You are currently viewing Market Outlook #114

Market Outlook #114

Market Outlook #114 (1st March 2021)

Hello, and welcome to the 114th instalment of my Market Outlook.

In this week’s post, I will be covering Bitcoin, Ethereum, Chainlink, Cosmos, THORChain, TomoChain, DIA, Constellation and LCX.

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

Bitcoin:

Monthly:

BTCUSDMonthly

Weekly:

BTCUSDWeekly

Daily:

BTCUSDDaily

Price: $48,312

Market Cap: $907.173bn

Thoughts: Despite the apparent doom and gloom of last week (of which I missed a great deal thanks to a perfectly-timed break), Bitcoin still looks fantastic following the monthly close.

Beginning with the monthly chart, we can see that price hit a new all-time high of $58,367 in February but, following a few days of sell-offs, closed the month out at just shy of the 2.618 extension of the bear market at $47k. Volume was high, though not as high as January, but this is unsurprising as we saw similar volume profiles in the 2017 run, with volume remaining high but not necessarily climbing with each new month of the rally. The candle close is very much bullish, with little to no lower wick and an expansive body relative to January, indicating strong demand off the February open. Looking ahead, I fully expect to see the 3.618 extension at $63.8k tagged by April, but it may yet be a short while of ranging before we expand towards the current all-time high and beyond.

Turning to the weekly, we can see here a heavy bearish candle, rejecting at the all-time high and selling off into prior resistance turned support above $42k, before bouncing and closing above $45k. Volume was higher than recent weeks and RSI has returned from extremely overbought levels to a healthy area for continuation. The uptrend remains very much intact and we have yet to retest trendline support from October 2020. As mentioned last week, there was a strong possibility that we would form some sort of local top in the $58k area, be it immediately or following a final flush of that high, with a range similar to January’s being the most healthy path forward for the cycle. Whilst it is possible we could sweep last week’s low from here back into that January range around $42k, it may well be that the range high retest has been front-run, as I mentioned would be likely given how many on the sidelines were waiting for that opportunity. If we do break lower again this, week, as long as we don’t close the weekly below $42k I think we’re still very much bullish, particularly so whilst that trendline support is holding firm.

Turning to the daily, I have left in the January range fractal, but I do not necessarily expect BTC to sweep last week’s low into range resistance at $42,150 before retracing to the all-time high. Rather, I think that if BTC can close today above $48.5k, it is likely that the bottom is in, and though we may retest it I would not expect price to break down below it. The likely scenario from here is some more time spent ranging between last week’s low and the all-time high, before a similar surge begins to that of early February to take us beyond $58k. The dump from $58,367 into $43,100 last week was almost 26%, which does give some wiggle room below if we were to see an equivalent percentage decline from the high as that of January from $42,150 down into $28,645, so there would be nothing uniquely bearish if we do see that low swept just above $43k, but as I said, too many people are waiting for that perfect retest that I think we just hold above it and force buyers to enter the market higher when they miss their entry. Daily RSI has reset significantly almost as low as in mid-to-late January, and I now expect the next week to ten days to consist of re-accumulation and further chop. Close the daily below $42k and I think we likely wick below trendline support and judge the reaction there (with the weekly close becoming very important at that point); that’s the only potentially bearish scenario I can see here. Bull market.


Ethereum:

ETH/USD

Weekly:

ETHUSDWeekly

Daily:

ETHUSDDaily

ETH/BTC

Weekly:

ETHBTCWeekly

Daily:

ETHBTCDaily

Price: $1530 (0.0318 BTC)

Market Cap: $169.485bn

Thoughts: Ethereum, unlike BTC, had a horrid February, retracing the bulk of its gains earlier in the month into the close.

