2100NEWS WEEKLY CRYPTO REPORT Jul-21

The NWST1100 index has decreased by 0.64% from the previous week. Over the last thirty days, coins, represented by the NWSCo100 index, have had the most favorable performance, soaring 21.99%.

*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 predicted in the previous report, the cryptocurrency market was experiencing a scenario of consolidation above Pivot P, indicating a pause in the prevailing trend and a period of stabilization or sideways movement in the market. Analyzing the NWST1100 index chart, which serves as a significant benchmark index, has revealed several key points:

1. Retracement to 10-DAY EMA: The index retraced to the 10-DAY Exponential Moving Average (EMA), signaling a pullback or correction in the market.
2. Negative Market Sentiment: Momentum indicators on the chart, such as the PPO lines, histogram, and RSI, suggest a negative market sentiment. The decrease in price momentum indicates a loss of upward momentum in the market, and the decreasing RSI points to a weakening of the market’s strength.
3. Crypto Market Breadth indicators: The observations on the Crypto Market Breadth indicators at the bottom of the chart reveal a decrease in market breadth. The ADVL (Advance-Decline Line) falling suggests that there are more declining digital assets than advancing ones. The McClellan Summation Index falling also indicates a negative breadth in the market.

Considering these observations, it becomes evident that the cryptocurrency market is currently in a state of uncertainty and consolidation. The negative market sentiment and decreasing market breadth indicate a lack of overall bullishness. The chart on the right shows that all four A50R lines are currently near a midpoint, meaning many digital assets are trading above their 50-day moving average. This breadth indicator measures the percentage of digital assets trading above a 50-day moving average. 

* 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:

1. 100 Large-caps members of NWSL100 (top box)
2. 1100 members of NWST1100
3. 100 Ethereum Tokens members of NWSET100
4. 100 Coins members of NWSCo100 (bottom box)

Outlook for this week

Despite the crypto market’s inherent complexity and volatility, some discernible patterns allow for a certain degree of predictability. While complete predictability remains challenging, examining momentum indicators provides valuable insights for the near-term market outlook:

1. RSI: The RSI (Relative Strength Index) currently stands at 57.
2. The PPO (Percentage Price Oscillator) histogram and the PPO lines may continue to fall, indicating a potential continuation of decreasing price momentum. The PPO is a trend-following momentum indicator that measures the percentage difference between two moving averages. A downward movement suggests a weakening of price momentum. This could imply a slowdown or a potential shift toward a bearish trend.
3. The Breadth indicators at the bottom of the first chart (NWST1100) may continue falling. The McClellan Summation Index, a long-term market breadth indicator relying on the McClellan Oscillator, indicates a continued decrease in market breadth. When the oscillator bars are below zero, it suggests a bearish momentum. This shows that the market breadth is currently in favor of declining assets.
4. McClellan Oscillator and Summation Index: The chart below shows that bearish downward pressure on price reduction was temporarily interrupted by the growth of XRP, but it re-established itself in the past week. Judging by the pace of this pressure, which can be seen as a histogram on the chart, it is expected to ease off by the end of the month.

Based on these signals suggests a market environment characterized by bearish momentum. Considering this setup, a move below the 25-Day Exponential Moving Average (EMA) is likely shortly.

Performance of different groups of Digital Assets (Coins and Tokens)

After analyzing the data in the table, the overall index NWST1100 has decreased by 0.64% over the past week. The chart below highlights the performance of various cryptocurrencies, such as Bitcoin, Ether, and the 2100NEWS Indices, which represent the performance of Ethereum-based tokens (NWSET100), Large caps (NWSL100), and Coins (NWSCo100). Looking back over the last thirty days, coins, represented by the NWSCo100 index, have had the most favorable performance, soaring 21.99%.

Crypto (Digital Assets) compared with global equity

These comparisons provide insights into the relative performance of digital assets and traditional stocks over different periods.

This comparison provides insights into the performance differences between digital assets (coins, tokens) and traditional stock; The NWST1100 represents digital assets, while the Dow Jones Global W1Dow index represents traditional stocks. Here are the key observations from the information you provided:

• Performance Comparison: 20 months ago, digital assets (represented by the NWST1100 index) were outperforming traditional stocks (represented by the W1Dow index), with a record high quotient between the two indexes. However, over the past 12 months, digital assets have lagged behind traditional stocks by 4.5%.
• Recent Shift: There has been a recent shift in performance in the current year, with the NWST1100 index outperforming the W1Dow index by a substantial margin of 35.2%. This shift potentially indicates a resurgence in the performance of digital assets.
• Mean Reversion Opportunity: The blue dashed curve on the chart represents the average quotient price over 143 working days, which has been lower than the long-run mean at 8.29. This suggests that digital assets may present an opportunity for buying at lower prices based on the theory of Mean reversion. Mean reversion theory suggests that asset prices and historical returns tend to revert to their long-run means over time.
• Returns: The bottom two boxes on the chart depict the return achieved with the stock price (blue curves) generated if we bought one point of the respective index daily in the past year. The Crypto Index NWST1100 experienced a 7.0% gain compared to a year ago. Moreover, the purchased stock experienced a 14.2% increase compared to the index’s current price. The DJW capital index experienced a 12.8% gain compared to a year ago and achieved a 10.8% return on the purchased stock based on buying one point daily.

*The box in the middle of the chart shows the original NWST1100 price; at the bottom is W1Dow.