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Crypto Monthly Market Analysis - January 2021Grab a cup of coffee and start your day by getting a quick update on the crypto market. We are starting January 2021 and like each month I analyse what happened to Bitcoin and the altcoin market. This time I decided to share the results with you here on Tradingview as well. In October Bitcoin gained 32%, in November Bitcoin gained 39%, and in December Bitcoin gained 54%! What an amazing way to end 2020! In November altcoins could keep up with Bitcoin very well, but Bitcoin really pulled away from altcoins in December. While Bitcoin gained 49.2% in December, altcoins (on average) did not increase in dollar value (-0.55%). This means altcoin lost quite a lot in Satoshi value and Bitcoin dominance increased from 63% to 71%. This could have fantastic implications for the altcoin market. The sad truth is that a lot of people are being congratulated on the price of bitcoin, but nobody actually holds a significant portion of BTC. We are all altcoin traders, and you're probably wondering whether you've been doing something terribly wrong not having seen the amazing bitcoin gains reflected on your own portfolio. Don't worry, everyone is in this situation right now. Altcoins are extremely low, and there are fantastic buy opportunities everywhere. You need to be patient, and make sure you don't take irrational decisions right now. What is also important: Total crypto marketcap reached an ATH as well: 777.514B! The total crypto marketcap is now higher than it was in January 2018. This might come as a surprise to many of you, wouldn't you have expected that the total market cap was way higher given that BTC is trading 50% above the previous all time high? Again, this is a sign of btc dominance and a signal to show how low altcoins are as a whole right now. Often when the price of bitcoin goes up, people take their money out of alts and put it in BTC instead. When BTC consolidates, that is when the altcoins rise. Again, I cannot stress this enough. Be patient and wait for those altcoin opportunities. The relative gain potential is much much higher on those than on the price of bitcoin. It'd be very surprising to see BTC double in value soon, as it required an entire doubling of the marketcap. To get double the price on altcoins is very easy however. For example, you could take a look at my XRP, ETH or LTC idea. But those would still be for higher marketcap coins. The true gains I expect come from the lower marketcap coins. Follow my channel to see more opportunities for those coming up in the coming weeks as well. The top 5 performers in December were $TFUEL (+233.60%), $THETA (+197.38%), $ZIL (+176.74%), $MITH (+138.78%), and $CHZ (+70.90%). Biggest losers were $SYS (-37.79%), $HC (-39.17%), $SNGLS (-39.37%), $AE (-40.30%), and $XRP (-66.02%). Follow me for consistent high quality updates, with clear explanations and charts. Please like this post to support me. - Trading Guru -------------------------------------------------------------- Disclaimer! This post does not provide financial advice. It is for educational purposes only!
COINBASE:BTCUSDLong
by Trading-Guru
36
JOET vs MTUM & an Understanding of ETF WeightingsThe purpose of this idea is two fold. 1) To discuss the fundamental differences between Market-Cap & Equal-Weighted ETFs & 2) To compare JOET & MTUM ETFs. The first half will cover topics specific to ETFs. The second half and very last section offers a comparison of the funds and conclusions to consider when choosing one. Feel free to skip to the bottom if the analysis or conclusions related to the ETFs is all that you wish to read. Definitions Market Capitalization = (stock price * outstanding shares) Momentum is the speed or velocity of price changes in a stock, security, or tradable instrument. Momentum indicates a stock’s price strength. (Source: Investopedia) Market Cap Weighted Indices Mechanics In market cap weighted indices, price plays a key role of weight. Asset allocation goes to stocks with rising prices over time, while allocation to stocks with decreasing prices, becomes smaller. Behavior Inherently momentum oriented. Concentrated on the winners. Anti-value like dynamic when weighting toward market cap. Performs the strongest in a growth based market or when you have concentration in some sectors or stocks but not others. Conversely, concentration risk is realized if a stock or sector’s market cap becomes concentrated regardless of actual growth and then crashes (eg. 2000 dotcom bubble). Equal-Weight Indices Mechanics In Equal-Weight indices, allocation is spread evenly across all stocks and regularly rebalanced at a predetermined time interval. Rebalancing Stocks in an index which have increased from equal weight average will be in excess of the average weight. The excess (difference between the new price and the price at the average weight) is sold. Stocks which have decreased from the last rebalancing will be below the average weight and the difference is bought. This mechanism ensures all stocks share an equal weight at the time of rebalancing. Because rebalancing typically occurs at predetermined time intervals (often quarterly), there will usually be a degree of asset allocation unbalance between those intervals, as stocks go up and down. Rebalancing daily isn’t practical and would lead to higher management costs. Behavior Broader exposure to the overall market. Favors value stocks and smaller sized companies. Protects against concentrated risk in a few stocks that may dominate a market cap weighted index. Performs the strongest when there is broader market