Market Outlook #36

AD: Before I begin this post, I’d like to briefly mention Bitcoin.Live, who are sponsoring my blog.

Bitcoin.Live offers regular, detailed content on their free-to-access blog, created by a panel of analysts (including Peter Brandt), and covering all manner of market-related topics. I found both the video material and the blog posts to be genuinely insightful, with many differing analytical perspectives available for viewers and readers. The platform also offers premium content for paying subscribers who find value in the free material, with daily videos, alerts and support provided. Check it out and bookmark the blog.


Market Outlook #36 (19th May 2019)

Welcome to the 36th Market Outlook. In this week’s post, I’ll be covering the past week’s price-action in Bitcoin, Ethereum and Monero, as usual, plus I’ll be taking a look at Cardano.

Bitcoin:

BTCUSDDaily

BTCUSD1H

Price: $7908

Market Cap: $140.048bn

Thoughts: In last week’s Market Outlook, I mentioned that the lower timeframes were indicative of a short-term top for Bitcoin, and that we may perhaps retest $7500 this past week before making a move back towards the $6800 area. Whilst we did indeed visit $6800, it was only briefly and only after price made new highs at $8400 a few days ago, having held onto the 4H parabola in place.

Looking at the Daily chart provided, we can see that Bitcoin has been capped at a prior level of resistance, forming a far too clean ‘double-top’ scenario. Further, the higher-timeframe parabolic advance is still very much in play, and the flash-crash into the high $6000s was met with a swift reversal and what looks to be a potential bullish continuation. Prior resistance was turned support at $6800 and the trend remains strong. Volume also doesn’t seem to have dropped off yet; as such, there is no indication that $8400 will hold BTC down for much longer…

Looking now at the Hourly chart provided, we can clearly see the current short-term market structure, where the flash crash to $6660 broke the bullish momentum briefly, but the reversal was relatively swift. Resistance turned support at $7600 has been reclaimed and price is lingering beneath local highs above $8k. I have depicted the bearish and bullish scenarios, but given the strength of the trend and the consistency of the volume, I am leaning bullish.

The bearish scenario would see price begin to break down on the lower timeframes, ultimately making a move back towards that pivot at $7600. If this level was lost again, I’d expect price to move back towards $6700. Price is essentially range-bound for now between $6660 and $8400, with $7600 acting as the range equilibrium.

The bullish scenario is a simple one; some consolidation early next week followed by a move above $8400. This is what I expect to see.


Ethereum:

ETH/USD

ETHUSDDaily

ETHUSD4H

ETH/BTC

ETHBTCDaily

Price: $252.24 (0.03206 BTC)

Market Cap: $26.771bn (3,403,218 BTC)

Thoughts: Unlike my thoughts on Bitcoin from last week’s post, my expectations of Ethereum played out near-perfectly, if a little more explosively than anticipated. We saw a sharp reversal for ETH/BTC, and thus a bullish continuation on ETH/USD.

Looking at the Daily chart, we can see how significant the volume is on ETH/USD at present, with volume equalling that of December 2017 on Coinbase. Price also closed above the 360-day moving average, and I have depicted the path to the next area of significant resistance. I doubt we’ll see much of a retrace prior to $350 being hit.

From the 4H ETH/USD chart, we can see the bullish break in market structure when price closed above $250. A pullback and continuation would be the expected course from here.

Finally, the Daily chart for ETH/BTC paints quite a picture. Most significantly, we have likely now found the cyclical bottom for Ethereum at 0.0246 BTC, indicated by the sharp reversal away from that level on heavy volume, in the process of which market structure on the Daily timeframe turned bullish, a level of prior support turned resistance was reclaimed at 0.0305 BTC and the 200-day moving average was reclaimed.

Trendline resistance is the next port-of-call for ETH/BTC, I believe, and a move above 0.035 BTC would herald the beginning of a new bull cycle and the likely breakout above 0.042 BTC in the coming weeks.


Monero:

XMR/BTC

XMRBTCDaily

Price: $86.26 (0.01087 BTC)

Market Cap: $1.465bn (184,719 BTC)

Thoughts: Monero found support at a critical level this past week: 0.01 BTC. Following this, price broke out above trendline resistance, though not as dynamically as the reversals on other altcoins. Range support has become resistance at 0.012 BTC, and price will need to reclaim this level for 0.01 BTC to be confirmed as Monero’s cyclical bottom.


