The NWST1100 index has fallen by 1.91% from the previous week. NEM(XEM), a 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 complex to read initially, but the chart shows essential price information, crucial decisive price levels, momentum, trading volumes, and crypto market breadth.
Based on our previous analysis, where we predicted the NWST1100 index would likely test the S1 support level followed by a quick and pronounced recovery, we have conducted a detailed examination of the NWST1100 chart, a vital metric for the cryptocurrency market. Our thorough review of various indicators has yielded a plethora of salient observations:
- The analysis of the NWST1100 chart suggests that the market’s rebound after nearing the S1 support level is a crucial observation. This indicates that the market has found a strong support level and is bouncing back from it. The market’s reaction to this support level, with a notable bounce back, underlines investor confidence at this price point.
- Market sentiment: The PPO lines and PPO histogram shift the slopes to ascending. This suggests an increase in the momentum of price changes, which could be a sign of market recovery. The RSI changed slope to upwards, another positive signal often interpreted as a market moving away from being oversold and potentially gaining strength.
- We are shifting our focus to the Crypto Market Breadth indicators at the bottom of the NWST1100 chart. A rising Advance-Decline Line (ADVL) suggests that more individual cryptocurrencies participate in the rebound. Similarly, a flattened McClellan Summation Index, a long-term version of the McClellan Oscillator that measures market breadth, could indicate that the market breadth is not deteriorating. In the context of recovery, this could mean that the upward momentum is becoming more established and might be sustainable.
Based on these indicators, the cryptocurrency market does appear to be showing signs of recovery, moving away from bearish tendencies towards a potentially more bullish phase. The combination of support level strength, positive changes in market sentiment, and broad market participation provides a strong case for this transition.
According to the chart on the right, all four A50R lines have settled in the neutral zone but have risen since a few days ago. This breadth indicator measures 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:
- 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.
- The RSI (Relative Strength Index), with an RSI reading of 46, the market is in a neutral zone, which typically suggests a lack of clear directional momentum. However, the fact that the RSI is rising indicates increasing bullish sentiment. This could be a precursor to a market upswing if the trend continues.
- The PPO lines may continue rising, and the histogram may cross the zero line with an ascending slope. This movement suggests strengthening momentum. A cross above the zero line in technical analysis often signals a bullish trend, indicating that the market could move higher.
- The Breadth indicators at the bottom of the first chart (NWST1100) may cease their decline. The potential rise in Breadth indicators, notably the McClellan Summation Index, hints at widening participation, which is often bullish.
Considering these momentum indicators, we anticipate the crypto market to rise. NWST1100 index will likely approach the upper Keltner Channel line (+5%).
Performance of various groups of Digital Assets (Coins and Tokens)
Investors and traders often rely on historical performance data to make informed decisions about their cryptocurrency holdings. After analyzing the data in the table, it can be seen that the overall index has fallen by 1.91% over the last week.
The chart above shows the performance of various cryptocurrencies, including Bitcoin, Ether, and the 2100NEWS Indices. These indices represent the performance of Ethereum-based tokens, Large caps, and Coins (NWSCo100). A retrospective view over the last thirty days indicates that Bitcoin has shown the least poor performance performance, with a loss of 0.84%.
While the broader market was experiencing a recovery after a pullback, different segments and individual cryptocurrencies exhibited varied performance dynamics. Ether and index NWSET100 were leading, and indices like NWSBE and NWWS30 were weakening. Bitcoin and indices NWSCo100 and NWSL100 were lagging. Investors and traders might use this information to adjust their portfolios, possibly shifting focus toward assets with stronger relative momentum while being cautious about those in the Weakening quadrant.
*RRG® charts show you the relative strength and momentum of groups of digital assets. That with strong relative strength and momentum appears in the green Leading quadrant. As relative momentum fades, they typically move into the yellow Weakening quadrant. If relative strength then fades, they move into the red Lagging quadrant. Finally, when momentum picks up again, they shift into the blue Improving quadrant.
Crypto (Digital Assets) compared with global equity
This report offers a comprehensive analysis comparing the performance of digital assets, as signified by the NWST1100 index, to shares on global capital markets, as represented by the Dow Jones Global W1Dow index. The comparison spans various timeframes, offering insights into historical and recent performances and potential future trends.
Let’s break down the key observations and implications:
- Historical Performance Comparison:
- 26 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. At this juncture, digital assets displayed a notably superior performance trajectory compared to shares on global capital markets.
- 12 Months Ago: Fast-forwarding to a year back, digital assets had a clear edge, outperforming shares by 28.8%. This performance data accentuates the heightened returns digital assets offered over shares in the specified duration.
- Mean Reversion Opportunity:
- The average quotient price over the past 143 working days is plotted as a blue dashed curve (6.35). Currently, this average sits near its long-run mean, hovering around 7.30. However, the spot price is 7.05.
- The mean reversion theory suggests that asset prices, over time, tend to revert to their historical average returns. The current average quotient price at the long-run mean could imply that digital assets are fairly valued compared to historical trends.
- Returns Comparison:
- The chart also presents the returns achieved with the stock generated by buying one point of the respective index daily over the past twelve months.
- The NWST1100 Crypto Index enjoyed a 49.41% appreciation relative to last year’s period. With daily index investments, an investor’s stock would have seen a 31.1% uplift compared to the index’s current price.
- Contrasting with the crypto index, the DJW, representing global capital market shares, grew by 12.17% over the past year. However, a strategy involving daily purchases would have resulted in a gain of 9.6%.
- Expectations are rife as we stand the confirmed bullish trend between digital assets and global capital market shares. Digital assets purchased over the preceding year at an average price of 2982 points seem poised to offer magnified returns compared to shares as we traverse this bullish phase.
*The box in the middle of the chart shows the original NWST1100 price; at the bottom is W1Dow.
Indices Revision 1-26-2024
Based on the latest Bi-weekly revision, Blur, Astar, and NEM have improved their ranking and were added to the NWSL100 index. On the other hand, Basic Attention Token, Kusama, and Huobi Token were removed from the NWSL100 index. Several new mid-cap assets have been added to the NWSM200 index, including Manta, Fusionist, Sleepless AI, etc. More information about the additions and deletions for other indices in the family is available in each index’s presentation.
Congratulations to NEM (XEM) 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.
*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.
XEM Large-cap Coin is 94th in the 2100NEWS ranking. It is an Index member: NWST1100, NWSL100, NWSCo100
2100NEWS DA Orderbook Quality Evaluation Grade: Good, 19 (Average for Large-caps: 18)
Over the last week, the average market cap was $396.8 million, and the average daily volume was $65.1 million.
NEM’s blockchain platform was designed and coded from the ground up for scale and speed. NEM’s permissioned private blockchain delivers industry-leading transaction rates for internal ledgers. Its revolutionary consensus mechanism and the Supernode program ensure NEM’s open, public blockchain can grow without compromising throughput or stability.