The State of the Alts – 06-09-22

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.

 

And the survey says… SIDEWAYS.  The sad news continues for Alt traders as we continue to see three things over the last week:

BTC Dominance Rise

Alt Dominance Sideways

Alt values dropping

We have seen a few outliers defy the laws of bear markets but outside of that, the majority of alts remain in pain.

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. 

BCH – 7%
BNB – 7%
EOS – 5%

And of curse the list goes on for the “Majors”.  The outlier here is LINK.  LINK is up 30% in the last 7 days and that is a really good sign that some investors or traders are warming up to the idea of starting to accumulate good projects for the next cycle.  

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 are serving up the same story as the Majors.  The action is nearly identical from chart to chart as both are taking heavy immediate resistance from the 20 EMA on the Daily resolution.  

XTZ, LEO, NEO and even BSV are actually green for the rolling 7 days which is better than we can say about 90% of the rest of the list.  Again, this can be a very early sign of traders starting to play the sideways market.  

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 once again candle for candle with both indexes but Shit seems to be taking very heavy resistance from teh 20 EMA.  The potential good news here is that the continual abuse of the 20 EMA from the underside generally leads to a breakout of that resistance. We already have seen THETA test the waters and we are hopeful to see a few more Shitcoins make a breakout play so we can get some excitement back in the market.  

Weekly Movers

Don’t let a few outliers fool you into thinking we are in a Bull Market because… well… we are not.  Sometimes we can see false rallies and other times we can see engineered fakeouts.  We need to pay attention to what is moving and why it is moving so we can better see what MAY move next.  These trades are notoriously riskier than most as you are going against the grain and looking long when the world is short.

The Wrap Up

It is very important to understand the difference of an overall market that is trending up and an overall market that is trending down.  There is nothing wrong with taking long positions during any market but there is certainly a difference in the approach and the method.

Strategies that do well in trending markets may not do well in sideways markets and the same goes for strats that are only good in either up or down markets.  We find ourselves back in the “wait and see” mode but at least things are starting to get more interesting.

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