Cardano:

ADA/USD

ADAUSDDaily

ADA/BTC

ADABTCDaily

ADABTC4H

Price: $0.085 (1067 satoshis)

Market Cap: $2.194bn (276,732 BTC)

Thoughts: I don’t think I’ve ever analyed Cardano on the blog, but it’s current price-action presents a great opportunity, in my opinion; in particular because it is one of the few altcoins on BitMex, and a leveraged long on a potential cyclical bottom is an attractive idea. Now, I rarely ever trade on leverage, but there are rare occasions where it makes a lot of sense to do so.

Looking first at the ADA/USD Daily chart, we can see the strength of trendline support and the fact that price bounced off the 200-day moving average recently on solid volume. We can also see the resistance at $0.10.

More important, however, is the ADA/BTC chart, which shows price finding a bottom at 911 satoshis, above the December 2018 low of 834 satoshis. Following this, price bounced hard and broke out above the trendline resistance that has been in play since April. Currently, the 200-day MA is capping price, but, given the bullish market structure on ETH/BTC, I expect ADA will follow suit once ETH begins moving up again.

Looking at the 4H chart, we can see the clean break above trendline resistance, as well as the bullish market structure break above 1058 satoshis on high volume. An entry here with a stop-loss at 900 satoshis and a target of 1950 satoshis (the local high from April) present a 6:1 reward-to-risk opportunity, unleveraged. Add in some low leverage and you have an opportunity for some very high returns.

And that concludes this week’s Market Outlook. I hope you’ve found some value in the read.

Feel free to leave any comments or questions below.


If you’ve enjoyed this post and want to receive new posts straight to your inbox, I’ve set up a RSS-to-Email feed that will be sent out weekly; every Monday, 12pm. Just submit your email and I’ll make sure you’re included in the list. Cheers.

Market Outlook #35

AD: Before I begin this post, I’d like to briefly mention Bitcoin.Live, who are sponsoring my blog.

Bitcoin.Live offers regular, detailed content on their free-to-access blog, created by a panel of analysts (including Peter Brandt), and covering all manner of market-related topics. I found both the video material and the blog posts to be genuinely insightful, with many differing analytical perspectives available for viewers and readers. The platform also offers premium content for paying subscribers who find value in the free material, with daily videos, alerts and support provided. Check it out and bookmark the blog.


Market Outlook #35 (12th May 2019)

Well, we’ve had a wild week.

In today’s Market Outlook, I’ll be analysing the past week’s price-action in Bitcoin, Monero and Ethereum. There’s quite a lot to cover, as you might expect, so let’s crack on:

Bitcoin:

Weekly:

BTCUSDWeekly

Daily (1):

BTCUSDDaily

4H:

BTCUSD4H

Shorts/Longs Ratio:

BTCUSDShortsLongs

Daily (2):

BTCUSDDaily2

1H:

BTCUSD1H

Price: $7132

Market Cap: $126.209bn

Thoughts: There’s really very little point in harking back to last week’s Market Outlook, because this past week Bitcoin has blown all expectations of bears and bulls alike out of the water. I will say that, whilst I began last week expecting one final leg up before a drop, I certainly did not expect what has occurred; at least not until I did some further analysis, as I shall come to a little later. If you’d like to bypass all the following analysis and skip straight to an explanation of what’s happened this past week, read my thread from Twitter.

Let’s begin with the Weekly chart:

Following the breakout from trendline resistance and range resistance at $4100, Bitcoin jumped up towards $5200 and consolidated. The week before last saw the Weekly close poised beneath the $6000 supposed resistance. “Resistance, what resistance might that be?” exclaimed Big Daddy Bitcoin as it spent the past 7 days rallying over $1500 towards $7500. Indeed, it has been a magnificent week for BTC. If Bitcoin can hold above $7000 for the Weekly close, one could make the case that the $6k resistance has been reclaimed as support, but that’s many hours away and, as we will see from the lower timeframe charts, it does appear the local top is in.

Looking now at the first Daily chart provided, I have depicted the parabolic curve of the bull run that culminated in the blow-off top at $20,000 in December 2017. Now, take a look at the 4H chart below it and observe the similarities in the curve of the rally: each leg proceeds to get steeper, culminating in that blow-off top pattern. But why have we had such an extended rally, blowing out levels of perceived significant resistance?

