Tag: Alpha Finance

VORTECS Report: Dammit, Musk, now you’re messing with AAVE too?

by Cointelegraph

Who knew what, and when did they know it?

Investigating Watergate in 1973, Senator Howard Baker Jr. wanted the answer. Thanks to a couple of journalists, he eventually got it. And while the stakes may not be as high, the team at Cointelegraph Markets Pro is pretty curious about some interesting crypto data this week.

The VORTECS™ Score includes sentiment analysis, tweet and trading volume, and price action as components of the algorithm — which are then weighted according to a proprietary formula based on how similar these are to historical conditions.

If there is a similarity in these factors, the score will be higher when historical precedents have most consistently led to higher prices.

But while the score is algorithmically-generated, the raw data can sometimes tell a story too.

AAVE Idea

First off, here’s a chart of tweet volume for AAVE this week, charted against the price of the DeFi asset.

Tweets are obviously public information, but what are the chances that most retail participants in the crypto markets are able to absorb this outlier and analyze its meaning? The VORTECS™ Score can, however — it’s untouched by human hands, and since one of the components is based on the entire Twitter universe (most algos are only fed a subsection of the full firehose) it is essentially omnipotent when it comes to tweet data.

And sure enough, the VORTECS™ Score began to rise very shortly after this large spike in tweet volume, as seen in the chart below.

So what’s going on here? An AAVE Army arising to pump the token? Some kind of amazing news that only affected the price 24 hours later?

Well here’s the kicker for all those conspiracy theorists out there: this is pure coincidence. Plain and simple.

And in fact it all comes back to Elon Musk… in a roundabout way. Because everything in crypto does these days.

On Saturday Night Live this week, which was hosted by the Doge fanboy, he participated in a sketch featuring the acronym ‘AAVE’, which appears to have resulted in a large volume of tweets concerning “African-American Vernacular English” over the next couple of days.

In fact, even the Urban Dictionary tweeted about the acronym, though the tweet is (as might be expected from such an august website) NSFW. The show’s co-head writer was accused of cultural appropriation as a result of using certain Black vernacular terms in the show, and as we all know, outrage drives social media.

So… here’s a fantastic learning moment for sentiment analysis in the crypto market: Proof that causation and correlation are not the same thing.

As it happens, AAVE (the crypto asset) did indeed soar following the uptick in Twitter volume for the term AAVE (an acronym). And although the VORTECS™ Score picks apart tweets using artificial intelligence to remove those that don’t fit the context that the algorithm is seeking… perhaps this time it was fooled. But don’t worry — Markets Pro will be filtering for this term in future.

Damn you, Elon Musk!

Alpha before Alpha?

Alpha Finance has no Musk connection (as far as we know) so we’re just going to treat this as a curious outlier.

The red arrow in the chart below shows an unusual pattern of reported trading for 24 hours which was followed by the price of ALPHA moving up by almost 50%.

It turns out Alpha Finance had some news of its own this week as the team announced on May 10 that they’d be launching an oracle aggregator.

Following this unusual pattern and the release of the news, the VORTECS™ Score began to rise too.

As is often the case when price rises, the trading volume soared in conjunction with price action. But the steep introduction to the May 9 outlier, and its equally steep decline, could lead one to believe that this was a trading bot being turned on and off again.

So why would anyone move the trading volume so significantly in advance of an important news story… and how would they time it so well?

Or in other words… who knew what, and when did they know it?

Best returns from Cointelegraph Markets Pro live-tested strategies

The Markets Pro team has been tracking 42 possible strategies since the launch of the VORTECS™ algorithm on January 3rd 2021. Current top returns, as detailed in this document on the methodology used, are as follows:

Holding Bitcoin: 47% return

Holding Top 100 altcoins: 426% return

Best-performing time-based VORTECS™ strategy: 3,199% return

Best-performing score-based VORTECS™ strategy: 3,682% return

Cointelegraph Markets Pro is available exclusively to member on a monthly basis at $99 per month, or annually with two free months included. It carries a 14-day money-back policy, to ensure that it fits the crypto trading and investing research needs of subscribers, and members can cancel anytime.

Important Disclaimer

Cointelegraph is a publisher of financial information, not an investment adviser. We do not provide personalized or individualized investment advice. Cryptocurrencies are volatile investments and carry significant risk including the risk of permanent and total loss. Past performance is not indicative of future results. Figures and charts are correct at the time of writing or as otherwise specified. Live-tested strategies are not recommendations. Consult your financial advisor before making financial decisions. Full terms and conditions.

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Here’s why Ethereum, AAVE, ALPHA are unfazed by Bitcoin’s latest ‘Elon candle’

by Cointelegraph

Bitcoin (BTC) and altcoins’ markets lost a combined total of up to $602 billion overnight in a shocker brought forth by Elon Musk.

The billionaire entrepreneur did an about-turn on his decision to accept Bitcoin for the electric vehicles offered by his company Tesla. He cited environmental concerns, noting that Bitcoin mining requires many fossil fuel burnings, especially coal.