If we begin with ETH/USD, we can see from the weekly that last week retraced the prior three weeks of advances, dumped into the prior all-time high and lower into $1293, but ultimately closed the week above $1415. Whilst this did print a horrible monthly candle, as long as ETH remains above last week’s low, it still looks decent here, with a textbook (albeit more brutal) breakout > retest formation. Now, weekly RSI had been as extremely overbought as in January 2018 for several weeks and this has now very much been reset to healthier levels, and as that 1.618 extension did not get tagged before the dump, that provides us with a nice target for a high R long from this area. If we drop into the daily, we can see that price has failed to close the daily back below that 2018 all-time high on consecutive days, wicking below it twice but always pushing higher. This suggests to me that ETH is finally finding some strength after a couple of weeks of lethargically being dragged higher by BTC/USD. RSI is as low as it has been in months on the daily, and I am happy to be a buyer here and lower back into $1415 if we get it this week, with a stop on a daily close below $1293 (manual exit) or a hard stop at $1038. The first target is $2270. Once the pair gets back above $1655, I will look to add to my position and move the hard stop up to $1293.

Turning to ETH/BTC, it has been three poor weeks for the pair, retracing around 35% from the 2021 high at 0.0461. However, last week saw the pair dump into reclaimed channel support, as well as the original breakout area following the dump into 0.023 at 0.0311. This is a critical area to hold as support, with any weekly close below last week’s low opening up further downside into 0.0262 or potentially lower back into that December 2020 low at 0.023, which would not be ideal for the current multi-year uptrend. If we do see the pair hold here, I would be looking for a bounce this week and close above the daily trendline resistance and 200dMA at 0.0327. That, for me, would confirm that the bottom is in and that we are likely to push higher towards 0.046 in March.


Chainlink:

LINK/USD

Weekly:

LINKUSDWeekly

Daily:

LINKUSDDaily

LINK/BTC

Weekly:

LINKBTCWeekly

Daily:

LINKBTCDaily

Price: $27.08 (55,200 satoshis)

Market Cap: $11.103bn

Thoughts: Looking firstly at LINK/USD, from the weekly we can see that the pair sold off relatively hard last week, dumping all the way into the prior all-time high at $21, which held firm as support, with price bouncing into the close. Much like BTC, I do not want to see LINK now close the weekly back inside that prior all-time high, so holding above $21 is vital to maintain bullish structure as opposed to looking like a failed all-time high breakout. Notice how the previous two cycles for LINK/USD have never seen price close back inside the prior all-time high after a breakout; price has ranged above it but never broken back inside. As such, we have a clear invalidation for any long positions we might consider here. Dropping into the daily, the pair did break below trendline support and is now retesting resistance at $26.80; break back above this level and I think we see LINK push on for new highs, with the bottom in at $21. Fail here and we may well see $21 retested this week.

Turning to LINK/BTC, despite signs two weeks back that we may forego a final dump into trendline resistance turned support, last week did see that dump play out; the reaction was precisely what I had been wanting to see. If we look at the daily for clarity, we can see that the second failed breakout above the 360dMA led to a slow bleed into 57k satoshis, which gave way to an accelerated dump all the way into the original breakout area at 45,391 satoshis, where price bounced hard and ultimately closed the day back above the prior low at 53k satoshis. Price has since held above this level, but as long as that  45,391-satoshis swing-low holds, I am now bullish on LINK outperformance. My expectations for a full reversal will be confirmed when we see that 360dMA give way for the third time at 67.5k satoshis; above that and I think LINK pushes on for a second historical trendline support turned resistance retest, potentially as high as at 97k satoshis later this month. Break below 45k after such a rejection from that level and it is likely this entire 2021 move is undone and price falls towards 27k satoshis.


Cosmos:

ATOM/USD

Weekly:

ATOMUSDWeekly

Daily:

ATOMUSDDaily

ATOM/BTC

Weekly:

ATOMBTCWeekly

Daily:

ATOMBTCDaily

Price:

Market Cap:

Thoughts: Beginning with ATOM/USD, we can see from the weekly that the pair has been in a strong uptrend since its breakout above $9 a few weeks ago, rallying over 200% into the current all-time high at $27.85 two weeks ago. Since, the pair has stalled and retraced, last week dumping into $14.66, a fall from the high of almost 47%. In a bull market, it is unlikely you get better opportunities than that for majors, particularly given the funding reset and mass liquidation event that occurred during last week’s sell-offs. However, if last week’s low does give way, it is likely ATOM retraces all the way back into the prior resistance area at $10.55, which would be a no-brainer buy, in my opinion, at least for spot. Turning to the daily, RSI is back where is was in late January before the two week rally into $27.85, and price is now holding well above last week’s low, but there is no clear structure here for any new leveraged positions at the moment.

