Analysis of Market Direction… acumen knowing when to “hold ’em when to fold up, when to walk away and when to run. Timing is Everything!
Breadth indicators are powerful technical analysis tools that gauge the direction of the market and help determine if it’s bullish, bearish or neutral. They offer a different perspective on the markets that can’t be seen through other indicators by analyzing the degree of participation in an advance or a decline to see whether or not an uptrend or downtrend is broad-based and therefore likely to continue. We use a combination of several methods and look for confluence and increase their odds.
We analyze the crypto market breadth and direction of the market by showing charts 2100NEWS Digital Assets Total Index (NWST1100) which represent top 1100 Digital Assets and 2100NEWS Digital Assets 100 Large Cap Index (NWSL100) which represent 100 large-cap Digital Assets. In the last 2100News crypto market breadth survey, the market showed signs of bearish direction. Since early February, for almost three weeks we have seen confusing moves in a sideways trend.
Crypto Intermarket analysis
The 2100NEWS DA Factor Indexes were developed to show that different groups of Digital Assets behave differently in certain market conditions. Crypto Intermarket analysis is a branch of technical analysis that examines the correlations between four major factors: Coins, Tokens, Ehtereum based, and not Ethereum based Tokens. Chartists can use these relationships to identify the stage of the business cycle and improve their forecasting abilities. There are clear relationships between coins and tokens. Knowing these relationships can help chartists determine the stage of the investing cycle. An excellent indicator that gauges the direction change to bullish is Coins to Tokens ratio. On the chart below, we can see 2100NEWS DA Coin Index (NWSCo100) and 2100NEWS DA Ethereum Tokens Index (NWSET100). The graph shows that the pattern of Coins and Tokens movement marked with a blue vertical line predicts the start of a rally.
2100news Digital Assets Total Index (NWST1100)
Sideways price action lasts almost one month. The market is always moving in the waves, last ten days the wave of PPO histogram was positive. On the PPO, we can see that it was approaching the zero line. RSI was over 60 which is bullish. The target is near 500 points.
Looking at the breadth charts ADVP is a breadth statistic based on Net Advancing Volume, which is the volume of advancing digital assets less the volume of declining. McClellan summation index is lagging indicator vs. ADVL and with it, we are looking for confirmation. Since early February, for over ten days McClellan oscillator has been predominantly positive. On the McClellan summation index chart below we can see, that the direction of the market turns to bullish is confirmed.
2100news Digital Assets 100 Large Cap Index (NWSL100)
Large-cap Digital Assets have similar charts with similar indicators set up as the total market. The target is near 470 points.
Looking at the breadth charts McClellan summation index is lagging indicator vs. ADVL and with it, we are looking for confirmation. Since early February, for over ten days McClellan oscillator has been predominantly positive. On the McClellan summation index chart below we can see, that the direction of the market turns to bullish is confirmed.
The percentage of DA trading above 50 days EMA
The percentage of digital assets trading above a specific moving average is a breadth indicator that measures internal strength or weakness in the underlying index. The 50-day moving average is used for the short-medium term timeframe. The percent of DA above their 50-days EMA is best suited for overbought and oversold levels. Because of its volatility, this indicator will move to overbought and oversold levels more often than the indicators based on longer moving averages. In general, readings above 70% are deemed overbought and readings below 30% are deemed oversold.