The digital asset market continued to push higher adding a few percentage points and currently has a valuation of 435 billion dollars. The broader market was able to trade a new 2 month high just edging out the 472-billion-dollar number traded in early March of 2018. This 472 bb valuation for the cryptocurrency market was also minor resistance in March and set up a period of consolidation, as the market takes a breather after a lengthy bull run. Buying support had surfaced over the past few months near the 400 bb mark while profit taking comes in the 470’s. Historically, as markets mature and the trading bands become tighter and tighter as either buyers or sellers manage to push through, and what was once resistance becomes the new support level, or vice versa.
Volume in US Dollars has also steadily increased and after making multi months lows in early April with only 11 bb per day, price weighted daily volume is now 27.8 bb over the past seven days. Last week VWAP (Volume Weighted Average Price,) for the entire market was at the 438 billion prices.
Another positive sign and point I have tried to illustrate many times is that of the Bitcoin Market share or “BTC Dominance,” as referred so often, continued to decrease. BTC’s market chare traded down to a multi month low at 35.2%, and is currently 36%, this continued move from Bitcoin to other digital commodities is a necessity for a continued broad-based rally.
Market standouts included:
Bitcoin Cash + 22%
IOTA + 28%
Bytecoin + 151%
In other markets:
Dollar Index edged up and traded new highs for the year
US Equities moved up 2%
US Treasury Complex and Eurodollars were largely unchanged, but rates remain at multi year highs.
Gold traded higher by a few dollars and is currently consolidating in the $1,300 – $1,320 range.
Price and Volume are of the utmost importance, but one needs to know be aware of looking at only the dollar weighted volume. When the cryptocurrency market was near all time highs with a valuation of more than 800 billion dollars, volume in dollars set a historic high with more than 70 billion dollars of digital commodities changing hands in one day. By dividing dollars volume traded by total market cap, one will see that 8.7% of the total market cap changed hands on that day. Earlier I stated that in the past week the average daily volume was near 28 billion dollars per day in the cryptocurrency markets. Prior to December of 2017, this number would have been unfathomable by many as the all-time high in dollars traded was only 22 billion and that was in November of 2017.
Fast forward to the end of April 25, 2017, less than two weeks ago, the cryptocurrency market had a valuation of 400 billion yet 42 billion dollars of assets changed hands. This shows that more than 10% of the market valuation was traded in that day, hence there is more interest now than there was at all time highs in early January 2018.
In conclusion, in my experience, when observing assets priced in a low nominal values, whether that is penny stocks, but 1 cent crypto currencies of those priced in Bitcoin “satoshi’s” looking at charts in a logarithmic (log) fashion has helped create a clearer picture for me. This can be noted that an asset priced at one cent historically has a higher probability of having a large percentage move than an asset priced at $100.