Over the last week, NWST1100 dropped by 2.88%; the price was hovering at 10-days EMA; tested the support represented by 25-days EMA then immediately rebounded. Intermarket relationships show stage 4 in Crypto Cycle.
*We gauge the crypto market breadth and direction of the market by showing charts 2100NEWS Digital Assets Total Index (NWST1100), representing the top 1100 Digital Assets. The information-laden chart is difficult to read initially, 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: a sideways trend was more likely, traders were buying on dips. The NWST1100 chart shows that the assumption proved to be correct; the index price was hovering at 10-days EMA; tested the support represented by 25-days EMA and immediately rebounded. Momentum indicators at the top show: PPO lines and RSI have continued falling, PPO histogram changed direction.
The chart on the right shows: all four A50R lines were in balance. This is typical of a sideways trend.
* 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 chart on the right side 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)
Crypto Cycle and the Intermarket relationships
Crypto market cycles are a natural thing. The chart below shows four stages in the last three months. Stage 1: The Bitcoin rally can be seen as the entry point of a new bull market. (On the left side of the chart: Bitcoin outperformed Tokens and Coins in October)
Stage 2: Coins become undervalued, investors start buying Coins at the same pace as Bitcoin (the area on the chart between the green and red vertical lines)
Stage 3: Coins take the lead (the area on the chart between the red and blue vertical lines)
Stage 4: Consolidation (last three weeks – on the right side of the chart)
In the third stage, and even more so in the fourth, Bitcoin becomes fuel for a broad rally in the market, so its dominance falls.
Outlook for this week
Looking ahead, the Momentum indicators give us the following signals: the RSI is 59; The Breadth indicators, at the bottom of the chart, could flatten; PPO lines may continue direction in the coming days. My opinion is based on this constellation: a sideways trend is more likely.
Performance of different groups of Digital Assets (Coins and Tokens)
The table shows that the total (NWST1100) index dropped by 2.88%.
Crypto (Digital Assets) compared with global equity
We have already shown the superiority of crypto investments. We reviewed various timespans for objectivity; however, the chart shows that crypto investments are superior in various timespans. The chart 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. Three weeks ago, a new record high was hit. The Percentage Change Marks on the chart show that this year NWST1100 outperformed W1Dow by 145.9%, while over the last 12 months, NWST1100 was 133% higher. The blue curve is the average index price over the last twelve months. We can see that the NWST1100 spot price is 79.4% higher than twelve months index average price. This means: If we bought one NWST1100 every day over the last twelve months, our investment is recording 76.4% gains today.
*The box in the middle of the chart shows the original NWST1100 price; at the bottom of the chart is W1Dow.