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Crypto Broker Weekly Crypto Market Update CW8 by Cointelegraph

Our Crypto Broker Weekly Crypto Market Update, directly from the Crypto Broker trading floor. Our Head of Trading, Simon Tobler, provides extensive insights into the crypto asset market. Together with eToro’s Mati Greenspan, he discussed the question: « Will Bitcoin break 4000 USD? ».

Crypto Broker Weekly Rotation Report CW 07

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.

Should you wish to receive this weekly report by email, you may subscribe below.

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

Let us begin with something quite notable: the positive performance week after week as seen in our comparison overview (Table 1). Most of the coins have performed better compared to last week’s report. Volatility for BTC versus USD has remained subdued. But for some of the altcoins, we have been seeing some life coming back to the market. LTC is the clear leader with an increase of over 26 percent in volatility.

The correlation is spreading out further and we are seeing more and more coins on our 60-day correlation table (Table 2). Even directly against BTC, we now have two coins showing a slight negative correlation. We have not seen that for quite some time. You can also see the widening of the correlation numbers on our graph (Figure 2).

MACD on BTC has finally turned (Figure 4). We are not trending below the midpoint yet, but the crossing has happened. On the other side, we see the MACD of the ranks 2-10 and 11-50 turning the other way, but they, too, are not yet trending above the midpoint. The hesitation is nicely displayed in our advance decline line (last two graphs on Figure 4). The smoothed out line (purple) is still trending below the 0.5 level.

Based on all of our indicators from the correlation to the MACDs, advanced decline line, and the ETHBTC chart, we will shift our overweight BTC position to neutral. We will follow closely the developments of the MACDs and advance decline line this week to see if we can finally shift to overweight altcoins.

2 Market Analysis

Crypto markets traded with a friendlier tone this week and rebounded off the 2019 lows. While the recovery comes as a relief to crypto enthusiasts, markets are certainly not out of the woods yet. However, some signs may be indicators that the market is about to define a bottom. For instance, the patterns observed in Bitfinex for about a month now are reporting bitcoin positions where the longs have gained overhang over the shorts. And this is only one example. Others may be the steadily increasing number of transactions, the rising bitcoin hash rate, and the time until the next bitcoin halving. Current liquidity is certainly not where it should be in a healthy market. While spot market volumes are decreasing since the beginning of the year, CME and CBOE have also reported the lowest bitcoin futures volumes since they launched the products in December of 2017. Lower volumes and depressed prices in the first month of the year is nothing unusual when looking at bitcoin’s history. Much of this, however, used to be attributed to the Chinese lunar new year and less active Chinese traders in the past. As Chinese volumes lost market weight after the ban imposed by the government, things could be different this year and a pick-up in volumes might depend much less on Chinese traders getting back to work. While global volumes are down, bitcoin is experiencing a boom in Venezuela, where local trading volumes have reached a new all-time high amidst massive hyperinflation and an ongoing presidential crisis. Apparently, volatility is a minor issue when people are desperately seeking a quick and convenient safe haven.

On a tech note, Ethereum developers said that the community will again try to execute its upgrade called Constantinople later this month. The hard fork was previously scheduled for mid-January, but was postponed after the discovery of a critical bug in one of the upgrades. SEC commissioner Jackson leaked positive signals in regard to the much anticipated Bitcoin ETF approval and said that the prospect of a Bitcoin ETF is highly likely and that he is confident that either VanEck or Bitwise will satisfy the demands of the SEC. Another remark came from the CEO of International Exchange (ICE) who took a more cautious stance in regards to the launch of their digital asset platform Bakkt and aims at a launch later in 2019. A similar pace can supposedly be expected with SDX, the digital asset project of the Swiss Stock Exchange SIX, and may match the launch of a number of digital asset-offering banks. Despite a chilly crypto winter, this is exactly the kind of infrastructure that is required now and will bring volumes, and hence liquidity, to a whole new level. Infrastructure will doubtlessly be the backbone of the next bull market.

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

The breakout has happened – and, surprisingly, to the upside.

Finally, we have managed to move out of the trading range. To our surprise, we pushed through the upper end of it. It happened with a decent volume and a nice follow through after pushing through the Ichimoku cloud. We finally stopped just below the bigger resistance zone – just below the 0.035 level.

