Index Technicals Shed a Light on the Recent Crypto Market Price Action

Jim Makos / Flickr / jimmakos.com/photography
Voyager
Voyager

The cryptocurrency market pulled back on Thursday as Bitcoin (BTC) dropped more than 4% to around $5,000 and the market lost nearly $20 billion in total value.

While many analysts failed to predict the latest drop, often citing near-term bullish predictions of $6,000-$7,000, data provided from crypto index platform AltDex suggested the market was primed for a period of consolidation.

Over the past month, the AltDex 100 Index (ALT100), a benchmark index for large-cap cryptocurrencies that doesn’t include stablecoins, surged more than 29.5%, marking one of the best 30-day periods in the last year.

That surge in the index level was enough to bring the ALT100’s relative strength index (RSI) to just shy of 90. Traditionally, an asset is considered overbought when the RSI is above 70 and oversold when it’s below 30. This suggests the ALT100’s RSI of around 90 was a major signal that the crypto market was ready to pull back.

AltDex 100 Index RSI

Shortly after, the index value dropped more than 7% as Bitcoin and major altcoins retreated.

Similarly, the AltDex Exchange Token Index¬†(ALTEXC) dropped 9% on Thursday before recovering around 3.7% today. Notably, the ALTEXC’s moving average convergence divergence (MACD) saw a bearish cross into negative territory just before the latest pullback.

MACD for the AltDex Exchange Token Index (ALTEXC)

Bloomberg recently published a similar analysis, citing the GTI Global Strength Indicator (GSI), a price strength indicator that compares individual upward or downward movements of successive closing prices. According to the analysis, Bitcoin’s GSI was at levels last seen during the historic 2017 bull run following its recent breakout.

While AltDex indicators like RSI and MACD are not yet publicly available, investors can sign up to receive alerts on new features on the platform’s dashboard.

More: Bloomberg Analyst: Bitcoin (BTC) Most Overbought Since 2017 Rally
Referenced: Crypto Markets Shed Nearly 20 Billion as Bitcoin and Major Altcoins Plunge

Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. AltDex and SludgeFeed were created by the same team and are both owned by¬†Peer, LLC.¬†This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.

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