Well, I believe a large part of the answer is related to the Shorts/Longs ratio for Bitcoin. At the beginning of the week, this ratio was at all-time highs, indicating the extreme bearishness of market participants and an excess of shorts. With each successive leg up, more and more of these shorts were liquidated, causing Bitcoin to be bought at market price, pushing prices further and beyond levels that would have expected to give resistance. This cascading effect ends only when the shorts/longs ratio returns to normal, and the steep decline in the ratio over the past couple of days is indicative of this.

And what about current price-action? Well, let us look at the second Daily chart provided:

Here, we can see the multiple swing-highs cleared by the rally, as well as the direction I expect price to take from here. A retest of $7400 is possible but not required, but I do believe we’ll begin to break down towards the $6k area to retest it as reclaimed support.

Finally, the 1H chart shows that the parabola is indeed broken and thus it is likely that ~$7550 was the local top. From here we can expect price to to move towards key short-term support at $6930, which, if it gives way, will open up a move back down to $6800. A breakdown at $6800 would send price back towards the $6300 area.

Let’s see what next week brings us.


Ethereum:

ETH/USD

Weekly:

ETHUSDWeekly

Daily:

ETHUSDDaily

ETH/BTC

Daily (1):

ETHBTCDaily

Daily (2):

ETHBTCDaily2

15m:

ETHBTCDaily

Price: $188.10 (0.0265 BTC)

Market Cap: $20.041bn (2,810,020 BTC)

Thoughts: Now, looking at the Weekly chart for ETH/USD, I noticed that the uptrend that formed when Ethereum bottomed in late 2016 was never broken as price made its way towards the resistance at $15. Given that theĀ  cyclical bottom for ETH/USD is likely in now, we may see something similar hefollow, wherein the trendline support remains firm all the way to resistance at $350, above which I expect the real party to begin.

Looking at the Daily chart for ETH/USD, I have depicted this trajectory, anticipating a brief dip as BTC/USD dips but expecting this to be shortlived as ETH/BTC gets bought up. This past couple of days has experienc $ed huge volume on Kraken, as Ethereum has broken above the $188 resistance briefly, it is the $250 area that I am most interested in, as it is an area of support turned resistance but also in the region of the 360-day moving average.

Turning towards ETH/BTC, which is where I believe capital will begin to flow (and subsequently to other alts) following Bitcoin’s local top, the first Daily chart shows the bounce from trendline resistance yesterday on significant volume. Further, it shows a similar fractal playing out to that of December 2017 – December 2018 but on a smaller scale. Such a fractal would have ETH/BTC bottoming out here and beginning a new rally to take out the highs at 0.042 BTC.

The second Daily chart shows the breakdown from support turned resistance at 0.0306 BTC. This is the level that needs to be reclaimed on the Daily timeframe for market structure to become bullish again. Also, it is interesting to note that the recent ETH/BTC price-action almost mirrors and inverts the parabolic curve of BTC/USD, culminating in yesterday’s local bottom at 0.0255 BTC.

Finally, a much lower timeframe view – the 15-minute – shows us the level I would like to see reclaimed for ETH to make a move above 0.029 BTC.

Again, I expect that much of the capital that has bought into Bitcoin over the past week will flow into ETH/BTC as Bitcoin marks out its local top. Let’s see…


Monero:

XMR/USD

XMRUSDDaily

XMR/BTC

XMRBTCDaily

Price: $74.39 (0.01059 BTC)

Market Cap: $1.282bn (179,778 BTC)

Thoughts: Monero looks similar to Ethereum here, albeit with a deeper spring on XMR/BTC than on ETH/BTC. On the XMR/USD chart, we can see the breakout above trendline resistance on signficant volume, as well as the successful retest of the 200-day moving average. There is significant resistance to overcome below $100, but, if Ethereum does lead the way, Monero will follow.

Looking finally at XMR/BTC, we can see that price is sitting right above critical support at 0.01 BTC, having fallen through range support at 0.0115 BTC last week. Below 0.01 BTC, there is little support for a long way down; as such, I suspect this is indeed a deep spring from which price will experience a sharp reversal over the coming weeks. A higher timeframe close below 0.01 BTC would spell doom, but a move back above 0.0115 BTC would cement the likelihood of a new bull cycle.

And that concludes this week’s Market Outlook.

I hope you’ve found some value in the read. If you have any questions or comments, feel free to leave them below.