This is now a clear change in trend. We turned bullish on the 4h-charts and on the daily. As we mentioned in our last report, if this happens, we will reduce BTC exposure and rotate into altcoins. There is no rush, however, as we are just getting minor rejections just below that lower band of the resistance zone.

We see this view to be valid as long we can hold the support line of the upper end of the trading range (grey line). This will also converge with the lower end of the Ichimoku cloud.

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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Download Rotation Report here

Technical Analysis Tuesday 12. February 2019

It is TA Tuesday again. Let’s dive right into the charts.

BTC / USD Daily Chart

BTC$ daily chart 

On Friday we saw a spike from the middle of the accumulation zone right to the upper band of it. Additionally the upper band is also nicely converging with the base line (blue) of the Ichimoku cloud. We stayed at around 3600 for a while, but now we are drifting lower.

There was a bit too much excitement for my taste after that 300 USD rally. When looking at the daily chart we have not taken out any significant levels. However, we did not reach any new lows so far, which is positive. Neither did we manage to make any new highs. From a daily chart point of view, we need to trade above the 4250 level. This is just below the minor resistance zone. If we break through that resistance to the upside that would be a clear change in the structure and I will begin to be excited.

For the overall sentiment we will also watch the Ichimoku cloud. If the prices drift further sideways the cloud will act like pressure to the downside. The lower band of the cloud (green) worked especially well as a first resistance level to break and indicate a meaningful up move.

ETH / USD Daily Chart

ETH$ daily chart

A very similar picture to BTC$. After the lows just below 88 USD, we managed to spike higher and stopped just below the resistance zone. Which nicely converged with the Ichimoku cloud.

After Friday’s rally, we also just managed to trade up to the base line (blue) of the Ichimoku cloud and since then we have been drifting lower. What is different here to BTC$ is that ETH$ is currently trading in a high volume price range (yellow and blue bars on the right hand side). There is some serious volume changing hands down here compared to the summer months or even the sell off in November.

Zooming back to the bigger picture we can say as well that we have not made new lows, which is positive but we were also not able to make new highs. 160 USD is the magic level to be taken out, and if you want proper confirmation, the price needs to push into the resistance zone.

LTC / USD Daily Chart


LTC$ daily chart

Our rally forerunner. It performed an impressive rally with high volume out of the accumulation zone, and it just stopped shy of the lower band of the resistance zone.

The structure has turned bullish. LTC$ managed to make new highs when it rallied on Friday (the previous high was 41 USD). Now, it will be crucial for LTC$ to sustain the positive momentum and finally break back into the resistance zone.

Any long positions should have their stop just below 28.50 USD.

Crypto Broker Weekly Crypto Market Update CW6 by Cointelegraph

Our Crypto Broker Weekly Crypto Market Update, directly from the Crypto Broker trading floor. Our Senior Trader, Patrick Heusser provides extensive insights into the crypto asset market. Together with eToro’s Mati Greenspan, he discussed the question: « Could Bitcoin’s price drop below 3000 USD? ».

Crypto Broker Weekly Rotation Report CW 06

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.

Should you wish to receive this weekly report by email, you may subscribe below.

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

Tron (TRX) and BNB are in the spotlight. Tron has been the altcoin darling for quiet some time now. Even though this coin is very volatile, it has shown a nice upward trend since the begining of the year. The last spike to the upside was not driven by fundamentals, but by a derivatives trader on Bitmex that ran into a liquidation of 100 million in TRX contracts, which is worth roughly 2.5 million USD.

Volatility is still grinding lower on most of the coins. Worth mentioning is that BTCUSD 3-month ATM volatility has slowed down with its decreasing trend. Additionally, we are approaching a lower volatility, last seen in November 2018 before the big sell off.

In our correlation table (Table 2), we see a further spread in the numbers. TRX and BNB are now trading at about a 0 correlation versus BTC. Within the top 5 in theh table, the correlation is what we would call « sticky » at close to 1. It is also nicely visualised on our graph in Figure 2.

There are no big changes in our last chart (Figure 4). The MACD analysis still indicates overweighted exposure in BTC, but it is losing some steam. This is probably the effect of ranks 2 to 10 where the MACD is bottoming out, but it does not show any signs of upward strength yet. Altcoins ranked 11 to 50 continue their downward trend after last week’s turn. This is additional confirmation that the prevailing trend is continuing is given the advanced decline line (purple). Both ranking sectors are below the 0.5 level and even the unsmoothed line (grey) is below that level.

