ZN Crypto Market Report — July 17th, 2019

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Given the volatility of Bitcoin recently and a number of news events and narratives that have surrounded the price gain, it seems only right to take a more holistic view of the markets.

This brief report will not only look at Bitcoin, but the majority of the crypto markets as well in order to provide a more in-depth perspective on what is going on.

As a warning, readers should keep in mind that not every aspect of the crypto markets will be dissected in this report, but the findings presented below should yield a greater perspective of the ‘bigger picture’ in the crypto markets.

Contents hide

Taking a Brief Look at Bitcoin

Double-Top Formation Confirmed

In our previous price analysis of Bitcoin, we discussed the possibility that a double-top formation (reversal) could be occurring, when the price of Bitcoin was at roughly $12.3k.

Based on the price action that we can see currently, it appears that the double-top chart formation that we were originally discussing has finally come to fruition. From that top of $12.3k-$12.5k to $10.6k, we’re talking about a $1.7k-$2.k distance ($10.6k = neckline). That means that the double-top formation would fulfill itself at $9k-ish or so (assuming that the pattern accounts for the full drawdown of $BTC).

Per usual, Bitcoin is dragging the rest of the markets down with it. We know this because the Bitcoin dominance % is still at 66%+, which is where it has been lingering over the past few days.

Evaluating Bitcoin Dominance Percentage

The data presented below is from CoinMarketCap:

On June 12th, the dominance % was at 55.07% (approx; data from CMC). Since that point, the dominance % has soared through the roof and is currently sitting at 66%+, as mentioned before.

But what we need to factor in is that the dominance % of Bitcoin is at 66%+ at the price of $9.5k. Let’s see where it was the last time that Bitcoin was at $9.5k.

This occurred on June 20th, 2019.

On that day, the Bitcoin dominance % was at 57.65% compared to the 66%+ dominance that its at currently. At face value, that seems to indicate that the entire market has been tanking while Bitcoin, solely, has been increasing in value.


Market Analysis

In this section of the report, we’re going to take a more holistic view of the markets in relation to Bitcoin to see where the money has been flowing into the markets for Bitcoin.

First, we’ll start by looking at the Total Market Capitalization for Bitcoin.

Total Market Capitalization Metrics for Bitcoin

Total Market Capitalization (excluding Bitcoin) = $147B on June 26th.
Total Market Capitalization (excluding Bitcoin) = $86.7B today (July 16th, 2019) ; less than a month later

That’s a -41% drop in the total market capitalization (excluding Bitcoin) since June 26th, 2019. This is an astronomical decrease in the total market cap apart from Bitcoin. So much so to the extent to where the concept of an “alt seazon” or any other similar euphemism should be seriously questioned.

Some of the projects in the lower tiers are dying currently, and they are not experiencing the same boom that Bitcoin is. Those that are looking at the markets need to be careful to take this observation into consideration when formulating their own personal investment strategies.

MVIS Indices Analysis

If you’re not familiar with the MVIS Indices for Digital Currency, a brief description is provided below:

MVIS is a website that compiles together financial products that can serve as derivatives for various markets. Some of their products deal specifically with digital currency markets. We’re going to be looking at those for this section of the report. Specifically, we’re going to be looking at four different indices. They are as follows; MVIS CryptoCompare Digital Assets 100MVIS CryptoCompare Digital Assets 100 Large-CapMVIS CryptoCompare Digital Assets 100 Mid-CapMVIS CryptoCompare Digital Assets 100 Small-Cap.

Per the MVIS website,

“The MVIS CryptoCompare Digital Assets 100 Index is a market cap-weighted index which tracks the performance of the 100 largest digital assets. The index serves as benchmark and universe for the other MVIS CryptoCompare Digital Assets Indices.”

The link to each specific index will be provided in the photo captions as they are covered.