participation and when smaller size / value stocks are in favor. Costs Equal weighted ETFs have higher turnover from rebalancing weighting = higher fees and higher capital gains taxes Market Cap & Equal-Weighted (MISC) Both Equal and Market Cap weighted ETFs require reconstitution or adjustments of their holdings as stocks fall in or out of their parameters of measurement. Examples could be: mergers, delistings, or new inclusions from the parent or underlying index the fund is tracking. --- MSCI USA Momentum Factor ETF - MTUM Dividend Yield: 1.01% Expense Ratio: 0.15% Hierarchy MSCI USA Index (Parent Index) MSCI USA Momentum SR Varient Index (Underlying Index*) MSCI USA Momentum Factor ETF (The Fund / MTUM) *On November 23, 2020, the Fund’s Underlying Index changed from MSCI USA Momentum Index to the MSCI USA Momentum SR Variant Index Prospectus notes “ uses a representative sampling indexing strategy to manage the Fund. “Representative sampling” is an indexing strategy that involves investing in a representative sample of securities that collectively has an investment profile similar to that of an applicable underlying index.” “The Underlying Index is designed to measure the performance of an equity momentum strategy by emphasizing stocks with high price momentum, while maintaining reasonably high trading liquidity, investment capacity and moderate index turnover....” “The Fund generally will invest at least 90% of its assets in the component securities of the Underlying Index and may invest up to 10% of its assets in certain futures, options and swap contracts, cash and cash equivalents, including shares of money market funds advised by BFA or its affiliates, as well as in securities not included in the Underlying Index” How does MTUM determine the makeup of a “Momentum” stock? The exact calculation is not published but, MTUM screens for the best performing US Large and Mid-cap stock price returns over the past three years, 12 months, & 6 months as a factor for inclusion into the fund. What is MTUM’s reconstitution strategy when adding / removing stocks from the fund? MTUM cites using a statistical model published in the Journal of Finance: N. Jegadeesh and S. Titman, “Returns to Buying Winners and Selling Losers: Implications for Stock Market Efficiency.” Journal of Finance, 1993. The research suggests, buying past winners and selling past losers, you can achieve profitable returns. Thesis of the model: Buy past winners and sell past losers in multiple time configurations. (only two configurations are selected in practice) Winners measured over 12, 6, 3, or 1 months prior to the time of purchase. Top winners are selected (selected stocks). Performance of selected stocks are measured over 12, 6, 3, or 1 months after the time of purchase. Winners & losers are selected. Buying more of the winners and selling the losers occurs. Takes advantage of short term market inefficiencies and lag time between corporate events and price movements. Eg. earnings announcements. The research conducted demonstrates buying winners and selling losers works within a 12 month timeframe. Beyond 12 months the strategy breaks down. Because MTUM reconstitutes the fund semi-annually and profitability using this strategy occurs within a 12 month period of time, the fund should be able to realize similar profitable outcomes. Virtus Terranova U.S. Quality Momentum ETF - JOET Dividend Yield: Dividends reinvested Expense Ratio: 0.29% Hierarchy: Terranova U.S. Quality Momentum Index (Underlying Index) Virtus Terranova U.S. Quality Momentum ETF (The Fund / JOET) How does JOET determine the makeup of a “Momentum” stock and the ETF? Screens 500 US large cap stocks for the last 12 months’ total return (technical indicator) 500 then ranked based on momentum and quality Momentum is ranked based on the last 12 months’ total return Quality is ranked based on: return on equity (net income divided by average shareholder equity) debt to equity (total liabilities divided by total shareholder equity) sales growth rate (annualized sales growth rate over the past three years). Pick top 250 The 250 Stocks are then again quality ranked based on the same metrics above. Top 125 chosen for the inclusion into the Underlying Index and used in the fund. Equal weighted / rebalanced quarterly What is JOET’s reconstitution strategy when adding / removing stocks from the fund? Their strategy mimics the above, rebalanced & reconstituted quarterly. --- Factors to consider when selecting JOET vs MTUM Costs of ownership / fees / dividend yield -- JOET is nearly 2x more expensive than MTUM, excluding any dividend yield. MTUM’s ~1% dividend yield is also a consideration when selecting. Stock Selection -- MTUM uses a more technical approach to stock picking, rebalancing, and reconstitution. JOET uses a combination of both technical and fundamental (quality) indicators when stock picking, rebalancing, and reconstitution. Timeframe & Concentration Risk -- With concentration risk in MTUM’s market cap weighted fund, you must consider the forward 12 month performance for the sectors most heavily weighted. Historical data shows equally weighted outperform market cap weighted indices (there are exceptions by sector). Equally weighted indices do a better job of mitigating single-stock event risks. If a stock takes a header during an earnings announcement, the impact on the fund will be lower if in an equally weighted fund. Sector weighting inside the funds -- JOET & MTUM stock selection begins with the largest US market cap weighted stocks. JOET holdings are equal-weighted, but not the sectors that make it up. JOET is made up of ~33% Tech & ~22% Healthcare stocks. 