Therefore, our conclusion remains the same: keep your exposure overweighted in BTC versus the altcoins.

2 Market Analysis

The bright start to the year did not help to overcome the persistent bearish sentiment that looms over the market. In only a few days we are about to officially witness the longest stretch of continuously declining prices in Bitcoin’s 10 year history. This even exceeds the infamous 2013 – 2015 bitcoin bear market, which spanned 410 days from its highest to lowest price. Many of the altcoins have suffered even more, bringing the total market capitalisation near the $100bn mark again. While projects with enough cash from the boom times have used the calmer times to develop and invest, we see the prolonged crypto winter slowly taking its toll on poorly funded or mismanaged projects. One of the most battered projects recently has been NEM (XEM) where the foundation mismanaged its funds as the bear market took hold and nearly went bankrupt. While they claim to have recovered from this point, they may have lost much trust in the community. If they succeed, it may take them a while to recover, which is a pity for such a promising technology.

Many large institutions are still holding to their optimistic crypto outlook, such as the US exchange CBOE that resubmitted its application to list a bitcoin ETF on one of its trading platforms. Kraken’s latest accomplishments may support such product offerings. The US crypto exchange announced the high-profile, pricey acquisition of Crypto Facilities, an established crypto trading platform that is already regulated by the Financial Conduct Authority (FCA). This is the first exchange of this kind, and it will enable Kraken to offer users spot and futures trading. Binance, the world’s largest crypto exchange by volume, announced with its partnership with Simplex, a licenced financial institution offering online fraud-protected payment processing tools. The partnership makes services such as debit and credit card payments in cryptocurrencies available. As such, Binance users can purchase Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and XRP (XRP) via Visa and MasterCard debit and/or credit cards within 10 – 30 minutes on average. Upcoming block reward adjustments in some of those projects may bring some market activity. LTC will be halving in August of this year and ETH will be reducing its block reward by 33% in February. Block reward reductions are often bullish events. While many market participants claim that such events should be priced into efficient markets, others believe that the events could actually lead to some bullish momentum. Either way jitters will intensify as we approach the halving dates.

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

 

Looks like range trading

ETHBTC is trading in a 6.5 percent wide range. Currently we are sitting right in the middle of that range. The recent lows moved lower to around 0.02980, which we touched twice. The upper band of the range comes in at around 0.03170, which nicely converges with the upper band of the Ichimoku cloud.

The overall trend has not changed, which is clearly displayed by the big red Ichimoku cloud. The market is now consolidating after the fast drop around the end of January. This will give us a clean textbook setup to play.

As the overall trend is down we are looking for trades to shorten the ETHBTC pair or in terms of rotation, move some more altcoins into BTC. But since we are stuck in a range we recommend waiting until there is a breakout to the downside with a daily closing below the recent lows. If the market decides to push the upper end, we would start reducing the BTC exposure versus altcoins but only when a clear breakout to the upside happens. This would also be followed by a daily closing above 0.03170.

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&

More information about and contact details for Crypto Broker AG are here.

Download Rotation Report here

Crypto Broker Weekly Crypto Market Update by Cointelegraph

Our Crypto Broker Weekly Crypto Market Update, directly from the Crypto Broker trading floor. Our Senior Trader, Patrick Heusser provides extensive insights into the crypto asset market. Together with eToro’s Mati Greenspan and Anthony Pompliano from Morgan Creek Digital, he discussed the crypto markets with a focus on volatility, Bitcoin price performance and recent XRP’s price hike.

Crypto Broker Weekly Rotation Report CW 05

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.

Should you wish to receive this weekly report by email, you may subscribe below.

