Welcome to this edition of the Market’s Compass Crypto Sweet Sixteen Study #169. In this study, we take a closer look at the technical landscape of sixteen major cryptocurrencies by market cap. Each week, we focus on any changes in technical indicators for these assets, shedding light on significant movements in individual cryptocurrencies and overall indexes. Paid subscribers can look forward to the full, unabridged Market’s Compass Crypto Sweet Sixteen Study delivered straight to their inbox. If you’re interested in past editions, they are accessible to subscribers on The Market’s Compass Substack Blog.
With the festive season upon us, this will be the final complete study for 2024, in observance of Christmas, Hanukkah, and the New Year. I want to express my sincere gratitude to all subscribers, both paid and free, for their engagement and feedback throughout 2024. Today’s analysis will be sent out to all subscribers. Wishing you Happy Holidays!
For those interested in diving deeper into my objective Individual Technical Rankings, you can explore more at www.themarketscompass.com. Head to the MC’s Technical Indicators section and look for "crypto sweet 16."
Below, you’ll find an Excel spreadsheet showing the weekly changes in the objective Technical Ranking (“TR”) for each cryptocurrency, as well as the Sweet Sixteen Total Technical Ranking (“SSTTR”).
The SSTTR has recently experienced a decline after a nine-week rise. It dropped by 14.45% to 547.5 from last week’s reading of 640, which itself was an 8.11% decline from the December 6th reading of 696.5. This earlier reading was the highest recorded overbought reading since we started tracking these metrics in October 2021.
Last week, only one of the Sweet Sixteen cryptocurrencies saw its Technical Ranking rise, while the remaining fifteen declined. This contrasts with the previous week, where two TRs rose, one remained the same, and thirteen fell. The average TR loss last week was 5.78%, compared to the 3.53% average loss from the prior week. Seven cryptocurrencies ended the week in the “green zone” (TRs between 35 and 50), and nine were in the “blue zone” (TRs between 15.5 and 34.5), whereas last week saw fifteen in the “green zone” and one in the “blue zone.” These TR contractions reflect the broader market’s pullback.
*The CCi30 Index is a registered trademark, maintained by an independent team led by Igor Rivin. It indexes the 30 largest cryptocurrencies, excluding stablecoins, based on market capitalization. More details are at CCi30.com.
For guidance on interpreting RRG charts, head to the Market’s Compass website mentioned above. For more in-depth interpretations, refer to the postscripts and links at the end of this blog.
The accompanying chart consists of three weeks or 21 days worth of data points, marked by dots.
In the Leading Quadrant, Tron (TRX) and Litecoin (LTC) began to trend downward two weeks ago. TRX accelerated its downward momentum into the Weakening Quadrant, while LTC lost its relative strength momentum, also entering the Weakening Quadrant. Polkadot (DOT) moved through three quadrants, transitioning from the Leading to the Weakening and finally to the Lagging Quadrant, although it’s showing signs of recovery alongside Cardano (ADA). Bitcoin, having exited the Lagging Quadrant two weeks ago, has been regaining momentum, even though it’s starting to slow down. Solana (SOL) entered the Improving Quadrant, continuing its upward trajectory from the Lagging Quadrant.
The two charts below display longer-term line charts of the Relative Strength of the Sweet Sixteen cryptocurrencies against the CCi30 Index. These charts utilize a 55-Day Exponential Moving Average in blue and a 21-Day Simple Moving Average in red. By observing trend directions and crossovers, you can get hints at potential trend continuations or reversals.
Every cryptocurrency in the Sweet Sixteen recorded losses last week, with thirteen seeing double-digit declines. This follows the previous week, when three experienced gains, and the rest saw decreases. Before this, the market had seen significant gains, with increases of 61.07%, 130.10%, and 88.87% over preceding weeks, indicating a period of high volatility. The average absolute price loss over the past week was 15.88%, significantly higher than the 2.56% average loss from the week before.
The DMTCF (Daily Trend Technical Condition Factor) took a sharp fall last week, down to a reading of 6.25 from a previous 27.68 — a move to deeply oversold territory. Previously, I mentioned the DMTCF had reached an unprecedented high of 100% last month. As of last week, it continued its decline to 63.75%, highlighting ongoing weakness in the Sweet Sixteen’s daily trend.
When all eight TCFs (Technical Condition Factors) show improvement week-over-week, it confirms that more cryptocurrencies are strengthening internally on a technical level, hinting at a potential market rally. Conversely, if more TCFs decline, it suggests market weakness. Last week, one TCF rose while seven fell.
For a concise guide on interpreting the SSTTR versus the CCi30 Index’s weekly price chart, please visit the previously mentioned site.
Three weeks ago, based on the Weekly Candlestick Chart, I stated that the five-week rally seemed too rapid, indicating we might face a period of consolidation or correction. This view was supported by the Sweet Sixteen Total Technical Ranking’s overbought status and the Fisher Transform’s extreme levels. Last week’s rally hit a ceiling for three consecutive weeks and concluded near its weekly lows. Key support levels are 19,861 and 17,696.
Last Tuesday saw a breach of the Lower Warning Line, leading to a rapid drop on Wednesday, breaking price and Kijun Plot support at 23,570, indicating a deeper correction might be unfolding. All secondary indicators continue to track lower with no sign of the sell-off concluding. Support is now pegged at 20,210, just above the Cloud’s Upper Span.
Last week, I introduced the concept of Combination Pitchforks to identify the prevailing rally angle. That angle was breached, and with the Sweet Sixteen Daily Momentum/Breadth Oscillator reaching an oversold level, we might witness a temporary lull in the downtrend. However, the resulting Doji pattern suggests a balance rather than a reversal or bottom.
Optuma provides the charts, facilitating visualization of any data, including my Objective Technical Rankings. Cryptocurrency prices are courtesy of Kraken.
For those interested in learning more about RRG charts, introductory and detailed tutorials can be found at Optuma’s website and webinar.
To explore Optuma’s charting software, they offer a 30-day trial at www.optuma.com/TMC.
Additionally, a basic tutorial on technical analysis tools is available on my website, www.themarketscompass.com
