Welcome to the first issue of Market’s Compass Weekly Crypto Sweet Sixteen Study. The study tracks the technological state of 16 cryptocurrencies with large market capitalization. We have compiled historical quantitative objective technical ranking data and secondary technical indicators including Sweet Sixteen Total Technical Rankings and Weekly Average Technical Rankings, dating back to October 2021. As individual highlights on notable movements of specific cryptocurrencies.
This Week and 10 Week Trailing Technical Rankings of 16 Individual Cryptocurrencies
The Excel spreadsheet below shows the weekly changes in the Objective Technical Rankings (“TR”) of individual cryptocurrencies. A technical ranking or scoring system is a fully quantitative approach that utilizes multiple technical considerations including, but not limited to trend, momentum, accumulation/distribution measures, and relative strength. As the technical state of an individual cryptocurrency improves, its Technical Ranking (“TR”) increases, and conversely, if its technical state continues to deteriorate, the TR decreases. The TR of individual cryptocurrencies ranges from 0 to 50. The spreadsheet below also works as a “heat map” in that cryptocurrencies with a TR ranging from 1 to 15 are highlighted in red and those with a TR ranging from 15.5 to 34.5 are highlighted in blue. TRs between 35 and 50 are shown in green. The main takeaway from this spreadsheet is the trend (continuous improvement or deterioration and change in direction) of individual TRs. Sustained trend changes need to be deployed in individual TRs for it to be viable. Secondly, a very low ranking can indicate an oversold condition, and conversely a very high number can be seen as an overbought condition. As such, oversold conditions can ensue quickly, and overbought securities that exhibit exceptional momentum can easily become even more overbought. Third, the Sweet Sixteen Total Technical Ranking (“SSTTR”), which ranges from 0 to 800, is near the bottom of the range, with individual cryptocurrencies having TRs that remain high, indicating their relative strength. It tells a story. Conversely, when the SSTTR is near the high end of its recent range and the TR of an individual cryptocurrency stagnate at low levels, it indicates relative weakness. Finally, I see objective technical rankings as the starting point for my analysis, not the whole “final game”.
Individual and collective technical weakness in cryptocurrencies through the end of December 2021 can be seen in the week ending December 30th. The first few weeks of February yielded better and more consistent readings. A singular example of superior relative technical prowess was Litecoin, which maintained high TR levels in the green zone during his first seven weeks of the new year. This is due to staying in the “green zone” (TR between 35 and 50) over that period, showing positive relative technical strength in Litecoin against the other 15. That wasn’t the only improvement by the end of February, but it was a notable tip for digging deeper into Litecoin’s technicals at the time.
The Sweet Sixteen Total Technical Ranking (“SSTTR”) leveled off in late February and was pulled four weeks ago before all Sixteen TR’s technical conditions recently improved.
As we saw above last weekend, there were 6 cryptocurrencies TR in the ‘green zone’, leaving 9 in the ‘blue zone’ (15.5 to 34.5) and 1 (Cosmos) in the ‘red zone’. .
This compares to the previous week, when there were 5 cryptocurrencies in the ‘green zone’, 9 in the ‘blue zone’ and 2 in the ‘red zone’. Mean TR gain over the week was +4.88.
12 cryptocurrency TRs improved on a terrific basis, with Cardano gaining +15.5 “handles” from 24 to 39.5, recording the highest TR improvement (see chart and technical comments below).
After overtaking resistance in the Kijun Plot (green line) a week ago last Tuesday, Cardano rose further but was capped by resistance at the top of the cloud. Earlier last week he saw the Kijun Plot support a price retracement, with price rising due to a cloud “twist” that continues to rise from the March 10th low. The MACD (Panel Below Price) reflects improving price momentum as the oscillator enters positive territory while tracking above the signal line. This is consistent with increased relative intensity compared to the CCi30 Index* (bottom green arrow). We expect his early February price reversal at the 0.42 level to provide at least a measure of resistance.
*CCi30 Index is a registered trademark and is created and maintained by an independent team of mathematicians, quants and fund managers led by Igor Rivin. It is a rules-based index designed to objectively measure the overall growth, day-to-day and long-term movements of the blockchain sector. We do this by tracking the 30 largest cryptocurrencies by market cap, excluding stablecoins (for more information, see CCi30.com).
“What’s in your wallet?”
Comparison of Relative Strengths of Sweet Sixteen and CCi30 Indexes
The relative strength of the Crypto Sweet Sixteen numbers you can see above, including but not limited to Bitcoin, Ethereum, Ripple, Stellar, and the aforementioned Cardano, is steadily improving continuously.
