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11 avril 2019

Crypto Broker Weekly Rotation Report CW 15

Patrick Heusser

Patrick Heusser

Trader chez Crypto Broker AG

A propos de l'auteur

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 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

More weakness is entering the altcoin market.

We saw some profit-taking last week across the 2 – 10 and also the 11 – 50 rankings. TRX and EOS were the only coins able to gain against BTC. Chances are that there will be some more profit-taking over the next few days. Volatility is still depressed and, in our view, too low. We see good chances that volatility will spike higher over the next few weeks.

Correlation is still very high. The big mover was TRX, which moved from a negative correlation straight up to the others and settled there at around 0.8.

At least on the MACD and advance decline line analysis, we have a clearer picture. Rankings 11 – 50 are turning bearish. MACD is confirmed and the advance decline line is comfortably below the 0.5 line. Rankings 2 – 10 are not showing their hands yet, but on the advance decline line we are having bearish indications. Therefore, we are changing our call to overweight BTC against altcoins.

 

2 Market Analysis

Bitcoin and global crypto market capitalisation has managed to hold on to the recent gains and have formed a solid uptrend, with bitcoin setting a base above $5,000. We should not forget, however, that the risk for a short-term dip remains elevated after an almost 30 percent rise. It currently looks like the $5,000 level is continuing to attract fresh buyers and has, therefore, transformed into a crucial support line. The move to fresh 2019 highs after more than a year-long bear market has recaptured the attention of investors and also sparked the interest of mass media again. Google Trends has seen the popularity of the search term « bitcoin » spike as the market started to show signs of life. However, rather than transforming itself into a FOMO driven, highly volatile instrument for quick wins, we deem it as extremely positive that the market has stabilised and calmed down again after the latest push. This will help infrastructure and the ecosystem continue to build and take the next needed important steps. A report issued by Diar showed that demand for institutional Bitcoin products, such as CME and CBOE Futures, has steadily grown since the beginning of the year. Particularly the last seven days have shown very good volumes, and this week CME Bitcoin Futures reached record volumes. This is in line with the latest announcement by Bitfinex, one of the world’s largest crypto exchanges, which stated that it will remove the $10,000 minimum equity requirement for new account openings. This is due to them noticing an increasing demand for this. Since inception of the capital hurdle, Bitfinex has redesigned its support centre, created a new Know Your Client (KYC) portal, and started offering sentiment analysis. Also, Binance recently announced expansion plans for a Singapore-based platform with a fiat-to-crypto exchange that supports the Singaporean Dollar (SGD) and thus strengthens its international footprint.

Japan continues to be on the forefront of development with Mitsubishi UFJ Financial Group (MUFG), notably the fifth largest bank in the world, saying that it is set to launch its own stable coin later on this year. The asset is designed with a focus on currency functionality, with customers to download an app that will automatically convert their bank deposits into the stable coin. Another step towards mass adoption comes from the EU as it has officially launched the International Association of Trusted Blockchain Applications (INATBA) with IBM, Accenture, and Deutsche Telekom among the 100-plus members to have signed the association’s charter.

 

3 Top Ten Comparison

 

4 Volatility and Correlation Comparison

 

5 ETHBTC 4h Technical Chart Analysis

A proper retest of the broken trend line.

We called the retest of the trend line too early. It looks like it happened over the past few days. After the retest, we moved back down again as expected. Funnily enough, we are now right back to last week’s level.

The chart does not look healthy. Therefore, we will stick to our view that the probabilities are skewed to the downside. Similar to our report from last week, we are targeting the 0.03000 level.

We need, however, to change the invalidation level. If we move above 0.03750, the bearish sentiment will be reversed.

 

6 Market Cap Overview

 

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 for Section 2 Market Analysisvision&

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