30 days.
Fees to use a strategy range from $10 per month on the low end all the way up to 35% of profits.
While copy trading can be quite risky as the trader can literally employ any strategy (including leveraged futures), if you look for a long enough track record, study their trades and trading model, and get to know them a bit through their Telegram channels, you can get enough comfort to put a small amount of your portfolio to work and see what happens.
Here were the best performing strategies from the last 30 days all of which you can copy automatically in a few minutes…
The Best Performing Strategies on Zignaly The Last 30 Days
Global Trading - 119.27% monthly return 30% of profits
We are a team of highly trained traders in cryptocurrency trading, especially in binance futures. Our strategy consists of technical analysis and fundamental analysis of the market. Our strategy perfectly masters supports and resistances, trends, over-sell and over-buy, candlestick patterns and chart figures.”
301 trades over the last 90 days.
TFUEL-USDT Pumps - 61.21% monthly return $10/mo
Our trading strategy identifies markets which look like they are about to make a significant move to the upside and we get in early on the wave. Once the trend shows weakness, we look for the next wave.
5 trades the last 90 days.
See their website for more: ERFund
MTC-BTC - 42.00% monthly return $50/mo
This strategy uses several traditional and modern methods of trading techniques maximize successful trades. They aim for smaller profits around 0.7% to 10% per trade. They use 4 DCAs instead of the stop loss method to minimize risk of heavy loss and increase the possibility of successful trades.
63 trades the last 90 days.
Experienced Algotrader - 41.50% monthly return $56/mo
This trading service is done by a combination between a trading bot and experienced humans who have been traded since 2017. As you know in 2017, crypto conditions are almost the same as in 2021. But the main difference is that this year the crypto market already has a feature for trading in long/short positions where we can take profits both when the price increases or decreases.
234 trades the last 90 days.
Hammerbots Trading - 31.19% monthly return 25% of profits
This strategy finds a good entry point into a trend, is based in several indicators. It will trade SUSHIUSDT, on the 5 min chart, long and short positions.
421 trades over the last 90 days.
Who is John Galt - 19.36% monthly return 35% of profits
This strategy is based on Manual Trading, and part of the 15 minute charts only and exclusively, I use 3 osilators (RSI, MACD, KDJ) that in correlation situations I will use them to determine the entry and exit points. I use 3 moving averages of (200,100.50) that will determine the most likely supports and resistances. The capital in question to be invested will have a maximum leverage of x13, and the amount of each operation will be a maximum of 33% of the total capital. all positions have Stop Loss, as no strategy is foolproof.
31 trades over 90 days.
The Best Performing Strategies on Shrimpy The Last 30 Days
Shrimpy is another platform for copytrading. Here are the top performing trading strategies on Shrimpy the last month...
The top six traders over the last month are below, followed by their own description of their trading strategy:
Enlighted Trade 01 - 100.40% monthly return
This strategy uses a combination of technical analysis and Dollar Cost Averaging. It trades mainly these coins: BNB, Theta, Ada and Comp.
The Borg - 92.02% monthly return
I've been trading and researching crypto since late 2017 and I think it's one of the most exciting fields to be in right now. My main focus is the Trading- or Index-portfolio: all of the projects that are included/traded here are vetted and researched with serious teams and backing behind them. I don't trade meme-coins (even if Elon tweets about them! ;)), and I'm not here for a quick buck. Since the projects that I'm interested in are all fundamentally sound, I can trade them with a fairly strict momentum-focused strategy based on Technical Analysis and various news sources. I care about reliable, sustainable gains and securing profit when momentum drops.
Curly Jazz - 81.72% monthly return
Uses a combination of leveraged up and down tokens on Binance.
100M 2021 - 64.20% monthly return
Short term technical trading with AVA, TFUEL, ICP, ETH, DGB, WAVES, SOL, RUNE, BNB, and BQX
Einstein AI Trade - 50.14% monthly return
Einstein AI is an algorithmic strategy that automatically copies trades directly into your Binance account real time 24/7. The code was written over a 6 year period studying the habits of bitcoin/cryptocurrency and market conditions integrating 31 Indicators into one. We have developed the AI for retail investors and institutional investors in the crypto space. Our margins so far have outperformed any AI in the industry overall. We will tether into USDT and short the market on drops.
