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07 März 2019

Crypto Broker Weekly Rotation Report CW 10

Patrick Mehrhoff

Patrick Mehrhoff

Marketing und Kommunikation bei Crypto Finance AG

Über den Autor

This is our Crypto Broker Weekly Rotation Report, directly from the Crypto Broker trading floor to provide extensive insights into the crypto asset market, including quantitative data analysis, macro market comments, technical chart analysis, and rotation (sector) analysis. All in all, this gives a good overview of different practices to help you evaluate different market sectors. A PDF version of the report can be found at the bottom of this page.

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Contents

1 Rotation Analysis

2 Market Analysis

3 Top Ten Comparison

4 Volatility and Correlation Comparison

5 ETHBTC 4h Technical Chart Analysis

6 Market Cap Overview

Glossary

1 Rotation Analysis

In our report from last week, we mentioned that we felt that the pullback was a healthy correction of the overall bullish uptrend in altcoins. From a performance point of view (see Table 1), that statement seems to be accurate. We have seen gains in 4 out of 9 cryptocurrencies, with LTC and BNB being the top performers. The losses of the other 5 are moderate. Since LTC was one of the bigger outperformers, we also checked the correlation changes (see Table 2). Correlation moved higher, and is currently at 0.71 to BTC, which is an indication that LTC was most probably one of the market drivers for the overall positive week.

The devil is in the details, as they say. Our last indication set the MACD, and the advance decline line is the perfect fit for this (see Figure 4). Unfortunately, there is no clear signal on the MACD for bitcoin nor the MACD for ranks 2 to 10. Also, the advance decline line for the ranks 2 to 10 is (if anything) slightly bearish. Regarding the 11 to 50 ranks, we do see a turn from bullish to bearish. This is for both, the MACD and the advance decline line.

Usually, we simply take ETHBTC as the big picture proxy for the altcoin sentiment. But we would like to point out that in the current environment, where LTC is the outperforming currency, and as per our correlation analysis a potential driver for the overall positive sentiment in the market, we are keeping a close eye on LTCBTC.

2 Market Analysis

Markets continue to consolidate on a relatively stable note after the slide at the end of February. The Ethereum hard fork apparently went through without a hitch and did not lead to any noticeable price swings to the down or the upside. A small market rally on Tuesday sparked hopes of a renewed break of the $4,000 bitcoin level. Leading coins in this move higher were EOS and Litecoin. EOS jumped from $3.30 to a high of $3.84 before pulling back to $3.70, marking a 12% gain in 24 hours. Litecoin did even better with a surge of about 13%. Technical indicators continue to point toward a recovery this year, which is notably the year previous to the bitcoin mining reward halving – a reoccurring event that has triggered positive price actions in the past. While frequent dumps of large holdings have kept the market under pressure for a while, engagement of whale accounts may now actually be a supportive factor. Over the past 60 days, about $570 million worth of bitcoin have reportedly been bought by the 100 largest BTC wallets. A similar pattern was observed back in December when Ethereum (ETH) whales piled up their stocks. On the one hand, we all appreciate the supportive character this engagement has on prices and the overall sentiment for the market. On the other hand, growing whale accounts are certainly not in the interest of a balanced and well diversified market, given the still limited liquidity.

Switzerland’s SIX stock exchange announced the launch of an Ethereum (ETH) exchanged-traded product. March 5 was the first trading day for the ETP, which is backed by the Swiss company Amun AG. Furthermore, the Zug-based real estate startup Blockimmo processed the first real estate transaction on the blockchain. The property in Baar consists of 18 flats and a restaurant. From the funds raised, CHF 3 million or 20 percent of the property value was registered on a blockchain, and a token was distributed to four investors. It requires exactly such use cases to prove the advantages. The next step is now widespread adoption.

3 Top Ten Comparison

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

Table 2: Data source: Coinmarketcap; change to last week in parentheses

4 Volatility and Correlation Comparison

 

Figure 2: Correlation comparison; Data source: Coinmarketcap

5 ETHBTC 4h Technical Chart Analysis

Figure 3: Data source: Bit1nex; Chartsystem: Tradingview

ETHBTC has been on a wild ride, but closed unchanged for the week.

When we broke through to the downside at around 0.03460 pressure increased, which was probably due to the fact that the lower band of the Ichimoku cloud and the resistance zone converged right there. This triggered more sellers coming out of the woodwork. But again, for some reason we did not see a total collaps, and ETHBTC bounced back quickly right up to the lower band of the Ichimoku cloud. However, the sell-off did leave some scars. The Ichimoku clould turned bearish, and from what we can see right now, the lower band is acting as resistance.

We are currently in a bit of a dilemma. One of two indicators has turned bearish for our altcoin call. The Ichimoku cloud turned bearish, but we are back in the resistance zone. Therefore, we will switch from overweight to neutral for the altcoins versus BTC. It is one of those periods where you better stay on the sidelines and wait until the picture becomes clearer.

ETHBTC chart 4 hours

6 Market Cap Overview

Figure 4: 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.

Source Section 2 Market Analysisvision&

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