The State of the Alts – 09-15-22

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 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.

The Merge, the Merge, the MERGE! That is about all we heard for the last week or so, and last night, it finally happened. What was the result? ETH dumped 10% even tho the funding rate of ETH Shorts is some of the highest they have ever been. In the end, massive whales transferred millions and millions of dollars worth of ETH, and market sold them all to keep Shorts from getting liquidated and causing a liquidation cascade.

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. 

Last week, we once again saw the potential for some decent upside, but, also once again, we exercised enough patience to realize the support did not hold and more downside was on its way. The entire market is suffering, and the majors are simply not immune to the downward pressure. After the recent 20/50 break, many were hoping for some sustained upside, but with the dramatic decrease over the last three days, we can now very clearly see the lower high compared to the recent high from mid-August.

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.

If you ever wondered why we use Support and Resistance in the form of Moving Averages, trendlines, and horizontal zones, take a look at the rejection point that MIDS saw recently on the chart. Even when the market was looking as if it may turn around for a bit, the 50 EMA on the Daily, coupled with the downward sloping trendline from the high back in November, was enough to stop the MIDS dead in their tracks. We are still well above our lows from June, and now with the second point of rejection on the local action, we can monitor the break as soon as it happens.

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 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!

SHIT was not even able to make it up to its downward-sloping trendline. In fact, its rejection from mid-August happened in the horizontal rejection zone and was not even on the trend. This makes things even less Bullish for SHIT as it does not seem to have the steam to even ride on the same plane as MIDS and Majors. SHIT will have its day… it always does, but as of now, it’s trending South. Just as with MIDS and Majors, though, we do have a new local lower high that we can draw a trendline on and set a few alerts.

Weekly Movers

For those who remember last week’s PAS shot, this week looks a whole lot different. Nearly everything is red short-term and a majority are still dark red on the Daily trend. The Bears are surely winning the battles… and the WAR. Only LINK and ATOM have any dark green, even ETC is taking a major pullback at the moment.

The Wrap Up

So here we are, once again, mid-Sell-Off September… these markets are not for the faint of heart. As mentioned previously, we now have a few decent local reference points that we can watch. Whenever a trend is being formed, whether it’s on the 5-minute chart or on the Daily chart, take note of the swing levels. This is when the price changes course from up to down or from down to up in a very obvious way. We look at those points as clues for when a current trend is getting weaker.

At the moment, either load your Shorts or stay patient with the market. We could be looking at a fairly severe dump in the near future. At the moment, there are no signs that point to a Bullish Reversal just yet.

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