Market Outlook #101 (16th November 2020)
Hello, and welcome to the 101st instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, Litecoin, Monero, Tezos, Zilliqa, Fantom, Kleros, Fetch.ai and COTI.
As ever, if you have any suggestions for next week’s post, feel free to leave them in the comments below.
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.
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.
Price: $67.39 (0.0041 BTC)
Market Cap: $4.44bn (272,268 BTC)
Thoughts: Litecoin is looking bullish again and is on the precipice of an important breakout.
If we look at LTC/USD, on the weekly, we can see that the 200-week moving average – which capped price earlier this year – is now being tested once more at $69. If the weekly closes above that level, I would expect to see a run to $85 follow swiftly, with $99 the next resistance above that. Ultimately, the trendline breakout from the all-time high is a sign of cyclical reversal, so acceptance above the 200wMA would make me consider a run into $146 is very likely over the coming months. I would like to be long Litecoin for a sustained period of time once we do close above this overhead resistance.
Turning to LTC/BTC, price is still below trendline resistance that has capped price throughout 2020, but there are signs of reversal as price has printed bullish divergence on both the weekly and daily timeframes. I’d like to see that 0.00442 area cleared along with a trendline breakout before I turn into a full Litecoin bull, but once we flip that level I expect we see a rally into that historical support turned resistance at 0.00685. Looking at the daily, there is very strong bullish divergence but – as I say – there is a confluence of important resistances directly overhead. Not only do we have the 0.00442 support turned resistance, but also trendline resistance and the 200-day moving average. Overcome that confluence and this thing will fly and I want to be on board.
Price: $118.07 (0.00725 BTC)
Market Cap: $2.096bn (128,890 BTC)
Thoughts: Monero has actually broken lower than expected against BTC but is looking ready to bottom now.
If we begin with XMR/USD, we can see from the weekly that price has been flagging below $141, pulling back a little into prior resistance turned support at $106, which was the area I was looking to buy (and have since been front-running with buys at ~$111-112). If we drop into the daily, I have left in my previous rough trajectory illustration, though as we seem to be holding above $110 very well, I am now doubting a final sweep into the $106 area. Instead, if we can reclaim the 2019 high at $123, I’d consider this bottomed and would expect another test of $145. Above that, the next major resistance is $215.
Turning to XMR/BTC, as we can see the sell-off from 0.0116 has been brutal, with price crumbling back into the range below 0.0073, but with the previous week’s volume markedly lower than the week before it, despite the push lower. I think we are seeing seller exhaustion now as price retests range resistance as support, but the real indicator of a reversal will be when 0.0074 gets reclaimed as support. Once we get above that level, those on the sidelines could enter with a stop below range support at 0.006 and targeting new yearly highs above 0.012.
Price: $2.04 (12,550 satoshis)
Market Cap: $1.533bn (94,157 BTC)
Thoughts: Tezos still looks horrendous against BTC but moderately attractive against the Dollar; that said, I remain uninterested.
If we look at XTZ/USD, we can see that price is now consolidating between $1.95 and $2.25, with the prior all-time highs acting as support. Price also remains above the trendline support from October 2019. If we drop into the daily chart, this range has printed bullish divergence on the dump into $1.78, but I would not be interested in getting long the pair until $2.25 (and the 360dMA just above it) have been reclaimed as support. Really, low-risk longs would present themselves when price flips $2.65, which is the final major resistance level before an all-time high retest. Bears would want to see $2.25 hold as range resistance, with a move back below $1.95 opening up the likelihood of a sweep of $1.78 into trendline support. Below that trendline, however, there is no support until ~$1.25.
Turning to XTZ/BTC, we have now come into an area of prior resistance at 12k satoshis, which for now is acting as support, but the pair printed 9 consecutive red candles and recently retested 14.6k satoshis as resistance, failing to break back above it. If it can hold above 12k satoshis, I would like to see a range form here (as I have previously mentioned), but a break below that level opens up a retest of 9,110 satoshis as support, which would be a much more interesting place to look for long-term buys. Briefly turning to the daily chart, here we can see that price remains capped by trendline resistance, so I’ll be looking for a trendline breakout to signal an end to the downtrend.
Price: $0.021 (129 satoshis)
Market Cap: $223.57mn (13,742 BTC)
Thoughts: ZIL has been holding up pretty well relative to many other alts whilst BTC/USD has been rallying.
Beginning with ZIL/USD, there is a clear consolidation range that has formed on the weekly beneath long-term support turned resistance at $0.029. Support for the range is at $0.015 and price now appears to be pushing for a range resistance retest. On a longer-term view, I am expecting that $0.029 resistance to give way; once it flips as support, the path to $0.054 is underway and ultimately to $0.175 or higher. Those early prices from April 2018 were traded at as the market turned bearish and ZIL had effectively no developmental progress – I see no reason why ZIL/USD cannot retest those highs in a bull market. Nonetheless, $0.054 will be the area I begin to scale out, selling incrementally as price pushes higher from there towards the ATH at $0.235. Looking at the daily, the 200-day moving average continued to support the pair and unless we lose it and subsequently range support at $0.015, I see no reason to be bearish on ZIL.
