2100NEWS WEEKLY CRYPTO REPORT Jan-23

The crypto index NWST1100 dropped 7.30% last week. Over the past 30 days, large caps (NWSL100) emerged as the strongest relative performer, posting a small gain of 1.68%.

*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 the 2100NEWS Digital Assets Total Index (NWST1100), which measures the performance of 1100 (by market capitalization) significant crypto assets. The information-laden chart is complex to read initially, but it effectively displays essential price information, key decision-making 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, several essential market dynamics and changes in market sentiment are revealed:

The NWST1100 index dropped 7.30% over the past week, confirming a decisive regime shift from speculative, narrative-driven advances into a phase of forced liquidation, capitulation, and early base formation. The early-January rebound failed to generate follow-through, and the market entered the week under persistent downside pressure. Price action was characterized by rapid, impulsive sell-offs followed by shallow, corrective rebounds, indicating distribution rather than trend development. From a structural perspective, the index held above the 0.236 Fibonacci threshold into mid-January, but that level ultimately failed in a sharp, momentum-driven breakdown. Selling accelerated mid-week, pushing prices decisively below short-term supports and triggering a liquidation cascade. As volatility subsided toward the end of the week, price action stabilized below the former Fibonacci threshold, gravitating toward Pivot P. This behavior reflects post-liquidation consolidation rather than equilibrium oscillation. Attempts to reclaim higher levels were brief and lacked commitment. At the same time, downside extensions also failed to develop sustained follow-through, together forming the classic footprint of a market transitioning from directional decline into a search for a new balance zone.

Market Sentiment (PPO & RSI): Momentum indicators deteriorated meaningfully. Importantly, momentum did not collapse further late in the week, suggesting exhaustion rather than continuation. PPO lines rolled lower, while the PPO histogram turned decisively negative, confirming renewed downside acceleration. The RSI slipped into the low-30s, signaling capitulation pressure rather than constructive digestion.

Crypto Market Breadth indicators: Remain weak despite early signs of stabilization. The Advance-Decline Volume Line (ADVL), adapted by 2100News for the crypto market as ADVPL, tracks the net money volume of advancing versus declining digital assets. It fell sharply during the sell-off, indicating broad capital withdrawal rather than isolated risk reduction. Although inflows stabilized late in the week, there was no evidence of renewed accumulation. The McClellan Summation Index, a long-term version of the McClellan Oscillator that measures market breadth, continued to decline — a condition consistent with late-cycle liquidation rather than early recovery.

According to the chart on the right, all A50R indicators across the major segments (NWST1100, NWSET100, NWSL100, NWSCo100) have produced a sharp, synchronized decline.  The spike emerged from a failure to sustain the early-January rebound, driven by a rapid price reversion below the 50-day EMA. A50R readings — the share of assets trading above their 50-day EMAs — ended in the 7% to 17% range. Coins (NWSCo100) cohort remains the weakest, with only 7% of its constituents above their 50-day averages.

* 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)

📉 Summary

The week of 17–23 January was defined by capitulation, volatility, and failed stabilization attempts. Momentum turned decisively bearish, breadth weakened further, and leadership fractured. There is no confirmation of accumulation or trend reversal. This remains a corrective, mean-reverting market, where rallies are tactical, and risk management dominates conviction.

Outlook for this week

This report examines the cryptocurrency market’s short-term outlook, identifying patterns and signals that may offer insights into potential market direction. While predicting market behavior is inherently uncertain, discernible trends in momentum and market breadth indicators suggest possible developments.

