2100NEWS WEEKLY CRYPTO REPORT Jul-28

The NWST1100 index has fallen 1.86% from the previous week. XDC NEtwork (XDC), Large-cap Coin, is biweekly making the most significant leap in rank within the NWSL100 crypto index.

*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 chart shows essential price information, crucial decisive price levels, momentum, trading volumes, and crypto market breadth. 

The previous report accurately predicted that the cryptocurrency market would fall below the 25-Day Exponential Moving Average (EMA) and remain stagnant. This report will delve into a closer analysis of the NWST1100 chart, a benchmark index, and examine various indicators to gauge the current market sentiment and breadth.

1. Market sentiment: The Percentage Price Oscillator (PPO) lines have experienced a decline, indicating a decrease in short-term momentum. However, it is noteworthy that the PPO histogram has started to flatten, suggesting a potential stabilization in the near term. Additionally, the Relative Strength Index (RSI) has also exhibited a flattening trend, which further supports the idea of a market consolidation phase.
2. Turning our attention to the Crypto Market Breadth indicators at the bottom of the NWST1100 chart, two crucial observations come to light: Firstly, the Advance-Decline Line (ADVL), which reflects the difference between the number of advancing and declining cryptocurrencies, had been on a downward trajectory. However, since Wednesday, it has ceased its decline and shown signs of stabilization. And the McClellan Summation Index, which measures the rate of change of the ADVL, has also flattened. This suggests that the momentum of the breadth indicators is stabilizing, further reinforcing the notion of a consolidation phase in the cryptocurrency market.

Considering all these observations, it is evident that the cryptocurrency market is presently consolidated. The market sentiment shows signs of stabilization, and the breadth indicators support this observation with their flattening trend.

One of the indicators providing insight into the market breadth is the A50R lines. These lines represent the percentage of digital assets trading above a 50-day moving average.

*This breadth indicator is essential in measuring the internal strength or weakness of the underlying index. Looking at the chart on the right side, we can see the A50R lines for four different categories of digital assets:

1. The top box shows the A50R lines for 100 Large-cap members of NWSL100.
2. The middle box displays the A50R lines for 1100 members of NWST1100, which is the Total Index measuring the performance of significant crypto assets based on market capitalization.
3. The third box shows the A50R lines for 100 Ethereum Tokens members of NWSET100.
4. The bottom box represents the A50R lines for 100 Coins members of NWSCo100.

All four A50R lines are currently below a midpoint. This means that, on average, a significant portion (one-third or more) of the digital assets are trading above their 50-day moving average.

Outlook for this week

This crypto report aims to provide an analysis of the near-term market outlook for the cryptocurrency market. While complete predictability remains challenging, the market waves show some degree of predictability with discernible patterns in market behavior. By examining momentum indicators, several signals emerge that offer insights into the potential direction of the market shortly. Recently, the market has experienced a price decline, leading to key support levels being tested. Such price action often provides critical clues about the market’s sentiment and potential future trends. Based on the analysis of the momentum indicators, after declining and testing support, the near-term market outlook for the cryptocurrency market appears to be balanced, with a potential for a bullish trend to gain momentum. The stable market sentiment reflected by the RSI and the potential upward movement in the PPO suggests the possibility of price increases. Additionally, the possible stabilization in market breadth indicated by the McClellan Summation Index could be a positive sign for the market. Considering this setup, it is likely that the cryptocurrency market will trend within a range between pivot P and support S1.

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

After analyzing the data in the table, the overall index NWST1100 has fallen by 1.86% over the past week. The chart below highlights the performance of various cryptocurrencies, such as 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, coins, represented by the NWSCo100 index, have had the most favorable performance, soaring 19.30%.

Crypto (Digital Assets) compared with global equity

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

The comparison highlights the performance differences between digital assets (coins, tokens) and traditional stocks; the NWST1100 represents digital assets, while the Dow Jones Global W1Dow index represents traditional stocks. Here are the key observations:

• Performance Comparison: 21 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. This indicates that investing in digital assets yielded higher returns during that period than traditional stocks. However, over the past 12 months, digital assets have lagged behind traditional stocks by 10%.
• 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 31.1%. This shift potentially indicates a resurgence in the performance of digital assets and a potential shift in investor sentiment toward the cryptocurrency market.
• 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 8.25. 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 illustrate the returns achieved with the stock price (blue curves) if one point of the respective index was bought daily in the past year. The Crypto Index NWST1100 purchased stock experienced a 10.6% increase compared to the index’s current price. The DJW capital index experienced an 11.4% gain compared to a year ago and achieved an 11.4% 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. 

Indices Revision 7-28-2023

Based on the latest Bi-weekly revision, Kaspa, Mantle, and XinFin have improved their ranking and were added to the NWSL100 index; they were previously included in the NWSM200 index. On the other hand, Gate Token, Kucoin Token, and Kusama were removed from the NWSL100 index. Several new mid-cap assets have been added to the indices, including Worldoin, Arkham, Terra, etc. More information about the additions and deletions for other indices in the family is available in each index’s presentation.

Winning member

Congratulations to XDC Network (XDC). XDC Network (XDC) has achieved a significant milestone by being the winning member of the NWSL100 crypto index with the most considerable rank jump. Let’s delve into the details of its performance:

1. Outperformance in the Last Ten Weeks: XDC Network (XDC) has demonstrated impressive growth, outperforming the 2100NEWS Digital Assets 100 Large Cap Index (NWSL100) substantially. Over the previous ten weeks, XDC has outperformed NWSL100 by an impressive 70%, as indicated by the violet area chart.
2. XDC vs. NWSL100: Comparing the performance of XDC with the NWSL100 index, we can observe the green area graph representing XDC and the orange area graph illustrating the index. There has been a weak correlation between XDC and NWSL100, with a Pearson’s correlation coefficient of 0.30; XDC has moved in the same direction as the index about 80% of the time.
3. XDC’s Representation of Price Changes: Despite its tendency to move in the same direction as NWSL100 most of the time, XDC has not been a good representative of the index regarding price changes. This indicates that XDC’s price movements have not fully aligned with the broader market represented by NWSL100, suggesting that other factors have influenced it or have experienced unique market dynamics.

*We elect the member of the NWSL100 crypto index with the most significant jump in our ranking. We will examine how the market rates the project’s progress in case of price changes. It seems important to us whether the project is out of the ordinary tide of crypto project prices. Peer comparison should be efficient and effective, considering an investor’s point of view. 

XDC Network (XDC) Website: https://xdc.org/

XDC Large-cap Coin is 71st in the 2100NEWS ranking. It is an Index member: NWST1100, NWSL100, NWSCo100

2100NEWS DA Orderbook Quality Evaluation Grade:  Poor, 10.6 (Average for Large-caps: 18.5)

Over the last week, the average market cap was $754.4 million, and the average daily volume was $14.2 million.

*The chart below shows the XDC compared to NWSL100 at the top, the box in the middle of the chart shows the original price, and at the bottom, we see NWSL100 and the correlation between  XDC and NWSL100.