The State of the Alts – 09-29-22

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.

Once again, what small rally we saw was simply not enough to move the needle for the entire index, which goes for all three indexes. Bitcoin Dominance remains North of its 40% Support Zone. Each index has its own struggles, and we’ll get into more of that in just a minute.

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. 

The biggest index by weight of market cap is the Altcoin Index. The struggle to trade above the 20 and 50 EMAs is continuous. We now have a local downward sloping trendline from the very recent price action that helps to illustrate the downward trend. Alt Index needs to be able to trade above the 20 and 50, have the 20 cross back over the 50, and break above this downward sloping trendline before there is anything bullish to say about this chart.

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 closed their Daily Candle yesterday on the local downward-sloping trendline. In effect, this made the next candle (today’s candle) open above the trendline. When this happens, we do not consider it a breakout, as the candle never actually broke out of anything. Instead, the next candle simply opened above the trend. Regardless, the thing to look for now is a flip from resistance to support if the trendline can now act as support, which gives the mids a much better chance to correct the 20/50 and work its way through the much larger zone that they are currently trading in.

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 a few 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!

ShitPERP is really struggling pretty hard. The separation between the 20 and 50 is growing and growing in the wrong direction. Every low is just another lower low, and the entirety of the recent action is below the 20 EMA, the 50 EMA, and the local downward sloping trendline. There is absolutely nothing bullish about this chart at the moment.

Weekly Movers

Despite the indexes, the PAS does show a few slivers of hope. For example, BNB and XRP were able to reduce their heavy downtrend on the Daily resolution to just a mild downtrend. This is an improvement. On top of that, they are showing some strong upward trends in their respective lower timeframes. These are two to watch out for in the coming days/weeks.

The Wrap Up

The holding pattern on Alts, Mids, and Shitcoins continues for now. We may see a coin or two start moving away from the average as we have witnessed XRP and ATOM both make some moves to the high side with no correlation to the Bitcoin price action. One or two, here or there is unfortunately not the entire market.

Bitcoin is range-bound at the moment and that is generally a really good time for the Altcoin market to make a big move. Unfortunately, this time around, the market makers have scared retail crypto investors to their core. They got a little too greedy, and they underestimated the fear they drove into regular traders. Without the opportunity to short the market, there are a lot of traders who are either sitting on their hands or have simply walked away.

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