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Market Outlook #108

Market Outlook #108 (18th January 2021)

Hello, and welcome to the 108th instalment of my Market Outlook.

In this week’s post, I will be covering Bitcoin, Ethereum, Chainlink, Tezos, Zilliqa, Algorand, Basic Attention Token, Matic Network, Utrust and Golem.

As ever, if you have any suggestions for the next post, feel free to leave them in the comments below.

Bitcoin:

Weekly:

BTCUSDWeekly

Daily:

BTCUSDDaily

Price: $36,118

Market Cap: $665.374bn

Thoughts: As expected in last week’s Outlook, the uptrend in BTC/USD held firm, but price is now very much in consolidation as a failure to make a new all-time high led to a lower-high forming.

Beginning with the weekly chart, the first thing to take note of is that last week was an inside week, meaning that the range of the week was within the range of the previous week (the current all-time high week). We often find that if price breaks one side of the inside week but fails to close outside that range, the subsequent week will see the other side of the range tested too, so that is something to keep in mind should we sweep either the prior weekly high or weekly low this week. Now, last week also saw price retest the 1.618 extension at $30,000 as support, which held firm and pushed the pair to a weekly close 20% higher at ~$36k. If we drop into the daily, we can see more precisely how this played out, with Bitcoin selling off hard early last week on the highest daily volume since March capitulation last year, but bouncing almost 20% from the low and closing above prior minor resistance turned support at $33,200. Subsequently, we saw a day of consolidation followed by a bullish engulfing, with the pair then pushing on for an all-time high retest but ultimately falling short and printing a lower-high. There are a number of people who think this lower high may well be a complacency shoulder, but unless we see Bitcoin break and close below $30,000 – thus printing a lower-low on the daily for the first time since September 2020 – there is no reason to expect this just yet. If we do see that occur, I would expect a much longer period of consolidation to follow before an all-time high retest, with $27,680 likely to get swept also. However, for now the pair remains in bullish market structure and printing a pennant with higher-lows and lower-highs, with a possible breakout by January 26th. As such, I wouldn’t be surprised to see a few more days of consolidation before a direction is found: break and close above the pennant on good volume and I’d expect an all-time high retest to follow; break below $33,215 and I think $30k gets retested as support. In that scenario, we’d want to see $30k get swept but print a swing-failure in order for bullish market structure to remain intact.


Ethereum:

ETH/USD

Weekly:

ETHUSDWeekly

Daily:

ETHUSDDaily

ETH/BTC

Weekly:

ETHBTCWeekly

Daily:

ETHBTCDaily

Price: $1221.47 (0.0339 BTC)

Market Cap: $137.576bn

Thoughts: The teasing continues for Ethereum, as we hover within spitting distance of the Dollar ATH.

Looking firstly at ETH/USD, we can see a similar inside week to that of BTC/USD, albeit with a much stronger weekly close thanks to the performance of ETH/BTC at the weekend. Importantly, we can see that price effectively retested the prior weekly low before retracing almost the entire sell-off to close near the yearly high, indicating the degree of demand for ETH. If we turn to the daily, we can see that following the sell-off the pair has been respecting local trendline support, the steepness of which would have ETH at all-time highs this week should it continue to be respected. I am expecting that $1416 all-time high to get swept before another pull-back and am positioned for that scenario, but should we begin to break down here on the lower timeframes, I’d expect that $896 low to get retested and possibly swept into the $830 resistance turned support; close below that $830 swing-low and market structure would turn bearish following a failure to break the all-time high, which would not be a great look. For now, however, I am an ETH bull, as there is no reason yet to expect a bearish reversal here.

Turning to ETH/BTC, I mentioned on Twitter that I was looking for a weekly close above 0.035, and although we didn’t quite get it, the close was strong indeed, as we can see. Price retested channel support and bounced, ultimately pushing for 0.0348 on Sunday and closing at weekly highs on good volume. However, we need to see the pair breach that 0.035 resistance in order for things to get really interesting for ETH outperformance, as above that there is no resistance to the 2020 high at 0.0405, which, given the trend that the pair has been in since September 2019, I fully expect to lead to a higher-high. Turning to the daily, we’ve got near-perfect bullish structure here now, as price retesting the short-term trendline resistance as support last week, as well as the 200dMA, holding firm and subsequently pushing on for that 0.035 area, where the daily closed above minor resistance at 0.0339, having failed to do so on four consecutive attempts previously this year. As I said, the most important level for me remains 0.035, and I want to see a daily close above it so that I can confidently expect a 2020 high retest over the coming weeks.