Additional MVIS Index Information

Color Coordination for the Indices on the Chart(s) Are as Follows:

Yellow = (MVDASC) MVIS CryptoCompare Digital Assets 100 Small-Cap

Red = (MVDAMC) MVIS CryptoCompare Digital Assets 100 Mid-Cap

Blue = (MVDA) MVIS CryptoCompare Digital Assets 100 Large-Cap

Gray = (MVDALC) MVIS CryptoCompare Digital Assets 100

Sample:

Index Components

For the sake of space, the components (cryptocurrencies included within) of each index were compiled in separate Google Sheets (Excel Documeents, which are linked below (bit.ly used to shorten links; malware link scanner can be found here = https://urlscan.io/):

  1. MVIS CryptoCompare Digital Assets 100 Large-Cap Components = https://bit.ly/2O0J8eE
  2. MVIS CryptoCompare Digital Assets 100 Mid-Cap Components = https://bit.ly/2Z2MhMo
  3. MVIS CryptoCompare Digital Assets 100 Small-Cap Components =https://bit.ly/2XIUxEq

Final Notes:

The three indices listed above under the components section are cross-sections of assets with the T100 market capitalization. There is no overlap in the assets in these categories, which means that there is nothing is the MVIS T100 Large Cap that’s also in the T100 Mid-Cap or T100 Small-Cap.

These indices are all weighted, so keep this in mind as well going forward. That means that strong performance (positive or negative) by assets that have a heavier weight in the indices could skew the performance of the entire index. As it pertains to that sentiment, please keep in mind that these indices have also been created to model actual financial products (i.e., an index investment is a financial product in reality).

There are monthly, quarterly and semi-annual index reviews that are published by MVIS for each of these indices. Those will be included at the end of this report.

Tracking the Performance of the MVIS Indices Over Various Time Intervals (1 Week/30-days [1 month]/6 months/1 Year)

This data uses July 16th/17th, 2019, as the anchor date for the “now” period.

Performance of the MVIS Indices Over the Past Week

As one can see in the screenshot above, all of the indices have been impacted nearly the same by the market. The “strongest” performer was the MVDAMC (Mid-Caps), which posted a loss of -18.42% vs. their counterparts, which have all posted -20%+ losses over the same time span.

Performance of the MVIS Indices Over the Past Month (July 17th, 2019)

The parity between the indices grows significantly when looking tracking their individual performances over the past month (30 days).

The following observations can be made about the 30-day tracking of these indices:

  • The MVDA (Large-Caps) posted a negative, but their performance (-7.81%) was significantly better than that of their counterparts in the MVIS Small-Caps & Mid-Caps, respectively.
  • The MVIS Small Caps and MVIS Mid-Caps both posted losses that are essentially equivalent (-26.50% & -24.27%, respectively).

Performance of the MVIS Indices Over the Past Six Months (July 17th, 2019)

At 6 months, the chart above essentially tracks the performance of the four indices throughout 2019 thus far (starting at January 18th, 2019).

Before discussing the massive parity in performance between the indices, it is worth noting that each index closely followed one another until roughly the end of the April.

As one can observe in the chart above, around April 23rd, 2019, the large-caps began to experience tremendous gains that did not trickle down to the mid-caps or the small-caps.

As many reading this report will recall, this is around the time that Bitcoin began to ‘take off’. Given the fact that Bitcoin has significant weight (70.42%), it is worth evaluating whether Bitcoin’s performance has been the sole reason for the increase in the large-cap index or whether this trend has pervaded among other components in the index.

Evaluating Bitcoin

For this portion, we’re going to consult the BraveNewCoin Index Charts ($BLX) on TradingView because they contain aggregate data that is averaged from all of the top exchanges in crypto.

Below, we can see the gains of Bitcoin from April 24th, to one of Bitcoin’s localized price peaks ($12,620) on July 10th, 2019.

