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21 November 2019

Crypto Broker Weekly Rotation Report Week 47

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.

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

A classic „went long at the top“ call.

All our indicators have pointed to further strength in the altcoin market. But the market decided to do a sharp correction. The rather lagging indicators such as our MACD and advanced decline line are still pointing in favour of altcoins.

We see a similar picture on the three charts below. The alt index has lost the most compared to the Mid and Shit. But all charts are still in a bullish set-up, either trading in the Ichimoku cloud, or above the upper band. All clouds are still bullish.

For the time being, we are holding on to our position to be overweight in altcoins versus bitcoin.

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

 

2 Altcoin Futures Basis Analysis

The BTC$ basis is staying stubbornly high even though we are getting closer to the Dec19 maturity every day. Some of the altcoin future bases have contracted further and are nearing more neutral levels.

However, the backend basis Mar20 for BTC$ is moving wider. The market seems to be pricing in a price increase at around the halving event, which will occur in May 2020. The option market does the same when you look at the 25 delta skew (we mentioned it in our market commentary yesterday).

In roughly three weeks we will see the new altcoin futures on the board, which should spark some trading interest for everyone who needs to do their rolls.

Figure 1: Altcoin futures basis overview

 

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: 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

ETHBTC is moving a little slower than expected

We are grinding higher, but failed to take out my initial target of 0.022. Nevertheless, the bullish set-up is still in place with the price hovering nicely above the Ichimoku cloud.

The trading plan remains the same. Stay long for a target of 0.026 with the stop loss just below 0.01875.

The trading desk is running that position with an entry at 0.021.

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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