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 dropped by 12% to reach the $1.75 Trillion level, with Bitcoin trading slightly below $38K and Ethereum trading at $2,600 at time of writing. Out of the top 10 coins by market cap excluding stablecoins, all the coins had double digits weekly losses except for LUNA that had a +0.5% weekly return. In addition, out of the top 100 coins by market cap, JUNO had a positive weekly return of +2.5% and the remaining coins had significant losses. In fact, 70% of these coins had double digits weekly losses.
Figure 1: The Crypto Market Cap
Data as of 02/22/2021 – Past performance is not indicative of future performance
Market Indicator
At Token Metrics, we have built multiple market signals that help identify the prevailing trend and strength of momentum. In Figure 2 below, we show our TM grade indicator applied on the total crypto market cap, which is built by looking at the proportion of coins that have a low TM grade compared to coins with high TM grades. When the majority have a low TM grade, it signals that the market is likely to be in a bearish regime.
We can see from figure 2 that the TM market indicator is still bearish on the total market since the
$2.75 trillion level, as we still have more coins with low TM grades in the top 100 coins by market cap. In fact, 95 out of the top 100 coins by market cap have a bearish grade below 40.
Figure 2: TM Market Indicator
Data as of 02/22/2021 – Past performance is not indicative of future performance
TM Performance
The recent down-move in the market enforced the notion that the rally in early February was a bear market rally, as mentioned in the previous newsletter. In fact, the February gains have been erased. The Token Metrics All-Exchange indices have been sitting in stablecoins and mainly in Gold-backed assets like PAX Gold and Tether Gold. Shown in Figure 3 below is the allocation of the all-exchange index as well as it’s daily returns that shows small losses compared to the overall market.
Figure 3: All-Exchange Index
Data as of 02/22/2021 – Past performance is not indicative of future performance
TM Grade Analysis
Nest Protocol, LEO Token and PAX Gold have been showing up in the TM indices over the past week due to a good TM grade. As shown in Figure 4 below, we can see how the TM grade evolved over time compared to the price of these tokens.
Figure 4: TM Grade vs Price
Nest Protocol
LEO Token
PAX Gold
Data as of 02/22/2021 – Past performance is not indicative of future performance
As shown, the TM grade is a great tool to identify coins that have strong bullish momentum, especially low-cap coins that can go under the radar. In fact, as shown in Figure 5 below, the TM grade was able to flag a few tokens that performed well in terms of weekly returns
Figure 5: Top Performers by TM Grade
| Coin | TM Grade | Date of Grade | ROI |
| Nest Protocol | 85 | 02/15 | + 35% |
| API3 | 82 | 02/15 | + 30% |
| Retreeb | 90 | 02/15 | + 13% |
| Tether Gold | 93 | 02/15 | + 2% |
| PAX Gold | 93 | 02/15 | + 2% |
Data as of 02/22/2021 – Past performance is not indicative of future performance
Looking ahead
Looking at the current indices allocation, we can also see that the most popular coin recommended by the AI this week is PAX Gold. Other popular coins in the TM indices currently are Bitcoin, Avalanche, Numeraire, and XRP.
