Weekly Index Performance – May 26, 2022

In this newsletter, we will go through the new TM Market Page to provide an analysis on the crypto market using Token Metrics tools. In addition, this newsletter will cover the performance of TM grades over the past week.

Market Review

Over the past week, the total crypto market has found support around the $1.2 Trillion level and has been ranging between that level and $1.4 Trillion. As shown in figure 1, the volatility in the market dropped following the big down moves during the first half of May, and most tokens had relatively weaker relief rallies compared to previous local bottoms where the buy-the-dip phenomena was stronger, and also shorter lived. In fact, out of the top 100 tokens by market cap, only 7 coins had 7-day returns exceeding 10%. The biggest weekly gainer is Fantom with an 18% gain as it is trading at $0.467 as of the time of writing, down over 87% from all-time-highs.

Figure 1: The Crypto Market Cap and Volatility Index

Market Indicator

The new Token Metrics Market Page has multiple features that analyze the current trend of the overall crypto market. Figure 2 below shows the TM grade market indicator applied on the total crypto market cap time-series. We can see that the market indicator is still in a bearish regime ever since April 9th, where the total crypto market cap was at the $2.08 level. In addition, figure 3 shows the percent of coins that have a Bullish TM grade out of the top 300 tokens by market cap. We can see that although some coins had relief rallies of over 20% gains, the overall market remains bearish as less than 3% of tokens have Bullish TM grades.

Figure 2: TM Grade Market Indicator

Figure 3: Percent of Bullish TM Grades

Other indicators on the TM Market page that determine strength of the prevailing trend are also in agreement with the overall bearish environment. In fact, looking at figure 4 below, the Bull and Bear indicator shows that 94% of tokens are trading below their 60-day EMA, and both the breakout and low-frequency trend signals are showing that over 90% of coins are in bearish territory.

Figure 4: Trend Analysis

Further, the TM Market page provides additional features and indicators can can help navigate this environment. The Market Cap chart shown in figure 5 below uses the signals from the TM Market Indicator to visualize the bearish and bullish regimes on the total crypto market cap, Bitcoin’s market cap, and the Altcoin market cap. This is helpful as it shows how during bear markets altcoins tend to be hit harder than bitcoin, and during bullish markets altcoins tend to outperform bitcoin. In addition to this, the Bitcoin vs Altcoin Season indicator shown in figure 6 below has been in Bitcoin territory since the start of May, which confirms that bitcoin is likely to outperform altcoins during this bearish environment.

Figure 5: Crypto Market Cap

Figure 6: Bitcoin vs Altcoin Season

TM Grade Analysis

With the current bearish reading from the TM grade market indicator, very few tokens have had a high TM grade over the past week. The TM grade has proved to work very well during trendy markets, and it helped investors get out early during this market downturn. In fact, shown below in figure 7 is the time-series of tokens compared to their TM grades. These charts are now available on the Token Metrics website for any token that has a TM grade. We can see that TM grades have been very low for these tokens for some time, which helped investors exit long positions and save capital on the way down.

Figure 7: TM grade vs Price

Looking ahead

Looking at the current indices allocation, we can also see that the most popular coins recommended by the AI this week are Bitcoin, Binance Coin and Tron.