Welcome to this week’s publication of the Market’s Compass Crypto Candy Sixteen Examine. The Examine tracks the technical situation of sixteen of the bigger market cap cryptocurrencies. I’ve compiled the historic quantitative goal technical rating information and secondary technical indicators together with the Candy Sixteen Complete 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 observe in addition to particular person highlights on noteworthy strikes in sure 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 or scoring system is a completely quantitative strategy that makes use of a number of technical concerns that embrace however usually are not 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 under additionally acts as a “warmth map” in that, cryptocurrencies with a TR within the vary of 1 to fifteen are highlighted in pink, 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 must be the pattern of the person TRs, both the continued enchancment or deterioration, in addition to a change in route. 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 may be considered as an overbought situation however, as we all know, over bought situations can proceed at apace and overbought securities which have exhibited extraordinary momentum can simply turn out to be extra overbought. Thirdly, the weekly TRs are a beneficial relative power/weak point indicator vs. one another, as well as when the Candy Sixteen Complete Technical Rating (“SSTTR”), that has a spread 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 power. Conversely 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 it isn’t the whole “finish sport”.
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 September 1st
The SSTTR fell to 167 from the earlier weeks 200 studying. Final week’s studying within the SSTTR was the bottom studying because the week ending June sixteenth at 157.5.
On per week over week foundation six cryptocurrencies registered positive factors of their Technical Rankings one was unchanged and 9 fell. The common Technical Rating loss was -2.06. Three of the Candy Sixteen ended the week within the “blue zone” (TRs between 15.5 and 34.5) and 13 ended the week within the “pink zone” (TRs between 1 and 15). The earlier week there have been 4 of the Candy Sixteen within the “blue zone” and twelve had been within the “pink zone”. Tron (TRX) and Steller (XLM) dropped essentially the most “handles” (-10 and -8 respectively) however each remained within the “blue zone”.
Relative Energy and Weak spot within the Candy Sixteen vs. The CCi30 Index* using a Relative Rotation Graph
*The CCi30 Index is a registered trademark and was created and is maintained by an impartial 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, every day and long-term motion of the blockchain sector. It does so by indexing the 30 largest cryptocurrencies by market capitalization, excluding steady 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 singular visualization device for relative power evaluation. Chartists can use RRGs to research the relative power traits of a number of securities towards a standard benchmark, (on this case the CCi30 Index) and towards one another over any given time interval (within the case under, every day because the 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 pattern. 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 may be seen as securities transfer from one quadrant to the opposite over time. That is solely a short rationalization of methods to interpret RRG charts. To be taught extra, see the put up scripts and hyperlinks on the finish of this Weblog.
In final week’s Crypto Candy Sixteen Examine (#100) I introduced consideration to TRON (TRX) which was monitoring increased within the Main Quadrant. It has since “rolled over” and is monitoring decrease and is getting into the Weakening Quadrant. Stellar (XLM) additionally has additionally rolled over earlier than reaching Main Quadrant. I’m intently watching Litecoin (LTC) and Ripple (XRP). Each are in what I wish to discuss with because the Enhancing Quadrant “candy spot”, however the relative power momentum is slowing (they’re beginning to observe sideways) and that’s causeing me to mood my enthusiasm. Dogecoin (DOGE) is beginning to present indicators of life because it tracks increased within the Enhancing Quadrant.
Seven Day Absolute % Worth Change*
*Friday August twenty fifth to Friday September 1st
Twelve of the Candy Sixteen underperformed the CCi30 Index. The common 7-day absolute loss was -3.15%
The Technical Situation Issue modifications for the week ending August 18th and trailing ten weeks.
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 an extra level is added to the person TR. Conversely if the technical query is destructive, 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 above calculates every issue’s weekly studying as a p.c of the doable whole. For instance, there are 7 concerns (or questions) within the Every day Momentum Technical Situation Issue (“DMTCF”) of the 16 Cryptocurrencies ETFs (or 7 X 16) for a doable 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.
Three weeks in the past the DMTCF fell to an oversold excessive of 0.00%. I’ve by no means seen as deep an oversold situation as that studying (couldn’t get any decrease). On the finish of final week the DMTCF rose to 37.50% or 42 out of a doable 112. That was a enchancment over the prior week’s studying of 27.68%.
As a affirmation device, 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 increased (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 six TCFs fell and solely two TCFs rose exemplifying the present malaise that has beset the broader cryptocurrency market.
The CCi30 Index with This Week’s Candy Sixteen Complete Technical Rating “SSTTR” Overlaid
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 device: If the broader market as measured by the CCi30 Index continues to rally and not using 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’s 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 stage (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 turn out to be “stretched” there’s 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 unstable SSTTR readings and analytically is a greater indicator of pattern (I’ve switched to an exponential transferring common from a easy transferring common on this weeks Examine).
Final Tuesday the CCi30 Index spiked increased in a brief squeeze on the Greyscale information. I warned those that comply with me on X that they need to not let the FOMO satan take management of their feelings and that they need to wait to see if there was a comply with by way of to the impulsive transfer. The rally failed on the underside of the Decrease Warning Line (gold dashed line) of the Schiff Modified Pitchfork (gold P1-P3) and over the course of the three days that adopted, the index retraced the whole rally (after which some). That worth motion drove the SSTTR to the bottom stage since June sixteenth. MACD is monitoring quietly decrease in destructive territory underneath its sign line. The one technical function that the “base constructing camp”, of which we’re cautiously one, can discover solace in is that key help on the 6,580 has not been violated.
The CCi30 Index Weekly Cloud Mannequin with the Common Candy Sixteen Technical Rating (ASSTR)
Final Tuesday’s quick squeeze rally failed on the Median Line (purple dotted line) of the Schiff Modified Pitchfork (purple P1-P3). In doing so the CCi30 Index failed to carry onto the bottom within the Cloud and closed decrease on the week. The ASSTR has fallen to an oversold stage the has led to not less than a counter pattern rally however the worth motion has but to endorse that.
The Candy Sixteen Index*
*The Candy Sixteen Index is comprised of the bigger market cap cryptocurrencies that we observe on this Weblog
Final week my Candy Sixteen Index fell under the Median Line (gold dotted line) of the Schiff Modified Pitchfork (gold P1-P3) that I first utilized to the Every day chart in July. The Index is attempting to hook increased however the worth transfer isn’t endorsed by the primary mover oscillator, the Fisher Rework, which has turned decrease by way of its sign line. The Candy Sixteen Every day Momentum / Breadth did spike increased final week nevertheless it has retraced most of that transfer and is again to simply under impartial. I’m not compelled to do something right here.
12 months to Date Relative Comparability
Charts are courtesy of Optuma whose charting software program allows anybody to visualise any information together with RRG Charts and our Goal Technical Rankings. Cryptocurrency worth information is courtesy of Cryptowatch.
The next hyperlinks are an introduction and an in depth tutorial on RRG Charts…
To obtain a 30-day trial of Optuma charting software program go to…
A 3 half tutorial collection on Andrews Pitchfork could also be learn at my website…. www.themarketscompass.com