We can approach the cryptoactive market from different ways and points of view. If you follow these posts you already know that I am mainly interested in a more macro approach to the market, since it is the one that I consider most valuable to carry out to evaluate the performance of the market in a certain period of time.
Lateral evolution in the altcoin ecosystem
Within this context, we can move away from dominant assets a bit. This allows us to have a more global vision of the market, which represents approximately 40% of the total, if we take into account the dominance data that we have regarding BTC and ETH.
In it we can see a clearly significant fact that we have discussed in our Twitch market commentary program, Good Morning Crypto:
The disposition of the altcoins at this moment indicates a possible upward movement in the market
SINCE we can see a structure where the assets that tend to attract more capital in upward movements have the best performance
- EGold, the cryptocurrency of the elRond network
- AVAX, the cryptocurrency of the Avalanche network
These two assets are used to being excellent indicators of bullish movements in the market. In moments of uncertainty and declines we can see BTC and ETH leading this ranking
In the graph it can be seen how this week the market gives more than modest benefits, but important given the context. Approximately half of the assets are still in negative weekly returns
Following the money trail
Another of the interesting information that the graph gives us can be seen in the lower zone, with our intensity indicators
We have talked on several occasions about the concept of intensity as one of the two basic pieces of information that we have to monitor in the market to make our investment decisions.
Knowing the power or force behind a price movement will allow us to make estimates of the real scope of a market movement.
As can be seen in the graph, this has been a week in which money has not flowed excessively to altcoins. In the graph below, the red areas are in the majority, indicating a decrease in the intensity or outflow of liquidity from these assets. We can see how much of that liquidity has shifted to neutral assets. (Stable coins), coinciding with a capital outflow of these with a new price increase of the main DeFi protocols, although not with special force
This is mainly because the money has been directed to other assets in the market
Moderate accumulation in Bitcoin
The answer to where that money has gone is given by the rest of the graphs where we can see those flows. Specifically, the Bitcoin graph shows us a progressive and discreet entry of this capital that has maintained an increasing speed of this flow.
For this we can see the hourly chart in weekly format of Bitcoin and we can see in the lower indicators this trend that has dominated the second part of the week
Ethereum, the big deal
Ethereum has developed a lateral movement during this week with hardly any volatility, but our intensity indicators do give us significant information in this regard, and that is that we can clearly see how in absolute terms (upper graph), and relative (lower graph). , liquidity has come to this asset in an important way
The result in absolute terms gives us a significant increase in the dominance of this asset in the market, with an increase in the speed of inflow of liquidity in this last period with a clear peak in demand that has been smoothing out.
Next change of scenery?
We never have an answer to a question like that, but what we can say is that this market composition is increasingly similar to the context of a bull market, both from the side of the dominant assets and from the rest of the market.
And it is that in the end what commands and determines the direction of the asset price is to identify those that cause the most appetite in investors, and for that the intensity of each of the movements must be analyzed.
The correlation between these intensities and price movements can be clearly seen in the graphs, and I am convinced that interesting investment strategies can be extracted from this, which I already tell you is something I am working on.
As always, remember that none of this is investment advice. You have to make your trading decisions based on your risk profile and this is a totally individual and personal research and execution process.
Everything expressed here are exclusively personal opinions that do not have to coincide with the investment criteria that fit your needs, not even those of a fund like BELOBABA.