The Market’s Compass Crypto Candy Sixteen Examine
10 min read
Welcome to the the third publication of the Market’s Compass Weekly Crypto Candy Sixteen Examine. The Examine tracks the technical situation of sixteen of the bigger market cap cryptocurrencies. I’ve compiled the historic quantitative goal technical rating information and secondary technical indicators together with the Candy Sixteen Complete Technical Rankings and Weekly Common Technical Rating again to October of 2021. Each week the Research will spotlight the technical adjustments of the 16 cryptocurrencies that I monitor in addition to particular person highlights on noteworthy strikes in sure cryptocurrencies and Indexes.
This would be the final unabridged model that shall be despatched to free subscribers of my Substack Weblog. I hope you discovered these Research a helpful tactical instrument. Please contemplate changing into a paid subscriber at $12 a month or $100 a yr. Paid subscribers additionally obtain my weekly ETF Research which are revealed on Mondays. The three ETF Research monitor 30 US Index and Sector ETFs, 22 Developed Markets Nation ETFs, and 21 Rising Markets Nation ETFs. Additionally there’s a month-to-month Weblog put up that covers ENR development prices and occasional multi-time body index, commodity and FX technical research.
The Excel spreadsheet under signifies the weekly change within the goal Technical Rating (“TR”) of every particular person Cryptocurrency. The technical rating or scoring system is a completely quantitative strategy that makes use of a number of technical concerns that embody however aren’t restricted to development, momentum, measurements of accumulation/distribution and relative energy. If a person Cryptocurrency’s technical situation improves the Technical Rating (“TR”) rises, and conversely, if the technical situation continues to deteriorate, the TR falls. The TR of every particular person Cryptocurrency can vary from 0 to 50. The spreadsheet under additionally acts as a “warmth map” in that, cryptocurrencies with a TR within the vary of 1 to fifteen are highlighted in pink, 15.5 to 34.5 are famous in blue and TRs within the vary of 35 to 50 are in inexperienced. The first take-away from this unfold sheet ought to be the development of the person TRs, both the continued enchancment or deterioration, in addition to a change in route. A sustained development change must unfold within the particular person TRs for it to be actionable. Secondarily a really low rating can sign an oversold situation and conversely a continued very excessive quantity will be considered as an overbought situation however, as we all know, over bought circumstances can proceed at apace and overbought securities which have exhibited extraordinary momentum can simply turn out to be extra overbought. Thirdly, the weekly TRs are a worthwhile relative energy/weak point indicator vs. one another, as well as when the Candy Sixteen Complete Technical Rating (“SSTTR”), that has a variety of 0 to 800, is close to the underside of its vary and a person cryptocurrency has a TR that continues to be elevated it speaks to relative energy. Conversely if the SSTTR is close to the highest of its current vary and a person cryptocurrency has a TR that continues to be mired at low ranges it speaks to relative weak point. Lastly I view the target Technical Rankings as a place to begin in my evaluation and it isn’t your complete “finish recreation”.
This Week’s and 10 Week Trailing Technical Rankings of the 16 Particular person Cryptocurrencies*
*Rankings are calculated as much as Friday April twenty eighth
As will be seen within the unfold sheet above there was a small contraction within the TSSTR. The TSSTR fell to 406 from the earlier weeks studying of 416 (chart and additional dialogue of that technical situation follows later within the Weblog).
On a Wow foundation, eight Cryptocurrencies registered enchancment of their goal TRs and eight marked contractions. Two Cryptos ended the week within the “inexperienced zone” (TRs of between 35 and 50), twelve are within the “blue zone” (TRs between 15.5 and 34.5) and two ended up within the “pink zone” (TRs between 1 and 15). The earlier week there have been three Crypto’s within the inexperienced zone, eleven within the “blue zone” and two within the pink zone. Most all TRs ended the week between up +7 and down -7 leading to a small contraction within the Common TR of -0.63. The one outlier was ChainLink (LINK). It had essentially the most “handles” chopped off its TR by falling -16.5 to fifteen.5 from 32. Bitcoin (BTC) sported the perfect technical rating of the Candy Sixteen and has been within the inexperienced zone for seven weeks working and on the finish of final week it additionally has the perfect relative energy of the Candy Sixteen vs. the CCi30 Index*. The Day by day Bitcoin chart and feedback observe under…
*The CCi30 Index is a registered trademark and was created and is maintained by an impartial group of mathematicians, quants and fund managers lead by Igor Rivin. It’s is a rules-based index designed to objectively measure the general development, each day and long-term motion of the blockchain sector. It does so by indexing the 30 largest cryptocurrencies by market capitalization, excluding secure cash (extra particulars will be discovered at CCi30.com).
