Saturday, June 15, 2024

The Market’s Compass Crypto Candy Sixteen Research

Welcome to this week’s publication of the Market’s Compass Crypto Candy Sixteen Research #116. The Research tracks the technical situation of sixteen of the bigger market cap cryptocurrencies. 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.

Within the spirit of Christmas, this week’s Weblog might be despatched to each free and paid subscribers. I cannot be publishing a Market’s Compass Crypto Candy Sixteen Research for the following two Sundays as I benefit from the Christmas Vacation and New Years celebration with household and mates. The following MC Crypto Candy Sixteen Weblog might be posted on Sunday January seventh. That stated, if there are necessary technical modifications, I’ll submit a brief interim report.

The standout performer of the week, on a number of technical fronts, was Avalanche (AVAX) on an absolute and relative foundation and it ended the week sporting one of the best Technical Rating of the Candy Sixteen. On the index degree the CCi30 Index has held key short-term assist ranges since final Saturday’s intraday excessive. Solely a break of key assist on the 10,030 degree within the Index would recommend a correction of a bigger diploma was unfolding.

The Excel spreadsheet beneath signifies the weekly change within the goal Technical Rating (“TR”) of every particular person Cryptocurrency. The technical rating system is a quantitative strategy that makes use of a number of technical concerns that embrace however should not restricted to development, momentum, measurements of accumulation/distribution and relative power. The TR of every particular person Cryptocurrency can vary from 0 to 50. The first take-away from this unfold sheet must be the development of the person TRs, both the continued enchancment or deterioration, in addition to a change in path. Secondarily, a really low rating can sign an oversold situation and really excessive quantity may be seen as overbought. Thirdly, the weekly TRs are a useful relative power/weak point indicator vs. one another, as well as when the Candy Sixteen Complete 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 and 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’s not your complete “finish recreation”.

*Rankings are calculated as much as the week ending Friday December fifteenth

The SSTTR fell -16.91% to 565 final week from 680.5 for the week ending December eighth wiping out a lot of the earlier weeks +16.52% acquire to 680.5 two weeks in the past. At 680.5 the December eighth studying within the SSTTR was the best degree since I began monitoring The Candy Sixteen Complete Technical Rating in October 2021 and regardless of final week’s pullback the SSTTR stays in overbought territory as might be seen later in immediately’s Substack Weblog. Additionally, as may be seen within the spreadsheet beneath, solely three of the Candy Sixteen registered features in particular person Technical Rankings (“TRs”) vs. the earlier week when 13 registered features of their TRs.

As talked about above, solely three of the Candy Sixteen Cryptocurrencies registered features of their particular person TRs and 13 fell. The typical TR loss acquire was -7.22 versus the earlier week’s common TR acquire of +6.03. Main the sector with increased TRs final week was Avalanche (AVAX) which gained +14 “handles” to 46.5 from 32.5 adopted by Cardano (ADA) which gained +3.5 to 43.5 from 40. 9 of the Candy Sixteen ended the week within the “inexperienced zone” (TRs between 35 and 50) and 7 had been within the “blue zone” (TRs between 15.5 and 34.5). The earlier week ending December eighth, there have been fifteen crypto foreign money TRs within the “inexperienced zone” and there have been one within the “blue zone”. AVX registered the best TR of the Candy Sixteen final week (46.5) and as might be seen later within the Weblog AVX additionally recorded distinctive optimistic relative power and one of the best absolute features over the previous two weeks.

*The CCi30 Index is a registered trademark and was created and is maintained by an impartial workforce of mathematicians, quants and fund managers lead by Igor Rivin. It’s is a rules-based index designed to objectively measure the general development, each 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 may be discovered at CCi30.com).

The Relative Rotation Graph, generally known as RRGs had been developed in 2004-2005 by Julius de Kempenaer. These charts are a novel visualization instrument for relative power evaluation. Chartists can use RRGs to investigate the relative power traits of a number of securities towards a typical benchmark, (on this case the CCi30 Index) and towards one another over any given time interval (within the case beneath, each day because the finish of the earlier week). The facility of RRG is its capability to plot relative efficiency on one graph and present true rotation. All RRGs charts use 4 quadrants to outline the 4 phases of a relative development. The Optuma RRG charts makes use of, From Main (in inexperienced) to Weakening (in yellow) to Lagging (in pink) to Bettering (in blue) and again to Main (in inexperienced). True rotations may be seen as securities transfer from one quadrant to the opposite over time. That is solely a short clarification of learn how to interpret RRG charts. To study extra, see the submit scripts and hyperlinks on the finish of this Weblog.

Common readers will discover that not all sixteen cryptocurrencies are plotted on this week’s RRG Chart. I’ve executed this for readability functions. These of technical curiosity stay.