If we account for the recent decline in price, Bitcoin is up +71.29%, which can be seen below:

Specifically, over the last 6 months (since January 18th, 2019), Bitcoin has increased by 159.08% to-date:

In order to better gauge whether or not the performance of the MVIS Large-Cap Index has been solely due to Bitcoin’s recent astronomic price rise, we’re going to take a brief look at the performance of the other components in the MVIS Large-Cap Index over the past 3 months, since the decoupling began on April 24th, 2019.

Tracking back 3 months from the date of this report’s compilation will bring us to April 17th, 2019 — which is perfect because it takes us back just one week before the decoupling of the MVIS Large-Cap Index.

Please note: The markets have declined significantly over the past week (over 20%+ as shown in our 1-week analysis of all MVIS T100 Indices; However, since the drop was virtually equitable among all indices, this should not skew our results to any great extent).

Here is a view of the results directly from Google Sheets in Google Drive:

Link: https://docs.google.com/spreadsheets/d/1hUuVq3dLuc79zVkNT8F3U3eYdSgQFYcA0eFRBIFVE7Q/edit?usp=sharing

As can be seen above, there were numerous other strong performers in the MVIS T100 Large Cap Index. It is worth noting that some of the assets that are depicted above would no longer qualify for the MVIS T100 Large-Cap Index. This adjustment will be made soon per MVIS’ monthly/quarterly schedule.

What is also notable is that the assets, XRP and XLM, were the only members of the MVIS T100 Large-Cap Index to post a negative return over the past three months (90 days), shedding losses of –11.17% and –26.53%, respectively.

Intermittent Conclusion:

The performance of the MVIS T100 Large Cap Index is not solely attributable to Bitcoin. In fact, other assets such as Litecoin ($LTC) and Binance Coin ($BNB) have significantly outperformed Bitcoin over the past 90 days.

This is a trend that traders and other market spectators may want to pay keen attention to in the future moving forward.

Performance of the MVIS Indices Over the Past Year (July 17th, 2019)

When observing the performance of all of the indices over the past year, the parity between them is astounding.

Specifically, we can see that the index performances reveal:

  • MVIS Large-Caps are Only Down –17.10%.
  • MVIS Mid-Caps are Down –70.55%.
  • MVIS Small-Caps are Down –71.11%.

The parity between the performance of the Large-Caps and the Mid-Caps & Small-Caps could not be more evident.

Another clear observation that can be made is that the Mid-Caps and Small-Caps have essentially been coupled together in their overall performance, which is noteworthy.


Reviewing Component Performance

In this section, we’re going to review the best and worst performers of each of index, starting with the MVIS T100 Large-Caps.

MVIS Large-Cap Component Performance

MVIS Large-Cap Index Performance YTD (July 17th, 2019)

What’s most notable in the chart above is the YTD performance of the MVIS Large-Cap peformance, which is at 104.46% as a whole at the time of writing. The 3-year performance must be taken with a grain of salt because not every component in the index was in existence 3-years ago.

A more concise longitudinal capture would be a 1.5-year index performance review.

In lieu of such a metric, the 1-Year Index Performance also serves as a statistic that should help to adequately measure the performance of the MVIS Large-Cap Index. According to the chart posted above, the entire index is only down -2.82% over the last year (365 days; not YTD).

This is a pretty noteworthy stat when considering the fact the entire crypto space’s value plummeted during a bear market that pervaded throughout the entirety of 2018.

MVIS T100 Large-Cap Index Best Performers YTD (Year-to-Date; July 17th, 2019)

Notably, Binance Coin reigns at the top of the list by a far measure. Thus far, Binance Coin has posted a +351.23% return YTD vs. second place finisher Bitcoin, which has posted a +159.65% return thus far this year, according to the MVIS Index.

This is another testament to the extraordinary performance of exchange tokens in the market vs. all other alternatives. As we will see in the review of other indices, exchange tokens from Huobi, KuCoin, OKex, and others have experienced gains that far outweigh what can be seen in the rest of the crypto markets.

