Welcome to this week’s publication of the Market’s Compass Weekly Crypto Candy Sixteen Research. The Research tracks the technical situation of sixteen of the bigger market cap cryptocurrencies. I’ve compiled the historic quantitative goal technical rating knowledge and secondary technical indicators together with the Candy Sixteen Whole Technical Rankings and Weekly Common Technical Rating again to October of 2021. Each week the Research will spotlight the technical modifications of the 16 cryptocurrencies that I monitor in addition to particular person highlights on noteworthy strikes in sure cryptocurrencies and Indexes.
The Excel spreadsheet beneath signifies the weekly change within the goal Technical Rating (“TR”) of every particular person Cryptocurrency. The technical rating or scoring system is a completely quantitative strategy that makes use of a number of technical issues that embrace however aren’t restricted to pattern, momentum, measurements of accumulation/distribution and relative power. If a person Cryptocurrency’s technical situation improves the Technical Rating (“TR”) rises, and conversely, if the technical situation continues to deteriorate, the TR falls. The TR of every particular person Cryptocurrency can vary from 0 to 50. The spreadsheet beneath additionally acts as a “warmth map” in that, cryptocurrencies with a TR within the vary of 1 to fifteen are highlighted in crimson, 15.5 to 34.5 are famous in blue and TRs within the vary of 35 to 50 are in inexperienced. The first take-away from this unfold sheet needs to be the pattern of the person TRs, both the continued enchancment or deterioration, in addition to a change in path. A sustained pattern change must unfold within the particular person TRs for it to be actionable. Secondarily a really low rating can sign an oversold situation and conversely a continued very excessive quantity could be seen as an overbought situation however, as we all know, over bought circumstances can proceed at apace and overbought securities which have exhibited extraordinary momentum can simply grow to be extra overbought. Thirdly, the weekly TRs are a helpful relative power/weak point indicator vs. one another, as well as when the Candy Sixteen Whole Technical Rating (“SSTTR”), that has a variety of 0 to 800, is close to the underside of its vary and a person cryptocurrency has a TR that is still elevated it speaks to relative power. Conversely if the SSTTR is close to the highest of its current vary and a person cryptocurrency has a TR that is still mired at low ranges it speaks to relative weak point. Lastly I view the target Technical Rankings as a place to begin in my evaluation and it isn’t the whole “finish recreation”.
This Week’s and 10 Week Trailing Technical Rankings of the 16 Particular person Cryptocurrencies*
*Rankings are calculated as much as the week ending Friday June ninth
The Candy Sixteen Whole Technical Rating or SSTTR fell sharply final week from the earlier week. The SSTTR fell to 206 from 374, marking a drop of -44.92%. That stage, (206) was the bottom stage registered since December of final yr and largest WoW drop since within the SSTTR since November eleventh when it fell -53.47% from the earlier week. That stated, apart from the sharp WoW deterioration in all however one of many Candy Sixteen, there was a sluggish worsening of the 16 particular person TRs because the center of April as revealed by the “warmth map” function embedded within the unfold sheet.
On a Wow foundation, all however one Cryptocurrency registered contractions of their goal TRs and just one marked a small acquire, that was Ripple (XRP). The typical TR loss was -10.5. Solely XRP ended the week within the “inexperienced zone” (TR of between 35 and 50), 5 had been within the “blue zone” (TRs between 15.5 and 34.5) and ten ended the week within the “crimson zone” (TRs between 1 and 15). The earlier week there have been three within the “inexperienced zone”, seven had been within the “blue zone” and 6 had been within the “crimson zone”. The most important drop in TR was registered by Cardano (ADA) whose TR fell by -23.5 “handles” to 10 from 33.5. The decrease panel within the chart beneath reminds one which sharp drops and advances aren’t unusual within the TR of ADA however as shall be seen later within the Weblog, ADA was down -21.92% Friday to Friday and it’s shortly approaching the December lows.
Measurements of Relative Energy and Weak point within the Candy Sixteen vs. The CCi30 Index*.
*The CCi30 Index is a registered trademark and was created and is maintained by an unbiased group of mathematicians, quants and fund managers lead by Igor Rivin. It’s is a rules-based index designed to objectively measure the general progress, day by day and long-term motion of the blockchain sector. It does so by indexing the 30 largest cryptocurrencies by market capitalization, excluding secure cash (extra particulars could be discovered at CCi30.com).
“What’s in Your Pockets?”
Even in a nasty week that noticed the CCi30 Index drop -7.04% and my Candy Sixteen Index fall -17.38% there have been at the least two cryptocurrencies which have continued to outperform on a relative foundation. Each Ethereum (ETH) and Ripple (XRP) have continued to the place “to be” vs. both ADA or Binance (BNB) which has troubles of its personal.
