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 knowledge and secondary technical indicators together with the Candy Sixteen Whole Technical Rankings and Weekly Common Technical Rating again to October of 2021. Each week the Research will spotlight the technical modifications of the 16 cryptocurrencies that I observe in addition to particular person highlights on noteworthy strikes in sure cryptocurrencies and Indexes.
This would be the final unabridged model that can be despatched to free subscribers of my Substack Weblog. I hope you discovered these Research a helpful tactical software. Please contemplate turning into a paid subscriber at $12 a month or $100 a 12 months. Paid subscribers additionally obtain my weekly ETF Research which might be printed on Mondays. The three ETF Research observe 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 publish that covers ENR building prices and occasional multi-time body index, commodity and FX technical research.
The Excel spreadsheet beneath signifies the weekly change within the goal Technical Rating (“TR”) of every particular person Cryptocurrency. The technical rating or scoring system is a wholly quantitative method that makes use of a number of technical concerns that embody however are usually not restricted to pattern, momentum, measurements of accumulation/distribution and relative power. 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 beneath additionally acts as a “warmth map” in that, cryptocurrencies with a TR within the vary of 1 to fifteen are highlighted in crimson, 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 needs to be the pattern of the person TRs, both the continued enchancment or deterioration, in addition to a change in course. A sustained pattern 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 offered 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 useful relative power/weak spot indicator vs. one another, as well as when the Candy Sixteen Whole Technical Rating (“SSTTR”), that has a spread 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 power. Conversely if the SSTTR is close to the highest of its latest vary and a person cryptocurrency has a TR that continues to be mired at low ranges it speaks to relative weak spot. 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 “crimson 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 crimson 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 very best technical rating of the Candy Sixteen and has been within the inexperienced zone for seven weeks operating and on the finish of final week it additionally has the very best relative power of the Candy Sixteen vs. the CCi30 Index*. The Each day Bitcoin chart and feedback observe beneath…
*The CCi30 Index is a registered trademark and was created and is maintained by an unbiased crew of mathematicians, quants and fund managers lead by Igor Rivin. It’s is a rules-based index designed to objectively measure the general progress, every day and long-term motion of the blockchain sector. It does so by indexing the 30 largest cryptocurrencies by market capitalization, excluding steady cash (extra particulars will be discovered at CCi30.com).
Bitcoin has one of many extra “constructive” charts of the sixteen cryptocurrencies we observe within the weblog. The pullback in worth in early February held Cloud assist in early March and lifted off once more. After reaching the very best worth stage since Could of final 12 months BTC traded decrease however the “backing and filling” has up to now held key assist at 27,050 and has averted testing Cloud assist. MACD is is beginning to hook larger and has averted unfavourable territory and likewise, be aware the flip within the Fisher Remodel. 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 (crimson line). There could also be extra “work” to do however I imagine 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 can be challenged.
Additional Measurements of Relative Energy and Weak point within the Candy Sixteen
“What’s in Your Pockets?”
A take a look at the relative power/weak spot of the Crypto Candy Sixteen versus the CCi30 Index.
Each Bitcoin (BTC) and Solana (SOL) are exhibiting constructive relative power vs. the CCi30 Index and are monitoring larger above each the longer, 55-Day EMA, and shorter time period (21-Day SMA) shifting averages. Polkadot (DOT) has marked an all-time relative power 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 power strains (or ought to I say relative weak spot strains) are monitoring decrease beneath 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 singular visualization software for relative power evaluation. Chartists can use RRGs to investigate the relative power developments of a number of securities in opposition to a standard benchmark, (on this case the CCi30 Index) and in opposition to one another over any given time interval (within the case beneath, every day because the finish of the top of final week). The ability of RRG is its potential 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 pattern. The Optuma RRG charts makes use of, From Main (in inexperienced) to Weakening (in yellow) to Lagging (in pink) to Enhancing (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 clarification of how one can interpret RRG charts. To study extra, see the publish scripts and hyperlinks on the finish of this Weblog.
The seven-day RRG displays the short-term acceleration within the enchancment in relative power in TRON (TRX) which has moved shortly from the Lagging Quadrant although the Enhancing Quadrant and into the Main Quadrant. That acceleration will be seen because it shortly rose within the enhancing Quadrant by the gap between the dots within the tail because it got here off a 12-month relative power low. Though it stays within the Main Quadrant Binance Coin (BNB) is starting to to gradual. Bitcoin’s aforementioned latest resurgent relative power is also revealed within the RRG chart above.
Seven Day Absolute % Worth Change*
*Saturday to Saturday
The Technical Situation Issue modifications 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 constructive a further level is added to the person TR. Conversely if the technical query is unfavourable, it receives a “0”. A couple of TCFs carry extra weight than the others such because the Weekly Development Issue and the Weekly Momentum Think about 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 attainable complete. For instance, there are 7 concerns (or questions) within the Each day Momentum Technical Situation Issue (“DMTCF”) of the 16 Cryptocurrencies ETFs (or 7 X 16) for a attainable vary of 0-112 if all 16 had fulfilled the DMTCF standards the studying could be 112 or 100%.
Two weeks in the past, for the week ending April twenty first, 13 of a attainable complete of 112 constructive factors or 11.61% studying within the DMTCF was registered marking an oversold studying of between 0% and 15% suggesting that there could be on the very least a brief time period bounce. As can be seen beneath that’s what unfolded.
As a affirmation software, if all eight TCFs enhance on every week over week foundation, extra of the 16 Cryptocurrencies are enhancing internally on a technical foundation, confirming a broader market transfer larger (consider an advance/decline calculation). Conversely, if extra of the TCFs fall on every 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 larger (the Each day Momentum Issue out of oversold territory) and one was unchanged (the Weekly Development Issue).
The CCi30 Index with This Week’s Candy Sixteen Whole Technical Rating “SSTTR” Overlaid
The Candy Sixteen Whole 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 software: If the broader market as measured by the CCi30 Index continues to rally and not using a commensurate transfer or larger 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 may be little change or a constructing enchancment within the SSTTR a constructive 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 stage (all 16 Cryptocurrencies having a TR of fifty) “issues can’t get a lot better technically” and a rising quantity particular person Crypto’s have turn out to be “stretched” there may be 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 Pink smooths the risky SSTTR readings and analytically is a greater indicator of pattern.
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 by way of 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 12 months. Final week the CCi30 Index bounced again to the Median Line (gold dotted line) after breaking beneath it the earlier week. The 13-Week Transferring Common (crimson line) has continued to roll over however it additionally did so in March earlier than the following leg larger. 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 imagine that the CCi30 Index will simply problem worth resistance finally June/July highs on the 10,000 /11,000 stage within the weeks forward.
The Market’s Compass Crypto Candy Sixteen Index
My Candy Sixteen Each day Momentum / Breadth Oscillator reached an oversold situation every week in the past and the Index bounced earlier than testing assist on the Median Line (crimson dotted line) of the Normal Pitchfork (crimson P1 by way of P3) in live performance with a flip within the Fisher Remodel and the start of a hook larger in MACD final week.
Charts are courtesy of Optuma whose charting software program permits anybody to visualise any knowledge together with RRG Charts and our Goal Technical Rankings. Cryptocurrency worth knowledge 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 collection on Andrews Pitchfork could also be learn at my website online…. www.themarketscompass.com