4 of the top 5 weighted sectors make up the majority of both funds. Conclusion / Determination This mostly boils down to deciding which fund does a better job of stock picking. JOET & MTUM use different stock selection techniques for inclusion into their respective funds, however, both utilize market cap weighted indices when making initial stock selections, leading to similarly skewed sector weighting in both funds (particularly Tech & Healthcare). Although, while sector weighting is concentrated similarly in both, the underlying holdings making up those sectors are largely different. Of the roughly 125 stocks in each ETF, only 48 names are shared in both ETFs. If you believe a more technical stock picking process, weighting, rebalancing, and reconstitution strategies will work better, MTUM is the winner. MTUM does carry a higher degree of concentration or single-stock event risk and is not as diversified across sector allocation vs. JOET. However, during times when market cap leaders are leading, MTUM will outperform. If you believe a combination of technical and fundamental quality factors for stock picking & reconstitution strategies will work better, JOET is the winner. JOET is more expensive to own with a higher expense ratio. However, by nature of being equal-weighted, longer term hold durations should have stronger positive outcomes, and lend credence to value-like holdings that have not yet surprised to the upside. JOET also provides exposure to what Virtus believes are higher quality stocks with stronger fundamentals, as that is a criteria for their selections. Because JOET is less than 12 months old, historical performance cannot be compared with MTUM’s. Additionally, because MTUM recently changed the underlying index used for stock selection and inclusion into the fund (Nov 2020), its historical performance cannot be used as an indicator or expectation of how the fund may perform moving forward.
JEducation
by MichaelGoldberg
2
Altcoins struggling & seeking support before next cycleAltcoin are clearly taking a hit with Ripple's struggles with the SEC suit. Altcoin market cap seeks support at 26-27% range in order to maintain momentum in this bull cycle and kick off (or continue depending how you count) the next alt coin cycle. As I expect Bitcoin continue to show strength and reach new ALT this year and push forward to its 2021 100k goal, alt coins will now start to follow again and pick up steam. There are many great protocols and value products out there. Particular in the Defi space. It's hard for the market to disregard this and only put it's money on Bitcoin. The largest margin will come from the favorite alt coins. Which those are will not be so easy to spot. Many around the DeFi space seem obvious, so look for the ones to stay; the ones that add value to the market . Look for alt coin market cap by percent to hold this week and pick up momentum. This may very well be the last could opportunity to get some of the alt coins for a rebate. Happy holiday season from me to my followers. Drop me a like to support me.
CRYPTOCAP:BTC.DLong
by CarpeMomentum
Bullish breakout on TOTAL2...Altcoins: "IS IT MY TURN YET???"This chart shows total market cap of all cyptos minus BTC. It's an important indicator for identifying altcoin market trends. You can see the bullish divergence on Stoch RSI has played out with the breakout from the triangle (or bull flag). We are seeing a retrace right now, but if this bullish breakout gets confirmed by a retest of support at the top of the pattern, we will see a lot more gains from Altcoins in the coming months. A confirmation of the bullish MACD cross on the 1D TF would support this idea. This is contingent on BTC however, which has reached the top of the rising broadening wedge pattern to which it has stayed surprisingly faithful. This makes me anticipate a retrace toward the bottom end of the wedge, but who knows! BTC just broke ATH and may surprise us all... another push higher would continue to steal the altcoins thunder in the short term. happy trades ~ CD
CRYPTOCAP:TOTAL2Long
by cryptodonovan
How are we swinging BTC?Swell, thank you. Upswing took place just as wished for earlier. Now the intension is to gradually calm down with the volatility and continue sideways. The present price action is more or less identical with a similar situation in early May. Then, during the 50 days BTC was trading sideways, BTC.D dropped by 9 points. That was reflected in the altcoins marketcap that rose by more than 40%. I am hoping to see a similar altseason now. Trade safe and take care. Cheers Whoop
by WhooperSwan
2021 2nd look at marketcaps for Bitcoin and Altcoins12,553,081,000,000 altcoin marketcap 4,650,000,000,000 Bitcoin marketcap If Altcoins do the same percentage gains at end of 2017 beginning of 2018 then we could see a spike in the market cap as high as $12 Trillion plus if we follow the Beam Bands of the last bull run. I know this is a little too much to expect but with all the information we have on the financial direction globally I would not put this a mere fantasy. Bitcoin reaching anything above $250k would bring its market cap to about $4.6 Trillion or so and if it is commanding a 30% control then it would make sense for Altcoins to reach this insane $12 Trillion market cap if it commands 60% of total market share. I know this is a lot to think about. Notice how we go above this Beam Band by about 322%. This happened in the last bull run where Bitcoin went outside the Beam Bands by about 322% so I am just thinking that this could happen again but of course, there is no certainty but only speculation.
