The NWST1100 index has risen by 2.36% from the previous week. Frax Share FXS Large-cap Ethereum-based Token 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 complex to read initially, but the chart shows essential price information, crucial decisive price levels, momentum, trading volumes, and crypto market breadth.
According to the previous report, the cryptocurrency market was predicted to rise to the target, the resistance level represented by the 143-day Exponential Moving Average (EMA). Analyzing the NWST1100 chart, a critical benchmark index, by examining various indicators to gain insights into the prevailing market sentiment and breadth has revealed several key points:
- Observing the NWST1100 index price movement, we note that the index made the second unsuccessful attempt to break through the resistance represented by the 143-day EMA (red curve) on Monday, followed by four days of consolidation.
- Market sentiment: Market sentiment analysis reveals several noteworthy points. The Percentage Price Oscillator (PPO) lines have slightly risen, indicating that the market might be consolidating or taking a breather after recent moves. A change in the direction of the PPO histogram hints at a potential slowdown in the momentum of price changes. The Relative Strength Index (RSI) has flattened, indicating a possible stabilization in market sentiment.
- We are shifting our focus to the Crypto Market Breadth indicators at the bottom of the NWST1100 chart. The Advance-Decline Line (ADVL), which reflects the difference between the number of advancing and declining cryptocurrencies, has started to fall. This could signify a shift in market breadth, implying that more cryptocurrencies are declining than advancing, which could negatively impact overall market sentiment. On a positive note, the rising McClellan Summation Index suggests there could be some underlying positive developments in the market.
Considering these insights, it’s clear that while there has been a consolidation in the market after an unsuccessful attempt to break through the resistance, there are some indications of stabilization and potential negative shifts in market breadth; there are also positive signals, like the rising McClellan Summation Index, suggesting that there may be underlying positive factors at play in the market.
The chart on the right shows that all four A50R lines are currently near or in the oversold territory. This breadth indicator measures the percentage of digital assets trading above a 50-day moving average. The current condition suggests that a substantial portion (over 65%) of the cryptocurrency market is trading below its 50-day EMA (at relatively low levels compared to their short-term moving averages). When many cryptocurrencies start trading above their 50-day EMA, it may indicate a broader upward trend or a potential bullish sentiment in the market.
*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:
- The top box shows the A50R lines for 100 Large-cap members of NWSL100.
- 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.
- The third box shows the A50R lines for 100 Ethereum Tokens members of NWSET100.
- The bottom box represents the A50R lines for 100 Coins members of NWSCo100.
Outlook for this week
This report aims to provide insights into the cryptocurrency market’s near-term outlook. 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.
- Recently, the market has experienced a consolidation after an unsuccessful attempt to break through the resistance. Such consolidation often serves as a pause and can precede further market action. Monitoring whether this consolidation leads to a breakout or breakdown is important.
- The RSI (Relative Strength Index) currently stands at 61, indicating a moderate level of buying pressure in the market. An RSI reading 61 suggests that buying forces are prevailing.
- The Percentage Price Oscillator (PPO) histogram appears to be potentially turning upward. A rising PPO histogram can signal a strengthening momentum, hinting at the possibility of a new trend forming. This suggests the market may be gearing up for a potential move in either direction.
- The Breadth indicators at the bottom of the first chart (NWST1100) may flatten. The McClellan Summation Index is a long-term market breadth indicator relying on the McClellan Oscillator. Flattening indicators could signal a period of stability or uncertainty.
Considering this analysis, I expect further declines toward the support levels at pivot P or possibly even pivot S1 in the upcoming week. This could potentially serve as a foundation for the next, as per past patterns, the successful third attempt to breach and break through the red curve (143-day EMA).
Performance of various groups of Digital Assets (Coins and Tokens)
Investors and traders often use historical performance data to make informed decisions about their cryptocurrency holdings. After analyzing the data in the table, the overall index NWST1100 has risen by 2.36% over the last week, indicating a modest positive performance in the broader cryptocurrency market. 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). A retrospective view over the last thirty days indicates that Bitcoin has shown the most promising performance, with a gain of 4.77%.
