The State of the Alts – 08-12-22

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.

Altcoins are still trying to establish themselves as they have been trying in the last few weeks. Last week, we saw a pivotal moment in the indexes for all three, ALT, MID, and SHIT, when they each achieved their own 20/50 EMA crossover on the Daily chart. This last week has been a mix of bullish days and pullback days. All things considered, Altcoins are trending upward while Bitcoin Dominance is trending downward.

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. 

For those of you out there who read this article every week, you may notice something very different on the chart above… the GREEN downward sloping widened trend line. Last week was too early to consider this Support as it had yet to really prove the breakout, especially considering it wasn’t a technical breakout but more of an “open over the line” breakout. ALTPERP is the first of the three to manage this task. The trend that it broke began last November.

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.

Unlike the ALTPERP, the MIDS positioning on their respective downward sloping widened trendline means that the MIDS need to do a lot more work in order to approach and then eventually break through its line. The issues are the same for all three indexes as they all face three important areas of resistance and are all within close proximity to each other.
1: Downward sloping trendline
2: Horizontal Resistance Zone
3: Daily 200 EMA

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!

Shitcoins are lacking the most between the three but not by accident. The Horizontal Resistance Zone for SHITPERP is much lower, relatively speaking, than either ALT or MIDS. Shitcoins are hitting that resistance level right now and have been for the last week. The other issue SHITPERP has is the 42% distance between its current value and the breakout of the trend. This is in comparison to the 20% MIDS need and the 0% ALTS need, as we discussed them already breaking out before.

Weekly Movers

Here we can see coins like ETH, DOT, SHIB, and ETC are all performing really well on all timeframes except the Daily timeframe. There are others that are trending strongly in 4 and 6-hour timeframes but are seeing some slight pullbacks on the lower timeframes. Overall, this is a pretty good sign for continuation. We are a long way off from being out of the macro downtrend but this is a relatively good start for either a reversal or a false rally.

The Wrap Up

The best time to trade Altcoins is when Bitcoin has gone sideways, and the Bitcoin Dominance is falling. Bitcoin has been dancing around $23K for four weeks now, and we are starting to see the signs of early traders taking risks on counter-trend trades. This is good for the market as we see money flowing back into Alts, even the ones that represent more risk. This time around we are seeing the big dogs take a majority of the capital and that shows there is still plenty of fear left in the market.

Coins like ETH and DOT are doing well and receiving a lot of capital. This will generally spill over into the MIDS and SHITCOINS as traders take profit from the majors and use some of that profit in much higher-risk assets. We continue to watch the overall market for an increase in trading volume and interest in all Altcoins.

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