Looking now at ZIL/BTC, the range resistance at 100 satoshis appears to now be holding as support, although price has actually failed to move that low, instead dropping into the 360-day moving average at around 120 satoshis and holding above it. Trendline resistance is still capping price, as is support turned resistance at 136 satoshis, so whilst we are below those levels I wouldn’t be surprised to see a final flush into 100 satoshis; that said, once we break above 136 satoshis, I would then be looking for price to retest 206 satoshis – close above that and market structure would be bullish once again, opening up the full reversal into the yearly highs and beyond.
Price: $0.043 (265 satoshis)
Market Cap: $32.216mn (1,980 BTC)
Thoughts: Much like ZIL, FET looks to be bottoming here above prior resistance.
If we look at FET/USD firstly, we can see this rounded bottom forming above $0.03, which was the pre-March-capitulation support level. From the daily, we can see that the 200dMA was lost, as was the 360dMA, but price seems to be holding above $0.035. I would like to see $0.048 reclaimed as support, thus pushing us back above 360dMA, but I – as I mentioned in a previous post – am happy to be a buyer here. Risk-averse traders will want to see that overhead resistance reclaimed before stepping in. If we break above $0.059, market structure turns bullish and I’d be looking for another leg higher into $0.21.
Turning to FET/BTC, there isn’t much to add here beyond what I have said previously, as the pair is behaving precisely as I was hoping for, having dumped into the prior accumulation range and now appearing to flatten out. I am buying this range with a stop on a weekly close below 169 satoshis, and I am ultimately looking for 3280 satoshis to be retested in 2021.
Price: $0.076 (468 satoshis)
Market Cap: $43.475mn (2,671 BTC)
Thoughts: Kleros has experienced a strong rally this year but the project has now reversed much of its bull cycle and appears to be in the latter stages of a bear cycle.
If we begin with PNK/USD, unlike on its BTC pair Kleros has held up fairly well against the Dollar, though it has fallen from the all-time high at $0.188 to support at the 200dMA around $0.047. Since, the pair has bounced higher, printed a higher-low above $0.047 and rallied higher against, closing at a higher-high above ~$0.083. This indicates that PNK/USD is reversing, but based on PNK/BTC I am not interested in buying just yet.
If we look at PNK/BTC, the spike into 1254 satoshis following the dump from the all-time high at 1646 satoshis is now clearly the complacency shoulder for the bear cycle, with subsequent price-action sending the pair back below the 200dMA into the 360dMA and prior resistance turned support at 386 satoshis. Now, for this pair specifically, I would like to see a new range form above 386 satoshis as a re-accumulation range before a reversal (and before I enter any position). If we break below 386 satoshis and the 360dMA, this isn’t something I’d be interested in until 215 satoshis is retested as support. The ideal scenario for bulls and current holders is that the pair ranges here, but I am not ruling out further capitulation below the 360dMA, as we have seen this with a number of newer alts recently. A dump into 215 satoshis would also provide a higher R entry for a longer-term play.
Price: $0.019 (118 satoshis)
Market Cap: $41.027mn (2,521 BTC)
Thoughts: If we begin by looking at FTM/USD, from the weekly we can see that price closed below trendline support from March, retesting it as resistance for two consecutive weeks subsequently. Price also dumped below reclaimed support at $0.015 into $0.012 but ended up closing the week above that level. If we turn to the daily, price has stalled its downtrend at the 360dMA but remains below two important resistance: prior support at $0.0245 and the trendline support turned resistance. To be honest, I wouldn’t want to re-enter Fantom until $0.0245 is reclaimed, as that would also turn market structure bullish again, so I have my eyes firmly fixed on that level.
If we turn to the BTC pair, we have returned to historical cyclical support at 86 satoshis, where the downtrend has ceased for now. From the daily, we can see how price capitulated below the 360dMA into that support area and now appears to be forming a higher-low. If we see the 360dMA reclaimed as support, I’d be much more interested in entries. Ultimately, I do think this breaks that double-top at 500 satoshis, but given that the all-time low is another 65-70% drop away at 37 satoshis, I don’t want to jump the gun on a re-entry.
Price: $0.037 (228 satoshis)
Market Cap: $21.101mn (1,296 BTC(
Thoughts: COTI has certainly ceased its downtrend and is now forming a range on both pairs, which is a promising sign.
If we look at COTI/USD, we can see that the 360dMA provided support at $0.0258, with that level now acting as range support. Price has since tested $0.039 overhead as resistance three times but failed to break above it, with the level also having confluence with the 200dMA. As such, COTI is trapped between these two MAs, but I have been happily buying this range in anticipation of a breakout above $0.039. Once that level flips as support, I think we see another rally into $0.09 followed by a retest of the all-time high at $0.13.
Turning to COTI/BTC, as expected we are seeing a rounded bottom form above prior range resistance at 185 satoshis, and I expect we’ll see some more consolidation here before a reversal higher. If we break below 185 satoshis, I would expect the all-time low to get tested or even swept at 75 satoshis, thus would exit my position and either re-buy much lower or re-buy on a reclaim of 185. However, as long as 185 satoshis holds as support, I think we can expect 320 satoshis to be tested over the coming weeks; break above that and we get another leg higher to new highs above 780 satoshis.
And that concludes this week’s Market Outlook.
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