Since its inception in 2018, the Crypto 10 index has been a guiding price return performance measurement of a basket including the 10 leading cryptocurrencies versus the US dollar. The weight of each cryptocurrency is related to its market capitalization, capping the largest positions to 25%.
The index is in a trading range since January 2022 between 11,719 and 16,578 on the medium term and is still in a sell mode on the daily time frame with higher momentum lately since it succeeded to close above the 50 Exponential Moving Average (EMA) since march 19th 2022. The current daily resistance is at 15,307 and support at 14,414.
As mentioned above, the index return is measured in relation to the US dollar, same like other tradable securities paired to the greenback like commodities and stocks which are mainly relying on market supply/demand and company earnings that highly contribute to its share price and, consequently affects its parent index’s value. Assuming all variables are constant, an interest rate increase on the USD would negatively impact the S&P500 index & cryptocurrency prices; however, at different volatility measures which would give room for a trend to develop by generating relative performance charts including the opportunity to trade it. Below is a sample of three charts demonstrating trend directions for 1- bitcoin relative performance to the DJIA 2- DJIA index and 3-Bitcoin. During the period between early 2018 and late 2020, Bitcoin was in a trading range, while the relative performance chart demonstrated trading opportunities.
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