Bitcoin prices started falling sharply within the first five minutes of Musk’s tweets in the late U.S. hours on Wednesday. They further plunged into the Asia-Pacific session on Thursday, logging an intraday low of $46,000 at one point in time, a breakaway from its previous session high of $59,592.

Altcoins tailed Bitcoin to its overnight losses. They collectively shed more than $367 billion off their market cap, led by massive downside corrections in some of the leading altcoins, including Dogecoin, a meme cryptocurrency pushed to explosively high levels lately on Musk’s endorsements.

Ether (ETH), Binance Coin (BNB), Bitcoin Cash (BCH), and  (LTC) also reported huge intraday declines after notching gains in the previous daily sessions.

Nonetheless, some altcoins managed to survive the brutal crash owing to their strong fundamental setups in the near term. Let’s take a look at he most notable three. 

Aave (AAVE)

AAVE turned out to be an exceptional performer as almost all the top altcoins declined.

The ERC-20 token, which serves as a governance token atop the Aave protocol, ended the Wednesday session up 11.62% to $511, despite reaching its all-time high of $640 earlier in the day. It looked evident that Musk’s anti-Bitcoin announcement affected AAVE as it did to other altcoins. But unlike its peers, AAVE appeared more resilient to sudden bearish pressure.

AAVE held its key moving average supports against market-wide bearish pressure. Source: Tradingview

The token maintained its bullish bias entering Thursday, trading for circa $589 as of 0813 GMT.

Fundamentals protected AAVE from serious bearish assaults. At first, Stani Kulechov, co-founder of Aave, revealed that their decentralized finance money protocol had built a “private pool” for institutional players. He noted that the new permissioned pool would serve as an emulator for investors who want to get accustomed to Aave’s lending and borrowing services before getting involved in the DeFi ecosystem.

The prospects of institutional involvement kept AAVE’s bullish bias intact. The upside sentiment further received a boost from Aave’s ballooning liquidity pool; it now holds $12.83 billion compared to roughly $2 billion at the beginning of this year, according to DeFi analytics platform Defillama. 

Alpha Finance (ALPHA)

The next asset in the queue that almost got entangled in the altcoins’ declining spree but escaped nonetheless is Alpha Finance.

The decentralized asset management platform, now running a homegrown leveraged yield farming protocol named Alpha Homora under its wing, enables its users to submit proposals and vote on operational and strategic decisions should they hold ALPHA, its native token. They can also earn ALPHA should they provide liquidity to Alpha Finance’s pool.

The Elon Musk shocker prompted ALPHA to take a breather from its prevailing upside move Wednesday, wherein it was testing its two-month high for a potential bullish breakout. The ALPHA/USD exchange rate fell by almost 23% from its Wednesday top of $2.465.

But, the pair quickly retraced its steps on supportive upside fundamentals, including a new partnership launch and continuing success of the Alpha Homora protocol.

ALPHA awaits breakout move above red horizontal resistance trendline. Source: TradingView

The total volume locked inside the Alpha Homora pools topped at $1.35 billion on May 10 vs. $1.37 billion currently. At the beginning of 2021, the TVL was roughly $188.5 million. The spike shows Alpha Homora has had a successful run so far.

ALPHA/USD has rebounded by more than 20% into the Thursday session, its recovery matching steps with the Alpha Homora TVL. Meanwhile, Alpha Finance announced the launch of Alpha Oracle Aggregator, featuring data from two of the largest data oracles providers, Band Protocol and Chainlink, to “ensure security, scalability, and flexibility.”

Bitcoin’s declines apprehensively did little in offsetting ALPHA’s overall upside bias.

Ether (ETH)

Ether’s positive correlation with Bitcoin prompted a certain degree of gains-slashing on Wednesday night. Nonetheless, the second-largest cryptocurrency by market capitalization remained stronger on medium-term timeframes, much like Aave and Alpha Finance.

The most important takeaway from Ethereum’s decline was its ability to hold above key support levels (moving average waves) despite a strong correlation history with Bitcoin trends. The ETH/USD exchange rate closed the previous session down almost 8.45% to $3,826 versus its intraday high of $4,055 on Thursday.

Ethereum bulls buy the dip just as the price approached the 20-day EMA. Source: Tradingview

The biggest factors that keep contributing to Ethereum’s rise as a blockchain project and as an investment asset include the rise of non-fungible tokens — digital assets that represent ownership of unique virtual items — and DeFi.

Meanwhile, the upcoming London upgrade in July, which proposes to transit the Ethereum blockchain from energy-intensive proof-of-work to a speedier proof-of-stake, promises lower transaction fees and scalability. Bulls expect it would onboard more crypto projects and should raise demand for ETH tokens.

ETH/USD maintains its 7-day profitability — now up 11% — unlike other altcoins. Aave and Alpha Finance are also up 25% and 13% on a seven-day adjusted timeframe.