2100NEWS WEEKLY CRYPTO REPORT Mar-21

The crypto index NWST1100 has increased by 0.19% over the last week. NWSCo100, covering Coins, has outperformed other segments, losing 2.12% in the previous thirty days.

*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.

After conducting a detailed examination of the NWST1100 chart, a vital metric for the cryptocurrency market, reveals several essential market dynamics and changes in market sentiment:

The NWST1100: The index inched up +0.19%. After probing the local low near 5484, the index managed a modest rebound, suggesting the potential formation of a short-term base.

Market Sentiment (PPO & RSI): Though still in negative territory, the Price Oscillator (PPO) lines have turned upward. This shift implies a slowdown in bearish momentum and lays the groundwork for a possible trend reversal. The histogram has also risen accordingly. The RSI has lifted from deeply oversold levels and, while still subdued, is signaling the early stages of recovery.

Crypto Market Breadth indicators at the bottom of the chart add another dimension. The Advance-Decline Line (ADVL), which measures the number of advancing versus declining assets, has improved slightly, indicating a more favorable ratio between advancing and declining assets. Meanwhile, the McClellan Summation Index has begun to tick upward, suggesting that selling pressure may be losing steam across the broader market.

* 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 the 50-day 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 delves into the cryptocurrency market’s short-term outlook, identifying patterns and signals that could provide insights into potential market direction. While predicting market behavior is inherently uncertain, discernible trends in momentum and market breadth indicators suggest possible developments.

1. Point & Figure analysis sets an upside target of 6400, pointing to potential for further upside if buying pressure continues.

2. The PPO lines may continue to rise toward the zero line, with the histogram likely remaining positive. This would indicate a pause in bearish momentum and raise the probability of relief rallies.
3.  The RSI (Relative Strength Index), with a current reading of 46, signals that the market is nearing the 50 threshold. It could trigger a short-term relief rally as momentum builds
4. The Breadth indicators, evident at the bottom of the first chart (NWST1100) and the falling McClellan Summation Index on the chart below, are attempting to climb toward the zero line, which would suggest improved participation and a broadening base for potential recovery.
5. Extreme oversold conditions, particularly evident across A50R indicators, may soon exhaust themselves. Historically, such extremes often precede stabilization phases or sustained rebounds.

In conclusion, the market is poised for potential short-term volatility, but early signs of stabilization are emerging. While short-term volatility is expected to persist, improving momentum and participation indicators could pave the way for a recovery phase.

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 increased by 0.19% 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). Coin represented by the NWSCo100 index has outperformed other segments, losing 2.12% in the previous thirty days.

While the broader market is experiencing a downward trend, different segments and individual cryptocurrencies exhibit varied performance dynamics. NWSBE led, NWSET100 was improving, Bitcoin and NWS30 were wekening, Ether, NWSCo100, and NWSL100 lagged. 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:
  • 40 Months Ago: Digital assets showcased a notable outperformance against shares in global capital markets, reaching a record high in the comparative quotient between the NWST1100 and W1Dow indexes. At this juncture, digital assets displayed a notably superior performance trajectory compared to shares on global capital markets.
  • Twelve months ago to Present, digital assets have underperformed shares by 12.2%, indicating a shift in returns that favors traditional equities in this timeframe.
• Mean Reversion Opportunity:
  • Over the past 143 working days, the average quotient price, represented by a blue dashed curve, stands at 10.22, while the current spot ratio is 9.33. This is higher than the long-term mean of 7.55, which has increased since October.
  • The mean reversion theory suggests that asset prices tend to revert to their historical average returns over time. The current average quotient price above the long-run mean could imply that digital assets are somewhat overvalued compared to historical trends.
• Returns Comparison:
  • The chart also presents the returns achieved by the simplified index-based accumulation approach—buying one index point per day over 12 months—to simulate a mechanical exposure build-up. While this method is not equivalent to classical dollar-cost averaging (which involves investing a fixed amount of capital daily), it offers a consistent benchmark to compare historical costs and returns. The NWST1100 Crypto Index has declined by 3.80%  relative to last year’s period. With daily index investments, an investor’s stock price roughly equals the current index price, reflecting unprofitable purchases due to high entry prices during a prolonged market uptrend when prices remained above the 143-day moving average for an extended period.
  • Contrasting with the crypto index, the DJW, representing global capital market shares, grew by 6.98% over the past twelve months. However, a strategy involving daily purchases would have resulted in a gain of 2.1%.

• Conclusion: While crypto has underperformed global equities over the past year, the recent pullback—especially below the 143-day moving average—may present attractive reentry opportunities. Historical data suggests that accumulation during such phases often yields superior returns once sentiment reverses.

*The box in the middle of the chart shows the original NWST1100 price; at the bottom is W1Dow.