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14 novembre 2019

Crypto Broker Weekly Rotation Report Week 46

Patrick Heusser

Patrick Heusser

Senior 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 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

Rotation has begun

Pretty much every indicator in our report is now bullish on altcoins. The future basis shows slightly more demand for altcoins compared to bitcoin. We have a bullish set-up on the ETHBTC 4h chart. The correlation chart is still showing some diversification, and our MACDs have turned bearish on bitcoin and bullish on the rankings 2 to 10 and 11 to 50.

The clearest picture can be seen on the three charts below. The three indexes show gains versus bitcoin between 4% and 8%. Especially the Mid Index is having a very good run.

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

 

2 Altcoin Futures Basis Analysis

The overstretched basis in BTC$ has started to come back a bit. Across the different exchanges we saw an average move of about 0.5%. The basis was triggered by the price move lower last Friday.

Most of the altcoins basis followed with roughly the same magnitude.

Nevertheless, most of the altcoins were able to outperform versus bitcoin. As we are getting closer to the expiry of the December contract, there is another factor gaining in significance: time decay. The December future price must converge to the spot price at expiry. Therefore, the basis has a natural drag to move tighter as we approach the fixing date of the December contract, which is Dec 27, 2019.

The most interesting time on the basis trading front will come when the next contract (March 2019) is listed on the various exchanges. It will give us an idea what the market is pricing in for the USD shortage and upcoming demand.

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

The bulls are in control

Every bearish indicator was taken out over the past seven trading days. We broke to the upside on our support/resistance flip line at 0.002072 (red line). Additionally, we went straight through the Ichimoku cloud and stayed above it. This resulted in a flipping of the cloud from bearish to bullish.

The dotted line is the extension of the large ascending triangle, which we broke a few months ago to the downside. This line might work as another resistance, which comes in at around 0.02150.

To give you a clearer picture, we have added the daily chart link below. The daily Ichimoku cloud started to turn bullish just recently and the upper end of the cloud comes in at around 0.022. This level also marks the last larger liquidity pool until we reach 0.026. Therefore, I expect the pair to move swiftly in the event that we break 0.022 to the upside, with an initial target of 0.025.

View the charts: ETHBTC 4h chart | ETHBTC 1-day 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.

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Download the Rotation Report as a PDF here.

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