Weekly Index Performance – March 22nd, 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 increased by 9% and is currently slightly below the $2 Trillion level. The overall market performed well, with Bitcoin and Ethereum having strong weekly gains of 10% and 16% respectively. In fact, out of the top 100 coins by market cap, less than 10% had negative weekly returns, and over 45% had double digits weekly gains. Some of the top weekly performers include Origin Protocol (+98%), STEPN (+92%), Ethereum Classic (+55%), and THORChain (+40%).

Figure 1: The Crypto Market Cap

Data as of 03/21/2022 – 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. Figure 2 below shows the proportion of coins out of the top 100 by market cap that have a bearish TM grade in blue, overlaid on the total crypto market cap size time series. This plot shows that although more than 50% of the coins still have a low TM grade, it is decreasing towards flipping to a bullish market regime. However, due to the wide range that the market has been trading in, it could be possible that the recent bounce could be a short-term rally similar to the rallies over the past couple months.

Figure 2: Portion of Low TM Grades in the top 100 coins

Data as of 03/21/2022 – Past performance is not indicative of future performance

TM Performance

Token Metrics indices are very helpful in providing insights and research recommendations to our customers. In Figure 3 and Figure 4, we show the Token Metrics’ high-cap and low-cap best-performing cryptocurrency indices over the past week.

Figure 3: TM High-Cap Indices Performance

Figure 4: TM Low-Cap Indices Performance

Data as of 03/21/2022 – Past performance is not indicative of future performance

To get a better idea about the performance of TM indices, figure 5 on the next page shows the allocation and daily returns of the Uniswap Daily High-Cap index. On March 18th, the index returned 12%, mainly due to Maple’s 15% weekly increase and Unibright’s 33% weekly increase. In addition, the Gate.io Weekly Low-Cap index had a +41% weekly increase that came from two double digit consecutive daily gains on March 17th and March 18th. The holdings of that index at that time is shown in figure 6 below, where we can see that the highest holding was NFTY token, which went up over 100% over the past week.

Figure 5: Uniswap Daily High-Cap Index

Data as of 03/21/2022 – Past performance is not indicative of future performance

Figure 6: Gate.io Weekly Low-Cap Index

Data as of 03/21/2022 – Past performance is not indicative of future performance

TM Grade Analysis

To see how the TM grade has been able to flag tokens that performed very well over the past week, figure 7 below shows the time-series of NFTY Token’s price compared to its TM grade, as well as Waves. From the NFTY plot, we can see that the TM grade was in the high 80s when the coin was still trading below $0.08, and remained in the high 80s with the coin now trading above $0.16. For Waves, the token has been picked in the TM indices consistently from February, where the coin was trading around $12, until today where the coin is trading above $30.

Figure 7: TM grade vs Price

Data as of 03/21/2022 – 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 coins that can go under the radar. In fact, as shown in Figure 8 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

Data as of 03/21/2022 – Past performance is not indicative of future performance

Looking ahead

Looking at the current indices allocation, we can also see that the most popular coins recommended by the AI this week are Waves, Ethereum, Polkadot, THORChain and Bitcoin.