Looking at ATOM/BTC, we can see the pair has been outperforming for 2021, having bounced from its all-time low in January at 14.5k satoshis into the historical pivot at 47k satoshis a few weeks ago, where it found resistance and has failed to break above on three attempts. Trendline support is currently holding from that all-time low but any failure to break higher this week would render it invalidated next week. RSI is still low, historically-speaking, so there is plenty of room for a second leg higher following this three week range below 47k. Dropping into the daily, we can see that the pair is holding above the 360dMA and 200dMA, with recent price-action tightening in a series of higher lows and lower highs. If the pair is able to push higher from here, flipping that pivot at 47.3k satoshis would be the trigger for a full retrace into the August 2020 high at 76.4k. Break down here and lose this confluence of supports and I’d expect that cluster of prior resistance at 27k satoshis to be retested. Overall, both pairs are in uptrends, so the likelihood is we do see upside resolution of the current range.


THORChain:

RUNE/USD

Daily:

RUNEUSDDaily

RUNE/BTC

Daily:

RUNEBTCDaily

Price:

Market Cap:

Thoughts: THORChain has been in a long-term uptrend since inception against the Dollar, with mini bear cycles that become re-accumulation ranges occurring every so often. Looking at RUNE/USD, the pair has recently been pressing up against historical channel resistance, failing to cleanly break above it and hold above, which would put the pair in accelerated price discovery move. RUNE did wick above it to form its all-time high at $5.73, but closed back below resistance and failed on a second attempt. For now, a range has been formed with support at $3.03 and resistance at the all-time high. As long as RUNE holds above $3.03, it is unlikely another mini bear cycle is due, and I would expect the pair to break out above the channel resistance the next time it retests $5.73. However, lose that level, and I think it is likely RUNE retraces into the 200dMA, which is has done in both previous mini-cycles before resuming its uptrend.

Turning to RUNE/BTC, the pair recently broke to new all-time highs at 12.5k satoshis, before retracing into 7k where support was found, significantly front-running a retest of the breakout zone and 200dMA at 6,130 satoshis. Price has reversed hard here, but is currently struggling at the prior all-time high around 10k; close the daily above this level and I would consider this to be acceptance for a new all-time high run, with 14,511 satoshis expected to be the next resistance, as the 1.618 extension of the bear cycle.


TomoChain:

TOMO/USD

Weekly:

TOMOUSDWeekly

Daily:

TOMOUSDDaily

TOMO/BTC

Weekly:

TOMOBTCWeekly

Daily:

TOMOBTCDaily

Price:

Market Cap:

Thoughts: If we begin by looking at TOMO/USD, we can see from the weekly that the pair is still very much in a parabolic uptrend that began in November 2020, having broken above its August 2020 high at $1.63 a couple of weeks ago, rallied to new highs at $2.77 and then dumped below that August high into $1.33 to retest it as support last week. As was the case with many altcoins, the pair closed the week back above that prior high and is now holding above it. I would consider that $1.33 low to now be clear invalidation, as any move below it would break the parabolic advance as well as lose critical resistance turned support, so longs here with targets of new highs at the 2.618 extension ~$3.51 are very attractive to me given how tight the stop is. Briefly dropping into the daily, the pair is also holding above the August high on this timeframe, confirming the strength following the sell-off, and I’d now be very surprised to see $1.33 lost without it meaning the end of the long-term uptrend and at least another 40+% dump back into $0.86.

Turning to TOMO/BTC, the pair has broken above historical range support at 2908 satoshis this year after sweeping the low, and has since retested prior support as resistance at 5,177, rejected and fallen back towards that historical support, above which it is currently holding. Again, this is a long-held area of support, so I would expect to see TOMO outperform from here, with confluence across both pairs for more upside. If 2900 is lost on the weekly, the low at 1967 would very likely get swept subsequently. Close the weekly above 5,177, however, and there is only minor resistance into 8294 satoshis. Looking at the daily, we see confluence here with the 200dMA and 360dMA both capping price at that 5177 level. That’s the area that needs to be flipped; above it, TOMO is golden.