MVIS T100 Large-Cap Index Worst Performers YTD (Year-to-Date; July 17th, 2019)

Brief Note: The ranking of these losses has been calculated based on their $BTC appreciation/depreciation. Thus, these values only account for the losses in Bitcoin that have been sustained since the beginning of this year(2019).

Surprisingly, Tron has had the worst performance, among all components in the Large-Cap Index, since the beginning of 2019 to date. Despite the fact that Tron has been in the news cycle, pervasively, over the past few months — starting with the publicly announced partnership between Justin Sun, founder of Tronm and Changpeng Zhao, co-founder of Binance, through Tron’s release of Bittorrent.

Following Tron are Dash, Monero, Stellar, and Tezos — in that order. There are a number of statements that can be issued about the above-mentioned assets in relation to their price action, but this report will refrain from doing so at this point in time for the sake of maintaining our aerial view of market performance in the T100.


MVIS Mid-Cap Component Performance

MVIS Mid-Cap Index Performance YTD (July 17th, 2019)

Source: https://www.mvis-indices.com/indices/digital-assets/mvis-cryptocompare-digital-assets-100-mid-cap/statistics

As can be seen above, the YTD performance of the MVIS Mid-Cap Index stands at +19.69%, which pales in comparison to the YTD performance of the Large-Cap Index (100%+).

At 19.69%, the Mid-Cap Index is only slightly outperforming the Dow Jones (+17.09% YTD) as an index and its actually performing at par with the S&P500 (+19.68% YTD).

When considering the dramatically increased risks inherent in crypto markets, in general, one could argue that this would make Mid-Cap Index a relatively worse investment in comparison to the S&P500.

The 1-Year Delta of the Mid-Cap Index shows that this index has shed a -67.55% loss over the last 365 days. This, again, is significantly worse than the Large-Cap Index (-2.82%). The 3-Year Performance stats, while limited for the reasons discussed in the Large-Cap Index performance review, notably trail the Large-Cap Index as well by a fairly significant margin.

Brief NoteWhen assessing these indices using longitudinal reviews such as the 1-year and the 3-year performance metrics, one must take into account the reapportioning of various assets over that same time span. For instance, on February 5th, 2017, MaidSafeCoin, Augur and Factom were ranked at #8, #10, and #13, respectively, among all cryptocurrencies, marketcap-wise. Today, those same coins are ranked at #86, #56, and #113, respectivelyAlso, projects that have entered into the market with a strong performance in that time span, such as Tron, Chainlink, Bitcoin Cash, and EOS, have changed the landscape of the T100 significantly. Thus, leveling comparisons between indices on a longitudinal basis that spans greater than a year is relatively ineffective in this context.

MVIS T100 Mid-Cap Index Best Performers YTD (Year-to-Date; July 17th, 2019)

Source: https://www.mvis-indices.com/indices/digital-assets/mvis-cryptocompare-digital-assets-100-mid-cap/statistics

Brief Note: The ranking of these losses has been calculated based on their $BTC appreciation/depreciation. Thus, these values only account for the losses in Bitcoin that have been sustained since the beginning of this year(2019).

As we can see in the picture above, apart from Chainlink and OKex (their exchange token), the peformance of all other T100 mid-caps has been fairly abysmal, to say the least.

$ONT (Ontology) is in third place in this index with a 35.80% return YTD, which isn’t terrible considering the condition of the markets at the end of 2018, while also factoring in the performance of $NEO (whose price action has been closely coupled to $ONT at several different points in time). However, despite these allowanaces, this gain still woefully underperforms the entire T100 large cap index (as an index; not individually) — and its performance is also significantly weaker than that of many coins in the MVIS T100 Large-Cap.

What was stated above about $ONT can also be said of $RVN (Raven Protocol), whose YTD gains are only +20.06% thus far, which, again, woefully underperforms the MVIS T100 Large-Cap index (as an index; not individually) as well as many of that index’s components.

