2100NEWS WEEKLY CRYPTO REPORT Dec-26

The crypto index NWST1100 rose 1.54% last week. Ether has posted a 2.61% loss, which is less severe than the losses seen across all other segments over the previous thirty days.

*Below, we present a standardized weekly report and next week’s outlook, prepared based on the Theory Swingtum of intelligent finance. We gauge the crypto market’s breadth and direction by showing the 2100NEWS Digital Assets Total Index (NWST1100), which measures the performance of 1100 (by market capitalization) significant crypto assets. The information-laden chart is complex to read initially, but it effectively displays essential price information, key decision-making levels, momentum, trading volumes, and crypto market breadth. Monitoring Market Sentiment and Breadth is necessary to detect early signs of trend reversals or continued strength.

After conducting a detailed examination of the NWST1100 chart, a vital metric for the cryptocurrency market, several essential market dynamics and changes in market sentiment are revealed:

The NWST1100 index declined 1.54% over the past week, a period marked by persistent volatility and predominantly defensive market behavior. Following a brief upside breakout attempt on December 20, the market quickly lost mid-channel support and spent most of the week grinding lower beneath the 10-day EMA. Intraday trading was characterized by repeated sharp V-shaped rebounds, each followed by rapid afternoon sell-offs—an unmistakable signature of thin holiday liquidity and fragile investor conviction. As a result, the index remained confined to the lower half of its regression channel. Only on December 26 did NWST1100 test its midline, offering a tentative indication of a possible Christmas rally, though this move has yet to be confirmed by follow-through.

Market Sentiment (PPO & RSI): Momentum indicators continue to reflect a corrective environment. PPO lines remain below zero, consistent with consolidation rather than an impulsive trend, while the PPO histogram flattened just above the zero line, signaling a slowdown in downside momentum. The RSI stabilized in the low-40s, suggesting short-term relief but insufficient strength to confirm a trend shift.

Crypto Market Breadth indicators: Breadth indicators remain weak despite early signs of stabilization. The Advance-Decline Volume Line (ADVL), adapted by 2100News for the crypto market as ADVPL, tracks the net money volume of advancing versus declining digital assets. It started rising but showed no meaningful improvement in net money flows. The McClellan Summation Index, a long-term version of the McClellan Oscillator that measures market breadth, remains near cyclical lows but turned upward.

According to the chart on the right, all A50R indicators across the major segments (NWST1100, NWSET100, NWSL100, NWSCo100) have remained oversold, though slightly improved from extreme readings. A50R readings — the share of assets trading above their 50-day EMAs — have flattened in the 6% to 14% range. Ethereum Tokens (NWSET100) cohort remains the weakest, with only 6% of its constituents above their 50-day averages.

This breadth indicator measures the percentage of digital assets trading above a 50-day moving average

* The percentage of digital assets trading above a specific moving average is a breadth indicator that measures internal strength or weakness in the underlying index. The chart on the right side compares the percentage of DA trading above the 50-day EMA for:

1. 100 Large-caps members of NWSL100 (top box)
2. 1100 members of NWST1100
3. 100 Ethereum Tokens members of NWSET100
4. 100 Coins members of NWSCo100 (bottom box)

📉 Summary

In Summary, despite intermittent intraday rebounds and a modest late-week seasonal lift, the cryptocurrency market remains firmly in a corrective phase. The week reinforced a defensive trading environment, characterized by mean-reversion dynamics rather than trend-following. Momentum has stabilized but not strengthened materially, breadth remains deeply oversold, and leadership continues to be narrowly concentrated in select blue-chip assets. Overall, the market has not yet transitioned into a confirmed recovery phase.

Outlook for this week

This report examines the cryptocurrency market’s short-term outlook, identifying patterns and signals that may offer insights into potential market direction. While predicting market behavior is inherently uncertain, discernible trends in momentum and market breadth indicators suggest possible developments.

1. This week’s outlook points toward the formation of a rounded bottom. Seasonality – the recent Christmas period provided a stabilizing effect rather than a growth impulse. Seasonal demand helped the market hold key support levels, but it failed to generate sustained upside momentum. Price action suggests that holiday-related flows acted more as a temporary cushion against further declines than as a catalyst for a new advance.
2. The RSI (Relative Strength Index) stood at 43 last week and may rise, suggesting downside pressure is fading.
3. The PPO histogram, which measures the rate of change (i.e., the first derivative) of PPO lines, may climb. As the histogram climbs, it signals a progressive recovery in momentum. PPO lines stay profoundly negative but rising within the red zone toward the zero line This pattern suggests downside momentum is slowing, though the PPO lines will likely remain below zero.
4. The Breadth indicators at the bottom of the first chart (NWST1100): The ADVPL could be the first to show signs of rising inflows, and the McClellan Summation Index could continue rising near current levels.
5. Seasonality remains a double-edged factor. While Christmas-related demand helped prevent a deeper breakdown, this support is temporary. As the market transitions into January and seasonal tailwinds fade, the absence of underlying demand and positive momentum heightens the risk of renewed downside pressure. At present, there is little evidence of fresh positive energy entering the market, and the start of the year—given current conditions—does not yet point to a constructive acceleration.

