A fixed sleeve rebalances into a week with no up day
Should the allocator rebalance the fixed crypto sleeve back to its target weights after ETH's 25.52% fall, or pause rebalancing and let the sleeve shrink with the market?
The market facts are real; the decision maker is illustrative.
The week and the position
In the week of 12 March 2018, ETH fell 25.52%, from 721.0 to 537.0, closing in the lower third of the week range and 53.67% below its 52-week high. The best day still lost 0.21%; the worst lost 11.6%, and the largest hourly move, 8.78%, came late in the UTC day on Sunday, when the weekly low of 450.0 was also set. ETH fell 13.3% against BTC while hourly correlation held close at 0.89. An illustrative allocator runs a small fixed crypto sleeve inside a larger fund.
Judgment
Keep the sleeve's dollar size fixed and rebalance to target weights; a fixed sleeve exists to buy when an asset falls, and the fund's exposure to crypto overall is unchanged by rebalancing. But the rebalancing is a decision to add to ETH while its weekly best day was still negative and while ETH's weekly return trailed BTC's by 11.43 percentage points. Accept that the sleeve may lag BTC, and execute rebalancing over the week rather than in a single late-UTC hour, when the largest moves clustered.
What would change it
If ETH loses to BTC by a similar margin for several consecutive weeks, shift the sleeve's internal split towards BTC rather than pausing rebalancing. If a written rebalancing band already exists and has not triggered, follow the band and do nothing this week.
What sets this case apart
The choice is not whether ETH recovers, but whether a fixed sleeve keeps its discipline during a week in which no day closed higher.