Don't panic: A trend analysis of major cryptocurrencies

So, crypto markets are unpredictable, huh? Well, the following analysis may convince you otherwise. WARNING: Use this information at your own risk. This article is just a study about trends on crypto, and holds no market predictions.

It's a treaty on bulls, bears, and supermarkets.

Most crypto charts you can find on the Internet right now are similar to the one below: A collection of candles swinging up and down, showing particular trends on short lapses of time (from five minutes to a day, if the charting application supports it) - but for the untrained eye, it's hard to tell if the overall market is really going up or down, given that hourly prices are based on pump and dump swings that could hardly be reflected on a graph with direct comparative indicators.

In short: these are only good for day traders, not for HODLers.

This has brought overall misinformation to new investors, since it's difficult to follow coin developments unless you shed some bucks on signaling apps that most times, can't hold better results than chance alone.

Which prompts to the following question: Is there a way to easily visualize market trends based on trusted information? We have to accept first that modern crypto analysis is based on early crypto analysis, back when the market was way smaller and inherited "stock market" traits, but seldom accounts on historic data - because either there wasn't any, or it was unreliable, or even the common "crypto goes too fast to do a proper analysis".

Behold the mighty S-curves, folks. Both are going through their rails.

But that was true five years ago. As of today, we have 10 years worth of valuable bitcoin data, and way more on other blockchain technologies and cryptoassets combined, data that must logically generate trends based on general investor sentiment (and not solely given by FUD, as most people tend to believe). So, in order to show the effects of this behavior, let's study the last 5 years of bitcoin using this approach (as the actual market reference) and its effects on other major crypto markets (LTC, ETH, PIVX and XLM).

bitcoin: a ROI approach

The best way to know investor sentiment, is to ditch the daily analysis for a rate of interest (ROI) analysis, which is a clearer indicator of how has the market progressed for a given period of time in percentages (for this article, daily) - with the added advantage of being able to compare between crypto currencies. First, we have to get reliable market historical data (which honestly, was a bit hard for modern standards) and calculate ROI as the growth percentage of any given time frame (ours go from May 2013 to February 2018). If we divide positive, neutral and negative results given a ±0.5% margin; it forms the comparative annual graphic shown below.

BTC/USD development is a shorter way of writing investor sentiments.

So, as seen above, investors have considered bitcoin as a growing positive investment through the last 5 years - except for 2014, for researchable reasons (no exchange controls 70% of the bitcoin market now and more antitrust legislation has been placed worldwide). The neutral sentiment has been on a general decline, which denotes a swinging mood on the market - good for anyone who wants to get in.

If we use a median filtering of this data, we could easily get a graphic like the one below:

This BTC/USD comparison shows ROI performance for the last 5 years.
Not shown: AAAAAH!!

As demonstrated with the colorful graphic above, even simplified annual data can't tell the whole story, given its cumbersome interpretation and the effects of certain events on some years. But it's possible to find some market trends, which are clearer in the integrated BTC graph shown below, made by averaging daily ROIs for the studied years.

This graphic shows the same, pinpointing market trends for any given period of the year.
Not shown: Phew!

And there you go folks: bitcoin is following an annual trend due to investor sentiment. This trend seemingly divides the market calendar into 8 different periods: The first week of the year regularly welcomes late investors (early hangover), followed by nearly 6 weeks of bearish market (winter blizzard). After that, investors tend to feel comfortable with prices so returns spike for about three weeks (march madness), before dipping again for a month (April fools). Roughly Mid-April onwards, there are two and a half months of positive ROI (Spring bloom) followed by two and a half months of a relatively stable market (Swinging Summer). Amid September, a 3-week bearish market (Autumn dip) signals the coming of the crypto holidays, the longest positive ROI period of the year.

But, how do other coins fare against this?

Not surprisingly, other coins follow different trends and are more sensitive to FUD than bitcoin (Remember the S-curves above? most aren't even taking them.) - but the top ones have fared amazingly shortly after their ICOs, followed by more supportable bullish periods caused mostly by brand growth or crashes. So, using the same analysis above, we compared four of the most respectable crypto currencies on the market with bitcoin, giving the results below.

ETH/BTC: A nice winter performer.

Ethereum performs strongly during the first two bearish periods of the year, while dipping during the last two quarters.

LTC/BTC: A better option for daily activities.

Litecoin doesn't swing daily as much as the other coins analyzed on this article, which might be a good defense against bitcoin spikes and crashes.

PIVX/BTC: Signaled by its ICO.

PIVX had it wonderful during the last two April fools (Post-ICO date), with spikes during swinging summer and the first two weeks of November.

XLM/BTC: An outstanding bullish performer.

Stellar seems to be a bullish performer, having some spikes parallel to those of bitcoin. It's a good coin to hold on April fools and the autumn dip.

Final advice

Well, today we have shed up some light on many crypto topics - but remember: this is just the tip of the iceberg - so use this information responsibly, complement your research with other studies and plan accordingly. And remember: Don't Panic.