Market Outlook #101 (16th November 2020)
Hello, and welcome to the free edition of the 101st Market Outlook.
In these free versions of the Outlook, I provide my analysis on Bitcoin and Ethereum.
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Bitcoin:
Weekly:
Daily:
Price: $16,219
Market Cap: $300.676bn
Thoughts: Despite last week’s minor signs of over-extension, Bitcoin appears to give absolutely zero fucks about printing any meaningful dip, with the past of maximal pain appearing to be higher towards $17,150 short-term.
If we look at the weekly, each week continues to close higher than the previous. with 6 consecutive weeks now closing green. Looking at recent history, there have been a couple of 7-week periods where candles have consecutively closed in the green – as such, its likely that we are now approaching the top of this rally, which does not necessitate a subsequent decline; after all, there was a several week consolidation period following the previous 7-week rally from March capitulation. Nonetheless, I would be surprised to see more than a week or two more of rallying before we see price take a breather. Above us, there is only that $17,150 area as resistance before the all-time high.
Turning to the daily, here we can see a new, steeper trendline support has been formed since mid-October, with price expected to push for $17,150 before December at the current rate. A break below that trendline support is likely to be the first major indicator of a short-term top, so I am watching that closely. It is quite clear that Bitcoin is now rallying in a parabolic manner, with trendlines growing steeper as we move into lower time-frames. This often precedes a blow-off top, which does appear to be the likely scenario now. How high we peak before a meaningful dip I have no idea at this point, but the reaction at $17,150 will tell us a lot; close the daily above it and hold there and we may well push for $20k before this tops out; however, wick above $17,150 and begin to break down on the lower time-frames and I’d be looking for intra-week shorts into $15,800. The daily trend is still clearly pointing higher, however, so do not try to call tops and punt shorts for the sake of it just because it looks over-extended. The smart trade at present is simply longing any daily dip.
Ethereum:
ETH/USD
Weekly:
Daily:
ETH/BTC
Weekly:
Daily:
Price: $453.82 (0.02779 BTC)
Market Cap: $51.485bn (3,153,276 BTC)
Thoughts: Ethereum continues to lag at present because ETH/BTC is finding and forming a new base.
If we look at ETH/USD, from the weekly we can see that price rejected a push higher into the 2020 high at $490 last week, wicking up into resistance but ultimately closing at the reclaimed support ~$448. Trendline support from May has continued to sustain the rally, with the preceding week evidence of that, as price pushed back above that $448 area. If we see ETH continue to hold this level, I am absolutely of the belief that this breaks out upwards very soon and pushes on for that $830 swing-high in early 2021. Turning to the daily, there is not a lot to add here except that we continue to print higher-highs and higher-lows since mid-September, and a dip into that $423 area or trendline support would make a good long entry for another push into $490.
Looking now at ETH/BTC, whilst the week before last closed with a strong bullish hammer from the confluence of support at 0.0263, this past week was more bearish, with price consolidating but ultimately closing below 0.0286. It is still above trendline support that has been respected this entire year, however, and I’d like to see this next week hold above that 0.0263 low. That said, if we drop into the daily time-frame, as I mentioned last week there is a distinct possibility that price sweeps that low into the 360-day moving average but prints bullish divergence on the dump lower, thus marking a bottom. Whilst I would like to see ETH/BTC hold a higher-low and push up and out of trendline resistance from here, the extent of a BTC/USD rally may well dictate which path we follow. Nonetheless, I do think we are very close to the pair reversing, and I’d expect a trendline breakout before 2021. Following that, we will be looking for a higher-high to follow before I start considering ETH/USD longs over BTC/USD longs, as that would mark the beginning of another period of BTC under-performance.
And that concludes this week’s free Market Outlook.
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