Bitcoin has one of many extra “constructive” charts of the sixteen cryptocurrencies we monitor within the weblog. The pullback in worth in early February held Cloud assist in early March and lifted off once more. After reaching the perfect worth degree since Could of final yr BTC traded decrease however the “backing and filling” has to date held key assist at 27,050 and has prevented testing Cloud assist. MACD is is beginning to hook greater and has prevented adverse territory and in addition, be aware the flip within the Fisher Rework. As will be seen within the decrease panel, relative to the CCi30 Index it held assist on the longer-term 45-Day EMA (blue line) and is again above the shorter time period 9-Day SMA (pink line). There could also be extra “work” to do however I consider if BTC continues to have the ability to maintain key assist at 27,050 and the Cloud that there are higher than even odds that the April highs shall be challenged.
Additional Measurements of Relative Power and Weak point within the Candy Sixteen
“What’s in Your Pockets?”
A have a look at the relative energy/weak point of the Crypto Candy Sixteen versus the CCi30 Index.
Each Bitcoin (BTC) and Solana (SOL) are exhibiting optimistic relative energy vs. the CCi30 Index and are monitoring greater above each the longer, 55-Day EMA, and shorter time period (21-Day SMA) shifting averages. Polkadot (DOT) has marked an all-time relative energy low on the finish of final week. Uniswap (UNI) marked an eleven month low and Matic Community (MATIC) a brand new seven month low. All three relative energy traces (or ought to I say relative weak point traces) are monitoring decrease under each their shifting averages.
Relative Rotation Graph of the Candy Sixteen
The Relative Rotation Graph, generally known as RRGs had been developed in 2004-2005 by Julius de Kempenaer. These charts are a novel visualization instrument for relative energy evaluation. Chartists can use RRGs to investigate the relative energy tendencies of a number of securities in opposition to a typical benchmark, (on this case the CCi30 Index) and in opposition to one another over any given time interval (within the case under, each day because the finish of the top of final week). The facility of RRG is its capacity to plot relative efficiency on one graph and present true rotation. All RRGs charts use 4 quadrants to outline the 4 phases of a relative development. The Optuma RRG charts makes use of, From Main (in inexperienced) to Weakening (in yellow) to Lagging (in pink) to Bettering (in blue) and again to Main (in inexperienced). True rotations will be seen as securities transfer from one quadrant to the opposite over time. That is solely a quick rationalization of the best way to interpret RRG charts. To study extra, see the put up scripts and hyperlinks on the finish of this Weblog.
The seven-day RRG displays the short-term acceleration within the enchancment in relative energy in TRON (TRX) which has moved shortly from the Lagging Quadrant although the Bettering Quadrant and into the Main Quadrant. That acceleration will be seen because it shortly rose within the bettering Quadrant by the gap between the dots within the tail because it got here off a 12-month relative energy low. Though it stays within the Main Quadrant Binance Coin (BNB) is starting to to sluggish. Bitcoin’s aforementioned current resurgent relative energy is also revealed within the RRG chart above.
Seven Day Absolute % Worth Change*
*Saturday to Saturday
The Technical Situation Issue adjustments because the week ending February tenth
There are eight Technical Situation Elements (“TCFs”) that decide particular person TR scores (0-50). Every of those 8, ask goal technical questions (see the spreadsheet posted above). If a technical query is optimistic a further level is added to the person TR. Conversely if the technical query is adverse, it receives a “0”. A number of TCFs carry extra weight than the others such because the Weekly Pattern Issue and the Weekly Momentum Consider compiling every particular person TR of every of the 16 Cryptocurrencies. Due to that, the excel sheet above calculates every issue’s weekly studying as a p.c of the doable whole. For instance, there are 7 concerns (or questions) within the Day by day Momentum Technical Situation Issue (“DMTCF”) of the 16 Cryptocurrencies ETFs (or 7 X 16) for a doable vary of 0-112 if all 16 had fulfilled the DMTCF standards the studying can be 112 or 100%.
