Stocktwits Crypto Data Dive – Week 50

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 -45.16%.

The cryptocurrency market is up +108.11% YTD and +91.64% YoY.

*the price levels and performance values may differ 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

Overall, the Top 25 cryptocurrencies were higher for the week by +0.8% versus +14.2% 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.

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

Click to enlarge.

Putting It All Together

There’s only one chart we need to look at as a barometer of where things are, and that’s Bitcoin’s weekly chart. 📈

The Technically Speaking articles have been hitting hard at the gaps between the bodies of the candlesticks and the Tenkan-Sen. When there are large gaps, like there are now, from an Ichimoku perspective, it means the market is out of balance. 

A return to equilibrium must occur, and it happens in one of two ways: time or, the most common, price. A return to equilibrium via price action is just how it sounds: prices fall back to the Tenkan-Sen. But a return to equilibrium via time is also possible. 

In the time ‘retracement’ scenario, price consolidates, and the Tenkan-Sen plays catch-up and moves closer. 🪗

Now, I don’t want to be all doom and gloom here, but here are some of the technicals indicating at least a pause in further movement higher. 

1. Massive gaps between the candlestick bodies and Tenkan-Sen.
2. Eight consecutive weeks higher.
3. The current weekly candlestick pattern is developing into a very powerful bearish reversal pattern, the hammer. 
4. The Composite Index has flatlined at historical highs and is turning south. 
5. The Detrended Price Oscillator has hit historical highs and is turning south. 

So, where is the next support level if the rally sputters out and things retrace? 

The nearest support is the Tenkan-Sen at $39,505. After that, it’s a hugely strong support level at $34,850 where the Kijun-Sen and 50% Fibonacci extension sit. 

As we transition into the final week before Christmas, volume tends to die down, and more price action shenanigans are likely to occur. So keep those eyes open. 👀

💻 Questions? Comments? Email Jon at jmorgan@stocktwits.com 💻