Seven Day Absolute % Worth Change*
* Friday June 2nd to Friday June ninth
The Technical Situation Issue modifications because the week ending Might nineteenth
There are eight Technical Situation Elements (“TCFs”) that decide particular person TR scores (0-50). Every of those 8, ask goal technical questions (see the spreadsheet posted above). If a technical query is optimistic a further level is added to the person TR. Conversely if the technical query is unfavorable, it receives a “0”. A number of TCFs carry extra weight than the others such because the Weekly Pattern Issue and the Weekly Momentum Consider compiling every particular person TR of every of the 16 Cryptocurrencies. Due to that, the excel sheet above calculates every issue’s weekly studying as a p.c of the attainable whole. For instance, there are 7 issues (or questions) within the Day by day Momentum Technical Situation Issue (“DMTCF”) of the 16 Cryptocurrencies ETFs (or 7 X 16) for a attainable vary of 0-112 if all 16 had fulfilled the DMTCF standards the studying could be 112 or 100%.
Two weeks in the past, for the week ending June 2nd, 91 of a attainable whole of 112 optimistic factors or a 81.25% studying within the DMTCF was registered. Final week the DMTCF fell sharply to fifteen.18%, approaching an oversold situation.
As a affirmation instrument, if all eight TCFs enhance on per week over week foundation, extra of the 16 Cryptocurrencies are bettering internally on a technical foundation, confirming a broader market transfer greater (consider an advance/decline calculation). Conversely, if extra of the TCFs fall on per week over week foundation, extra of the “Cryptos” are deteriorating on a technical foundation confirming the broader market transfer decrease. Final week all eight TCFs fell confirming the broad primarily based weak point within the Crypto market.
The CCi30 Index with This Week’s Candy Sixteen Whole Technical Rating “SSTTR” Overlaid
The Candy Sixteen Whole Technical Rating (“SSTTR”) Indicator is a complete of all 16 Cryptocurrency rankings and could be checked out as a affirmation/divergence indicator in addition to an overbought / oversold indicator. As a affirmation/divergence instrument: If the broader market as measured by the CCi30 Index continues to rally and not using a commensurate transfer or greater transfer within the SSTTR the continued rally within the CCi30 Index turns into more and more in jeopardy. Conversely, if the CCi30 Index continues to print decrease lows and there’s little change or a constructing enchancment within the SSTTR a optimistic divergence is registered. That is, in a vogue, is sort of a conventional A/D Line. As an overbought/oversold indicator: The nearer the SSTTR will get to the 800 stage (all 16 Cryptocurrencies having a TR of fifty) “issues can’t get significantly better technically” and a rising quantity particular person Crypto’s have grow to be “stretched” there’s extra of an opportunity of a pullback within the CCi30. On the flip aspect the nearer to an excessive low “issues can’t get a lot worse technically” and a rising variety of Crypto’s are “washed out technically” and an oversold rally or measurable low is nearer to being in place. The 13-week shifting common in Pink smooths the unstable SSTTR readings and analytically is a greater indicator of pattern.
In live performance with the CCi30 Index breaking help on the Decrease Parallel (stable gold line highlighted by the yellow circle) of the Schiff Modified Pitchfork (gold P1 via P3), the SSTTR fell to its lowest stage since final December and is approaching oversold territory. That worth drop gave delivery to a second Pitchfork. In our three half sequence on Median Line Evaluation or Andrews Pitchfork, my colleague Kyle Crystal and I coined this as a “Dueling Pitchforks”. The newly drawn second Pitchfork (purple P1 via P3) capped a rally try previous to final weeks worth break. MACD displays the lack of upside worth momentum because it has fallen beneath its sign line and is re-entering unfavorable territory. Common readers of the Market’s Compass Crypto Candy Sixteen Research know that I’ve thought-about the worth motion in Index as a base constructing course of. Regardless of final weeks break decrease that technical thesis stays unchanged and solely a break of the worth swing low at 6,580 adopted by a break of worth help at gold P1 would have me rethink that technical idea.
The CCi30 Index Weekly Cloud Mannequin with the Common Candy Sixteen Technical Rating (ASSTR)*
*The Common Candy Sixteen Technical Rating is the typical of the person TRs of the sixteen cryptocurrencies we monitor on the finish of every week.
On the finish of final week the CCi300 Index was teetering on help afforded by the Kijun Plot (inexperienced line) and the underside of the Cloud mannequin. The ASSTR has fallen to the bottom stage because the flip of the yr and the shorter-term 9-Week SMA is about to cross beneath the longer-term 45-Week EMA. That stated when the ASSTR reaches a stage of 15 or beneath it suggests an oversold situation is creating and a bounce in worth can happen.
As could be seen within the Day by day line chart of of the Candy Sixteen Index beneath, help on the Median Line (crimson dotted line) of the Normal Pitchfork (crimson P1 via P3) is in jeopardy of being violated. Each MACD and my Candy Sixteen Day by day Momentum / Breadth Oscillator are starting to grow to be oversold however there has but to be a touch of a optimistic a flip. Solely then can we are saying a counter pattern rally is unfolding.
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