Over the last week, NWST1100 surged by 6.55%. The index price made a breakout from the upper Bollinger line. Crypto markets index rotation from tokens to Bitcoin and Ether caused that the NWSET index went down while the NWSBE soared.
*We gauge the crypto market breadth and direction of the market by showing charts 2100NEWS Digital Assets Total Index (NWST1100) which represents the top 1100 Digital Assets. The information-laden chart is difficult to read at first glance but the chart shows key price information, important decisive price levels, momentum, trading volumes, and crypto market breadth.
The previous report showed, that our assumption for the last week had been: the sideways trend is more likely, the market could linger between 800 and 880 points. The NWST1100 chart shows that the assumption was true during the first four days of the week, then bulls controlled the index, the index price made a breakout from the upper Bollinger line. At the top we see momentum indicators: RSI, PPO lines, and PPO histogram continued rising. The chart below compares the percentage of DA trading above 50 days EMA for:
- 100 Large-caps members of NWSL100 (top box)
- 1100 members of NWST1100
- 100 Ethereum Tokens members of NWSET100
- 100 Coins members of NWSCo100 (bottom box)
over the last 10 months. All four A50R lines are near or over the red overbought border. *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.
Outlook for this week
Looking ahead, the Momentum indicators give us the following signals: the RSI is 85 (bullish and overbought); the PPO histogram bars and the PPO may continue sloping up in the coming days. At the bottom of the chart, we see the Breadth indicators that could continue moving up. This constellation is the basis for my opinion: a more likely course for the next week is a move up to resistance R1 which is 5% higher, correction to Pivot -5% is either possible.
Performance of different groups of Digital Assets (Coins and Tokens)
The crypto markets experienced a sharp move up over the last week, the table shows that the total (NWST1100) index surged by 6.55%. Other Tokens index NWSOT50 was the strongest.
Digital Assets decoupling
The breakdown of the market into groups represented by 2100NEWS DA indexes enables us to measure decoupling much more accurately than can do others who do not have the tools in the form of a full range of indexes. Over the last four months, Ethereum based tokens have decoupled. Their prices did not follow Bitcoin and Ether represented by the NWSBE. The chart below shows, crypto markets rotation from tokens to Bitcoin and Ether, which caused that the NWSET index went down while the NWSBE soared, as is illustrated by arrows.
Crypto (Digital Assets) compared with global equity
The chart below compares the performance of the average represented by our NWST1100 Digital Asset index with the average global share represented by the Dow Jones global W1Dow index. This year the NWST1100 outperformed W1Dow twice by 60%. The first wave up was an extended Christmas rally then the pair suffered a collapse caused by the corona pandemic, and the crypto markets had fallen more than the equity markets and lost their advantage. Since March 18th NWST1100 vs. W1Dow pair had rebounded and peaked eleven weeks ago. This year, crypto investment represented by NWST1000 beat global equity by 55.5% while over the last 12 months NWST1100 was practically at the same level. The box in the middle of the chart shows the original NWST1100 price, at the bottom of the chart is W1Dow. The blue curve is the average index price over the last twelve months. We can see that the NWST1100 price and W1Dow price are above average, but the NWST1000 price today is 16% above average.