These graphs are essentially long term trend lines with bands above and below. They can be used for gauging overall market risk or the speed of market growth. The more parabolic the growth, the more there is risk of a large drop like in early 2018.
The total market cap of cryptocurrency seems to go up one band each cycle. It has also reached a similar level to May earlier this year (2021). It would be interesting to see if it continues going up one more band, into the second highest band (teal). This would follow the trend of a the peak going up one band.
CCI30 is a cryptocurrency index featuring the top 30 coins and tokens, ignoring stablecoins. At the moment its make up is about 20% BTC, but started with about 40% BTC in 2015. However, it still reasonably resembles Bitcoin Rainbow Chart. Which confirms the idea that the market mostly follows bitcoin.
Total Market Cap is at all time high, but CCI30 isn't there just yet. This suggests that there is more popularity among less high cap coins and tokens.
In my opinion these graphs become more useful for gauging the overall status of the market as bitcoin's market dominance reduces. I use these graphs to help with risk management.
Data is from nomics.com and cci30.com.
Python with Anaconda was used for the calculations, roughly following this method from Chad Thackray.
A and B values are:
- Total Market Cap: 2.74274654, 3.88942524
- CCI30: 1.5597013, -3.26087673