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

When looking at the performance table (Table 1), there are three coins which are more prominent than the others. XRP and TRX are the outperformers of the week with over 4 percent in positive performance versus BTC. For XRP, it is worth mentioning that we have moved up more than 11 percent in the past 24 hours. We have, at the same time, seen XLM declining almost 14 percent versus BTC. Volatility is still under pressure (Table 1 and Figure 1): it is declining across almost all top 10 currencies. BTC versus USD volatility is getting close to the lows we saw in November 2018. Do not get me wrong, absolute numbers are still high compared to any traditional financial asset out there. For all portfolio managers we have good news. Correlation (Table 2 and Figure 2) is still spreading out further. Across the board, we are seeing a declining correlation between the top 10 tokens. And, as mentioned in our last report, there are even some tokens that are negatively correlated to each other. Turning now to our last chart (Figure 4), we are still getting clear signs of weak altcoins versus BTC. The MACD for BTC is still in positive territory (green surface), where the MACD for ranks 2 to 10 is still under pressure (red surface). Also, the MACD for ranks 11 to 50 has cooled off, and has just flipped into negative territory. The advance decline line is also indicating to stay out of altcoins. Especially the smoothed line (purple) keeps printing below the 0.5 line.

2 Market Analysis

After crypto prices have followed a narrow range over the past week, consolidating sideways, we saw another damper at the beginning of the week with markets feeling increased pressure from the bears. Bitcoin hit its lowest level in more than a month as we struggled to overcome some key resistance levels that would have brought a certain relief to the market. Consequently, most altcoins were dragged along, some of them showing up deeply in red. The ongoing crypto winter over the past month has also led to a trend reversal compared to 2017 in terms of bitcoin and cryptocurrencies as a store of value, with investors prioritising traditional safe haven assets such as gold as the world continues to face geopolitical issues. Despite the correlation of traditional equities and cryptocurrencies still showing up near zero, the bear market has left some scars in the traditional world. Chip maker Nvidia had to take a hard hit this week after cutting Q4 sales guidance by $500mln. While the decline in demand for crypto miners was cited as being negative for the company, the real reason for the plunge is attributed to a cooling customer base in the gaming industry. At a time where some of the early movers face increased headwinds, we see others taking the opportunity to enter the space. Kudelski Security founded a Blockchain Security Centre (BSC) with the aim to make the company’s cryptography experience available to the ever-increasing number of Blockchain developers around the globe. Also Fidelity, which administers over $7.2 trillion in client assets, seems to be moving forward with its plans to launch trade execution and custody services for digital assets for institutional investors as early as March.

Litecoin creator Charlie Lee declared that he will focus on making the currency more fungible and private by adding the feature of confidential transactions, which would certainly be a groundbreaking change in the protocol, and, eventually, put some pressure on « big brother » bitcoin. Often discussed is the BitTorrent token (BTT), which finally went on public sale on Monday, and was sold out within minutes. Despite some technical difficulties, roughly 59.8 billion BTT worth $7.2 million found new ownership.

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

 

ETH/BTC took out the recent low

Last week we were calling for lower levels on ETHBTC on the back of a possible break to the downside of the recent low from December ‚€ˆ. The break has happened and we pushed quickly … percent lower before we started to consolidate. Reactions down there were hefty due to the combination of ETHUSD just trading at around USD €€. There is a large liquidation just below the €€ USD mark, which is keeping the market on its toes and sparking sudden moves. One of these sparks pushed ETHBTC back above the recent low line (grey). We would not call it a turnaround just yet, but ETH is de1nitely showing some signs of life at around these levels. Altcoins are still losing against BTC in general, but the momentum is fading. Therefore, we are getting more cautious, and will not increase the weights in BTC. Nevertheless, we are staying overweight in BTC versus underweight in altcoins.

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&

More information about and contact details for Crypto Broker AG are here.

Download Rotation Report here

Crypto Broker Weekly Rotation Report

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.

Should you wish to receive this weekly report by email, you may subscribe below.

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

Finally, the correlation table (see Table 2) is starting to look more meaningful. At least in the top ten rankings, most of the 90 correlation figures have decreased, meaning that they are correlating less to each other. This helps the diversified portfolios out there.

Also worth mentioning is that BNB now correlates negatively as well, alongside TRX.

In the top ten rankings performance was rather positive. Compared to last week, it was actually outstanding. Almost all of the coins show a positive change compared to last week, except for XRP. But having said that, BTC was even stronger, and therefore our rotation call is still performing well. Overall volatility has come off quite significantly. We see double digit losses across most top 10 coins.

You may have noticed on the back of the price actions over the past 3 weeks that we are in a consolidation phase. This is also nicely displayed in our volatility chart (see Figure 1) and the correlation chart (see Figure 2). Especially on the correlation side, it shows that there has been a reallocation or redistribution of tokens, which usually happens when the market is consolidating.

