View on the Market

May 3

The Importance of Patience

TLDR: Bitcoin has been stable between $60k and $70k for four months after a big rally. At CommonSense, we recommend caution and patience, keeping cash ready for opportunities while holding a long-term bullish view. Most altcoins have significantly corrected, unlike Bitcoin. This highlights the need for caution with altcoins as the market focuses on top assets. Patience is key in these times, benefiting calm and strategic investors. Now is a great time to join our portfolios if you share this approach.

Bitcoin has been moving sideways between $60k and $70k for the past four months after a spectacular rally that started at the end of 2023, creating both positive and negative headlines.

This raises the debate of whether we are in an accumulation or distribution phase, meaning whether investors are gradually buying or selling Bitcoin. These phases can last until they end abruptly with a bullish or bearish movement.

Understanding this is one of the most challenging scenarios for active investors. At CommonSense, we believe it’s a time for caution and patience. Therefore, we’ve made few changes to our portfolios, keeping strong cash positions to take advantage of a major correction while maintaining a long-term bullish view and holding positions in high-potential assets to not miss out if the market rises.

However, we want to highlight what’s happening in the broader crypto market excluding Bitcoin. Altcoins, with few exceptions like ETH, BNB, and SOL, have not mirrored Bitcoin’s lateral movement but have instead experienced a significant correction from their peaks.

This is evident when comparing Bitcoin to a TOP 100 Equal Weight Index (100 equally weighted cryptocurrencies). Since April, while BTC has moved sideways, other assets have nearly returned to their beginning-of-year prices, erasing gains. Investing in the Top100 Equal Weight Index would result in a -8% return today, compared to BTC’s 44% gain.

Looking at our CS30 index, which includes BTC weighted at nearly 23%, the performance so far this year is 24.51% versus BTC’s 44.28%.

We consider this particularly important for our Gems Lab portfolio, where we’ve taken an even more cautious approach as the market hasn’t shown a premium on these types of assets. Instead, the market has focused on the top 5 assets, and we are far from the scenes of late 2021 where all altcoins had spectacular performance.

Thus, patience regarding Bitcoin and caution regarding other assets are crucial in these situations where the market constantly invites us to over-weight or over-trade.

We maintain a long-term bullish outlook but with caution, measuring short-term risk until clearer market direction confirmations arise.

In such scenarios, anxious investors lose while patient ones win. If you are among the latter, now is an excellent time to join one of our portfolios.

And the last piece of good news is that everything continues to behave similarly to previous 'post halvings', characterized by a 'lateralization' movement (with possible corrections and rises), before facing a violent rally.

For now, we just need to position ourselves and wait.

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