A fixed loss limit cuts ETH mid-week, then Sunday's +5.92% best day reopens the question
Should a fund that hit its loss limit on ETH mid-week re-enter on Sunday's 5.92% best-day gain, or keep exposure cut through the close and reset only by a pre-written re-entry rule?
The market facts are real; the decision maker is illustrative.
The week and the position
In the week of 5 March 2018, ETH fell 16.82% from 866.61 to 720.85, with a 7.8% loss on Wednesday and a 6.27% hourly drop at 16:00 UTC that same day. An illustrative fund holding ETH hit its fixed loss limit during the fall and cut exposure. Price bottomed at 640.00 early Friday, then posted its best day on Sunday, a 5.92% gain, leaving the close in the middle third of the week's range. ETH and BTC moved together, with hourly correlation at 0.94, and ETH outperformed BTC by 0.39 percentage points, falling slightly less over the week.
Judgment
Sunday's gain is the best day inside a 16.82% losing week, and the week closed near the middle of its range, not near its high. Keep exposure reduced and re-enter only by a rule written before the limit was hit, such as a fixed fraction of size after the weekly close. The fund accepts missing part of the rebound; buying back on the strongest day of a falling week risks paying for it and meeting the next decline at full size. The small ETH-versus-BTC gap offers no separate reason to favour ETH.
What would change it
If the fund's written rule already allows re-entry once price recovers a stated share of the loss, acting on Sunday is consistent with it. If a later week closes above the week's open of 866.61, the loss limit can be reset upward.
What sets this case apart
This is re-entry discipline after a forced cut inside a week with a violent mid-week hour and a strong Sunday, not a forecast of the low at 640.00.