Sweet Sixteen Relative Rotation Graph
Relative rotation graphs, commonly called RRGs, were developed by Julius de Kempenaer in 2004-2005. These charts are unique visualization tools for relative intensity analysis. Chartist can use his RRG to analyze trends in the relative strength of multiple securities against a common benchmark (in this case his CCi30 index). The strength of RRG is its ability to plot relative performance and show true rotation in one chart. All RRG charts use four quadrants to define four phases of relative trend. The Optuma RRG chart uses leading (green) to bearish (yellow), lagging (pink) to improving (blue) and back to rising (green). You can see it as you move from one quadrant to another over time. To interpret the RRG chart. See the post script at the end of this blog for more details.
Ripple is by far the strongest of the Sweet Sixteens, followed by Stellar, as it rises to nearly unsustainable levels in the leading quadrant. I prefer to see tokens that have just entered the leading quadrant from improvement and are just beginning to gain relative strength. Both Cardano and Litecoin he two examples. These four that have or are improving come at the expense of both Bitcoin and Ethereum, which are starting to weaken.
Sweet Sixteen* 7-day absolute price change
*measured from Friday to Friday
The Technical Condition Factor will change from the week ending December 30th There are eight Technical Condition Factors (“TCF”) that determine an individual TR Score (0-50). For each of these eight, ask objective technical questions (see spreadsheet above). Additional points are added to the individual TR if the technical question is positive. Conversely, if the technical question is negative, you will receive a ‘0’. Some TCFs are more important than others, such as the Weekly Trend Factor and the Weekly Momentum Factor, in compiling individual TRs for each of the 16 cryptocurrencies. total. For example, the Daily Momentum Technical Condition Factor (“DMTCF”) for 16 cryptocurrency ETFs (or 7 X 16) would have seven considerations ( or question). The reading will be 112 or 100%.
Last week, 80.36% of readings for DMTCF were registered for the week ending March 31st. This equates to 90 of a total of 112 positive points. Five weeks before the DMTCF reading dropped to an oversold reading of 4 of 3.57% or 112 positive points. At current readings, DMTCF is approaching the short-term overbought range between 85% and 100%. It should be remembered that anything in the 0% to 15% range indicates a short-term oversold condition, just like it did five weeks ago.
As a confirmation tool, if all 8 TCFs improve week to week, we confirm that many of the 16 cryptocurrencies are technically improving internally and the broader market is moving higher (up/ Conversely, the more TCF is declining each week, the more “cryptocurrencies” are technically deteriorating and the broader market is declining. Make sure. Six TCFs rose and two TCFs fell last week, confirming the gains in the broader cryptocurrency market.
CCi30 index superimposed with this week’s Sweet Sixteen total technical ranking “SSTTR”
The Sweet Sixteen Total Technical Ranking (“SSTTR”) indicator is the sum of all 16 cryptocurrency rankings and can be seen as a confirmation/divergence indicator and an overbought indicator. As a confirmation/divergence tool: If the broader market as measured by the CCi30 Index continues to rise without a commensurate or higher move in his SSTTR, a continued rise in the CCi30 Index will become increasingly jeopardized. Conversely, a positive divergence is recorded when the CCi30 index continues to record lows and the SSTTR shows little change or building improvement. In some ways this is like a traditional A/D line. As an overbought/oversold indicator: The closer the SSTTR is to the 800 level (all 16 cryptocurrencies with a TR of 50), the more “technically it doesn’t get any better.” Possible pullback of CCi30. Conversely, an increasing number of “technically washed out” cryptocurrencies are approaching extreme lows where “technically it can’t get any worse”, leading to oversold rallies or measurable lows. It’s getting closer to realization. The 13-week moving average shown in red smooths out the unstable SSTTR measurements and is a better indicator of trends analytically.
The CCi30 Index’s nine-month base building process continues. That price action is consistent with improving price momentum as evidenced by the MACD continuing to track higher than the signal line as the Momentum Oscillator approaches positive territory. With the rising March 10 low and continued confirmation of the Sweet Sixteen Total Technical Ranking’s 13-Week Moving Average (red line) since the turn of the year, the CCi30 Index briefly entered price resistance last June. I think we can take on the challenge. The /July high is at the 10,000 /11,000 level for the next few weeks.
Sweet Sixteen Index Daily Line Chart with Sweet Sixteen Daily Momentum Oscillator
The Sweet Sixteen Daily Momentum Oscillator is the sum of 16 Cryptocurrency Daily Momentum Technical Condition Factors. It serves as a short-term confirmation/disconfirmation and overbought/oversold indicator of Sweet Sixteen Crypto Index price movements and is used in conjunction with the MACD.
There is only one short-term technical concern, as shown in the chart above. The Sweet Sixteen Daily Momentum Oscillator has yet to see an increase in the index (yellow dotted line in the Price and Momentum panel) despite the rising price lows and highs. Only time will tell if the divergence with the MACD (which continues to track higher in positive territory) is resolved.
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