The State of the Alts – 04-14-22

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.

Even with all the excitement two weeks ago and a fairly normal and expected pullback last week, the Bulls are simply falling flat.  When we see assets start turning around there is always the possibility that the reversal is nothing more than a fakeout.  Now, we are not exactly to that point but as you will see in the following charts, we are headed that direction.  

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. 

Our Majors are in an embarrassing state of affairs over the last 7 days.  ADA is down 14% in the last 7 days.  LINK and DOT are both down 13% in the last 7 days.  Our chart above shows that after the rejection at the 200, the 50 was looking like support until it failed and sent all majors downward for further sell pressure.  This rejection at the 200 could set in motion a much larger downward spiral.  There is still time for correction but there is now reinforced resistance at the 20 and 50.  

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.

Mids have been following along Majors for quite some time now so it is to be expected that when the Majors dropped off a few days ago that the same fate would come to the Mids.  ATOM, VET, AAVE – all down 15% or more in the last 7 days.  When the market decides to sell or traders get nervous about price action, the mids will generally take a larger hit than the Majors.  But no one takes it worse than the Shitcoins.

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!

WAVES got smashed 30%, HBAR got hit for over 15% and the rest of the list more or less looks the same.  If you remember from a few weeks ago, Shitcoins were decoupling from majors and Mids.  They were actually leading the charge of a potential reversal.  The dump the other day has brought Shitcoins right back in line with Majors and Mids once again.  Now all three follow the same price action almost to the exact candle formations.  

Shitcoins are always High Risk – High Reward and the High Risk also insinuates that when they dump, they dump hard.

Weekly Movers

Generally speaking, the market is in a tough spot.  We can see only three Alts that are trending on the Daily.  NEAR, KNC and DREP.  NEAR is taking resistance right now after working its way back to its 88.6 from a 64% loss.  There is nothing more to talk about here until NEAR either gets fully rejected or breaks its previous ATH.  

KNC on the other hand has hit all of our previous targets and is now trying to solidify previous ATH as support.  Rejection from the previous ATH has been on-going for 6 days so we need to wait and see if we will actually close this Daily above the level or if we see another rejection.

 

The Wrap Up

Last week it was recommended that we take no trades.  That turned out to be the right decision as the market tanked 4 days ago.  The thing about downtrends is everyone expects every bounce to be the big reversal – the problem is, they are only right once after being wrong far too many times before.

Confirmation in trends like this are so important.  Yes, we can get excited about a potential reversal but we need to let it play out and confirm he trend is legit before we go head first into the asset.  That way, we have a far better chance of having a successful trade.

If we can use KNC and NEAR as potential templates for other coins in the near future then we can start to see some coins make the first few moves.  We need to establish a low timeframe trend and see conviction from buyers.  From there we look to retest the previous high or slightly lower, near the 78.6 or the 88.6.  However, for that to happen on a market wide platform, we will need to see Bitcoin either go full range – sideways trading chop – or we will need to see a push from Altcoins in unison.

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