If you’ve enjoyed this post and want to receive new posts straight to your inbox, I’ve set up a RSS-to-Email feed that will be sent out weekly; every Monday, 12pm. Just submit your email and I’ll make sure you’re included in the list. Cheers.

Market Outlook #34 (Altcoin Special)

AD: Before I begin this post, I’d like to briefly mention Bitcoin.Live, who are sponsoring my blog.

Bitcoin.Live offers regular, detailed content on their free-to-access blog, created by a panel of analysts (including Peter Brandt), and covering all manner of market-related topics. I found both the video material and the blog posts to be genuinely insightful, with many differing analytical perspectives available for viewers and readers. The platform also offers premium content for paying subscribers who find value in the free material, with daily videos, alerts and support provided. Check it out and bookmark the blog.


Market Outlook #34 (7th May 2019)

Hello, and welcome to part two of this week’s Market Outlook. For those who missed the first part, which dealt exclusively with Bitcoin, Ethereum, Monero and Dash in extensive detail, you can find it here.

In this post, however, I will be covering Stratis, Komodo, Ark and Ardor. These are four of the larger mid-to-largecap altcoins I’m invested in, and I think they largely reflect the nature of most of the altcoin market at present.

Strangely, whilst most of the market is at ALT/BTC lows, I do not think the bloodshed is quite over yet, as my expectations for an imminent short-term top in Bitcoin give me reason to believe we’ll see more blood when BTC retraces. Altcoins will have their time to shine, but it’ll take either a period of consolidation or a slow and steady rise in Bitcoin (above the $6k resistance) before that occurs. Volatility and uncertainty in Bitcoin is generally not so good for alts…

Stratis:

STRAT/USD

STRATUSDWeekly

STRATUSDDaily

STRAT/BTC

STRATBTCWeekly

STRATBTCDaily

Price: $0.82 (13787 satoshis)

Market Cap: $81.175mn (13,693 BTC)

Thoughts: Stratis has a lot going for it fundamentally (as do the rest of the four coins featured in this post) but its chart now looks horrific. Just two weeks ago, it was one of the stronger looking charts…

Now, let us take a look at the Weekly chart for STRAT/USD for some context:

Trendline resistance that was in play for a year was broken going into 2019 and price successfully retested it in January. As such, there is a strong possibility that the cyclical low was formed at $0.53 last year. Since then price has found resistance at an historical level of support, $1.34.

Looking now at the Daily chart, we can see the breakout from trendline resistance occurred on high volume and that mid-term support has formed around $0.73. However, STRAT’s climb above the 200-day moving average was shortlived and price now sits in a precarious position with at least 30% of room to fall before it reaches the low from December 2018. If Bitcoin does retrace towards the low $4k area, STRAT/USD would undoubtedly be dragged down towards this potential support level.

STRAT/BTC looked rather comfortable above 21k satoshis in April, but, looking at its Weekly chart, we can see that it now looks a little grim:

18-month trendline resistance was broken in December, and price found resistance at support turned resistance around 40k satoshis. Following this, it retraced towards 21k satoshis where it sat, presumably in re-accumulation, for a couple of months. However, late April brought with it a breakdown from this support level and price has continued to fall, breaking and closing the Weekly below the November low of 15k satoshis. It seems to me to be painting something of a spring as it seeks to test the trendline resistance as support once more, though this time around 12k satoshis.

Looking at the Daily chart, we can see where price lost the 200-day moving average followed by a fall through the significant 0.0002 BTC level. The subsequent sell-off has been steep but very low in volume, indicating that a move into historical resistance at 12k satoshis from 2017 will likely be a good place to buy. However, low-risk buyers would wait for a rejection and break of the bearish market structure before an entry. I have depicted the path I expect Stratis to take on its Weekly chart, though I expect movements to be more explosive than shown if late Q2/early Q3 is when alts get some relief.


Komodo:

KMD/USD

KMD/BTC

KMDBTCWeekly

KMDBTCDaily

Price: $1.10 (18567 satoshis)

Market Cap: $124.511mn (21,000 BTC)

Thoughts: Komodo looks relatively strong compared to other alts, though it suffered from a great deal of downside of late too. Looking at KMD/USD on the Weekly timeframe, it is evident that price is lingering around serious resistance but remains above its 20-week moving average. Again, given the significant relationship between Bitcoin’s price at ALT/USD prices, I expect KMD/USD to be dragged back towards trendline support (and perhaps briefly under it) as Bitcoin finds a short-term top.