Our main call is still to rotate out of altcoins into BTC. We do admit, though, that the MACD for the « shit coins » (Figure 4) looks positive, and that the smoothed advance decline line is in neutral territory.

 

2 Market Analysis

We have seen another week with interesting developments in many areas of the blockchain industry. This underlines a solid start to a promising 2019. After the first larger price swings last week, the market seems to have found some equilibrium in the short term and is consolidating at levels around a total market cap of $120 bln. The risk, however, remains on the downside. Volumes have not improved yet and the market is required to pick up substantially, ideally above the $4,300 handle in bitcoin terms. Last year made history for being one of the worst years in terms of crypto price development. However, a report published by NY-based SCR shows that bitcoin transactional volume in 2018 actually reached a stunning $3 trillion, outpacing most emerging economy currencies. This is certainly a development we like to see. Blockchain was featured as a disrupting technology in the Tech Trends 2019 report published by Deloitte a few days ago, and it looks like a trend is about to emerge within the financial sector as more banks expand their offering for digital assets. After Vontobel announced crypto custody for institutional investors last week, Swiss private bank Falcon did not wait long to drop the bomb and announce that it has launched direct transfers, custody, and crypto fiat withdrawals of four major cryptocurrencies, namely BTC, ETH, BCH, and LTC, for private banking clients. Yesterday, Wednesday, Dutch bank ABN AMRO also unveiled cryptocurrency storage facilities where customers will be able to store bitcoin and the like in the same online banking environment they use for their day-to-day activities. The number one Swiss central banker, Thomas Jordan, expressed a supportive view in a panel discussion at the World Economic Forum (WEF) in Davos, where he acknowledged blockchain as a very powerful technology, and denied the fact that it could be a threat to monetary policy.

Furthermore, according to CEO Patrick Byrne, Overstock.com’s long awaited security token trading platform (tZero) is scheduled to go live by the end of this week, and, hence, meet the timeline that was given last month. Strong conviction also came from Japan as Tokyo-listed internet group Digital Garage announced Monday that it has launched a new platform, which would allow app development on Blockstream’s inter-exchange settlement network called Liquid. The feature makes use of so-called « atomic swaps », the ability to make cross-blockchain transactions without manually converting assets. In the hope to clear the ETH Constantinople fork debacle, core developers of the Ethereum network have proposed to roll out the much awaited software upgrade in late February.

 

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
Table 2: 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 1: Volatility comparison; Data source: Coinmarketcap
Figure 1: Volatility comparison; Data source: Coinmarketcap
Figure 2: Correlation comparison; Data source: Coinmarketcap
Figure 2: Correlation comparison; Data source: Coinmarketcap

 

5 ETHBTC 4h Technical Chart Analysis

Figure 3: Data source: Bit1nex; Chartsystem: Tradingview
Figure 3: Data source: Bit1nex; Chartsystem: Tradingview

ETH is still looking weak

ETHBTC continued its decline over the past 7 days. We moved closer to the recent low, which, for now, is just 3.7 percent away. Long positions should be on alert mode. We are trading below the red line as mentioned in our last report. To get confirmation, though, we will wait to see where the weekly candle will close. A closing below the red line will increase the chance of pushing down further toward the recent low.

Unfortunately, there is not much to add to the current chart. The structure looks weak and we are in danger of printing a weekly close below the red line. Our call for rotating out of altcoins into BTC still stands. One last comment (or warning) points to the MACD for the « shit coins ». We are still seeing some sign of strength as it trends in bullish territory.

 

6 Market Cap Overview

Figure 4: Market capitalisation overview; Data source: Coinmarketcap
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&

More information about and contact details for Crypto Broker AG are here.

Download this Crypto Broker Weekly Rotation Report as a PDF

Crypto Broker Weekly Rotation Report

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.

Should you wish to receive this weekly report by email, introduced in January 2019, you may subscribe below.

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

We would like to begin by focusing on the correlation matrix on page 2. This is the first time in weeks where we see two tokens showing a negative correlation to each other. TRX and XLM have a correlation of -0.3. The tokens stem from completely different sectors – which makes sense. As we are not doing a sector analysis, we cannot confirm that the two sectors of these coins are also negatively correlated. In general, we see on our correlation chart (on page 3) that a small widening is in process.