Chainlink:

LINK/USD

Weekly:

LINKUSDWeekly

Daily:

LINKUSDDaily

LINK/BTC

Weekly:

LINKBTCWeekly

Daily:

LINKBTCDaily

Price: $21.85 (61,156 satoshis)

Market Cap: $8.774bn

Thoughts: New all-time highs for LINK/USD this past week, following a magnificent reversal on its BTC pair.

Looking at LINK/USD firstly, the weekly close tells you everything you need to know, with price having closed above that all-important pivot at $13.80 the previous week, retested it as support last week and then rocketed up above $20.98 into a new all-time high at $24.59, closing firmly above that prior high. If we look back at previous ATH breakouts, we can see that LINK tends to have a few weeks of straight rallying subsequently before putting in a new top, thus I think we can expect price to push forward from here towards February, with $41 as the next likely area for major resistance to be found, as the 1.618 extension. Buy the dips.

Turning to LINK/BTC, here we can see just how strong the reversal was from the support base that formed at prior resistance around 37k satoshis. Following a couple of weeks of consolidation at the base, we got a hard and fast rally back above prior range resistance at 60k satoshis, with the weekly closing close to that 67.5k-satoshi prior support. If we look at the daily, we can see that the trendline resistance has been broken with price stalling at the 360dMA. I’d expect any dips into 57k satoshis to be bought fast should we get them, and if the pair can close back above 67.5k satoshis, I’d expect the 200dMA to be retested at resistance around 85k satoshis.


Tezos:

XTZ/USD

Weekly:

XTZUSDWeekly

Daily:

XTZUSDDaily

XTZ/BTC

Weekly:

XTZBTCWeekly

Daily:

XTZBTCDaily

Price: $2.96 (8,134 satoshis)

Market Cap: $2.238bn

Thoughts: Tezos finally looks ready join the party after weeks of being a laggard.

Beginning with XTZ/USD, we can see from the weekly that the pair has broken out, closing at a higher-high (just) above the $2.97 high from late last year, after sweeping the $1.78 low into trendline support at the turn of the New Year. Now that weekly market structure looks bullish, I am interested in longing whatever dip we may get on the pair, with a retest of $2.65 as support the most likely area to get long for a retest of the all-time high at $4.52. Turning to the daily, we can see that both the 200dMA and 360dMA have been reclaimed as support, and there isn’t really a great deal of resistance between here and the February 2020 high at $3.95. Onwards and upwards.

Looking at XTZ/BTC, we can see the makings of a reversal after an 86% decline against BTC over the past few months, with the pair now wrestling with trendline resistance, having reclaimed the July 2019 low at 7,500 satoshis. I’d like to see range support at 9k satoshis now be broken above and hold as support, opening up the potential for a longer-term reversal into that reclaimed resistance at 14.6k satoshis (and possibly higher depending on market conditions). From the daily, we can see how this might play out, if price can form a higher low above that 7,500-satoshi area, which would make a good long entry up into 12k satoshis as resistance.


Zilliqa:

ZIL/USD

Weekly:

ZILUSDWeekly

Daily:

ZILUSDDaily

ZIL/BTC

Weekly:

ZILBTCWeekly

Daily:

ZILBTCDaily

Price: $0.0767 (210 satoshis)

Market Cap: $832.225mn

Thoughts: As I mentioned near the beginning of the year, Zilliqa had a strong period of outperformance and I was expect a few weeks of consolidation to follow, which we appear to be within at the moment.

Looking at ZIL/USD, we can see that price is holding above reclaimed support at $0.054, having retested it last week but closed the week around the $0.075 area where it has been sitting comfortably this month, respecting trendline support. I am now expecting the pair to push on for a third leg higher into the $0.18 area (the all-time high weekly close and 78.6% retracement of the bear cycle). This may still take a few weeks to unfold, but I would imagine that $0.054 low will hold as the bottom of this consolidation. Turning to the daily, we can see the beginnings of a flag breakout today, with that 2020 high at $0.105 the most important level to consider at present; close above it and the third leg of the rally will begin. Ultimately, I am expecting ZIL/USD to have broken its all-time high in the first half of 2021, having looked at how other projects have broken those highs and where ZIL currently is in its market cycle.

Turning to ZIL/BTC, the 600-satoshi area remains most interesting to me as a place to shed some of my position, which is nearly 3x where it currently sits (and would see ZIL/USD at or above $0.18 assuming no capitulation in BTC/USD). As we can see from the daily, the pair retested resistance at 340 satoshis, poking above but rejecting, which led to a retracement into the 200dMA, where it appears to have found support and is reversing. The third test of the level above will no doubt see it give way, with 500 satoshis the next resistance above it. Bullish.


