After their dramatic 71% surge last week, you might think crypto markets would be prone to some sort of setback.
But this past week, there was nothing of the kind.
This reconfirms was we told you here on March 20:
The crypto flash crash is done.
The bottom is confirmed.
And regardless of what may happen in global stock markets, Bitcoin (BTC, Rated “B+”) and its cohorts are on an upward path, at least for now.
Consider, for example, our Weiss 50 Crypto Index (W50), the industry’s broadest benchmark for crypto assets. Even though the market was visibly quieter, in the seven-day stretch ending March 26, this index still managed to post double-digit gains of 10.08%.
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Stripping out Bitcoin, we can see that it was primarily the king of crypto that led the way higher this time around; the Weiss 50 Ex-BTC Crypto Index (W50X) rose somewhat less, up 7.44% on the week.
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Meanwhile, it seems there’s still some residual fear in the crypto space, with most of the capital moving into Bitcoin and other high-quality names. That helps explain why …
- The Weiss Large-Cap Crypto Index (WLC) is up a solid 14.17% this week, while …
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- The Weiss Mid-Cap Crypto Index (WMC) was mostly flat, up only 2.17%, and …
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- The Weiss Small-Cap Crypto Index (WSC) did pretty much the same, and is up 3.62%.
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In addition, since the March 12 flash crash, most crypto derivatives have been selling at a discount to the underlying assets. This pattern, called “backwardation,” is another sign that traders are looking to reduce their leverage and stay on the cautious side.
All good — giving us additional confidence that the flash crash low of March 13 is likely a support level that will hold for the foreseeable future.
Best,
Juan