Now, let’s take a look at the Weekly chart for KMD/BTC:

10-month trendline resistance was broken and retested prior to 2019, after which price rose steadily, respecting its trendline support. It found resistance at prior support around 28k satoshis, retracing hard towards the trendline, which then gave way. What has followed is a move back into what is clearly an area of historical accumulation for all of Komodo’s bull cycles.

From the Daily chart, we can see that price is lingering within this range, above support at 17500 satoshis, but if Bitcoin sneezes I expect this level to give way and KMD to move towards 15700 satoshis. I do, however, expect the November low at 13400 satoshis to remain intact as a cyclical low. A move above 21500 satoshis would confirm the reversal.


Ark:

ARK/USD

ARKUSDWeekly

ARKBTCWeekly

ARK/BTC

ARKBTCWeekly

ARKBTCDaily

Price: $0.49 (8191 satoshis)

Market Cap: $54.54mn (9,178 BTC)

Thoughts: Ark is another coin that looked very strong against Bitcoin in Q1 but has suffered a deep retracement towards November lows.

The Weekly chart for ARK/USD depicts the breakout above support turned resistance at $0.50 and the 20-week moving average in Q1, following which price found resistance at $0.90. It has since fallen towards trendline support and the 20-week moving average has been lost. Further, it is sitting at the reclaimed level of support at $0.50.

Looking now at the Daily chart, we can see price flirting with trendline support, but also that the 200-day moving average has also been lost. Multiple Daily closes below support indicate that there is further downside to be had, and a close below $0.45 would open up a move towards $0.36.

But what about ARK/BTC? Well, as can be seen in the Weekly chart, price is sitting just above the first ever Weekly orderblock, which preceded the 2017 bull cycle. This is likely a great area for low-risk, high-reward accumulation, and the successive bearish Weekly candles suggest to me that we will see the local low at 7300 satoshis taken out before price rejects, acting as a spring for a new cycle to begin.

I have depicted this on the Daily chart, where we can also see the series of significant levels of support that have been lost recently. A move back above 9500 satoshis would indicate that a bottom has been found, but I expect we shall see price wick below 7k before that happens.


Ardor:

ARDR/USD

ARDRUSDWeekly

ARDRUSDDaily

ARDR/BTC

ARDRBTCWeekly

ARDRBTCDaily

Price: $0.07 (1176 satoshis)

Market Cap: $69.6mn (11,753 BTC)

Thoughts: Finally, we have Ardor. One particularly interesting feature of Ardor’s price-history can be found on the Weekly chart for ARDR/USD, where I have depicted a very similar fractal that seems to be playing out from late 2016/early 2017. Further, the 5-month trendline support is being respected by the Weekly candles, but its fortunes are largely tied to the movement of Bitcoin. We can clearly see numerous levels of support becoming resistance, with the most recent resistance found at $0.09.

Looking now at the Daily chart, we can see that there is actually a little room to fall before Ardor tests its trendline support against the Dollar. Further, it also just about holding onto its 200-day moving average and holding above resistance turned support at $0.067. However, again, unless Ardor massively outperforms Bitcoin, a retracement in BTC/USD will certainly bring ARDR/USD below these areas of support, perhaps towards $0.50.

The ARDR/BTC chart, however, is a work of art, as price has moved back into the original accumulation zone from 2016. I have painted a price trajectory on the Weekly chart. It is, however, paramount that Ardor holds above 900 satoshis, which is its all-time low. A move below that would open up bearish price discovery. Whilst Ardor holds within this range, it is likely a rewarding opportunity to accumulate.

Finally, looking at the Daily chart, I have shown where Ardor broke its uptrend against Bitcoin and lost its 200-day moving average. The subsequent dump has been extensive, bringing price all the way back to the November low above 1100 satoshis. The recent rejection of a move below this does suggest that a double bottom may be forming, but I expect this low will be swept in a similar spring-like fashion to that which we are seeing across-the-board in alts.

And that concludes this lengthy second part to this week’s Market Outlook. I hope you’ve enjoyed the read.

As ever, feel free to leave any comments or questions below.


If you’ve enjoyed this post and want to receive new posts straight to your inbox, I’ve set up a RSS-to-Email feed that will be sent out weekly; every Monday, 12pm. Just submit your email and I’ll make sure you’re included in the list. Cheers.