The State of the Alts – 08-05-22

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.

Let’s cut right to the chase… the Market is MOVING. Bitcoin Dominance is sacrificing itself for the greater good of all Alts: Top 10, Mids, and Shitcoins. Last week we talked about the pending 20/50 Daily Crossover, and as of a few hours ago, we can now officially say that all three indexes are showing a 20/50 crossover with a closed candle for confirmation. (Mids were dragging behind the pack.)

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. 

Green days make everyone feel better, and successive green days in a row help restore confidence in a pretty shaken market. Hack after hack, chain after chain, we continue to see the nightmare unfold, but the good thing about this market is that if you give it enough time and remain patient, it will always come back and give you great opportunities.

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.

The Mids were the last to officially close a candle after the 20/50 crossover but it’s all thanks to Decred which has just put in an 87% candle today. Decred is still down 80% from its $248 ATH but this was a significant move seemingly out of nowhere. Remember that week when we warned of random coins popping off like crazy? – This is exactly what we were talking about.

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 to stand out projects.  Coins like MANA, in and of itself, is 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!

Shitcoins are the only index of the three that are immediately approaching resistance in the form of a horizontal zone that was previous support in July of 2021. The good news is that we can use the reaction as a template for the Mids and the Majors by seeing if the Shitcoin index has any reaction to this year-old zone or not. Alts and Mids will likely need to contend with their respective 200 EMA before dealing with their horizontal zones.

Weekly Movers

It has been a long time since we have seen nearly all major T-25 coins with a strong H4 trend on the PAS. The really good part of this is the opportunities that come along with it. Confidence in lower timeframes can add potential trades to the list but they would all be short-term trades until we start getting some more macro trends.

What to Watch

For now, you really want to watch everything. The best trades will be on H1 and M15 charts as their “macro trend,” the H4, is becoming a Strong Trend. These trends can certainly fail but with each additional confirmation of a strong trend that we see, it adds reassurance and confidence back to taking long positions.

The Wrap Up

We are not out of the woods just yet but you can almost get the sense that people are starting to come back to crypto after being away for a long, long time. Some coins are moving 30-50% in a rolling 7-day period and that is nothing to scoff at. For a while, we were seeing consistent 15-20% downward days, so this is a very enjoyable relief. The problem is, it may only just be a relief.

As a trader, you need to keep all options open: The Reversal, The Bull Trap, the False Rally, and the Relief.

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