Stocktwits Crypto Data Dive – Week 22

Total Market Cap Update

What is the broader trend within the crypto market? The simplest way to track that is using a total market capitalization chart. So let’s see what we’ve got. 🔭

From the highest all-time market cap close of $2.834 trillion, crypto is down -62.16%, versus -62.22% from last week. 

YTD, the cryptocurrency market is up +43.39%.

*the price levels and performance values may be very different from what you read in your mailbox vs. what’s happening in the live market. This is especially true when crypto faces a new bull or bear run. 

Top 25 Cryptocurrency Update

There were 3 changes in the Top 25 this week.

In: $SAND, $LTC, and $UNI

Out: $RNDR, $TRX, and $XMR

Overall, the Top 25 cryptocurrencies were higher for the week by +2.3% versus -1.2% prior. 👍

*The universe used to construct the Top 25 list consists of all cryptocurrencies with at least $1 billion in market cap, excluding stablecoins.

Stocktwits Crypto Index RRG

Relative Rotation Graphs (RRG) help us visualize how a currency or sector performs compared to a benchmark – in this case, the U.S. Dollar Index (DXY). Think of the four colored sectors as stages in a race:

• Leading Quadrant (green) – You’re a champ! 🏆 You’re ahead of everyone else, and the crowd is cheering. But watch out; you might be overdoing it.
• Weakening Quadrant (yellow) – You’re slowing down 😓 and losing your lead. Maybe you’re a bit demoralized because your biggest fan didn’t show up. You’re now in the middle of the pack.
• Lagging Quadrant (red) – Disaster strikes! 😱 You’re injured, exhausted, or just made a big mistake. You’re now in last place, and it’s a sad scene.
• Improving Quadrant (blue) – Time for a comeback! 💪 Your motivation returns, the music swells, and you’re picking up speed. You’re back in the middle, catching up with the leaders.

Analyzing the RRG Examples 

Example 1: Rapid Rotation
– If an instrument moves quickly through all four quadrants, it could indicate high volatility or erratic behavior. Traders may want to be cautious or use appropriate risk management strategies in such cases.

Example 2: Stuck in the Middle
– An instrument that remains close to the center of the RRG might be in a consolidation phase, lacking a clear trend or momentum. Traders might wait for a decisive move before entering a position.

Example 3: Consistent Leader
– If an instrument stays in the Leading Quadrant (top right) for an extended period, it could signify a strong, sustained uptrend. Traders might consider buying opportunities or riding the trend.

Example 4: Slow Recovery
– An instrument that gradually moves from the Lagging Quadrant (bottom left) to the Improving Quadrant (blue) and eventually to the Leading Quadrant (green) could indicate a slow but steady recovery. Traders might look for potential reversal or bottom-fishing opportunities.

The GIF below shows the past 10 days of movement on the RRG.

Momentum remains bullish but very choppy, it’s almost like the border between the Lagging and Improving quadrants acted like a support zone for some of the indices. 

The GIF below shows the past 13 weeks of movement on the RRG.

Pretty much the same as last week: the weekly RRG still looks weak, but the momentum to the downside appears to have at least slowed down.

Putting It All Together

Structurally, nothing has changed from last week: price is still stuck inside the Falling Wedge. 

However, price did attempt a breakout before returning inside – analysts often interpret that as a bearish event, but the bears have been unable or unwilling to capitalize on that event. 

I’ll keep the falling wedge patterns ‘definition’ here until there is a clear breakout from that pattern.

As per Bulkowski’s analysis, the falling wedge pattern in a bullish market exhibits the following characteristics:

1. Typically, there are at least five instances where the price touches one of the trendlines, with the other three being touched multiple times.
2. The falling wedge pattern tends to persist for a minimum of three weeks.
3. Volume generally declines until the breakout occurs.
4. Approximately half of the falling wedges serve as consolidations of the preceding trend.
5. Breakouts above a falling wedge in a bull market tend to have the lowest failure rates.
6. The most robust breakouts tend to happen between 55% and 80% of the way toward the pattern’s apex.
7. Around 29% of falling wedges experience false breakouts to the downside, resulting in a bear trap followed by a strong rally.

While these statistics provide valuable insights, it is important to note that Bulkowski’s analysis primarily focuses on the stock market. How his statistics stack against the crypto market is unknown.