The State of the Alts – 12-08-22

The Global View

Top Left: Total Market Cap – Daily
Top Right: Total Excluding BTC – Daily
Bottom Left: Total Excluding BTC and ETH – Daily
Bottom Right: Total Market Cap – Others – Daily

The charts above represent the Market Cap of Crypto in four different ways. At first, we can see the total Market Cap of all of Crypto, and we can easily decipher if there is a trend up or down. From there, we move to the total Market Cap of all Altcoins (any coin that is not Bitcoin). The bottom two charts represent the entire Market Cap without Bitcoin and Ethereum, somewhat representing what the entire Altcoin market Cap looks like with the biggest player, Ethereum. The last chart is called Others, which would be our closest representative of Shitcoins.

Is there breaking news this week? Let’s get right to the point. No. Unfortunately, the best day of the last two weeks was last Wednesday, and that was already covered in last week’s article. This week so far has been very mundane. All four charts above remain paralyzed for ten days straight under their respective Daily 20 EMAs. Let’s take a closer look.

Total Market Cap - (T - 125)

Description: Total Market Cap is the figure you get when you add up the market cap of all individual coins throughout crypto. This number comes with a disclaimer, as not every single crypto is included in this list. With over 20,000 individual token protocols, not everyone is legit. There are dead coins, scam coins, and coins that are irrelevant and artificially propped up to maintain some type of market cap. This chart, in particular, is calculated by TradingView, and the Total Market Cap comprises the Top 125 coins on the market.

Last Wednesday, we saw a sizeable candle rip through the Daily 20 EMA with style. The following day was a near-perfect retest of the 20 EMA, which could have paved the way for a similar situational test against the Daily 50 EMA. However, the market got stale, the action became stagnate, and the world went sideways. Ten days later and we continue to fight the 20 EMA for any resemblance of support in an effort to make a push to the 50 EMA. 

Total Excluding BTC

Description: This chart is the Total Market Cap but without Bitcoin. The reason for this is to get a gauge on where all the other money is in Crypto if it’s not in Bitcoin. The difference between the Total Market Cap and the one excluding Bitcoin can help you understand where Bitcoins’ Dominance comes from. If the chart above was half of the Total Market Cap, we could say that Bitcoins’ Dominance in the entire Cryptosphere is 50%.

So, what do we get when we remove Bitcoin from the equation? Unfortunately, no change at all. The action remains constant, and just as a spoiler alert; it’s the same for TOTAL 3 and OTHERS. I know, shocker. Some good news is that we are approaching the apex between the support zone we have been riding for a month and the larger overhead pressure. One will hold, and one will fail. So, we have that to look forward to this week. 

Total Excluding BTC & ETH

Description: Just as the chart above excluded Bitcoin from the Total Market Cap, this chart excludes Bitcoin and Ethereum. Ethereum has made its stand for the Number One Altcoin and currently enjoys a 4X in Market Cap next to its closest competitor on the list. This chart removes the two biggest players from Crypto and gives us a better idea of what the actual market is doing, regardless of what the two major players are up to.

As mentioned above, the action is the same for TOTAL 3 or the chart that displays the Top 125 coins, excluding BTC and ETH. Action is sharing a space with both Support and Resistance simultaneously. This is unusual, but because these zones are so wide, we will run into this from time to time. Generally speaking, when there is a tie or conflicting factors, the winner is usually based on some preceding factors, mostly trend. In this scenario, we have been down for a year, so the bias leans toward the pressure to win the battle and for the support to eventually fail.

Market Cap - Others

Description: In keeping with TradingViews tradition of removing coins from their Total Market Cap, OTHERS represents coins 11-125 by Market Cap. They essentially remove the Top 10 coins from their list of 125, and we are essentially left with the old Index we used for Midcaps. This does not precisely show us what mainstream Shitcoins are doing but rather the middle-of-the-road Mids that are fighting with each other to move up the list and breach the sacred T – 10.

OTHERS remains the outlier regarding not diving dip within its lower support. OTHERS remains miles away from its overhead pressure, too, so we need to keep that in mind. If BTC and ETH crash, expect the rest of the market to also crash. We may see a faster recovery in Major Alts but the other 140 or so Alts in OTHERS would likely continue to drag that metric down for awhile.

Top 30 by Market Cap

Here we can see the price action and trends of the Top 30 in Crypto by Market Cap. On the right-hand side of the picture, you can also see the Peak Gains from the last seven days.

The Wrap Up

So, where does it all leave us? Well, the short answer is “wait and see,” but I understand that is not an answer. If you go to the socials and spend more than 15 seconds on Twitter, you’ll hear that the BOTTOM IS IN. However, when you ask those analysts if they have zoomed out and factored in the overall macroeconomics instead of only focusing on the crypto market as a single financial instrument, they shun you away and dismiss you.

The reality of the situation is this: No one knows.

Some metrics do indeed indicate not only a slowing down of the bear market but potentially some early signs of a reversal. Regardless of those metrics, the overall market, like, the entire world’s market, is in the worst shape it’s been since 2008. Do the math on that one. Bitcoin was created in January of 2009, partly, according to the whitepaper, because of the crash of 2008.

Bitcoin has only existed during a time when macroeconomics were favorable. Sure, a slight dip here and there, but overall up in the world’s largest Bull Run in the Traditional Stock Market in history. We must pause for a second and think about how Bitcoin and Alts will act when the global economy enters a full-fledged recession – if that is to come to fruition. Will Bitcoin get crushed by the cascade of obliteration if we are to realize a full-on depression, or will it rise to the occasion as the People’s Money, the only true currency that is deflationary in nature? Only time will tell.

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