The State of the Alts – 09-22-22

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.

All indexes remain underneath their respective 20 and 50 EMAs on the Daily resolution. This also puts each one at about two weeks of trending downward after their latest rejection, which was also a lower high across the board. Bitcoin dominance was able to save face at 40% once again, marking it the 4th major time Support was found in that area since May of 2021.

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. 

XRP is trying to steal the show, even if there is no real show to steal. ETH, EOS, LINK, ADA, etc are all trending heavily to the downside on their respective 12 and Daily timeframes. Earlier today, we saw some excellent bounces from all the majors, but the follow-through post-candle close has been disappointing at best. We remain in a downward cycle until the Altcoin index can work its way back over its 20 and 50 EMAs and reclaim a new higher high from the local price action.

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 are in a worse situation than the Alts because they are dealing with massive overhead resistance in the form of the much larger downward-sloping trendline. This is a trendline that the ALT chart has already overcome. MIDS, on the other hand, is struggling to get any type of rally going at all. To make matters worse, they must also contend with their 20 and 50 EMAs and the local swing-fail trendline.

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 is really struggling at the moment. Unlike the MIDS and the ALTS, SHIT has yet to even reach its major downward sloping trendline, from which it will almost definitely take resistance from. Last month, the resistance came from a horizontal zone and not from the major trendline. This zone continues to haunt the SHITcoins as they cannot claim any territory in that region. Instead, like ALTS and MIDS, they continue to trend downward, slowly but surely, posting new local lows about every week to two weeks.

Weekly Movers

XRP, XLM, and ALGO are showing the most promise as far as the PAS is concerned. All longs in this territory are riskier than in a Bull Market, but that does not mean they cannot be traded. When we start to see some early indications that a potential reversal may be happening on a higher timeframe, then we can start scaling into these positions. At the moment, the market is more or less sideways chop with an overwhelming momentum to the downside. This puts all trades at a greater risk of failing due to the conditions that can sweep across the market if Bitcoin is to fall a large amount in a short period of time.

The Wrap Up

As we just mentioned above… Sideways Chop. These current conditions try to feed on the uneducated by giving them a few days of upside, only to drive prices lower in a single 15-minutes candle. 

This is why we look for clear direction, and the clear direction now is DOWN just as it has been for months. Shorting the market is great for these situations as every pump so far has been nothing more than a better entry for shorts. These traders without the ability to short the market are stuck either accumulating, DCAing, or simply waiting patiently for the market to turn around and give them something else to look at.

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