Digital Asset Weekly, Jan 31 2020

Commentary

Digital Assets +12% this week bringing total BTC gains in January to +32%, the best month since May of last year. Gains were broad based with 66% of the top 100 coins and tokens by volume ending the week higher.

Risk appetite was noticeably better with Alt Coins +13% this week led by big gains in ETC +31%, ZEC +24%, LTC +21% and EOS +18%. LTC and ETH ended north of their 200 day moving averages for the first time since 3Q19.

News flow was light this week. Top stories included: 1) GBTC a top 5 holding for Charles Schwab millennials, 2) OSL raising US$36M via share placement, 3) Bittrex securing an industry high US$300M in insurance coverage, 4) CME reporting US$100B in BTC futures trading since 2017 and 5) Singapore enacting new regulatory requirements.

Despite a 32% rally this month, BTC still looks far from overheating. BTC’s 20 day % change remains pretty tame at just 16% (vs previous price peaks > 50%). The current RSI of 69 isn’t particularly hot and crypto fear and greed has only just stepped north of its midpoint.

Given that Feb has historically been a very strong month for BTC and the relative dearth of volume between the current price and ~ $10,200, I think there’s a good chance that BTC could challenge $10,000 in the next couple of weeks. It’s also worth noting that BTC has tended to show a significant degree of follow through on sudden surges in monthly price performance; meaning that big MoM gains have tended to cluster and large, sudden MoM gains have tended to be followed by further gains.

News

Charts

  • Chart 1. BTC, Before and After Chinese New Year
    – BTC is typically weak before CNY and strong after
    – That said, this year post CNY performance is especially strong
  • Chart 2. BTC Seasonality
    – BTC off to a very strong 2020 start
    – Feb has historically been a very strong month
    – But wonder if that will be somewhat tampered by outperformance in Jan
  • Chart 3. BTC MoM %
    – Large, sudden MoM gains tend to see follow through
  • Chart 4. Weekly % Change
    – Top coins and tokens by volume up an average of ~ 10%
    – ETC and ZEC the big leaders this week
    – LTC and ETH also crossed above their 200D MAVGs this week
  • Chart 5. % vs 50D MAVG
    – Alt Coins really on a rip this week
    – ETC and ZEC 2 of the biggest out performers
  • Chart 6. RSI
    – RSI’s highish….but these can stay elevated for weeks
    – BTC’s RSI not overheated at 69
  • Chart 7. 52 Week Range
    – ETC and XTZ close to setting new 52 week highs
    – BTC still south of its 52 week range mid point
  • Table 1. Equity holdings at Charles Schwab, by generation
    – 1.84% of Millennial equity holdings are in GBTC
    – Making GBTC a top 5 asset for Charles Schwab’s millennial clients
  • Chart 8. Fear and Greed
    – Crypto Fear and Greed is warming up…but is still pretty neutral
    – Still only just slightly north of its midpoint & well south of previous highs
  • Chart 9. BTC Price vs Volume
    – Volume has relatively little resistance until $10,200
    – 20 day rate of change remains pretty tame at just 16%
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