The State of the Alts – 01-05-22

The Global View

Top Left: Total Market Cap – Daily
Top Right: Total Excluding BTC – Daily
Bottom Left: Total Excluding BTC and ETH – Daily
Bottom Right: Total Market Cap – Others – Daily

The charts above represent the Market Cap of Crypto in four different ways. At first, we can see the total Market Cap of all of Crypto, and we can easily decipher if there is a trend up or down. From there, we move to the total Market Cap of all Altcoins (any coin that is not Bitcoin). The bottom two charts represent the entire Market Cap without Bitcoin and Ethereum, somewhat representing what the entire Altcoin market Cap looks like with the most significant player, Ethereum. The last chart is called Others, which would be our closest representative of Shitcoins.

Happy New Year to those who have not already read the Bitcoin Weekly Recap from the 1st of the year. Here we are, five days into 2023, and wouldn’t you know it… there are some signs of life! Our last update had a lot to do about our macro downward-sloping trendlines and the effect they were having on the total market and, more specifically, the Top-10 Crypto. You will be happy to see what happened to TOTAL2 when we get there. Let’s begin.


Total Market Cap - (T - 125)

Description: Total Market Cap is the figure you get when you add up the market cap of all individual coins throughout crypto. This number comes with a disclaimer, as not every single crypto is included in this list. With over 20,000 unique token protocols, not everyone is legit. There are dead coins, scam coins, and irrelevant coins that are artificially propped up to maintain some market cap. This chart, in particular, is calculated by TradingView, and the Total Market Cap comprises the Top 125 coins on the market.

At first glance, it would appear that TOTAL isn’t doing much of anything but the reality is that it broke through and closed above the Daily 20 EMA. Yesterday proved to be a pullback and a close above the critical level. That leaves us a confirmation. Before we get ahead of ourselves, the 20 remains underneath the 50; therefore, there is no reason to get excited. These are all clues tho for the very degen who like to try to predict the market before anyone else. TOTAL remains supported by its vast lower support zone and never dipped too deep into it, leaving much room if needed.


Total Excluding BTC

Description: This chart is the Total Market Cap but without Bitcoin. The reason for this is to get a gauge on where all the other money is in Crypto if it’s not in Bitcoin. The difference between the Total Market Cap and the one excluding Bitcoin can help you understand where Bitcoins’ Dominance comes from. If the chart above was half of the Total Market Cap, we could say that Bitcoins’ Dominance in the entire crypto sphere is 50%.

Removing Bitcoin from the data gives us a deeper dive into the large support zone. As of two days ago and after many failed attempts, TOTAL2 has finally been able to break north of the downward-sloping trendline. This is exciting for the Alt-World as this is the first actual break – and by a decent margin. We purposely expand some important trendlines to give a better sense of strength and to minimize false breaks. As we saw with TOTAL, TOTAL2 is trading above the 20 EMA with a confirmation candle from yesterday. We are under the 50 EMA just as we are with TOTAL. This is the first bullish sign we have seen for Alts since the trend was created back in September. The elephant in the room is the 200 EMA and the fact that it sits lower than the previous Lower High. This would indicate a rally to the 200 only to put in another new low afterward potentially. Be that as it may, let’s take it one day at a time.


Total Excluding BTC & ETH

Description: Just as the chart above excluded Bitcoin from the Total Market Cap, this chart excludes Bitcoin and Ethereum. Ethereum has made its stand for the Number One Altcoin and currently enjoys a 4X in Market Cap next to its closest competitor on the list. This chart removes the two most prominent players from Crypto and gives us a better idea of what the actual market is doing, regardless of what the two major players are up to.

To add to the “better than awful” news, TOTAL3 has also flipped GREEN, marking its first time above the downward-sloping trendline. TOTAL3 helps us see the rest of the Altcoin market after removing the most significant player in the Alt-game, ETH. BTC is also removed from this dataset as well. With no help from BTC or ETH, we can say that the Altcoin market is showing its first signs of life. ALtcoins face a MASSIVE band of resistance, while TOTAL and TOTAL2 must get past the 50 before testing the 200. TOTAL3 struggled slightly more than TOTAL and TOTAL2 regarding the retest of the 20 EMA after the flip, but today we can say it’s holding. The lower section of the resistance zone is confluent with the 50 EMA, which could be far too much for Alts to handle at the moment. The one thing Alts have on their side would be a shift in sentiment if we see hope set back for BTC and ETH. If that were to be the case, coupled with the recent break above the trendline, Alts would have a shot to smash the 50 EMA and never look back.


Market Cap - Others

Description: In keeping with TradingViews tradition of removing coins from their Total Market Cap, OTHERS represents coins 11-125 by Market Cap. They essentially remove the Top 10 coins from their list of 125, and we are essentially left with the old Index we used for Midcaps. This does not precisely show us what mainstream Shitcoins are doing but rather the middle-of-the-road Mids that are fighting with each other to move up the list and breach the sacred T – 10.

OTHERS have been the black sheep of the four ever since they rallied further last March than any of the other charts. Shitcoins tend to fly, and by doing so, they changed the landscape of the second test after the major swing-fail. This created a situation that left OTHERS at a greater distance away from the overall downward-sloping trendline. Be that as it may, the 20 and 50 EMA caught up in no time, acting just the same as the other charts. In fact, OTHERS broke its 20 EMA 2 days before any of the other three, indicating that Shitcoins are actually on the move without any help at all from the Top-10 coins by market cap. 

OTHERS has a lifetime to go, it seems, before reaching its 200 EMA, but it needs to be able to flip the 50 EMA before we even mention the 200. OTHERS is the only chart that has already tested the 50 EMA, found resistance twice, and is poised to test it again later today. If we are to see the Shitcoin chart break above the 50 EMA, we could see the first signs of some rally, whether big or small.


Top 30 by Market Cap

Here we can see the price action and trends of the Top 30 in Crypto by Market Cap. On the right-hand side of the picture, you can also see the Peak Gains from the last seven days.

What is that other color besides pink and red? Is that GREEN? LTC and XMR are showing favorable trends up to their respective 12-hour charts. That is incredible, given the current climate.


The Wrap Up

The funny thing about the market is that everyone is praying for a dump once it turns around because they missed the bottom. It’s the sad truth for those not paying attention. Don’t get me wrong; we can easily dump another 75-90% from current levels, but the whole point of analysis is to put aside bias and read the chart in front of you. Yes, we need to factor in many other variables. Merely looking at the market cap is not enough to make a trading decision, but it is a viable way to find clues. 

Traditionally speaking, first, second, and even third tests of overhead levels generally get rejected after coming from sideways consolidation. All four of these charts have something significant in common with each other, as they should, they are all market cap, but other than that, the intensity of the downward pressure has eased. We are in a market where things can go in either direction for a very long time. Markets that range are impossible to trade with standard trending strategies because the market is, indeed, NOT TRENDING. But that is the most bullish thing we have seen in over a year. If we can say the market is not trending, that means it is no longer trending down – do you understand what that means? 

It’s very significant considering the overall macroeconomics and the looming recession. Again, even with a small rally, a slight recovery is possible before another considerable leg down and we genuinely reach Max Pain.


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