MVIS T100 Mid-Cap Index Worst Performers YTD (Year-to-Date; July 17th, 2019)

Source: https://www.mvis-indices.com/indices/digital-assets/mvis-cryptocompare-digital-assets-100-mid-cap/statistics

Brief Note: The ranking of these losses has been calculated based on their $BTC appreciation/depreciation. Thus, these values only account for the losses in Bitcoin that have been sustained since the beginning of this year(2019).

Surprisingly, Zilliqa heads the list of Worst Performing Components YTD from the Mid-Cap Index. This only comes as a shock because Zilliqa’s social sentiment has been growing over the past few months as discussions regarding their sharding implementation continue to increase.

Zerononcense recently published a brief analytical review of the project, which can be seen here: https://blog.zerononcense.com/2019/06/19/zilliqa-project-pt-1/


MVIS T100 Small-Cap Index Best Performers YTD (Year-to-Date; July 17th, 2019)

Brief Note: The ranking of these losses has been calculated based on their $BTC appreciation/depreciation. Thus, these values only account for the losses in Bitcoin that have been sustained since the beginning of this year(2019).

Notably, the Huobi Token and KuCoin’s exchange token are in positions #1 and #3, respectively, on the list of best performers among all components of the Small-Cap Index.

As mentioned above when discussing Binance Coin’s ($BNB) price action, exchange tokens have posted substantial gains throughout 2019. This is due, in large part, to the advent of IEOs (Initial Exchange Offerings). These offerings, which will be discussed in subsequent/later publications by Zerononcense, have essentially usurped ICOs as the primary fundraising mechanism of the markets.

MVIS T100 Small-Cap Index Worst Performers YTD (Year-to-Date; July 17th, 2019)

Brief Note: The ranking of these losses has been calculated based on their $BTC appreciation/depreciation. Thus, these values only account for the losses in Bitcoin that have been sustained since the beginning of this year(2019).

Conclusion

There are an infinite number of takeaways that can be gleaned from the information posted above.

However, in order to concisely summarize what has been compiled in this report, we have summarized the most important insights for readers below:

  • Large-Caps have dominated the market entirely over the last year and especially so in the last 3 months.

 

  • While Bitcoin has been considered a frontrunner, there are numerous other very strong performing assets that have posted significant gains throughout 2019 in the Large-Cap Index.

 

  • The concept of “altseason” appears to be a moot point, currently. There is no indicator that we are on the precipice of such an event or that such an event will occur at any point in the near future.

 

  • Following up on the prior point, there does not appear to be any “trickle down” effect of monetary in-flow in the crypto markets. In other words, money that is flowing into Bitcoin and other large-cap assets is not being subsequently drained into “alts”, as many in social media have proposed.

 

  • Performance has been fairly consistent among the entire T100. Coins that performed well at the beginning of 2019 are continuing to do so and coins that performed poorly at the beginning of 2019 are continuing to do so.

 

  • Proof of Work coins, in specific, have been doing exceptionally wellthroughout 2019. Examples include: Bitcoin, Bitcoin Cash, Bitcoin SV, Litecoin, and Ethereum. There are, of course, exceptions to this rule — but in general, PoW (Proof of Work) coins have posted some of the strongest gains in the market.

 

 

  • Stellar and Ripple, two cryptocurrencies that were seemingly destined to be opposed to one another (referencing Jed’s less-than-cordial departure from the Ripple team to jumpstart competitor, Stellar Lumens) have exhibited abysmal price action for the last few months. Both communities have faced extreme scrutiny throughout 2019, with significant speculative doubt about the future of both projects being thrown into the mix. However, when considering the fact that there is no project in the crypto space that is beyond such speculative doubt, it does beg the question of why Stellar Lumens and Ripple have been hit so hard, in specific, in terms of their price action. Again, there are a slew of reasons that can be attributed to each project’s abysmal price action, but those issues will be discussed in future publications by Zerononcense.