Avalanche (AVAX) was the standout relative performer final week because it left the Weakening Quadrant and has risen sharply into the Main Quadrant exhibiting extraordinary relative power and relative power momentum. Immediately on its heels, has been Cardano (ADA) though late final week it had begun to roll over however nonetheless it stays elevated within the Main Quadrant. Polkadot (DOT) has moved increased within the Main Quadrant, nevertheless it additionally confirmed some slowing of relative power momentum on Friday. That stated, sooner or later just isn’t a development changer. Cosmos (ATOM) is what I prefer to confer with as a “candy spot” because it has left the Lagging Quadrant and has began to trace into the Main Quadrant. and Solana (SOL) has pushed into the Main Quadrant instantly from the Weakening Quadrant. Ethereum (ETH), Bitcoin (BTC) and Dogecoin (DOGE) have all left the main Quadrant behind and are monitoring decrease.

*Friday December eighth to Friday December fifteenth

Of the 5 absolute gainers final week the star absolute performer was Avalanche (AVAX) up +30.58% including to the opposite optimistic technical options. Chart beneath.

Final week’s absolute features in AVAX added to the earlier week’s 39.11% acquire. MACD continues to trace increased reflecting the optimistic worth momentum and there may be little trace within the Fisher Rework that there’s an impending worth reversal. The underside panel displays the sturdy relative power vs. the CCi30 Index because the begin of November. I’m not ready to argue with these optimistic technical options regardless of the “stretched” nearly parabolic worth motion.

There are eight Technical Situation Components (“TCFs”) that decide particular person TR scores (0-50). Every of those 8, ask goal technical questions (see the spreadsheet posted beneath). If a technical query is optimistic a further level is added to the person TR. Conversely if the technical query is adverse, 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 % of the potential complete. For instance, there are 7 concerns (or questions) within the Each day Momentum Technical Situation Issue (“DMTCF”) of the 16 Cryptocurrencies ETFs (or 7 X 16) for a potential vary of 0-112 if all 16 had fulfilled the DMTCF standards the studying can be 112 or 100%. A DMTCF studying at 85% and above suggests a short-term overbought situation is creating and a studying of 15% and beneath suggests a short-term oversold situation.

On the finish of final week, the DMTCF dropped to a studying of 27.68% or 31 out of 112 factors from the earlier week’s overbought studying of 91.96% or 103 out of 112 factors.

As a affirmation instrument, if all eight TCFs enhance on every week over week foundation, extra of the 16 Cryptocurrencies are enhancing internally on a technical foundation, confirming a broader market transfer increased (consider an advance/decline calculation). Conversely, if extra of the TCFs fall on every week over week foundation, extra of the “Cryptos” are deteriorating on a technical foundation confirming the broader market transfer decrease. Final week seven TCFs fell and one TCF was unchanged.

The Candy Sixteen Complete Technical Rating (“SSTTR”) Indicator is a complete of all 16 Cryptocurrency rankings and may 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 with no commensurate transfer or increased 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 may be little change or a constructing enchancment within the SSTTR a optimistic divergence is registered. That is, in a style, is sort of a conventional A/D Line. As an overbought/oversold indicator: The nearer the SSTTR will get to the 800 degree (all 16 Cryptocurrencies having a TR of fifty) “issues can’t get a lot better technically” and a rising quantity particular person Crypto’s have develop into “stretched” there may be extra of an opportunity of a pullback within the CCi30. On the flip facet 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 exponential transferring common in Purple smooths the risky SSTTR readings and analytically is a greater indicator of development.

*On the suggestion of some of my common readers, I’ve adjusted the chart beneath to higher visualize the extent of the SSTTR and the unfolding worth motion.

Final week the CCi30 Index traded in a large almost 1290-point vary and closed the week off the lows. I view that weekly worth motion as a pause to refresh after the earlier week’s 1,370 acquire and never a worth reversal. The Candy Sixteen Complete Technical Rating (heart panel) has pulled again from the earlier week’s overbought studying, however MACD continues to trace increased above its sign line. I’m watching key twin assist the Median Line (gold dotted line) of the Commonplace Pitchfork (gold P1 via P3) and the Higher Warning Line (pink dashed line) of the Schiff Modified Pitchfork (pink P1 via P3) a break of which might trace that the primary measurable correction because the late October worth lows could also be unfolding.

Final Saturday the CCi30 Index rose to one of the best degree (P3) since breaking out of the multi-month basing sample. On Monday morning there was a pointy pull again in worth throughout the crypto world that was what some say was a big deleveraging of lengthy positions. Extra necessary than a guess at what precipitated the sell-off is the actual fact the Kijun Plot (inexperienced line) and the Median Line (purple dotted line) of the newly drawn Commonplace Pitchfork (purple P1 via P3) held as assist. Two technical considerations are that MACD didn’t but verify the brand new worth highs and the Fisher Rework is monitoring decrease beneath its sign line. The Candy Sixteen Each day Momentum / Breadth Oscillator has pulled again from overbought territory. Solely a break of assist on the 10,030 degree would recommend {that a} correction of a bigger diploma is unfolding.

Charts are courtesy of Optuma whose charting software program permits anybody to visualise any information together with my Goal Technical Rankings. Cryptocurrency worth information is courtesy of Kraken.

The next hyperlinks are an introduction and an in depth tutorial on RRG Charts…

https://www.optuma.com/movies/introduction-to-rrg/

https://www.optuma.com/movies/optuma-webinar-2-rrgs/

To obtain a 30-day trial of Optuma charting software program go to…

www.optuma.com/TMC.

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