2100NEWS WEEKLY CRYPTO REPORT Jun-7

The index for NWST1100 has slightly risen by 0.31% over the last week; Ether has shown the most favorable performance within the previous 30 days, with a gain of 20.85%.

*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 it was more likely that the index prices would continue to hover in the upper segment of the Keltner Channel, 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 was hovering at the upper segment. The 25-day Exponential Moving Average (EMA) was a significant support level but has been challenged, suggesting weakening bullish strength. On Friday, there was a notable depletion of bullish momentum, with the market’s “pendulum” balancing in the middle, as indicated by the PPO histogram, going below the zero line. Over the weekend, the descent intensified.

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.

* 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 51 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 (chart below), 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. Cautious optimism is suggested, acknowledging that the market might be nearing a point of reversal, as technical signals indicate. The NWST1100 index will likely soon fall below the P pivot level. This will coincide with the PPO approaching the zero line, presenting one possible scenario for a market reversal. Another scenario involves the index testing of the S1 support area. Just below this area lies the EMA-143, a strong support level. If the market reaches this low, it will likely be an intraday event followed by an immediate and sharp rebound.

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 slightly risen 0.31% 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). Ether has outperformed other segments, with a surge of 20.85% over the last thirty days.

While the broader market is experiencing a downtrend, different segments and individual cryptocurrencies exhibit varied performance dynamics. NWSBE and NWS30 were leading; Ether was weakening; Bitcoin and NWSET100 were improving, while 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 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:
  • 31 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.
  • Twelve Months Ago: a year ago, digital assets had a clear edge, outperforming shares by 91.1%. 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, plotted as a blue dashed curve, stands at 8.88, while the current spot price is 10.13. This is significantly higher than the long-term mean of 6.81.
  • 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 126.72% appreciation relative to last year’s period. With daily index investments, an investor’s stock would have seen a 50.4% uplift compared to the index’s current price.
  • Contrasting with the crypto index, the DJW, representing global capital market shares, grew by 18.41% over the past 12 months. However, a strategy involving daily purchases would have resulted in a gain of 10.9%.
  • 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 4,016 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.