Weekly Index Performance – April 20, 2022

Weekly Index Performance – April 20, 2022

In this newsletter, we will go through the top weekly performances of the Token Metrics indices, the top TM grades, and how they performed over the past week. The second section of this newsletter will look into which coins are being picked most often for the upcoming week in the Token Metrics indices, and that week’s top-rated coins as well.

Market Review

Over the past week, the total crypto market cap had been consolidating slightly below the $2 Trillion level and has just surpassed it today, Wednesday, April 20th. The market continues to be choppy since the local bottom during January. The price swings of this type of market condition can be significant and abrupt, thus creating good profit opportunities by actively trading and managing positions. In fact, mean-reversion type strategies like selling resistance and buying support could outperform trend-following strategies like buying/selling breakouts.

Figure 1: The Crypto Market Cap

Market Indicator

At Token Metrics, we have built multiple market signals that help identify the prevailing trend and strength of momentum. Figure 2 below shows the TM grade market indicator applied to the total crypto market cap time series. We can see that the indicator flipped to a bullish regime on March 22nd, where the total crypto market cap was at the $2 Trillion level. This was the first bullish signal since the bearish signal of mid-November at the $2.75 Trillion level. After that bullish signal, the total crypto market cap went up by 15% to reach $2.3 and then reversed the trend. The indicator quickly adjusted to the reversal and a bearish signal came in on April 9th at the $2.08 Trillion level. Although the market indicator is still bearish, there are over 20% of the coins in the top 100 by market cap that has a high TM grade, showing that even during choppy and down trending markets, there are still some opportunities to profit by going long and managing risk strictly.

Figure 2: TM Grade Market Indicator

Token Metrics Performance

Token Metrics indices are very helpful in providing insights and research recommendations to our customers. During these choppy markets, the TM indices had a good weekly performance as shown in figure 3 below. We can see that low-cap indices performed well over the last week, on the daily and weekly time horizons. In fact, shown in figure 4 below is the allocation of the Weekly

Low-Cap Gate.io index, which had a weekly return exceeding 25%. Most of the gains came from a 22% allocation to Ref Finance, which went up by 40% since April 18th. 

Figure 3: TM daily indices weekly performance

Figure 4: Gate.io Weekly Low-Cap Index

TM Grade Analysis

To see how the TM grade has been able to flag tokens that performed very well over the past week, figure 5 below shows the time-series of Ref Finance’s price compared to its TM grade, as well as Meter Governance. From the plots, we can see that although there have been wide moves due to the recent volatility of the market, the TM grade captured the moves of these coins well.

Figure 5: TM grade vs Price

As shown, the TM grade is a great tool to identify coins that have strong bullish momentum, especially coins that can go under the radar. In fact, as shown in Figure 6 below, the TM grade was able to flag a few tokens that performed well in terms of weekly returns.

Figure 6: Top Performers by TM Grade

Looking ahead

Looking at the current indices allocation, we can also see that the most popular coins recommended by the AI this week are Shiba Inu, Pax Gold, Kyber Network Crystal, Lossless and Monero.