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28 März 2019

Crypto Broker Weekly Rotation Report CW 13

Patrick Heusser

Patrick Heusser

Senior Trader bei Crypto Broker 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

Our call was wrong – altcoins have continued to perform

The warning signs we spotted last week are still evident, but none of them were triggered. ETHBTC is still holding the crucial level of 0.034. The MACD for ranks 2-10 is still suppressed and the smoothed out advanced decline line is in bearish territory, i.e. below 0.5. Nevertheless, performance in the top 10 altcoins is still strong. Additionally, the rankings 11-50 are not cooling off yet. They are holding on to their elevated levels. Correlation between ETH and BTC is still very high. Our correlation matrix shows 0.96 (Table 2).

On the back of the recent developments, we will reverse our call from last week and return to neutral on altcoins.

2 Market Analysis

After some days of consolidation, we have seen momentum turn around again yesterday, Wednesday. The bulls stepped in at around the $3,900 bitcoin support level and took the total market cap up to $140bln again. The leader of the rally, though, was EOS, with an 11 percent pump on some positive comments from Weiss Ratings, while the rest of the market added moderate single digit percentage gains. As the price action continues to show positive signs, we also see infrastructure building up. Institutional crypto trading, portfolio, and risk management platform Caspian announced this week that it has integrated its platform with the futures and options exchange Deribit. Japan is also showing pioneering spirit as another large conglomerate, Yahoo! Japan, enters the crypto market with plans of acquiring a 40 percent stake in BitARG Exchange Tokyo. This now marks the fifth largest Japanese conglomerate besides Bic Camera, Rakuten, SBI Holdings, and GMO that is entering the crypto market. In addition to this, according to an article in the UK newspaper Express, the most popular messaging app WhatsApp is about to promote the ongoing adoption of crypto with a wallet powered by Wuabit. This wallet enables users to send, receive, and trade crypto assets on a platform they are highly familiar with. Once WhatsApp’s integration is complete, Telegram, Facebook Messenger, and Viber are all expected to be next in the pipeline.

Blockchain technology continues to prove its use with luxury brand conglomerate LVMH announcing that it is preparing to launch a blockchain for providing the authenticity of high-priced goods using a code named AURA. The company has apparently established a full-time blockchain team that is working closely with Ethereum design studio ConsenSys and Microsoft Azure. Also, BMW Group Asia, Intel, and Nielsen are reportedly partnering with Tribe, a Singapore government-supported blockchain accelerator with the aim to build an ecosystem „ready for industry 4.0“. These are brilliant developments from industry big wigs, and large steps towards a new world that integrates the many use cases of the blockchain.

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 – the 0.034 defense line is still holding.

ETH does not want to go down without a fight. The trend line is still holding, but time is running out. The symmetrical triangle did not materialise.

We are still cautious with regard to long positions. If we break the bullish trend line, we will be looking at lower levels again that are close to the recent lows.

On the upside, we need to take out the last recent high of 0.03575 to gain some fresh momentum to the upside. The first target at that point would be the upper band of the resistance zone at around 0.0375.

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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