CRYPTOCAP:TOTAL2Long
by altcoinb
CRYPTO TOTAL MARKET CAP (Y20.P5.E1).ConfluencesHi All, I thought I take a look at the bigger picture on Crypto which is the total market cap, potential stock markets and gold. Here I stopped at just the total market cap and it seems that we are having a pullback and looking back to historical data, and the indicators, we are still bullish at the Macro level. Points to take away: > Weekly 10/21 EMA (cream ribbon) acting as support as a few points in the trend. Similar to BTC price action > Fib level 0.236 seems to be the resistance point we have hit. If the pullback is to happen, I have the next fib level which has confluence with the weekly EMA and a bounce with a potential continuation of the trend. > Weekly indicators seem to indicate, that a drop is imminent and the weekly candle stick seems to suggest it as well. > Note the 2 wicks on the weekly candle sticks for this level followed by the red candle. > The MACD still bullish uptrend as well as the WT indicator. However the Phoeix indicator has the RSI crossed over so more downwards pressure as the gray energy drops below 50%. So a correction is taking place as its hit a major fib resistance level. The question is how much back, I say the next fib level down. Please give me a tick or like for this post Regards, S.SAri. PS. I'm starting to be bearish and I think this chart helps suggest this. I will take a short if this level is broken.
CRYPTOCAP:TOTALLong
by ssari
1
Is it cheap? Why "dilution" is a concept you NEED to understandMany newbie investors get in trouble because they don't understand the relationship between share price and share count. If you're new to investing and you've never heard of "dilution," it's very important that you keep reading this post. If I look at a standard chart of Spirit Airlines's share price, such as a upper chart above, I might conclude that the stock is cheap right now. Spirit shares are trading well below the price they've traded at for the last five years. This is an illusion. The valuation of a company is its share price times the number of shares outstanding. When a company runs low on cash, it sometimes issues and sells new shares. This "dilutes" the ownership percentage of existing shares. Imagine I have a pie, and I've invited you and two other people over for a piece. We're each going to get a quarter of a pie-- a really big slice! But then you decide to invite a friend. The size of the pie doesn't change, so now we have to cut it in fifths so your friend can have a slice. Each of us will get a smaller piece. Issuing new shares works the same way. Since the beginning of the Covid-19 pandemic, Spirit Airlines has issued 29.14 million new shares, increasing its share count by 42.5%. That means that each share now represents a much smaller proportion of the company than it used to. The shares have been "diluted." Because of dilution, looking at a chart of the price of a single share doesn't tell you how "cheap" or "expensive" a company is compared to its historical valuations. Fortunately, there's a quick and easy way to chart a company's actual valuation. Share price multiplied by shares outstanding equals the company's total price tag, its "market capitalization" or "market cap." To chart market cap on TradingView, find and click the button labeled "fundamental metrics for stocks" at the top of the chart. Type "market" in the search box, and TradingView will narrow the list of metrics down to the one you want. Clicking on "market capitalization" will add a time series of the stock's market cap to your chart. When we look at market cap for Spirit Airlines, it doesn't look cheap anymore. Spirit is trading within its price range of the last four years, even though the company is now financially worse off in every way. With earnings negative and sales nearly cut in half, Spirit is priced as if the pandemic had never happened. By charting market cap, you've adjusted for dilution and gained a much better understanding of the asking price.
SEducation
by ChristopherCarrollSmith
52