The NWST1100 index experienced a 0.63% decrease from the previous week. The 143-DAY EMA support held. Ether seems to have performed the best over the last thirty days, with a mere 0.26% decline.
*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.
As per the previous report, there was an expectation of a potential upward movement in the market. An analysis of the NWST1100, a significant benchmark index, reveals interesting observations. Although the index initially dropped below the 143-DAY EMA (Exponential Moving Average), the support held, and the index has rebounded and risen above it. This indicates a potential shift in market sentiment. A few noteworthy observations can be made on closer examination of the momentum indicators at the top of the chart. Firstly, the PPO (Percentage Price Oscillator) lines have started to rise, indicating a growing upward momentum in the market. Secondly, the PPO histogram exhibits an ascending trend near the zero line, further reinforcing the positive market sentiment. Lastly, the RSI (Relative Strength Index) has experienced an increase, suggesting a strengthening market trend. Turning our attention to the Crypto Market Breadth indicators at the bottom of the chart, two noteworthy observations can be made. Firstly, the ADVL (Advance-Decline Line) has started to rise, implying an increase in the number of advancing tokens and coins compared to declining ones. This indicates broader market participation in the upward movement. Secondly, the McClellan Summation Index has also experienced an upward trend, further supporting the notion of positive market breadth.
The chart on the right shows that all four A50R lines are currently in oversold territory. However, there are early indications of recovery as these lines have begun to rise. This breadth indicator measures the percentage of digital assets trading above a 50-day moving average. The rising trajectory of the A50R lines indicates a possible shift in sentiment as more digital assets start to move above their 50-day moving averages. This suggests an increasing number of assets are regaining strength and potentially entering bullish territory.
* 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 cryptocurrency market waves show some degree of predictability, with discernible patterns in market behavior, although complete predictability is difficult. Over the past month, the market trended downwards, hitting a significant support level, and there are signs that the bearish momentum could be ending. By examining the McClellan Summation Index chart, a long-term market breadth indicator, we can see that the upward slope of the McClellan Oscillator is causing the Summation Index to rise when the bars are above zero, which suggests that the market sentiment could be shifting towards more favorable conditions. Momentum indicators reveal several signals for the near future, such as the RSI 48 reflecting a neutral sentiment prevailing, the PPOlines potentially indicating upward movement, and the Breadth indicators at the bottom of the first chart indicating a possible continuation of the upward trend. This suggests that the breadth of the market may continue to improve, and an upward move over pivot P is likely.
Performance of different groups of Digital Assets (Coins and Tokens)
Based on the data in the table, the overall index in NWST1100 has fallen by 0.63% 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 0.26%.
Crypto (Digital Assets) compared with global equity
These comparisons highlight the contrasting performance between digital assets and traditional stocks.
The chart provided 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. Eighteen months ago, the quotient between these indices hit a record high, suggesting that digital assets were outperforming traditional stocks at that time. However, over the last 12 months, the NWST1100 index has lagged behind the W1Dow index by 14.0%, indicating that traditional stocks have performed better than digital assets. Nevertheless, this year there has been a recent shift, with the NWST1100 index outperforming the W1Dow index by 34.8%, potentially signaling a resurgence in the performance of digital assets.
The chart’s blue dashed curve shows that the average quotient price during 143 working days has been lower than the long-run mean at 8.41. This could present an opportunity for buying digital assets at lower prices based on the theory of Mean reversion, which suggests that asset prices and historical returns will eventually revert to their long-run means.
In the bottom two boxes of the chart, the blue curves represent the annual average returns of buying one point of the respective indices each day. The Crypto Index NWST1100 is 14% lower than a year ago. However, purchased stock has already yielded a return of 8.2%, higher than buying one point of the DJW capital index daily. The DJW capital index has a higher price than a year ago but achieved a return of 4.7% with the purchased stock.
*The box in the middle of the chart shows the original NWST1100 price; at the bottom is W1Dow.