Crypto (Digital Assets) compared with global equity
These comparisons provide insights into the relative performance of digital assets and shares on capital markets over different time periods.
The comparison highlights the performance differences between digital assets (coins, tokens) and shares on capital markets; the NWST1100 represents digital assets, while the Dow Jones Global W1Dow index represents shares on capital markets. Here are the key observations:
- Historical Performance Comparison:
- 23 Months Ago: Digital assets, represented by the NWST1100 index, were outperforming shares on capital markets, represented by the W1Dow index, with a record high quotient between the two indexes. This suggests that investing in digital assets was more profitable than shares in capital markets during that period.
- 12 Months Ago: However, over the past 12 months, digital assets have lagged behind shares on capital markets by 2.2%. 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 shares on capital markets by a significant margin of 28.6%. 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 is lower than the long-run mean at 7.65. 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 current average quotient prices 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 an 8.30% gain compared to a year ago, and the purchased stock of the index achieved a 1.3% gain compared to the index’s current price.
- In contrast, the DJW Capital Index (shares on capital markets) experienced a 13.19% gain compared to a year ago. It achieved a 1.7% gain 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 10-06-2023
Based on the latest Bi-weekly revision, Cheelee has improved its ranking and was added to the NWSL100 index. On the other hand, Chia was removed from the NWSL100 index. Several new mid-cap assets have been added to the NWSM200 index, including Carry Protocol, LeverFi, and Ultra. More information about the additions and deletions for other indices in the family is available in each index’s presentation.
Congratulations to Frax Share (FXS) for achieving a significant milestone by being recognized 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:
- Performance in the Last Ten Weeks: Frax Share (FXS) has displayed a growth trajectory closely aligned with the 2100NEWS Digital Assets 100 Large Cap Index (NWSL100) performance. The violet area chart indicates that FXS has shown almost equal growth to the NWSL100 index over the past ten weeks.
- FXS vs. NWSL100: A comparison of FXS’s performance with the NWSL100 index reveals interesting insights. The green area graph represents XRD’s performance, while the orange area graph illustrates the index’s performance. Notably, there has been a strong correlation between FXS and NWSL100, with a Pearson’s correlation coefficient of 0.71. FXS has tended to move in the same direction as the index about 80% of the time.
- Convergence in Price Changes: Because of the tendency to move in tandem with NWSL100 most of the time, FXS has been a reliable representative of the index regarding price changes. This convergence suggests that FXS’s price movements have closely followed the broader market trends represented by NWSL100. In other words, general market trends have influenced FXS’s price 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.
Frax Share (FXS) Website: https://frax.finance/
FXS Large-cap Ethereum-based Token is 70th in the 2100NEWS ranking. It is an Index member: NWST1100, NWSL100, NWSTo100, NWSET100
2100NEWS DA Orderbook Quality Evaluation Grade: Poor, 14.2 (Average for Large-caps: 18.5)
Over the last week, the average market cap was $407.7 million, and the average daily volume was $13.5 million.
The Frax Protocol is the first fractional-algorithmic stablecoin system. Frax is open-source, permissionless, and entirely on-chain – currently implemented on Ethereum (with possible cross-chain implementations in the future). The end goal of the Frax protocol is to provide highly scalable, decentralized, algorithmic money in place of fixed-supply digital assets like BTC. The protocol incorporates the following concepts: Fractional-Algorithmic – Frax is a unique stablecoin with parts of its supply backed by collateral and parts of the supply algorithmic. The ratio of collateralized and algorithmic depends on the market’s pricing of the FRAX stablecoin. If FRAX trades above $1, the protocol decreases the collateral ratio. If FRAX trades under $1, the protocol increases the collateral ratio. Frax Shares is the governance token that accrues fees, seigniorage revenue, and excess collateral value.
*The chart below shows the FXS 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 FXS and NWSL100.