In our last report, we mentioned the outstanding performance to the upside of the TRX token. TRX got a good shaking during the past seven days and lost all its gains from the previous week. We have spotted some close followers on the loser table: LTC with -23 percent and ADA with -18 percent. The most volatile token (BCH) remained relatively stable. As a side note, since the middle of December 2018, BCH has shown a volatility against USD of more than 200 percent.

The time has come to call out for rotation trades. The numbers are indicating quite clearly a rotation out of alt coins into bitcoin. Please refer to our MACD charts on page 6, where you can see that bitcoin has turned bullish versus alt coins and the ranks 2 to 10 have turned bearish. The so-called « shit coins » are in neutral territory. Since we have a high disturbance within the sectors of top 10 and 11-50 ranks, which is visible in the advance decline line (in grey) on the chart on page 5, we will solely focus on the smoothed out line (in purple). That line is trending just below the 0.5 level, which indicates that we are seeing a decline for more then half of the coins within the two sectors.

By the way, in case you follow the crypto trading twitter community, you might have been under the impression that the majority of traders are mentioning pumps of alt coins. This is also shown in our MACD chart for the ranks 11 to 50. But do not get fooled by all those pump tweets. There are only a handful of tokens in the « shit coin » sector that are demonstrating some good performances. If you take a look at our broad analysis, you will see that alt coins are looking rather weak right now.

 

2 Market Analysis

After a pleasant start to the new year, crypto hodlers witnessed the first intense moment in 2019 as the short-term overbought cryptomarket sold off heavily on January 10. While there was no obvious fundamental reason behind the sudden drop, it did demonstrate that the low volume market remains vulnerable to short-term corrections and that there is still more time required for a groundbreaking change in sentiment. The short-term trend break put an end to the corrective rally the market had been enjoying since mid-December. Consequently, cryptocurrencies that demonstrated solid gains throughout the past weeks such as Ethereum, Bitcoin Cash, and Litecoin suffered the most. Ethereum’s drop sub $120 enabled XRP to retake the second spot in terms of market cap. With a difference of only about $100 million, these two could remain in a battle for number two for a while. Bitcoin market share remains stable while the number of listed cryptoassets grows nearly on a daily basis.

In addition to the market moves, the year really kicked-off with some interesting developments. After the completion of its first funding round just recently, Bakkt announced an expansion of its risk management, compliance, and treasury operations this week by acquiring Rosenthal Collins Group, a well-respected independent futures commission merchant. But the big news this week was for sure that a Swiss Bank now offers a custody solution for digital assets to financial intermediaries such as banks and asset managers. This certainly strengthens the Swiss crypto industry and may send a wave around the globe. Big crypto exchanges also « don’t strike roots ». Bitfinex introduced trading in RSK Infrastructure Framework (RIF) tokens, which are currently trading below ICO price, and Binance officially launched their GBP/EUR exchange. Key news, which to date haven’t had much effect on the price, was that ETH suffered a set-back as Ethereum Core Developers and the Ethereum Security Community announced in a statement just hours before the scheduled and long awaited Constantinople upgrade that they had decided to postpone the hard fork (again) after security researchers identified a potential vulnerability in one of the software upgrades.

 

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

 

Table 2: 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 1: Volatility comparison; Data source: Coinmarketcap
Figure 1: Volatility comparison; Data source: Coinmarketcap

 

Figure 2: Correlation comparison; Data source: Coinmarketcap
Figure 2: Correlation comparison; Data source: Coinmarketcap

 

5 ETHBTC 4h Technical Chart Analysis

Figure 3: Data source: Bit1nex; Chartsystem: Tradingview
Figure 3: Data source: Bit1nex; Chartsystem: Tradingview

ETH led the way

ETHBTC did not spend a lot of time in the resistance zone as we predicted in our last report. The current structure does not look too healthy. We are only 7 percent away from the recent low. If we break it to the downside, it will send a bearish signal to the market and we can expect to trade lower toward the support zone.

First alarm bells should go off when we trade through the red line, which represents two weekly closings and also corresponds with two rejection points where the market bounced from it.

Our conclusion is that long positions should be very careful and set their stop at around 0.03150 ETHBTC. Our conviction level is not very high for long positions due to the fact that we are already seeing rotation signs on our MACD and advanced decline line chart.

 

6 Market Cap Overview

Figure 4: Market capitalisation overview; Data source: Coinmarketcap
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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