The NWST1100 index plunged by 25.32% over the previous week; the index experienced a black swan event, one of the largest collapses in crypto history. Top 10 crypto Luna’s market cap and its stablecoin UST fell from $80B at their peak to merely a fraction of that.
*Below, we present a standardized weekly report and next week’s outlook, prepared based on Swingtum Theory of intelligent finance. We gauge the crypto market’s breadth and direction by showing charts 2100NEWS Digital Assets Total Index (NWST1100), which measures 1100 (by market capitalization) significant crypto assets’ performance. The information-laden chart is difficult to read initially, but the graph 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: “the downtrend might last, and a move to support S2 was likely, but a rebound and move to support S1 by the end of the week was expected, too” The NWST1100 chart shows a black swan event, one of the largest collapses in crypto history, more extensive than Lehman Brothers in 2008, when LB went from $60B at peak to bankruptcy. This week, something even bigger happened in monetary terms. Top 10 crypto Luna’s market cap fell from $50B at peak + an additional $30B in total value locked (LVT) in its stablecoin UST to merely a fraction of that. UST is an algorithmic stablecoin intended to maintain stability through a 1:1 mint and redeem mechanism: a user must burn an equal amount of LUNA to mint UST; (burn $1 LUNA to mint $1 UST). To exit, a user can redeem their UST for an amount of LUNA. Momentum indicators at the top show: PPO lines, RSI, and the PPO histogram. PPO lines and the Breadth indicators (at the bottom of the chart) have fallen; RSI and the PPO histogram have changed direction.
The chart on the right shows The percentage of digital assets trading above a 50-days moving average breadth indicator: All four A50R lines are strongly oversold (belove 30). In various measures of market breadth on the chart can be seen more clearly that the crypto markets were in a downtrend.
* 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
The waves are at least partially predictable due to their quasi-periodic nature; the area plots the McClellan Summation Index, a long-term measure of market breadth. If we look ahead, the Momentum indicators give us the following signals in the coming days: RSI and PPO histogram may continue moving upward; PPO lines may change direction; and the Breadth indicators at the bottom of the chart may flatten. My opinion is based on this setup: The support S2 flipped to resistance after a spike and a rebound. That level could be the target for an upward move and less likely resumption of the downtrend.
Performance of different groups of Digital Assets (Coins and Tokens)
The table shows that the total (NWST1100) index plunged by 25.32% over the last week. On the chart below, we can see Bitcoin, Ether, and the 2100NEWS DA Indexes, which measure the performance of Ethereum-based tokens (NWSET100), Large caps (NWSL100), and Coins (NWSCo100). Bitcoin (-25.69%) has been the best-performing during the previous thirty days.
Crypto (Digital Assets) compared with global equity
The chart compares the performance of the average Digital Asset (Coins, Tokens) represented by our NWST1100 index with the average global share represented by the Dow Jones global W1Dow index. Their quotient hit a record high six months ago; however, it is 56.5% lower now. The Percentage Change Marks on the chart show that NWST1100 lagged behind W1Dow by 49.7% over the last 12 months, while this year, NWST1100 was 40% lower. The blue curve is the average index price during the previous twelve months. We can see that the NWST1100 spot price is 44.1% lower than twelve months index’s average price. That means: If we bought one NWST1100 every day over the last twelve months, our investment is recording a 44.1% loss today. Global equity (W1Dow) spot price is 12.7% lower than twelve months index’s average price.
*The box in the middle of the chart shows the original NWST1100 price; at the bottom is W1Dow.