MaiCoin Digital Asset Weekly, June 28 2019

Digital Asset Weekly, June 28

Commentary

Digital Assets ended the week +9.7%, but -15% off the week high. Total Digital Asset market cap briefly hit a 411-day high of US$386B. BTC +15% continued to do most of the heavy lifting, widening the gap with smaller coins and tokens. Breadth was skewed towards the negative with only 31% of the top 200 coins and tokens ending the week higher.

Trading was extremely active with average daily turnover this week +34% WoW to US$88B. Mid-week saw the most active day of Digital Asset trading on record with BTC trading US$45B and the entire space trading US$132B.

News sentiment this week remained positive with 81% of BTCarticles bullish vs 71% across the Digital Asset space. Top stories this week included: 1. Deutsche Bank strategist, Jim Ried, commenting that aggressive central bank policy could fuel BTC gains, 2. BitMEX posting a massive $16B single day trading record, 3. CFTC granting LedgerX a license for physically settled BTC futures trading, and 4. Jack Dorsey’s Cash App now supporting BTC withdrawals and deposits.

BTC price performance this week finally started to show signs of overheating. Red flags this week included: 20-day ROC of 65%, RSI of 87, a 50 day Z Score of 3.5 and a Mayer Multiple of 2.49 (ratio of price to the 200 day MAVG). On top of that, we’ve also had 2 days of very large long liquidations this week totaling ~ US$583M. Looking back at previous red flags like Mayer Multiples ≥ 2.49, price has typically seen corrections in the -30% to -40% range. That would imply a correction to the ~ $8,000 level. Though given the strength of recent sentiment, would be surprised if the pullback went that deep.

With BTC dominance at a multi-year high of 65% (BTC market cap as % of total Digital Asset market cap), one would expect that to trigger some degree of rotation into lagging alt coins. However, in the absence of an ICO boom to absorb that liquidity this relationship may be breaking down somewhat and we could be seeing a reversion of BTC dominance to the pre 2Q17 levels of 70% or 80%.

News

Charts

Chart 1. Weekly price vs volume

Chart 2. Weekly price change

Chart 3. Major thematics

Chart 4. Monthly average daily volume as % of historic high

Chart 5. MTD average daily volume

Chart 6. Price, 50 day z score

Chart 7. Mayer Multiple
– The Mayer Multiple is the ratio of price to the 200-day moving average
– Hit a 257 day high of 2.49 this week, the highest reading sine Jan of 2018
– Over the past 1,000 days Mayer Multiple readings ≥ the recent high of 2.49 have been followed by price corrections. The normal pattern is for a price correction of -30% to -40% over the following few weeks.

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