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12 December 2019

Crypto Broker Weekly Rotation Report Week 50

Patrick Heusser

Patrick Heusser

Senior Trader 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

Pre-holiday range trading

The overall market has moved lower towards the support lines. Aside from some attempts to break through the resistances towards year end, the sentiment still seems to be rather indecisive. As long as there is no clear direction, it is recommended that you stay on the sidelines, and wait for the breakout to the downside or upside.

The slightly negative indicators in altcoins have proven to be correct. Volatility still remains high as there is a good chance of a breakout, either through the technical support or the resistance. Additional factors to consider are the fact that the end of the year is near and that rollover transactions in the future contracts are ongoing and upcoming. Open interest in, e.g. BTC futures & option contracts have remained surprisingly stable so far. The future basis towards spot has not changed dramatically, and larger moves are to be expected. Overall correlation traded in a stable and high environment. MACDs and the advanced decline lines have remained similar to last week, with bitcoin and the Top Ten coins being neutral. Coins ranked from 10 to 50 are still indicating a negative scenario.

In the charts below, you can follow the technical analysis in Alt/Mid/Shit Indices. Overall, the bigger picture indices tend to be bearish. Please find our short-term opinion on support and resistance levels in all three indices.

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

2 Altcoin Futures Basis Analysis

The situation two weeks before the (Dec19) expiry has stayed very stable in terms of traded volume, open interest in derivatives contracts, and the traded future basis.

New (Mar20) futures contracts in altcoins have already been issued on one derivatives exchange and more will be released by Friday the 13th at the latest.

It is a matter of time and positioning of market participants for the future basis to trade at fair value.

Figure 1: Altcoin futures basis overview

 

3 Top Ten Comparison

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

 

Table 1: 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

ETH turnover in favour of BTC

ETH was generally very well supported by some representative buying orders almost throughout the entire week. Yesterday afternoon, December 11th, a gigantic volume of 700k ETH pushed down the market 2-3% within 10 minutes.

It traded for a longer period over the level of 0,0270, which nearly convinced us to put in a long position. Unfortunately, we touched the lower levels again with a registered massive traded volume. The red line still indicates a support/resistance flip line in combination with the upper band of the Ichimoku cloud, plus a high volume price range.

The Ichimoku cloud will continue to press on the price. Therefore, we can expect a sideways to lower market for the next few days. The level to watch on the downside is 0.01950.

View the chart: 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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