The State of the Alts – 07-28-22

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.

This week we saw Bitcoin at $24K and Ethereum $8 short of $1800. Not that long ago, ETH was trading in the high $ 800s. The market is steadily churning along, all without giving away its hand in the slightest.  The overall Macro trends for everything are still down, but the lower timeframes are focusing on local uptrends. This is significant in the regard that this is how reversals begin. Unfortunately, we generally see plenty of false rallies before we see the real deal. Cautiously optimistic is the way to approach this.

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 and EOS stole the show this last week even tho ETH was all the talk of the town. Each posted above 20% 7-day rolling highs, with BCH putting in 21% and EOS putting in 24% compared to ETH at only 8%. There was a retest of the daily 20 EMA after securing the 50 EMA. A huge test would come when ALTPERP can trade past the 200 EMA. Timing may just have a confluence of overhead resistance and the 200 EMA at the same time.

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 L1s like Algorand to ad-seeking marketing like BAT.

UNI pushed for 28% over the last 7 days making an impressive move and grabbing the spotlight. The chart itself for MIDPERP is very similar to ALTS in regard to the rejection at the 200 EMA in the past. We saw the 200 act as support until it broke, after which we have seen two rejections from the 200 EMA. The idea is that when we come back to it a third time – if the momentum is strong – the 200 will break and flip back to support. Just like the ALT chart, MIDS retested the 20 EMA with success and is trading over the 50 at the moment. Everyone is waiting for the 20/50 crossover for another form of confidence that the tides are shifting.

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 a 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 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 the only index of the three that has yet to trade beyond its high from last week. There is no reason to sound the alarm just yet but this behavior is odd, especially for SHITPERP. Shitcoins tend to take the lead in these situations and help to pave a path for traders to start sending capital to less risky assets, but this time around we are seeing the healthier projects receive the capital first instead of the all-out degenerate Shitcoins.

Weekly Movers

MATIC, ETC, and UNI have made their way into the light green trend for the 12-hour timeframe. This is big news as we haven’t seen an Alt in the H12 green in what feels like a very long time. We are seeing some consistent low timeframe trends growing North. Again, this does not mean we are in a reversal as a false rally at this point would look identical. That being said, there are longer-term macro signals we are looking for and one of which would be flipping the Daily 200 EMA on the indexes.

The Wrap Up

Keep a watch out for short-term gains on volatile assets. We will specifically be waiting for setups that involve capital flowing in and low timeframe trends increasing in momentum. It’s hard to imagine that we could see a few hundred percent gains only to have them all washed away again and trade even lower lows – that is if this turns out bad.

The reason we stay unbiased when looking at charts is that you need a clear mind to take the information that is in front of you and look at it for what it really is… We are cautiously optimistic about a reversal on the macro scale but there is not enough evidence to support that theory just yet.

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