2100NEWS WEEKLY CRYPTO REPORT Mar-1

The index for NWST1100 has soared 20.83% over the last week; the NWSET100 index (Ethereum-based tokens) has shown the most favorable performance within the previous 30 days, with a gain of over 57.5%.

*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 graph shows essential price information, crucial decisive price levels, momentum, trading volumes, and crypto market breadth. Monitoring Market Sentiment and Breadth is necessary to detect early signs of trend reversals or continued strength.

We have conducted a detailed examination of the NWST1100 index chart, which serves as a significant benchmark index and reveals a multitude of noteworthy insights:

1. The NWST1100: The index has continued the rally and surpassed pivot P with strong bullish momentum.
2. Market Sentiment: The PPO lines and histogram ascent indicate increasing momentum. This is a bullish signal, showing that prices are moving upward at an accelerating rate. The RSI’s upward trajectory has been situated in overbought conditions, confirming robust buying pressure. However, it also flags the risk of a pullback due to the market potentially being overextended.
3. Crypto Market Breadth indicators at the bottom of the chart show a rising Advance-Decline Line (ADVL), suggesting that more individual cryptocurrencies participate in the rally. Similarly, a rising McClellan Summation Index, a long-term version of the McClellan Oscillator that measures market breadth, indicates that the upward momentum was well-established, indicating a strong and sustained rally.

* 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

This report analyzes the cryptocurrency market’s short-term outlook and aims to provide insights into its potential direction. Although predicting the market’s behavior is challenging, discernible patterns in market waves offer some predictability. By examining momentum indicators, we can identify several signals that shed light on the market’s possible direction in the short term.

1. The possibility of a direction change in the PPO histogram. If the histogram moves lower, it might suggest slowing momentum.
2. The RSI (Relative Strength Index), with an RSI reading of 91, is significantly above the typical overbought threshold of 70, suggesting the market has extended beyond its usual range. While this reflects intense buying pressure and bullish sentiment, it also raises the risk of a corrective pullback as traders might take profits and reduce exposure.
3. The Breadth indicators at the bottom of the first chart (NWST1100) may continue their ascent. The rise in Breadth indicators, notably the McClellan Summation Index, hints at widening participation. This breadth expansion is a bullish signal, reinforcing the rally’s strength and the likelihood of its persistence.

In conclusion, while the short-term outlook for the cryptocurrency market appears favorable, with strong momentum and broad participation indicating a sustained rally, caution is warranted due to overbought conditions and potential volatility. Resistance levels can often trigger profit-taking and increased selling pressure. The NWST1100 index will likely approach the Resistance R1 points (+7%).

Performance of different 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 soared 20.83% over the last 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). Despite Ethereum-based tokens receiving less attention compared to Bitcoin and perhaps Ether, the NWSET100 index, which represents Ethereum-based tokens, has outperformed other segments with a remarkable gain of 57.55% over the last thirty days. This could imply that the market is particularly optimistic about the developments and prospects within the Ethereum ecosystem. Interestingly, all the spotlight is on Bitcoin, maybe Ether.

While the broader market is experiencing a rally, different segments and individual cryptocurrencies exhibit varied performance dynamics. Ether and index NWSET100 were leading; Bitcoin and certain indices like NWSBE and  NWWS30 were weakening, possibly due to profit-taking, sector rotation, or a shift in investor focus toward other assets. In contrast, 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:
  • 28 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 87.9%. 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 (6.88). Currently, the spot price is 9.92 and sits higher than its long-run mean, hovering around 7.15.
  • The mean reversion theory suggests that asset prices, over time, tend to revert to their historical average returns. The current average quotient price modestly above the long-run mean could imply that digital assets are currently 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 112.96% appreciation relative to last year’s period. With daily index investments, an investor’s stock would have seen an 80.0% uplift compared to the index’s current price.
  • Contrasting with the crypto index, the DJW, representing global capital market shares, grew by 20.50% over the past 12 months. However, a strategy involving daily purchases would have resulted in a gain of 10.7%.
  • 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 3155 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.