DIA:

DIA/USD

Daily:

DIAUSDDaily

DIA/BTC

Daily:

DIABTCDaily

Price:

Market Cap:

Thoughts: DIA/USD began by pumping for a couple of weeks until it printed its all-time high in September 2020 at $4.83, following which it began its first bear cycle, bleeding into support at $0.94. This support held firm throughout Q4 2020 and price has since reversed, rallying into and reclaiming support at $1.87 earlier this year. Subsequently, the pair broke higher and found resistance at $3.68, having since retraced back towards the breakout area and 200dMA at $1.87, where it currently sits. This is a prime opportunity for spot positions, as any close back below $1.87 would suggest that the February rally into $3.68 was a deviation above Q4 2020 resistance; hold above that level and I think we are primed for a rally to new all-time highs at $4.84. Particularly given how strong the oracle narrative has been this year, I think DIA is good option for a high R entry.

Turning to DIA/BTC, unlike for the dollar pair, the BTC pair has fallen too all-time low earlier this year at 3374 satoshis, rallied into prior support turned resistance at 7k and failed and since returned to the breakout area at 4400-4800 satoshis. This is a crucial area for DIA to hold, as the pair has been in a downtrend since September 2020 and holding for a higher low here would be the signal that the pair is ready to begin its bull cycle, with the all-time low acting as the obvious invalidation. The trigger here for those who’d like to see more strength on the BTC pair before entering a position on the Dollar pair is for that 7k area to be flipped as support; that would confirm a macro reversal, in my opinion, and we’d likely see the pair rally into 19k satoshis to retest that support as resistance, at the very least.


Constellation:

DAG/USD

Weekly:

DAGUSDWeekly

Daily:

DAGUSDDaily

DAG/BTC

Weekly:

DAGBTCWeekly

Daily:

DAGBTCDaily

Price:

Market Cap:

Thoughts: Looking firstly at DAG/USD, the pair is coiling up beneath the all-time high at $0.038, having broken above the August 2020 high at $0.026 and retested it as resistance last week, with volume now picking up. Strangely enough, the all-time high has confluence with the 1.618 extension of the August 2020 to January 2021 down-swing, so a clean break on high volume above this area would be a strong signal that DAG is ready for price discovery. Regarding targets, to be honest these are much clearer on the BTC pair, but the 2.618 extension of that down-swing at $0.058 has confluence with the 1.618 extension of the entire bear market of 2018 into 2019, so that is my first target.

Turning to DAG/BTC, we can see that the pair bumped its all-time low at 20 satoshis into 14 satoshis before reversing, now rallying into range resistance at 74 satoshis. I am now looking for a weekly close above this level to open up the long-term reversal, where we might see a period like that of September to December 2019. In that case, the 2019 high is my primary target at 291 satoshis. If we do get that high and close the weekly above it, there is literally zero major resistance back into 500 satoshis, with the all-time high not far off that at 600 satoshis. In these market conditions, I absolutely believe that DAG can run that high.


LCX:

LCX/USD

Daily:

LCXUSDDaily

LCX/BTC

Daily:

LCXBTCDaily

Price:

Market Cap:

Thoughts: LCX is another coin that has been in a long-term uptrend with mini bear cycles within that against the dollar, having printed its all-time low at $0.00127 shortly after initial trading began and rallied into the all-time high at $0.056 in early 2021. Since, LCX has retraced from the high back into the 200dMA, breaking below it briefly to test the long-term trendline support and 360dMA at $0.0137, which held firm. LCX/USD has been range-bound since, with $0.027 as range resistance and the 200dMA acting as range support. I am a buyer inside this range due to the tight invalidation, as any break below the 360dMA at $0.013 would lose the long-term trendline support and range support, thus rendering market structure bearish and potentially signaling the end of the trend. Close above range resistance and there is very little resistance back into the all-time high.

Turning to LCX/BTC, the pair finds itself back at range resistance turned support above 27 satoshis; the range that preceded the bull cycle of 2020. For now, 38 satoshis seems to be the battleground, and if LCX can hold this area I would expect to see 85 satoshis retested as resistance. Close below 27 satoshis (back inside the historical range) and I’d be less bullish on LCX. If it can get back above the 200dMA and 360dMA confluence, however, I think it goes for the August 2020 high at 277 satoshis, which is almost 7x higher from here.

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.


[mc4wp_form id=”95″]

Leave a Reply