Hopscotch Shrimp - 25.73% monthly return
Picking one winner might make you $100,000. Nailing your long term strategy will make you millions. No stupid bets. Here to take good positions in great projects, only. I won’t rebalance until I’m happy the project has peaked in the short-to-medium term. Philosophy: - Diversify with 10+ quality assets - Hold on to the good - In-Frequent rebalancing. Tax-efficient trading
Personally, I plan on putting about $25k to work in these copy trading strategies on Zignaly and Shrimpy and seeing what happens the next few months.
If you invest as well, let us know how it goes. And remember, past performance does NOT guarantee future results — but it at least is an indication of what’s winning right now in the current sideways phase.
Let me know if you know of other resources like Zignaly and Shrimpy for either good copy trading strategies or good bot trading tools. We’re all ears.
Even when markets are sideways, I like to look at what is winning in order to see what we can learn and to spot potential performers early.
Of the top 100 cryptoassets by market capitalization, the top seven performers the last month are:
ThetaFuel (TFUEL) - The gas token for the Theta decentralized video streaming service -- the Twitch of Web 3.0
Amp (AMP) - An “escrow token” for collateralizing asset transfers ranging from currency to real property using smart contracts
Quant (QNT) - Quant is designed to connect different blockchains. Its token powers Overledger, a Blockchain Operating System (BoS) that allows for apps to be developed that work across multiple chains.
XinFin Network (XDC) - An EVM-compatible enterprise blockchain designed for enterprise financial applications.
Theta (THETA) - The Twitch of Web 3.0
MDEX (MDEX) - An automated market making decentralized exchange (DEX). It uses both the Ethereum network (for deep liquidity) and the Hubio Ecochain (for low fees). It currently is the 2nd largest DEX in the world, recently surpassing Sushiswap, 1inch, Pancakeswap, and Quickswap.
Binance Coin (BNB) - The utility token for Binance and Binance Smart Chain (BSC) DeFi. Binance uses a portion of its profits to redeem and burn BNB each quarter.
Within the Messari index, which includes all cryptoassets with at least a $20M market cap, the only investment to outperform TFUEL and AMP this month was BlockV, a microcap that creates NFTs within augmented reality that are tied to specific geographic places (e.g. a gorilla NFT that can only be seen when looking at the actual Empire State Building with a phone screen).
Worst Crypto Performers - Last 30 Days
Of course, it’s not all green candle hopium out there… here are the worst performers the last 30 days…
My take: those who study and continue to dollar cost average during these times will be the ones doing the best during the next run up. There are some major sale prices out there currently.
Me? I’m studying hard and investing for the long term. Decentralized finance is the future and we’ve identified the best performing asset class of the 2020s. Now, we just have to keep our heads level and play for the long term.
Introducing the Ethereum Transaction Value Model (TVM)
Last month I introduced the Ethereum Fundamental Value Model (FVM) and wow, has our price floor held exceptionally well so far.
The model is simple… you buy when ETH is underneath green and you begin to sell when ETH hits the red line.
Over the last few weeks, I’ve created a new Ethereum price model that is based on the value of the on-chain transactions instead of only being based on Ethereum revenues.
This new model adjusts more quickly to major changes in network usage.
I call this model the Ethereum Transaction Value Model (TVM). It was informed using a similar methodology to Willy Woo’s Network Value to Transaction (NVT) model, but for Ethereum.
Here’s the chart for the Ethereum Transaction Value Model (TVM):
The yellow and pink lines are the price floors for the asset, the green line is the “fair price” and the red and blue lines are the price ceiling.
Blue line - Transaction Revenue Price ceiling - 200x the last 365 days of transaction revenue for Ethereum
Red Line - Transaction Value Price Ceiling - 45x the last 60 days of transaction value for Ethereum
Green Line - Fair Value - 100x the last 12 months of transaction revenue for Ethereum
Yellow Line - Transaction Value Price Floor - 12x the last 30 days of transaction value for Ethereum
Pink Line - Realized price. The average buy price for those currently holding ETH. Acts as a price floor in most instances.
You can see the chart live and with today’s today at the BOTTOM of the page of www.coinstack.co/ethvalue.
