Welcome to this week’s publication of the Market’s Compass Crypto Candy Sixteen Research #126. The Research tracks the technical situation of sixteen of the bigger market cap cryptocurrencies. Each week the Research will spotlight the technical adjustments of the 16 cryptocurrencies that I observe in addition to highlights on noteworthy strikes in particular person Cryptocurrencies and Indexes.
The Excel spreadsheet under 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 embody however aren’t restricted to development, momentum, measurements of accumulation/distribution and relative energy. The TR of every particular person Cryptocurrency can vary from 0 to 50. The first take-away from this unfold sheet needs to 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 will be seen as overbought. Thirdly, the weekly TRs are a precious relative energy/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 continues to be elevated it speaks to relative energy and if the SSTTR is close to the highest of its latest vary and a person cryptocurrency has a TR that continues to be 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 never the complete “finish sport”.
*Rankings are calculated as much as the week ending Friday February twenty third
The SSTTR fell -9.30% to 561 final week from 618.5 for the week ending February sixteenth which was a 13.80% acquire in SSTTR from the week earlier than that. For the fifth week in a row Tron’s (TRX) TR was 49 or 50.
Solely one of many Candy Sixteen Cryptocurrencies registered positive aspects of their particular person TRs, three had been unchanged and twelve fell. The one Candy Sixteen TR that gained was TRX which solely gained by one deal with however nonetheless it rose to an ideal Technical Rating of fifty. The typical TR loss was -3.49, which was a reversal of the earlier week’s common TR acquire of +4.69. Ten of the Candy Sixteen ended the week within the “inexperienced zone” (TRs between 35 and 50), 5 had been within the “blue zone” (TRs between 15.5 and 34.5) and one was within the “purple zone” (TRs between 0 and 15). The earlier week ending February sixteenth, there have been eleven crypto foreign money TRs within the “inexperienced zone”, there have been 5 within the “blue zone”.
*The CCi30 Index is a registered trademark and was created and is maintained by an impartial staff of mathematicians, quants and fund managers lead by Igor Rivin. It’s is a rules-based index designed to objectively measure the general progress, 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 will 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 singular visualization device for relative energy evaluation. Chartists can use RRGs to research the relative energy tendencies of a number of securities in opposition to a typical benchmark, (on this case the CCi30 Index) and in opposition to one another over any given time interval (within the case under, each day for the reason that finish of the earlier week). The ability of RRG is its capacity 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 Enhancing (in blue) and again to Main (in inexperienced). True rotations will be seen as securities transfer from one quadrant to the opposite over time. That is solely a quick rationalization of interpret RRG charts. To study extra, see the put up scripts and hyperlinks on the finish of this Weblog.
Not all sixteen cryptocurrencies are plotted on this RRG Chart. I’ve performed this for readability functions. These of technical curiosity stay.
The standout relative energy performer late final week versus the CCi30 Index over the previous seven buying and selling days was Uniswap (UNI). Though it was already within the Main Quadrant it took off increased on Friday (extra on that later within the Weblog). Binance (BNB) rose through the second half of the week gaining relative energy momentum by rising from the Lagging Quadrant by the Enhancing Quadrant and into the Main Quadrant. Solana (SOL), Avalanche (AVX) and ChainLink (LINK) all are monitoring decrease within the Lagging Quadrant leaving the Weakening Quadrant behind. Tron (TRX) has performed an entire flip from the Weakening Quadrant into the Lagging Quadrant and getting into the Main Quadrant on Friday.
*Friday February sixteenth to Friday February twenty third.
9 of the Candy Sixteen registered absolute positive aspects final week and 7 misplaced floor. The seven-day common absolute acquire was +2.25% including to the week earlier than +7.31% common absolute acquire. The typical absolute acquire of the Candy Sixteen Crypto Currencies on the week would have been +1.56% if not for the 13.97% acquire in Uniswap (UNI). The earlier week fifteen had been up on an absolute foundation and one misplaced solely -0.03%, that was Litecoin (LTC).
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 under). If a technical query is constructive an extra level is added to the person TR. Conversely if the technical query is unfavourable, it receives a “0”. Just a few TCFs carry extra weight than the others, such because the Weekly Development Issue and the Weekly Momentum Think about compiling every particular person TR of every of the 16 Cryptocurrencies. Due to that, the excel sheet under calculates every issue’s weekly studying as a p.c of the attainable whole. 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 attainable 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 under suggests a short-term oversold situation.
On the finish of final week, the DMTCF fell to 65.18% or 73 from a a nearing overbought studying of 87.50% or 98 out of 112 factors the earlier week.
As a affirmation device, 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 just one TCF rose and 7 fell.
The Candy Sixteen Whole Technical Rating (“SSTTR”) Indicator is a complete of all 16 Cryptocurrency rankings and will be checked out as a affirmation/divergence indicator in addition to an overbought / oversold indicator. As a affirmation/divergence device: If the broader market as measured by the CCi30 Index continues to rally with out a 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 constructive divergence is registered. That is, in a trend, 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 significantly better technically” and a rising quantity particular person Crypto’s have grow to be “stretched” there may be 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 exponential transferring common in Pink smooths the unstable SSTTR readings and analytically is a greater indicator of development.
The Higher Parallel (stable violet line) of the Normal Pitchfork (violet P1 by P3) has continued to cap the extension of the rally within the CCi30 Index however MACD displays the continuation of upside value momentum. The Candy Sixteen Whole Technical Rating (“SSTTR”) has pulled again from close to overbought territory.
*The Common Candy Sixteen Technical Rating is the common of the person TRs of the sixteen cryptocurrencies we observe on the finish of every week.
The Common Candy Sixteen Technical Rating fell again to 35.06 from 38.66 however has remained above its 9-week Exponential Transferring Common (purple line) and the 45-week Exponential Transferring Common (blue line). My solely concern is that CCi30 Index stays stretched as will be seen by the gap between final week’s closing value and the Kijun Plot (inexperienced line) which is the midpoint of the best excessive and lowest low over the previous 26 weeks.
The CCi30 Index first encountered resistance on the Higher Parallel (stable gold line) of the Schiff Modified Pitchfork (gold P1 by P3) every week in the past final Thursday. On a each day closing foundation, it has continued to impede a continuation of the rally from the February seventh low. MACD has began to roll over and the Fisher Rework just isn’t signaling an emanate flip within the Index. The Candy Sixteen Each day Momentum / Breadth Oscillator (decrease panel) has labored off a lot of the overbought situation and is monitoring decrease and is approaching oversold territory that has led to rallies up to now however first I have to see the 9-day easy transferring common (purple line) to show up above the 45-day exponential transferring common (blue line) to declare that the sideways value correction has run its course.
*Contains Saturday February twenty fourth
Charts are courtesy of Optuma whose charting software program permits anybody to visualise any knowledge together with my Goal Technical Rankings. Cryptocurrency value knowledge 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…
