2100NEWS WEEKLY CRYPTO REPORT Aug-11

The NWST1100 index has risen 1.16% from the previous week. Kaspa (KAS), 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’s accurate prediction of a cryptocurrency market rebound following a quick test of solid support represented by the 143-DAY EMA (Exponential Moving Average – red curve) demonstrates the value of our analysis. This report will conduct a more detailed analysis of the NWST1100 chart, a critical benchmark index, by examining various indicators to gain insights into the prevailing market sentiment and breadth.

1. Observing the NWST1100 index price movement, we note a downward trajectory along the 25-DAY EMA after the price rebounded over it on Tuesday. This pattern suggests a bearish trend within the market.
2. Market sentiment: Market sentiment analysis reveals several noteworthy points. The Percentage Price Oscillator (PPO) lines continue to decline, signifying a decrease in short-term momentum. While nearly flat, the PPO histogram hints at a potential lack of decisive market direction. Despite a rebound on Tuesday, the Relative Strength Index (RSI) has since resumed its decline.
3. Shifting our focus to the Crypto Market Breadth indicators at the bottom of the NWST1100 chart, a declining market breadth is evident. The Advance-Decline Line (ADVL), which reflects the difference between the number of advancing and declining cryptocurrencies, has been consistently descending. This decline in the ADVL implies that more cryptocurrencies are declining than advancing, indicating a bearish breadth within the market. The McClellan Summation Index, also on the decline, further supports the negative breadth, substantiating the overall bearish sentiment.

Considering these insights, it becomes evident that the current sentiment in the cryptocurrency market leans toward negativity. The market is witnessing declining prices and a reduction in market breadth. These combined factors suggest a challenging market environment marked by decreasing investor confidence.

The chart on the right shows that all four A50R lines are currently oversold. This breadth indicator measures the percentage of digital assets trading above a 50-day moving average. The current oversold condition suggests that a substantial portion (over 70%) of the cryptocurrency market is presently trading below its 50-DAY EMA (Exponential Moving Average). Investors and traders typically pay close attention to oversold conditions.

*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.

Outlook for this week

This report endeavors to offer insights into the near-term 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 in the short term.

1. Recently, the market has experienced a price decline, leading to the testing of key support levels again. This price action provides critical clues about the market sentiment and potential future trends.
2. The RSI (Relative Strength Index) currently stands at 48.
3. The Percentage Price Oscillator (PPO) histogram may resume falling. The PPO is a trend-following momentum indicator that measures the percentage difference between two moving averages.
4. The Breadth indicators at the bottom of the first chart (NWST1100) may change direction. 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, indicating that the market breadth currently favors declining assets. This bearish pressure is anticipated to reach a level in a few days where trend reversals occurred in prior instances, such as October or January. Judging by the duration of this pressure, as reflected in the histogram on the chart, a gradual easing is expected by the week’s end.

Considering this analysis, it’s likely that the crypto markets will experience a rebound after undergoing a swift test of the support level represented by the pivot point labeled as “S2.” At a significant technical level, this pivot point is expected to act as a potential platform for a market recovery.

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

After analyzing the data in the table, the overall index NWST1100 has risen by 1.16% over the past week. The accompanying chart illustrates the performance of several cryptocurrencies, including Bitcoin and Ether, as well as key 2100NEWS Indices, which measure the performance of tracking different segments of the market: Ethereum-based tokens (NWSET100), Large caps (NWSL100), and Coins (NWSCo100). A retrospective view over the last thirty days indicates that Ethereum Tokens, represented by the NWSET100 index, have exhibited the most favorable performance. However, this performance has still decreased by -3.95% over this period.

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:

• Historical 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 suggests that investing in digital assets was more profitable during that period compared to traditional stocks.
  • 12 Months Ago: However, over the past 12 months, digital assets have lagged behind traditional stocks by 11%. This indicates that conventional stocks have delivered better returns than digital assets during this specific time frame.
• Recent Shift in Performance:
  • In the current year, there has been a noticeable shift in performance, with digital assets outperforming traditional stocks by a significant margin of 33.5%. This suggests a potential resurgence in the performance of digital assets and a change in investor sentiment toward the cryptocurrency market.
• Mean Reversion Opportunity:
  • The chart includes a blue dashed curve representing the average quotient price over 143 working days. This average has been lower than the long-run mean at 8.16. This observation hints at a potential buying opportunity for digital assets based on the mean reversion theory.
  • The mean reversion theory suggests that asset prices, over time, tend to revert to their historical average returns. The fact that the current average quotient price is below the long-run mean could imply that digital assets are currently undervalued compared to historical trends.
• Returns Comparison:
  • The chart also presents the returns achieved with the stock price generated by buying one point of the respective index daily over the past twelve months.
  • The NWST1100 Crypto Index experienced a 7.01% loss compared to a year ago. Additionally, the purchased stock of the index achieved a 9.9% increase compared to the index’s current price.
  • In contrast, the DJW Capital Index (traditional stocks) experienced a 4.97% gain compared to a year ago. It achieved a 7.8% return on the purchased stock of the index based on daily purchases.

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

Indices Revision 8-11-2023

Based on the latest Bi-weekly revision, WhiteBit Token and Worldcoin have improved their ranking and were added to the NWSL100 index; they were previously included in the NWSM200 index. On the other hand, SingularityNET and Nexo were removed from the NWSL100 index. Several new mid-cap assets have been added to the indices, including Yield Guild Games, DODO, Orchid, 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 Kaspa (KAS) for achieving a remarkable milestone as the winning member of the NWSL100 crypto index with the most significant leap in rank within the NWSL100 crypto index. Let’s delve into the details of its performance:

1. Outperformance in the Last Ten Weeks: Kaspa (KAS) has displayed remarkable growth by substantially outperforming the 2100NEWS Digital Assets 100 Large Cap Index (NWSL100). Over the last ten weeks, KAS has outperformed the NWSL100 index by an impressive 142%, a trend clearly depicted by the violet area chart.
2. KAS vs. NWSL100: A comparison of KAS’s performance with the NWSL100 index reveals interesting insights. The green area graph represents KAS’s performance, while the orange area graph illustrates the index’s performance. Notably, there has been a weak correlation between KAS and NWSL100, with a Pearson’s correlation coefficient of 0.18. KAS has moved in the same direction as the index about 65% of the time.
3. Divergence in Price Changes: Despite the tendency to move in tandem with NWSL100 most of the time, KAS has not been a reliable representative of the index regarding price changes. This suggests that KAS’s price movements have not fully aligned with the broader market represented by NWSL100. This divergence indicates that KAS’s price dynamics have been influenced by other factors or unique market conditions, setting it apart from the general trends observed in the market.

*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. 

Kaspa (KAS) Website: https://kaspa.org/

KAS Large-cap Coin is 82nd in the 2100NEWS ranking. It is an Index member: NWST1100, NWSL100, NWSCo100

2100NEWS DA Orderbook Quality Evaluation Grade:  Poor, 7.9 (Average for Large-caps: 18.5)

Over the last week, the average market cap was $843.7 million, and the average daily volume was $24.3 million.

*The chart below shows the KAS 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  KAS and NWSL100.