Seven Key Crypto Stats by Ryan Allis
Below are 7 key crypto stats that I’m highlighting this week to help you get a sense of where things stand in the markets and tech shifts.
ETH DeFi is at $51.7B in Total Value Locked (DeFi Pulse)
Binance Smart Chain (BSC) DeFi is at $26.8B in Total Value Locked (Defi Station)
The number of entities that are using Bitcoin has begun increasing again, a bullish signal according to on-chain analyst Willy Woo.
Here are the top ten blockchains and Dapps by fees generated (CryptoFees). Ethereum continues to be the big winner.
Polygon is now doing 6x the daily transaction volume of Ethereum, though it has declined the last week (Nansen)
The market price of Ether (ETH) is now around $2000 (gray line below), which is approaching a price floor of 60x last 12 month revenues. ETH has only once in its history gone below that price multiple, indicating that ETH is oversold per historical conditions. See the full model at Coinstack.co/ethvalue.
According to Glassnode, the number of addresses who hold more than 10,000 ETH is at an all time high of 1,207 and has gone UP since the May 2021 market crash, showing that mega ETH whales are growing in number -- not shrinking, a bullish indicator of what the smart money is dong.
What are some other key crypto stats we should be tracking? Let us know in the comments section.
The Old Way Vs. The New Way…
The world is changing as we embrace decentralized distributed ledger technology to power a brand new generation of financial applications.
Here’s a comparison table of the old way (2010-2020) vs. the new way (2021-2030) for many of the common financial tasks for businesses and consumers.
See a crypto use case I’ve missed in my table? Let us know in the comments and we’ll add it to this table for future issues.
Our Top 30: A Long-Term Crypto Portfolio
If we were creating a portfolio from scratch right now that I didn’t want to touch for 5-10 years, we would be absolutely sure to include our top 5: ETH, DOT, KSM, RUNE, & NEXO. Here’s our top 30 for a well-rounded long-term crypto portfolio…
To see which exchanges to buy these on, use Coinmarketcap or Coingecko. We recommend using dollar cost averaging and holding for a 5-10 year time horizon for any crypto investor as prices can fluctuate a lot in the short-term.
Join Our Tuesday Crypto Community Zoom Calls
Every Tuesday Coinstack Founder and Publisher Ryan Allis does a live 30 minute Crypto Advice Zoom call at 8:30am PT / 11:30am ET / 4:30pm GMT.
All buyers of Mrs. Bubble’s NFTs and investors in the Coinstack Alpha Fund are invited to join and ask questions and share learnings with each other.
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Join our weekly calls by getting a Mrs. Bubble NFT or investing in the Coinstack Alpha Fund. With prices on most quality crypto assets about 50% lower than last month, now’s a good time to invest.
If you liked ETH at $4k you should LOVE ETH at $2k!
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Joinour Telegram Channel here to chat with our community, ask questions, and learn more about the future of money as we move to a decentralized internet and the creation of a new open global monetary system that works for everyone. We now have over 1600 members on our Telegram.
Mrs. Bubble’s NFTs of the Week
You can buy a Mrs. Bubble NFT here and join our weekly crypto Zoom calls. Mrs. Bubble uses these funds to be able to create more joyful art. You can think of her NFTs as both beautiful art that uplifts the world AND your digital ticket into our live weekly crypto advice calls.
Here are a few of Mrs. Bubble’s newer art pieces...
And here are her most viewed art pieces so far out of her first 134 NFTs...
Thank you so much for joining the Coinstack community and supporting Mrs. Bubble’s art.
The People We’re Following Closely on Twitter
How To Get Started With Crypto Learning
Bankless - The Ethereum & DeFi community (Substack + Podcast + Discord)
The Defiant DeFi Newsletter (Newsletter + Podcast)
Blockgeeks Video Tutorials (Videos)
The Coinstack Newsletter:
Tracking the most important blockchain stories of the 2020s including a decentralized internet and the creation of a new open global monetary system that works for everyone. As always, published for informational purposes only. Please do your own research. Just my opinions. Not intended as financial advice. At the time of publication, we are long on nearly everything we write about as we believe in it. Please do your own research. Published weekly. Published and written by Ryan Allis. Comments and thoughts welcome:
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