September 24, 2018   Market Update

September 24, 2018 Market Update

During the past week, several digital assets saw some percentage point gains in market share  while Bitcoin’s dominance decreased slightly. These are both positive signals for the overall digital asset marketplace.  As I mentioned in my last piece, there has and will continue to be a strong correlation between digital assets and emerging market currencies and equities.  Emerging market currencies and equities also found some support over the past week and will continue to be the key driver on when the digital asset market truly finds major buyers.

US equities were stable, and continue to consolidate near all time highs.  I recently saw a poll by a major bank written near the time of my last blog. According to this poll of Wall St. analysts, these are some of the most “crowded trades” at the current moment .

Short Bitcoin

Short Gold

Short Emerging Market Equities

Short Emerging Market Currencies

Long large cap US Tech equities

I have  noted in many of my prior pieces that as the digital asset markets continue to grow and mature, the correlations will continue and digital assets other than Bitcoin will continue their development in overall market share.  This is happening right  before our eyes.

Other keys to finding major support in the digital asset market are the key trading pairs.

BTC-ETH

BTC-LTC

BTC-XRP

BTC-DOGE

These four assets will need to gain traction versus Bitcoin before other projects with lesser market caps have major capital allocations.

 

Looking at these four large cap crypto currencies over the past week, Ripple was the strongest, gaining 37% vs. Bitcoin. Litecoin gained 3% vs Bitcoin. Dogecoin was flat vs Bitcoin and Ethereum lost 1% vs Bitcoin.  I look at this as an overall positive.  The total digital asset market cap, according to Coinmarketcap.com was able to gain in value and was not led by Bitcoin this past week.

 

The first step in a major recovery rally in the digital asset market is for money to flow from the number one asset to other large caps. This appears to be underway and over the next few months, I expect to see capital flow to the middle and smaller cap projects.

 

 

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