📌 Target and Scenario Considerations:

Most likely scenario: The NWST1100 oscillates between the 10-day DEMA and the 25-day EMA, reflecting a fragile stabilization phase rather than a confirmed base. This behavior aligns with the gradual improvement in the PPO histogram and may produce localized higher lows, but without broader confirmation. A controlled drift toward Pivot P (~6,100) remains possible while seasonal support persists. However, once holiday-related demand dissipates, the market becomes increasingly vulnerable. Failure to attract new participation could result in a renewed test of lower support zones early in January, keeping the broader corrective structure intact. Overall, the market appears to be transitioning from capitulation to stabilization, but not yet toward recovery. Sentiment remains fragile, and without a clear expansion in breadth or momentum, stabilization alone may prove insufficient to prevent further pressure once seasonal effects fade.📍 Key Levels to Watch:

• Support: 5,800 (Keltner lower boundary)
• Resistance: 6,100- 6,200 (Pivot P, 25-day EMA)

Performance of different groups of Digital Assets (Coins and Tokens)

Investors and traders rely on historical performance data to contextualize short-term moves and assess the relative strength of different market segments. The latest table shows that all categories drifted lower, with the NWST1100 index declining 1.54% over the past week. The chart above highlights the performance of various cryptocurrencies, including Bitcoin, Ether, and the 2100NEWS Indices, which represent Ethereum-based tokens (NWSET100), large caps (NWSL100), and Coins (NWSCo100). Among these, Ether was the strongest performer over the past 30 days, posting a comparatively modest decline of –2.61%. Losses across all other segments were notably deeper, confirming Ether’s defensive outperformance during the recent drawdown By contrast, Bitcoin and the broader index groups experienced more pronounced declines, placing Ether at the top of the relative-strength spectrum for the month. This divergence highlights a shift in short-term leadership toward Ether, even as the broader market remains under pressure.

While the broader market has trended sideways, different segments and individual cryptocurrencies exhibit different performance dynamics.

Performance Trends by Market Segment:

✔ NWS30, Bitcoin, and NWSBEled the market,

✔ NWSCo100 (Coins) has been improving.

✔ Ether weakened.

✔ NWSET100 (Ethereum-based tokens), NWSL100 (Large Caps) lagged.

Investors and traders might use this information to adjust their portfolios, possibly shifting focus toward assets with stronger relative momentum while being cautious about those in the Weakening quadrant.

*RRG® charts show the relative strength and momentum of groups of digital assets. Those with strong relative strength and momentum appear in the green Leading quadrant. As relative momentum fades, they typically move into the yellow Weakening quadrant. If relative strength then fades, they move into the red Lagging quadrant. Finally, when momentum picks up again, they shift into the blue Improving quadrant.

Crypto (Digital Assets) compared with global equity

This report offers a comprehensive analysis comparing the performance of digital assets, as measured by the NWST1100 index, to that of shares on global capital markets, as represented by the Dow Jones Global W1Dow index. The comparison spans multiple timeframes, providing insights into historical and recent performances and potential future trends.

Let’s break down the key observations and implications:

• Historical Performance Comparison:
  • 49 Months Ago: Digital assets vastly outperformed global equities in global capital markets, reaching a record high in the comparative quotient between the NWST1100 and W1Dow indexes. At this juncture, digital assets displayed a notably superior performance trajectory compared to shares on global capital markets.
  • Over the past twelve months, digital assets have underperformed equities by 34.7%.
• Mean Reversion Opportunity:
  • Over the past 143 working days, the average quotient price, represented by the blue-dashed curve, stands at 9.93, while the current spot ratio is 7.72, which is lower than the long-term mean of 9.18, which has increased since October last year.
  • The mean reversion theory suggests that asset prices tend to revert to their historical average returns over time. The current average prices’ quotient, which is below the long-run mean, could imply that digital assets are undervalued relative to historical trends.
• Returns Comparison:
  • The chart also presents the returns achieved by the simplified index-based accumulation approach—buying one index point per day over 12 months—to simulate a mechanical exposure build-up. While this method is not equivalent to classical dollar-cost averaging (which involves investing a fixed amount of capital daily), it provides a consistent benchmark for comparing historical costs and returns. The NWST1100 Crypto Index has dropped by 22.16% over the past twelve months. With daily index investments, an investor’s stock price would have resulted in a 17.3% loss from the current index price, because of unprofitable purchases at high entry prices during a prolonged market uptrend when prices remained above the 143-day moving average for an extended period.
  • The DJW, representing global capital market shares, has risen 19.26% over the past twelve months. However, a strategy of daily purchases would have yielded a 12.2% gain.
• Conclusion:

The recent pullback highlights a fundamental truth in crypto investing: market swings define opportunity. Historically, digital assets have significantly outperformed global equities, but their returns often come in concentrated bursts that follow periods of pessimism and capitulation. Prices have fallen below the 143-day EMA, positioning the market at a technically and psychologically critical juncture. Looking ahead, sentiment-driven capitulations often create conditions for stronger rebounds, especially when paired with structural oversold signals. While caution remains warranted in the short term, current price levels could present compelling opportunities for disciplined investors preparing for the next leg in crypto’s broader market cycle.

*The box in the middle of the chart shows the original NWST1100 price; at the bottom is W1Dow