2100NEWS WEEKLY CRYPTO REPORT Apr-12

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The index for NWST1100 has fallen by 4.91% over the last week; Bitcoin has shown the most favorable performance within the previous 30 days, with a loss of 7.07%.

*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.

Based on our previous analysis, where we predicted the NWST1100 index could experience an upward movement, with fluctuations expected between the pivot point (P) and the critical resistance level (R1), 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 NWST1100: The index has continued the rally till Monday. On Tuesday, there was a notable depletion of bullish momentum, with the market’s “pendulum” balancing in the middle, as indicated by the PPO histogram nearing the zero line. An attempted market reversal to initiate a rising trend failed, resulting in the first correction, which can be perceived as a period of quiet before a potential upheaval. The geopolitical tension specifically concerns about Iran potentially attacking Israel, exerted significant downward pressure on the index. This anxiety translated into a sharp decline towards a support level, delineated by a red dashed line on the chart. Over the weekend, the descent intensified, driving the index into the pink zone, reaching a foreboding target of 5200 points that the Point & Figure (P&F) chart had been signaling for several weeks.

Market Sentiment: The Price Oscillator (PPO) lines were falling, with a marked drop in the histogram, indicated by a red arrow. The Relative Strength Index (RSI) shifted its trajectory and began to fall.

Crypto Market Breadth indicators at the bottom of the chart show the Advance-Decline Line (ADVL) and McClellan Summation Index. A falling Advance-Decline Line (ADVL) and, similarly, a falling McClellan Summation Index, a long-term version of the McClellan Oscillator that measures market breadth, hint at a firmly established downward momentum that might have been prevalent.

Based on these indicators, observations point to a market facing considerable bearish pressure, possibly precipitated by the geopolitical uncertainties and technical resistance levels that thwarted bullish attempts. The breadth indicators further corroborate the presence of a broad-based decline across the cryptocurrency market.

According to the chart on the right, all four A50R lines were falling and settled in the oversold territory. This condition suggests that a significant number of cryptocurrencies are trading below their 50-day moving averages. This breadth indicator measures the percentage of digital assets trading above a 50-day moving average. 

* 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. There is a possibility of a direction change in the PPO histogram. The PPO histogram may be approaching a halt in its downward trend. This pause could suggest that the downward momentum is losing steam, which might lead to market stabilization.
  2. The RSI (Relative Strength Index), with the RSI at a reading of 39 and plummeting towards the oversold zone, the market appears to be in a strong bearish phase, dominated by selling pressure.
  3. The Breadth indicators, evident at the bottom of the first chart (NWST1100), are on a downward trajectory. A decline in Breadth indicators, primarily the McClellan Summation Index, signals shrinking market participation. Such a contraction in market breadth is often interpreted as a bearish signal.

In conclusion, Every downturn eventually comes to a halt. The timing of a reversal, which might occur in the upcoming week, is contingent upon the rate of the current fall. The adage “buy the rumors, sell the news” is relevant but must be weighed against the backdrop of the significant recent downturn due to geostrategic tensions. An event like the halving could be a psychological trigger for market sentiment reversal. Cautious optimism is suggested, acknowledging that the market might be nearing a point of reversal, as indicated by technical signals and an upcoming significant event in the cryptocurrency space. The NWST1100 index will likely soon reach a point where it tests the Support S2 level. If this support holds, it could be followed by a rapid recovery.

 

 

 

 

 

 

 

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 fallen 4.91% over the last week. The chart above 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). Bitcoin has outperformed other segments, with a fall of 7.07% over the last thirty days.

While the broader market is experiencing a downtrend, different segments and individual cryptocurrencies exhibit varied performance dynamics. Bitcoin and indices NWSBE and NWS30 were leading. Ether was improving. In contrast, indices NWSCo100, NWSL100, and NWSET100 were weakening, possibly due to profit-taking and a shift in investor focus toward Bitcoin. 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 the relative strength and momentum of groups of digital assets. Those with strong relative strength and momentum appear 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:
    • 29 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-forward to a year ago, digital assets had a clear edge, outperforming shares by 64.6%. 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 (8.19). Currently, the spot price is 10.13, which is higher than its long-run mean, which is hovering around 6.98.
    • The mean reversion theory suggests that asset prices tend to revert to their historical average returns over time. The current average quotient price, modestly above the long-run mean, could imply that digital assets are currently highly 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 90.56% appreciation relative to last year’s period. With daily index investments, an investor’s stock would have seen a 63.9% uplift compared to the index’s current price.
    • Contrasting with the crypto index, the DJW, representing global capital market shares, grew by 17.53% over the past 12 months. However, a strategy involving daily purchases would have resulted in a gain of 9.9%.
    • 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 3571 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. 

 


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We are the new economy news hub. 2100NEWS is the professional index, data, and tools provider in the digital asset space, offering Crypto Market Intelligence, providing the perspective you can trust and equipping you with information edge you need to stay ahead. (Real-time data of token issuers and news, analysis and commentary from community.) We are very excited to contribute to the evolution of the industry and build an ecosystem around our offering (the institutional-grade data infrastructure required to enable institutional investments in digital assets). We want our contributions (Contents and Tools on 2100NEWS.com) to be useful for helping investors.


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