Algorand:

ALGO/USD

Daily:

ALGOUSDDaily

ALGO/BTC

Daily:

ALGOBTCDaily

Price: $0.56 (1,548 satoshis)

Market Cap: $681.302mn

Thoughts: Algorand has finally broken above major resistance at $0.50 and appears to be holding firm, whilst its BTC pair is beginning to paint a reversal after the weekly close.

Looking at ALGO/USD, we can see here that the pair tested $0.50 a couple of weeks ago and failed, retracing into the 200dMA where it printed a higher-low. Since, it has rallied higher, break and closing above $0.50, and now looking as though it is retesting the breakout area as support. I am already long ALGO and will be adding on dips, looking for a retest of the 2020 high from here, with my stop below the 200dMA.

Turning to ALGO/BTC, following months of downtrend we have finally broken bearish market structure and printed a higher high after the all-time low got swept last week. I’d like to see the pair hold above 1,400 satoshis from here, with the next resistance that 1,870-satoshi level. Above that, it is the major support turned resistance at 2,030 satoshis; a weekly close above which I would consider to be the beginning of a macro reversal and a period of significant outperformance for ALGO. The bullish scenario is obviously invalidated if the pair retraces into the all-time low and fails to hold above it.


Basic Attention Token:

BAT/USD

Weekly:

BATUSDWeekly

Daily:

BATUSDDaily

BAT/BTC

Weekly:

BATBTCWeekly

Daily:

BATBTCDaily

Price: $0.29 (798 satoshis)

Market Cap: $429.723mn

Thoughts: If we begin by looking at BAT/USD on the weekly, the pair broke above resistance at $0.30-0.33 last August, hitting $0.45 before finding resistance beneath the 2019 high at $0.50. Since, the pair has fallen off to find new support and print a higher-low at $0.17, now breaking higher once more and looking to retest that $0.30 resistance: if we see a close above that, I’d expect BAT to continue higher towards the 2019 high, providing over 50% of potential upside from the breakout level; an obvious one to buy on dips. Above that high, there is very little resistance into the 2018 high at $1.09.

Turning to BAT/BTC, here we can see that price broke below the range support at 1,570 satoshis during BTC’s big run late last year, with it falling to new lows at 544 satoshis a few weeks ago. This appears to be holding as the base, with volume now picking up as the pair pushes higher. That said, until we see a series of higher-highs and higher-lows here, market structure remains bearish and there is no reason to jump in just yet. The first level I am looking for to be reclaimed as support is 1,024 satoshis, above which I think BAT has a good chance at retesting range support as resistance ~1,570 satoshis.


Matic Network:

MATIC/USD

Weekly:

MATICUSDWeekly

Daily:

MATICUSDDaily

MATIC/BTC

Weekly:

MATICBTCWeekly

Daily:

MATICBTCDaily

Price: $0.035 (97 satoshis)

Market Cap: $171.584mn

Thoughts: Straight off the bat I’d like to say that the MATIC/BTC chart is incredibly ugly – poor job whoever’s pulling the strings there.

Looking now at MATIC/USD, we can see that last week saw the pair break out above 2020 resistance at $0.029, closing above this level for the first time since December 2019. Price is now consolidating between $0.029 as support and the all-time high at $0.046 as resistance. If we drop into the daily, we can see that the pair retested the original breakout area at $0.022 as support following the $0.03 breakout, bouncing just shy of the 200dMA and breaking back above $0.03. This looks like it wants to retest the all-time high at $0.0467, but there isn’t a clear entry on the daily chart unless we get a retest of $0.0297 as support (although we already got one yesterday and I missed it, so perhaps not). Whilst the pair is above $0.03, I think its very likely to continue higher above that all-time high in the next couple of weeks. Break back below it and I’d expect it to return to $0.022.

Turning to MATIC/BTC, we find the pair hovering above the all-time low at 47 satoshis, having capitulated into it but failed to break to a new low at the turn of the New Year. Since, it has pushed higher, reclaiming the August 2019 low as support at 77 satoshis. As I said, this chart is super ugly, which we can see if we drop into the daily. The next resistance above is at 123 satoshis, followed by major support turned resistance at 150 satoshis, which is the clearest level on the chart for me. As such, until we reclaim that level as support, I’m uninterested in the pair and likely not going to take any positions in the Dollar pair either.


