Daily market commentary from 16.04.2020

Inhalt

• 1 Rotation Analysis
• 2 Altcoin Futures Basis Analysis
• 3 Top Ten Comparison
• 4 Volatility and Correlation Comparison
• 5 ETHBTC 4h Technical Chart Analysis
• 6 Market Cap Overview
• Glossary

1. Rotation Analysis

Trend slightly negative

The market was not flooded with major news last week, but BTC yet again experienced a trading range of nearly 1,000, and moved between 6,475 and 7,330 during the course of last week.

Some positive news on Easter Sunday was that OPEC and its allies agreed on a historical oil production cut. The proposal they agreed upon will mean cutting production by 10 million barrels per day, amounting to approximately 10% of the global oil supply. This will begin on May 1st and last until the end of June. This did help the crypto market to rally for a short while: BTC spiked from 6,750 to 7,300.

There has been some pressure on the entire crypto market, which led to the following: the Financial Stability Board has outlined recommendations to central banks for regulating global stablecoins, such as USDT, USDC, TUSD, and DAI. The FSB released a document addressing regulatory, supervisory, and oversight challenges for the G20 countries. In a nutshell, the suggestions are there so that authorities can control and regulate fully decentralised stablecoins; otherwise, they should consider banning them.

In the charts below, you can see the technical analysis for the Alt/Mid/Shit Indices. Attached you will also find our short-term view on support and resistance levels for all three indices:

Alt:     Support 65.00 / Resistance 75.00 / Alt (4h)

Mid:   Support 58.00 / Resistance 65.00 / Mid (4h)

Shit:   Support 69.50 / Resistance 78.00 / Shit (4h)

Alt, Mid, and Shit Indices traded neutral against BTC within the support and resistance range. All three indices experienced a USD performance of minus 10% over the course of the week.

The sector winners are Interoperability, Entertainment, Exchange, and Platform. The losing sectors are File Storage, SoV, and IoT.

The BNB coin performed neutral as the exchange Binance launched BTC options, and will therefore be in direct competition with the market leader Deribit. This exchange sector experienced an overall competition increase over the past few months. The best performing coin was KMD with a plus of 7.35%. BSV and BCH lost around 18% after the recent halving.

The MKR coin lost 7% as the Maker Foundation is facing a new lawsuit for the Black Thursday Liquidations of March 12th. The judicial total amount is USD 28 million. The losing coins were LAMB -21.5% and CKB -20%.

All MACDs are currently in a neutral zone.

Once again, cryptocurrencies moved more or less alongside the traditional market.

2 Altcoin Futures Basis Analysis

The futures basis turned slightly to backwardation again after we saw a recovery towards contango last week. Futures contracts are trading with a discount of nearly 1%. Altcoin futures changed into deep backwardation of around 2% again.

Implied volatility decreased a bit in the front months, but generally remained at the same levels.

Overall traded volume and liquidations of positions have not changed a great deal, even when the market in BTC dropped 900 points or 12%.

3 Top Ten Comparison

4 Volatility and Correlation Comparison

5 ETHBTC 4h Technical Chart Analysis

Someone seems to have a strong opinion

We mentioned two weeks ago that there was some aggressive buying of ETH going on due to the very large price-volume spike (visible on the right-hand side of the chart). It looks like this person has either increased their position or another trader has joined in, who has purchase a ton of ETH at around the current levels (look at the same indicator on the price-volume bar on the right-hand side of the chart).

The same trade is also visible on the ETHUSD margin long chart from Bitfinex. The margin longs have increased by roughly 1 million ETH over the past few weeks.

What does this mean for long positions?

Since we do not know how the funding situation (or leverage) is of that trader who bought all the ETH, nor do we know who sold it to them, I am not putting too much weight on this piece of data. The only thing that I can read out of this structure is that we need to see an upmove sooner than later due to the funding cost that will start to hurt the trader of the margin long position. If we do not see a price move soon, and the margin longs have not being reduced, the risk of this trader selling their longs will go up.

Therefore, I will not increase my long position, and will work with a stop just below the 0.0220 level.

View the charts: ETHBTC 4h

6 Market Cap Overview

Glossary

Advance Decline Line - the Advance Decline Line shows the ratio of coins for which the market cap increased relative to the market cap of BTC for each day.
ATH - all time high (maximum lookback period of 730€ days).
Data Source - tables and charts are based on daily close prices provided by Coinmarketcap.
EWMA - exponentially weighted moving average.
MACD - moving average convergence/divergence is a popular technical indicator to identify trends in the underlying instrument. It consists of the MACD and signal line, and the area shown in the background. The MACD line (strong) is the difference of two exponential moving averages, which are defined by the first and second parameter of the indicator. The signal line (weak) is the exponential moving average of the MACD line defined by the third parameter. The area in the background illustrates the difference between the MACD line and the signal line.
Pearson Correlation - quantifies the linear relationship between two variables.
Spearman Correlation - quantifies the monotonic relationship between two variables. As such, the Spearman Correlation is based on the ranked values of each variable and is used to detect non-linear relationships between the two.