The NWST1100 index has plunged 12.06% over the previous week. Ether seems to have performed the best over the last thirty days, with a fall of 9.21%.
*Below, we present a standardized weekly report and next week’s outlook, prepared based on the Theory Swingtum 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.
In line with the previous report, there was an expectation for the market to potentially move towards the 143-DAY EMA. Analyzing the NWST1100, it can be observed that the index initially dropped below the 143-DAY EMA but has since rebounded above it. The momentum indicators, represented by the PPO lines and RSI at the top of the chart, have continued declining, indicating a weak overall internal strength of the market and a potential stabilization of the PPO histogram. The Crypto Market Breadth indicators at the bottom of the chart have also continued to fall, suggesting a widespread decline across the cryptocurrency market.
The chart on the right shows that all four A50R lines are currently in oversold territory, signaling a bearish sentiment for the crypto market. This breadth indicator measures the percentage of digital assets trading above a 50-day moving average, which is currently at a low level compared to previous periods. This indicates a weak overall internal strength of the cryptocurrency market; however, downward pressure on the market may ease.
* 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 market waves demonstrate a certain level of predictability, given their quasi-periodic nature. While their predictability can only be partially anticipated, it suggests some patterns in market behavior. Over the past month, the markets have been in a downward trend and have now reached a significant support level. The McClellan Summation Index, a long-term market breadth indicator, indicates that the bearish momentum could face challenges due to the upward slope of the McClellan Oscillator, which causes the Summation Index to rise when the bars are above zero.
Identifying essential support and resistance levels and analyzing momentum indicators can assist in recognizing potential reversals in market trends. The rapid decline towards the 143-DAY EMA support level could be influenced by the widely known business and financial world saying: “Sell in May and Go Away.” The momentum indicators provide the following signals for the near future: The RSI is at 32, indicating a neutral to slightly bearish sentiment. The RSI, PPO histogram, and PPO lines may change direction, while the Breadth indicators at the bottom of the first charts (NWST1100) may flatten out. Given this setup and considering the strength of the support, a rebound is likely; however, at worst, a possible double bottom formation and rebound to pivot P are possible.
Performance of different groups of Digital Assets (Coins and Tokens)
Based on the data in the table, the overall index in NWST1100 has plunged 12.06% over the past week. The chart below highlights the performance of several cryptocurrencies, including Bitcoin, Ether, and the 2100NEWS Indices, which measure the performance of Ethereum-based tokens (NWSET100), Large caps (NWSL100), and Coins (NWSCo100). Looking back over the last thirty days, Ether seems to have performed the best, with a fall of 9.21%.
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 between these two indices hit a record high 18 months ago. However, over the last 12 months, the NWST1100 index has lagged behind the W1Dow index by 17%. This suggests that traditional stocks have performed better than digital assets during this period. Nevertheless, this year, the NWST1100 index has outperformed the W1Dow index by 35.7%, indicating that crypto investments are becoming more successful again. The blue curve on the chart represents the average index price during the 143 working days, which has been lower than the long-run mean represented by the brown dashed line at 8.40. The theory of Mean reversion suggests that asset prices and historical returns will eventually revert to this long-run mean, which may provide opportunities for buying digital assets at a lower price. The quotient shows that crypto investments are much more successful after rebounding and growing.
*The box in the middle of the chart shows the original NWST1100 price; at the bottom is W1Dow.