Utrust:

UTK/USD

Weekly:

UTKUSDWeekly

Daily:

UTKUSDDaily

UTK/BTC

Weekly:

UTKBTCWeekly

Daily:

UTKBTCDaily

Price: $0.228 (628 satoshis)

Market Cap: $102.718mn

Thoughts: Utrust is one of the more fundamentally sound midcaps on my watchlist, and it looks ready for a second leg higher against the dollar, following a multi-month consolidation.

Looking at UTK/USD, we can see that the pair found resistance at $0.25 in August 2020, retraced into reclaimed support at $0.084 in November and has subsequently rallied back into resistance as of last week, closing right at the $0.25 level. Once we see a break and close above this level, I think UTK goes nuts, as there is no resistance at all into the ATH weekly close at $0.79. This is another one I expect to see break its 2018 all-time high at $1.44 this year, particularly given the progress it has made since then.

Turning to UTK/BTC, the pair has returned to historical support at 360 satoshis following a pump into 2,050 satoshis in August 2020, with support holding firm over recent weeks and leading to a push higher on growing volume. If we look at the daily, the pair has now reclaimed the 360dMA and is trading above it at 628 satoshis, but trendline resistance from the 2020 high remains capping price. If it can break out above this resistance, I think we’ll see the next leg of its bull cycle begin, dragging UTK/USD up above $0.25 and beyond. If UTK retests the 2020 high against BTC, that alone would put it within spitting distance of the all-time high weekly close at $0.79. Looking at the weekly chart, however, I fully expect 3k satoshis to be retested as resistance this year, which is nearly 5x from current prices.


Golem:

GLM/USD

Weekly:

GLMUSDWeekly

Daily:

GLMUSDDaily

GLM/BTC

Weekly:

GLMBTCWeekly

Daily:

GLMBTCDaily

Price: $0.12 (337 satoshis)

Market Cap: $78.225mn

Thoughts: Golem has just about dipped below its all-time low against BTC and is now consolidating around that historical level, whilst simultaneously consolidating below the most important resistance level against the dollar at $0.17. Did someone say ‘point of maximal opportunity‘?

Looking at GLM/USD, following the token swap to ERC-20 the pair has been largely in a tight consolidation, holding above trendline support from March 2020 but failing to break above prior support turned resistance around $0.125. Above, we can see the $0.17 level capping price last year, with it also being the 200wMA. If the pair continues to patiently follow the trendline higher, we would expect to see a retest of $0.17 by May. However, I do think we’ll see that resistance retested well before that, with any breakout above it triggering significant upside potential into the next major resistance at $0.74.

Turning to GLM/BTC, we can see that the pair has been in a range for 546 days, with the all-time low at 305 satoshis recently forming after a minor break below range support at 328 satoshis. If we drop into the daily, we can see that price has consolidated back around 330 satoshis following the sweep of the range, but I would be looking for 450 satoshis to be reclaimed as support before expecting a reversal, which would also be where I will look to add to my position. For upside targets, the main one is a retest of the 2020 high at 1480 satoshis, but ultimately a retest of the 200wMA at ~3.3k satoshis would make sense in favourable market conditions.

And that concludes this week’s Market Outlook.

I hope you’ve found some value in the read and thank you for supporting my work!

As ever, feel free to leave any comments or questions below, or email me directly at nik@altcointradershandbook.com.


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This Post Has 6 Comments

  1. Guy Brooks

    Hi Nick

    Joined up last week and a total newbie , enjoying the book !
    just a quick one for now , when you talk about an open and close what does that mean as the markets never close ?? does that relate to the time frame being discussed , appreciate your time , thanks in advance
    Guy

    1. Nik

      Hey Guy,

      Whilst technically the market is never closed, there are distinct times at which candles end and other candles begin – for Daily candles, this is 12am GMT, so I am referring to that time when I talk about a daily open or close. Hope that helps.

  2. Steven Durksen

    Hi Nik have you thought of doing follow up article to last year’s ” Which Altcoins Will Outperform Bitcoin in 2020″ for 2021?

    1. Nik

      Not yet, but it’s definitely something I’ll look at updating soon.

  3. massimo cortesi

    Hi Nick, good work as usual…I have a question for you. I am interested in the pair of the various altcoins against BTC but I sold them all last week. What should I do in your opinion? Many thanks

    1. Nik

      I think altcoins are beginning a period of outperformance against BTC to be honest. It looks like Bitcoin dominance is ready to move towards 50% in the next few weeks.

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