1. The market enters the coming week at a delicate inflection point. The recent transition from capitulation to stabilization has reduced selling pressure, but it lacks the surplus energy typically required to sustain an advance. This is therefore a week to observe the behavior of support rather than anticipate acceleration. In this environment, geopolitical developments represent a clear source of asymmetric downside risk.
2. The RSI (Relative Strength Index) stood at 34 last week, consistent with post-capitulation conditions. While deeply oversold pressure has eased, RSI is likely to remain range-bound unless accompanied by a clear improvement in participation.
3. The PPO histogram, which measures the rate of change (i.e., the first derivative) of the PPO lines, may change direction to positive. An uptick in the histogram, even if it remains below zero, would signal stabilization rather than a trend resumption.  PPO lines may slow their descent and begin to flatten, assisted by seasonal tailwinds from the end-of-January rally.
4. The Breadth indicators at the bottom of the first chart (NWST1100) reinforce this interpretation: The ADVPL suggests that forced capital outflows linked to liquidation have largely run their course. Selling pressure has subsided, but there is no evidence of renewed accumulation. At the same time, the McClellan Summation Index may stay flat, reflecting repaired but not expanding participation.

📌 Target and Scenario Considerations:

📍 Key Levels to Watch:

• Support: 5,800 (triple bottom) 5,650 Pivot S1)

• Resistance: 6,350  (0.236 Fibonacci threshold)

Performance of different groups of Digital Assets (Coins and Tokens)

Investors and traders rely on historical performance data to contextualize short-term moves and assess the relative strength of different market segments. The latest table shows a fall across all categories, with the NWST1100 index dropping by 7.30% over the past week. The chart above highlights the performance of various cryptocurrencies, including Bitcoin, Ether, and the 2100NEWS Indices, which represent Ethereum-based tokens (NWSET100), large caps (NWSL100), and Coins (NWSCo100). Over the past 30 days, large caps (NWSL100) emerged as the strongest relative performer, posting a small gain of 1.68%.

While the broader market has fallen, different segments and individual cryptocurrencies exhibit distinct performance dynamics.

Performance Trends by Market Segment:

✔ Bitcoin, Ether,  and NWSBE led the market,

✔ NWS30 has been improving.

✔ NWSCo100 (Coins) and NWSL100 (Large Caps) weakened.

✔ NWSET100 (Ethereum-based tokens) 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 measured by the NWST1100 index, to that of shares on global capital markets, as represented by the Dow Jones Global W1Dow index. The comparison spans multiple timeframes, providing insights into historical and recent performances and potential future trends.

Let’s break down the key observations and implications:

• Historical Performance Comparison:
  • 50 Months Ago: Digital assets vastly outperformed global equities 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.
  • Over the past twelve months, digital assets have underperformed equities by 37.0%.
• Mean Reversion Opportunity:
  • Over the past 143 working days, the average quotient price, represented by the blue-dashed curve, stands at 9.53, while the current spot ratio is 7.79, which is lower than the long-term mean of 9.28, which has increased since October 2024.
  • The mean reversion theory suggests that asset prices tend to revert to their historical average returns over time. The current average prices’ quotient, which is below the long-run mean, could imply that digital assets are undervalued relative 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 provides a consistent benchmark for comparing historical costs and returns. The NWST1100 Crypto Index has dropped by 25.01% over the past twelve months. With daily index investments, an investor’s stock price would have resulted in a 14.1% loss from the current index price, because of unprofitable purchases at high entry prices during a prolonged market uptrend when prices remained above the 143-day moving average for an extended period.
  • The DJW, representing global capital market shares, has risen 19.20% over the past twelve months. However, a strategy of daily purchases would have yielded a 12.4% gain.
• Conclusion:
  

  The recent pullback highlights a fundamental truth in crypto investing: market swings define opportunity. Historically, digital assets have significantly outperformed global equities, but their returns often come in concentrated bursts that follow periods of pessimism and capitulation. Prices have fallen below the 143-day EMA, positioning the market at a technically and psychologically critical juncture. Looking ahead, sentiment-driven capitulations often create conditions for stronger rebounds, especially when paired with structural oversold signals. While caution remains warranted in the short term, current price levels could present compelling opportunities for disciplined investors preparing for the next leg in crypto’s broader market cycle.

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