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12 September 2019

Crypto Broker Weekly Rotation Report Week 37

Simon Tobler

Simon Tobler

Head of Trading at Crypto Broker AG

About the author

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

It was a good week for altcoins.

With bitcoin moving sideways with a slightly negative touch, we have seen some nice outperformance in most of the larger altcoins.

This is most obviously seen in ETHBTC, which recovered about 11 percent from its low a week ago. For the last couple of days, we have also seen some quite impressive buying flow going through in ETHUSD on several cash exchanges. Someone is picking up ETH in decent amounts….

Realised volatility is under pressure across all coins and the implied volatility in BTCUSD and ETHUSD options are also on multi-week lows. My guess is that we will see a larger move as soon as bitcoin breaks out of the 9k to 11k range.

The correlations are dropping, but only marginally. There is no change in the market cap, with bitcoin in a slowing uptrend, and altcoins in a slowing downtrend.

The altcoin basis has not moved much compared to last week’s levels and they are still negative versus bitcoin.

 

2 Altcoin Futures Basis Analysis

BTCUSD basis has been quite stable over the last week with the September contract rolling down slowly into expiry.

The altcoin basis versus bitcoin also has not changed much. If anything, we see Litecoin under pressure and some outperformance in ETHBTC.

Some nice disparity can be seen in the 3 FTX altcoin futures. Whereas the altcoin index managed to move sideways, the smaller midcap and shitcoin indices are still in a downtrend and just sitting on their lows, with no attempt to change their direction.

View the Charts: Altcoin index (4h)   |   Midcap index (4h)   |   Shitcoin index (4h).

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

 

Quite a change: we have experienced a week of altcoin outperformance.

It has been quite a nice recovery in ETHBTC, bringing the pair just back to its breakout level at 0.018, which is now acting as resistance. Together with the upper band of the Ichimoku cloud and the high volume zone between 0.018 and 0.019, this should limit further advances at least for some time.

For further advances in ETHBTC, and with it in the altcoin market in general, I would like to see some consolidation around 0.017 and ultimately fresh highs above 0.019 and 0.02.

In the big picture, we are still not out of the woods as long as we stay below 0.025 and a move down to 0.01 is still on the table.

 

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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