deen

13 August 2020

Crypto Broker Rotation Report August 2020

Daniel Kukan

Daniel Kukan

Senior Trader bei Crypto Broker AG

Über den Autor

This is our monthly Crypto Broker Rotation Report, directly from the Crypto Broker trading floor, with extensive insights into the crypto asset market, including quantitative data analysis, macro market comments, technical chart analysis, and rotation (sector) analysis. A PDF version of the report can be found at the bottom of this page.

Should you wish to receive this weekly report by email, you may subscribe below.

Contents

1 Rotation Analysis

2 Altcoin Futures Basis Analysis

3 Top Ten Comparison

4 Volatility and Correlation Comparison

5 ETHBTC 4h Technical Chart Analysis

6 Market Capitalisation Overview

Glossary


1 Rotation Analysis

MID and SHIT Indices outperform

At the end of July and the beginning of August, altcoins outperformed, and broke through the resistance level of 65 very easily. The overbought scenario has eased a bit, and, currently, we are trading just below the 65 resistance level. The MID Index marched through all resistances towards an all-time high of 83.50. After a strong sell-off at the end of July 2020, the market recovered very quickly, and is now trading within a range between 77.40 and 82.50.

The SHIT Index has shown similar patterns as the MID Index. In fact, the constituents of the SHIT Index shone brightly at the beginning of July 2020. The sell-off we saw below the support level of 97.50 demonstrated the vulnerability of this sector. The SHIT Index strongly depends on DeFi, since many of the coins are constituents of the index. Currently, all three indices are trading in a narrow range and close to the resistance levels.

Below you will also find our short-term view on support and resistance levels for all three indices:

Alt: Support 57.00 / Resistance 65.00 / Alt (4h)
Mid: Support 77.40 / Resistance 82.50 / Mid (4h)
Shit: Support 97.50 / Resistance 112.50 / Shit (4h)

Correlations continue to widen within the 10 altcoins, which has resulted in more traded volume across the board. The MACDs show a clear picture: BTC seems to be in an oversold situation with a huge potential of catching up to the smaller coins. Coins ranked between 2 and 10 are slightly overbought, since the coins ranked between 11 and 50 are massively overbought. A correction versus BTC is to be expected.

 

2 Altcoin Futures Basis Analysis

The term futures are trading in contango with a premium depending on the current market condition: for September it is approx. 2% and for December it is 3.75%.

Most of the altcoin term futures are also trading in contango with a similar premium. There are again some exceptions, e.g. XRP and ADA are trading neutrally or even in slight backwardation. This results in a lack of interest in these coins, since others are currently more in vogue. Another important fact is that there has been the ending of a vesting period. This frees up some stakes.

In general, the overall term futures situation has been overstretched for weeks and needs to consolidate in order to build a healthy and solid support. There have been signs of a possible small ease in the futures premium for the last couple of days now.

3 Top Ten Comparison

Table 1: Data source: Coinmarketcap; change to last week in parentheses

 

Table 2: Datasource: Coinmarketcap; change to last week in parentheses

 

4 Volatility and Correlation Comparison

Figure 3: Volatility Comparison; Datasource: Coinmarketcap

 

Figure 4: Correlation comparison; Data source: Coinmarketcap

 

5 ETHBTC 4h Technical Chart Analysis

Figure 5: Data source: Bitfinex; Chartsystem: Tradingview

ETH outperformance is stunning!

During the last week in July 2020, we reached the range between 0.029 and 0.030. Currently, the short-term trading range is set between 0.030 and 0.034. There is a resistance level between 0.033 and 0.034. ETH has profited greatly from the DeFi space and is in a short-term consolidation phase. As long as we stay above the support line of 0.030, there is more upside potential.

The long-term consolidation phase was broken quickly, and ETH moved rapidly to the next liquidity pool level at around 0.030. This was the area where we took profits, and we are now waiting for things to cool down before we re-enter with longs again.

View the charts: ETHBTC 4h chart | ETHBTC daily chart

 

6 Market Capitalisation Overview

Figure 6: Market capitalisation overview; Data source: Coinmarketcap

 

Glossary

Advance Decline Line – the Advance Decline Line shows the ratio of coins for which the market cap increased relative to the market cap of BTC for each day.
ATH – all time high (maximum lookback period of 730 days).
Data source – tables and charts are based on daily close prices provided by Coinmarketcap.
EWMA – exponentially weighted moving average.
MACD – moving average convergence/divergence is a popular technical indicator to identify trends in the underlying instrument. It consists of the MACD and signal line, and the area shown in the background. The MACD line (strong) is the difference of two exponential moving averages, which are defined by the first and second parameter of the indicator. The signal line (weak) is the exponential moving average of the MACD line defined by the third parameter. The area in the background illustrates the difference between the MACD line and the signal line.
Pearson Correlation – quantifies the linear relationship between two variables.
Spearman Correlation – quantifies the monotonic relationship between two variables. As such, the Spearman Correlation is based on the ranked values of each variable and is used to detect non-linear relationships between the two.

More information about and contact details for Crypto Broker AG are here.

Download the Rotation Report as a PDF here.

Weiterlesen