Over the last week, NWST1100 dropped 4.5%. The index price tested support represented by 25-Days EMA, which held, so prices quickly rebounded.
*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 essential price information, crucial 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 and consolidation were more likely; Crypto markets would be volatile, full of abrupt turnarounds, with up to 15 percent falls and further rebounds. The NWST1100 chart shows that the assumption proved to be correct; the index price tested support represented by 25-Days EMA, which held, so prices quickly rebounded. The volume profile Indicator on the left side of the chart displays trading activity and plots a histogram on the chart, revealing dominant and significant price levels based on volume. It shows that a bigger volume was made near 3000 points. Momentum indicators at the top show: RSI and PPO histogram changed direction.
The chart on the right shows: three A50R lines were overbought because the broader crypto market has intensified.
* 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)
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, may flatten out; PPO histogram bars may continue direction up, and PPO lines may change direction (up) in the coming days. My opinion is based on this constellation: a sideways trend and move up are more likely, bulls can propel the price above the upper Keltner line, but sentiment has changed to sell on rallies. Crypto markets will be volatile, with up to 15 percent falls.
Performance of different groups of Digital Assets (Coins and Tokens)
The table shows that the total (NWST1100) index dropped by 4.50% over the last week while tokens surged. Bitcoin recorded massive losses.
Crypto Cycle and the Intermarket relationships
The chart below shows four stages in the last three months.
Stage 1: Coins rally in November(On the left side of the chart)
Stage 2: The Bitcoin or Christmas rally (In the middle of the chart: Bitcoin outperformed Ether, Tokens, and Coins in December)
Stage 3: Ether led crypto markets up +35.1% vs. Bitcoin (the area on the chart between the yellow and green vertical lines)
Stage 4: Consolidation (last two weeks – on the right side of the chart). Bitcoin became fuel for a broad Tokens rally in the market, so its dominance fell. Ether hit a new all-time high. Tokens soared 57% vs. Bitcoin.
Crypto (Digital Assets) compared with global equity
We have already shown the superiority of crypto investments as a new investment class. 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 record high was hit. The Percentage Change Marks on the chart show that this year NWST1100 outperformed W1Dow by 23.5%, while over the last 12 months, NWST1100 was 236% higher. The blue curve is the average index price during the previous twelve months. We can see that the NWST1100 spot price and W1Dow price are above average, but the NWST1100 spot price is 158,7% 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 158,7% gains today.
*The box in the middle of the chart shows the original NWST1100 price; at the bottom of the chart is W1Dow.