Two weeks in the past, for the week ending April twenty first, 13 of a doable whole of 112 optimistic factors or 11.61% studying within the DMTCF was registered marking an oversold studying of between 0% and 15% suggesting that there can be on the very least a brief time period bounce. As shall be seen under that’s what unfolded.
As a affirmation instrument, if all eight TCFs enhance on per week over week foundation, extra of the 16 Cryptocurrencies are bettering internally on a technical foundation, confirming a broader market transfer greater (consider an advance/decline calculation). Conversely, if extra of the TCFs fall on per week over week foundation, extra of the “Cryptos” are deteriorating on a technical foundation confirming the broader market transfer decrease. Final week 6 TCFs fell, one moved greater (the Day by day Momentum Issue out of oversold territory) and one was unchanged (the Weekly Pattern Issue).
The CCi30 Index with This Week’s Candy Sixteen Complete Technical Rating “SSTTR” Overlaid
The Candy Sixteen Complete Technical Rating (“SSTTR”) Indicator is a complete of all 16 Cryptocurrency rankings and will be checked out as a affirmation/divergence indicator in addition to an overbought / oversold indicator. As a affirmation/divergence instrument: If the broader market as measured by the CCi30 Index continues to rally and not using a commensurate transfer or greater transfer within the SSTTR the continued rally within the CCi30 Index turns into more and more in jeopardy. Conversely, if the CCi30 Index continues to print decrease lows and there’s little change or a constructing enchancment within the SSTTR a optimistic divergence is registered. That is, in a trend, is sort of a conventional A/D Line. As an overbought/oversold indicator: The nearer the SSTTR will get to the 800 degree (all 16 Cryptocurrencies having a TR of fifty) “issues can’t get significantly better technically” and a rising quantity particular person Crypto’s have turn out to be “stretched” there’s extra of an opportunity of a pullback within the CCi30. On the flip facet the nearer to an excessive low “issues can’t get a lot worse technically” and a rising variety of Crypto’s are “washed out technically” and an oversold rally or measurable low is nearer to being in place. The 13-week shifting common in Purple smooths the risky SSTTR readings and analytically is a greater indicator of development.
The SSTTR had entered overbought territory in live performance with worth approaching potential resistance on the Higher Parallel (stable gold line) of the Schiff Modified Pitchfork (gold P1 via P3) three weeks in the past. I selected that Pitchfork variation as a result of worth revered the Higher Parallel (then assist) in June of final yr. Final week the CCi30 Index bounced again to the Median Line (gold dotted line) after breaking under it the earlier week. The 13-Week Transferring Common (pink line) has continued to roll over however it additionally did so in March earlier than the following leg greater. I now mark key assist at first the Decrease Parallel of the Schiff Modified Pitchfork (at present 7330) and subsequent on the P3 swing low. Remembering that my technical thesis is that this a base constructing course of, I nonetheless consider that the CCi30 Index will simply problem worth resistance finally June/July highs on the 10,000 /11,000 degree within the weeks forward.
The Market’s Compass Crypto Candy Sixteen Index
My Candy Sixteen Day by day Momentum / Breadth Oscillator reached an oversold situation per week in the past and the Index bounced earlier than testing assist on the Median Line (pink dotted line) of the Commonplace Pitchfork (pink P1 via P3) in live performance with a flip within the Fisher Rework and the start of a hook greater in MACD final week.
Charts are courtesy of Optuma whose charting software program allows anybody to visualise any information together with RRG Charts and our Goal Technical Rankings. Cryptocurrency worth information is courtesy of Cryptowatch.
The next hyperlinks are an introduction and an in depth tutorial on RRG Charts…
https://www.optuma.com/videos/introduction-to-rrg/
https://www.optuma.com/videos/optuma-webinar-2-rrgs/
To obtain a 30-day trial of Optuma charting software program go to…
A 3 half tutorial sequence on Andrews Pitchfork could also be learn at my site…. www.themarketscompass.com
