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09 Januar 2020

Crypto Broker Weekly Rotation Report Week 2

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, 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.

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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

Another test for BTC as digital gold

Due to the geopolitical conflict between the US and Iran, there was a BTC rally that resulted in an upmove of over 1,000 points within mere days. Even the resistance line of approx. 8,000 was briefly broken. In general, bigger moves can now be expected on account of the current global political uncertainty.

Altcoins have remained under pressure and are trading around the technical support lines. The levels still need to be confirmed it seems before a recovery is possible. Volatility levels have not weakend and remain high. Active trading in March futures has been monitored where the future basis has steadily increased. Correlation has generally decreased, and MACDs and the advanced decline lines show a slightly different, but still mixed picture. Coins ranked from 10 to 50 touched the low levels and are clearly oversold, whereas the Top Ten coins indicate a neutral scenario. BTC is absolutely overbought compared to the other coins.

In the charts below, you can see the technical analysis for the Alt/Mid/Shit Indices. The overall picture is very mixed, where the support lines in the Shit Index have been clearly broken. Here is our short-term view on support and resistance levels for all three indices:

Alt:     Support 57 / Resistance 64
Mid:   Support 54 / Resistance 59
Shit:   Support 70 / Resistance 77

View the Charts: Altcoin index (4-hour) |  Midcap index (4-hour)  |  Shitcoin index (4-hour)

2 Altcoin Futures Basis Analysis

The focus and concentration of derivatives trading activities has been in the forefront. The overall Future Basis of the March and June contracts has increased within the upmove of the market. In general, more trading positions have been openend, and to date the liquidation of positions has remained rather low.

The three-month future basis has continuously widened and currently represents a high yield. In the next few days it will be interesting to observe if the Future Basis in general will continue to stretch.

Figure 1: Altcoin futures basis overview

 

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 2: Volatility comparison; Data source: Coinmarketcap

 

Figure 3: Correlation comparison; Data source: Coinmarketcap

 

5 ETHBTC 4h Technical Chart Analysis

 

Figure 4: Data source: Bitfinex; Chartsystem: Tradingview

A new year, but no change in sentiment – ETH remains weak vs. BTC

In our last edition, we showed you a long-term daily chart to illustrate where the dotted trendline is coming from. That trendline is still valid and has already been tested in the new year. The rejection came swiftly, and prices moved even lower than what we saw over the winter holidays.\\ \newline
\noindent On account of the recent behaviour, I do not see there having been change in sentiment. As we mentioned in our last report, short positions should switch to alert mode as we near the 0.016 level, which then trigger a sharp counterreaction.

In case we go higher, the level to watch for short positions is 0.019. This is a support/resistance level, and, additionally, it converges with the dotted trendline.

View the charts: ETHBTC 4h chart

6 Market Capitalisation Overview

 

Figure 5: 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.

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