What a difference a week can make. The past week, The Cryptocurrency market regained some traction and is 40% off of the multi month lows set last Monday, which coincided with multi month lows in the US equity markets. I would note that that in Mid-December the digital asset market was setting all time highs with a total market cap of 425 billion which is the same as it is currently. After high volatility extremes, in this case a January high above 800 billion, a sharp sell off follows, which would appear to have been the case last week, as the total market cap shrank to 290 billion. It is also important to note that the crypto market has still seen a 20x return as an asset class, over the past year, where as in February of 2017 the digital currency space boasted a total market cap of 19 billion.
Another interesting point is that global interest rate futures, specifically Eurodollar Futures and the US Treasury Complex, all have rates that have increased a few bps over the past week. The VIX has come well off of its highs and is in the 26% range which is right near the midpoint of the past weeks low and high.
The February 5, 2018 panic, created an intermediate or potentially long term buy in the crypto space, as there was tremendous volume accompanied by extreme lows and then a positive close. The majority of the top 25 cryptos have increased in value 30% to 40% with the bell weather, Bitcoin, rallying 35% off of its intraday lows.
Bitcoin’s percentage of the cryptocurrency space had remained in a tight range and is currently 35%.
As funds and leveraged spec’s were forced out of markets across the board, some intriguing numbers and percentages came about over the past week.
Cryptocurrencies are 41% off of the recent lows.
The VIX is 47% off of its recent high. (Hint, Hint)
SPs are 2% above their low price on February 5, 2018. (They did trade significantly lower after the US close, and into the US open the next day.)
The US Treasury Complex and Eurodollar Futures are showing slightly higher rates compared with last weeks prices. Worth Noting, Eurodollar rates are only a couple basis point off multi year highs, last traded in August of 2015.
With the exceptional volatility in most asset classes, especially the crypto currency space, having a period of calm and trading in a range would be quite healthy. The 420 billion level for total market cap has been support as well as resistance over the past few months, depending on the trajectory of the market.
Other important levels for the total market are:
830 billion, the all time high
650 billion, strong resistance
280 billion, strong support
195 billion, 3 month low, very strong support
The One 888