Case studiesFebruary 202518 February to 4 March 2025 (UTC)
The Bybit hack, the tariff shock and Bitcoin below $80,000
The Fear & Greed Index fell to 10, its lowest since June 2022. Discrete Alpha bought the extreme fear 61 hours before the strategic-reserve news, then shorted the news-driven rally with size, more than a day before the reversal made headlines.
- Bitcoin, 18 Feb to 4 Mar
- −12.4%
- Discrete Alpha NAV, same period
- +23.3%
- Bought ahead of the reserve news
- 61 hours
- Fear & Greed Index low
- 10
Exhibit 1: Bitcoin, the news and Discrete Alpha’s trades ↓
Exhibit 1: Bitcoin, the news and Discrete Alpha’s trades
- UTC
- Bitcoin
- Fear & Greed
- Discrete Alpha NAV
Sources: news and opinions in Exhibit 4; Fear & Greed Index from alternative.me; price and NAV from Discrete Alpha. Times in UTC.
Why Discrete Alpha could act here
Most of the market is driven by emotion. When bad news keeps coming, people panic: they either act too early and buy halfway down, or freeze when the real opportunity finally arrives.
Discrete Alpha processes market data in depth. In effect it sees the whole market at once, including directions and angles most participants cannot see. Its greatest edge is finding the turn in liquidity inside the market before the news drives the price.
Here both turns came ahead of the headlines: the buy was 61 hours before the strategic-reserve news, and the heavy short more than a day before the reversal was reported. We did not know which headline was coming. The turn had already happened in the market.
We do not forecast news. When a headline lands we see it when everyone does. The difference is that we are not pushed by it.
Exhibit 2: When to act
| Entry (UTC) | Entry price | Further drop | At 4 Mar 12:00 |
|---|---|---|---|
| Too early: buy after the hack2/21 17:00 UTC | $98,183 | −19.6% | −14.6% |
| Too early: buy below $90,0002/25 08:00 UTC | $89,263 | −11.5% | −6.0% |
| Too early: buy after tariffs confirmed2/27 18:00 UTC | $84,568 | −6.6% | −0.8% |
| Discrete Alpha: buy the extreme fear2/28 02:00 UTC | $81,607 | −3.2% | Close long @ $91,200, +11.7% |
| Too late: chase the reserve news3/2 18:00 UTC | $94,040 | −11.6% | −10.8% |
| Wait lower: Standard Chartered’s $69,000 to $76,5002/28 14:03 UTC | never filled | low $82,056 | missed the rebound |
The early and late rows are hypothetical longs taken when each headline landed. Wait lower: from the bank’s call to the Monday it named, Bitcoin’s low was $82,056; its buy zone never came.
Sources: Discrete Alpha; The Block.
Exhibit 3: The trades in detail
| Open (UTC) | Action | Close | Worst move | Price move | Account | Ahead of news |
|---|---|---|---|---|---|---|
| 2/28 02:00 UTC | Long @ $81,600 | Close long @ $91,200 3/2 | −3.2%（acct −2.2%） | +11.7% | +7.9% | 61h (reserve news) |
| 3/2 17:00 UTC | Heavy short @ $91,200 | Cover @ $89,200 3/3 | −3.4%（acct −4.2%） | −2.1% | +2.6% | 27h (reversal news) |
| 3/2 21:00 UTC | Heavy add short @ $94,300 | Cover @ $89,200 3/3 | 0.0%（acct 0.0%） | −5.3% | +6.7% | 23h (reversal news) |
| 3/2 23:00 UTC | Heavy add short @ $94,200 | Cover @ $89,200 3/3 | 0.0%（acct 0.0%） | −5.3% | +5.7% | 21h (reversal news) |
Worst move is the most adverse price while the trade was on (account impact in brackets). Account return is measured on the account at entry; together, NAV rose 23.3% over the period.
Source: Discrete Alpha.
Exhibit 4: News, opinions and trades, in order
Sources: original articles (headlines as published, linked); Discrete Alpha.