The State of the Alts – 02-09-22

STATE OF THE ALTs

The Global View

Top Left: Bitcoin Dominance – Daily
Top Right: Altcoin Index – Daily
Bottom Left: Midcap Index – Daily
Bottom Right: Shitcoin Index – Daily

Above we can see a snapshot of the entire Crypto market broken down into four very specific charts.  The overall Bitcoin Dominance chart shows you how much of the total market cap belongs to Bitcoin and therefore it also tells you how much of the market belongs to Altcoins.

What a week it has been!  Alt, Mid and Shit have ALL broken out of there local downward sloping resistance levels.  They all have very similar locations for their respective 50 and 200 EMAs.  (More on that later). Bitcoin continue to get rejected at its local resistance from the downward sloping trend for Dominance.

Altcoin Index

Description: Each asset in the Altcoin Index is weighted the same.  This gives a good look at a basket of higher profile and higher MCAP coins. 

We have now broken through the downward sloping resistance level.  This is a big deal, especially after a 57% drop over 75 days.  The very local resistance is the 50 EMA.  We can see the last 4 days or so have struggled to push above that level.  Holding between the 50 (red) and the 20 (white) would still be a strong sign of further upside.

Midcap Index

Description: This is the playground for most traders.  It’s widely excepted that the top tier Crypto have already made most of their explosive moves but that is not the case in the land of the Mids.  The Mids make a wide variety of projects from L1’s like Algorand to ad seeking marketing like BAT.

The Mids have broken through their respective 50 EMA and actually backtested it once for Support.  We are now starting to see the more pronounced pullback and that is when it comes all the way back to the trendline to attempt to confirm the breakout and support.  With the 20 EMA located just South of the trend, we can say there is confluence at the trend for support to be tested.

Shitcoin Index

Description: What market in the world can you label a basket of assets and call them SHIT?  Only Crypto baby!  The SHITperp is your view through the window of our beloved Shitcoins.  These represent 50 coins that have relatively low market cap but still have stand out projects.  Coins like MANA, in and of itself is actually a great project with a bright future but its market cap deems it as Shit.  THETA, CHZ, ENJ, HBAR, ZEN, etc.  These projects are actually good projects with good fundamentals, so they skew the balance sheet a bit because these are not exactly the Shitcoins that some other people talk about when they talk about Shitcoins!

ShitPERP is currently all over its horizontal Resistance zone.  I did not convert this level to green just yet even tho the wicks in that area are an immediate confirmation that we are flipping the zone.  The reason is the constant resistance at its 50 EMA.  Coiling up in-between tight Support and Resistance can lead to a violent move in either direction.  Violent to the high side and we expect to see some Shitcoins fly!

Weekly Movers

There are a lot of Alts in the market that are finding Support and making their first go at resistance ina  long time.   Some are breaking through while others remain constrained by the overhead resistance in front of them.

All things considered, we can either see a fake out market wide and this move is nothing more than a distraction or a further rally up to local levels somewhere near the 50% of the major drop.

What to Watch

There are two coins that stand out at the moment.  One is in the midst of breaking local resistance and the other is receiving a ton of new volume.

TFUEL/USDT:

TFUEL is showing us a local breakout from its downward sloping resistance area.  The consistent rise and fall followed by another rise and fall will grab attention from very early trend traders.  A relatively small pullback can be a potential entry just for a back test of a broken trend.  

SLP/USDT:

SLP is an interesting one.  The last few days SLP has seen massive volume and an insane local breakout from this seemingly never ending downtrend.  From the low 8 days ago, SLP already went for 370%,  There can be another 112% move if we can get a decent pullback and attempt the first major overhead resistance.

The Wrap Up

Overall, Market Wide, we are seeing some health return to the atmosphere.  Will it last?  Too early to tell.  Can we trade setups that in this climate, yes.  Staying cautious when taking long positions in and otherwise down market is inherently more risky than taking long positions in a healthy market.

If we can see these indexes really fly then we know it’s time to start taking some positions but we want quick profits as we don’t want to be some whales exit liquidity.

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