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Market Outlook #123

Market Outlook #123 (3rd May 2021)

Hello, and welcome to the 123rd instalment of my Market Outlook.

In this week’s post, I will be covering Bitcoin, Ethereum, Polygon, Swipe, Energy Web Token, NKN, Vertcoin, Mirror Protocol, Utrust and xDai.

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: $58,496

Market Cap: $1.091trn

Thoughts: If we begin by looking at the monthly chart, we can see that BTC/USD printed its first red candle in over half a year on the lowest volume since October 2020. Looking back at the 2017 market cycle, we saw a similar candle print following five months of expansion into $5000, where price sold off and front-ran a retest of the prior monthly open, then rallied into monthly close a regained the bulk of the month’s dump before continuing the trend for the subsequent three months. Now, one different here is that we have formed more of a spinning top here, indicating indecision, but in all honesty April appears to have simply been a month of consolidation based on the low volume traded. Moreover, unlike that 2017 candle, this one retraced literally all but a couple of % of the sell-off, with buyers showing a lot of strength over the past week. It is possible that the spinning top leads to further consolidation below the all-time high – that is what tends to happen when we see higher time-frame indecision – but, based on the weekly and daily time-frame charts, it really does look like May will see another surge to a new all-time high. Further, what cannot be seen on the chart is that the recovery from the $47k low has been almost entirely spot-driven, with Coinbase retaining a premium over derivatives prices for the entirety of the past week, and funding for derivatives largely remaining neutral to negative.

Turning to the weekly, we can see that price retraced the entirety of the previous week’s sell off, closing not far off the original range high resistance at $57,800. Further, we have printed hidden bullish divergence, with price making a higher-low at $47,000 above the $43,125 swing-low whilst RSI made a lower-low. To confirm that we are likely heading to new all-time highs from here, I’d like to see this week close above $57,800. If, however, we see price trade up into $61,800 this week, reject and close back below $57,800, that would indicate to me that we will likely be stuck in this range below the all-time high for some time yet.

Turning to the daily, we can see by the steepness of the recovery from $47k that price is on track to print new all-time highs by mid-May, assuming trendline support holds until then. Price has also reclaimed $55,750 as support after it capped the pair initially last week, with the subsequent price-action closing firmly through the level into resistance at $57,800, retracing back into it as support and – as of today – continuing higher. I would like to see today now close above last week’s high to further compound the momentum with which BTC is moving, and I’d fully expect the $61,800 area to be retested this week if we do see the daily close above $59k. If we continue to see spot buying driving prices higher, I see no reason why trendline support shouldn’t hold and I would fully expect price discovery over the next 10 or so days, with $70k the next major target. If, however, derivatives begin to take the lead as we approach key overhead resistance, I’d take that as a sign that we are running out of fuel short-term. As long as we now hold above $53,220, I expect the bottom is in.


Ethereum:

ETH/USD

Weekly:

Daily:

ETH/BTC

Weekly:

ETHBTCWeekly

Daily:

ETHBTCDaily

Price: $3161 (0.0539 BTC)

Market Cap: $366.74bn

Thoughts: Looking firstly at ETH/USD, we can see from the weekly that the pair is in price discovery, running through expected resistance areas like hot butter, with a new all-time high having printed today at $3200. Last week, the pair closed firmly above the prior two weekly highs, where the pair had struggled below $2750, with the weekend’s price-action culminating in a weekly close at $2950; the 200% extension of the bear market did nothing to stem the rally. As such, the next area of interest above is of course the 2.618 extension at $3578, which, following the parabolic movement since the $2050 breakout, I would expect to provide some resistance on the first test. Weekly RSI still has some way to go before we reach the extreme overbought conditions of earlier this year and volume has clearly broken out of its downtrend, confirming the health of the rally. Moving forward, I see no reason why the 3.618 extension at $4900 is not tagged, also front-running the huge psychological figure at $5000. If we do see ETH hit those numbers over the next couple of months, I will be looking to exit the bulk of my spot ETH around $4850, and I would imagine that the scenario would be the same for other altcoins at that point. There isn’t a great deal to add from the daily chart, but if we do take a quick look, we can see that RSI is now at its highest since January, thus momentum is strong but we may well be approaching the next local top (which would align nicely with a blow-off into $3580 over the next few days). If that does occur, I would love to open some longs on a retest of the $2600 area should price come back into that region in May. This would be a ~30% haircut, which has been the norm throughout this trend.

Turning to ETH/BTC, strength is an understatement here and we have finally seen the pair hit the level I have been targeting for well over a year at this point. If we look at the weekly, we can see just how strong the pair is with each of the previous three weeks closing at weekly highs firmly through resistance levels. RSI has printed a higher high along with price as the pair has broken above minor trendline resistance and approaches channel resistance. We are now sitting at the April 2018 support around 0.0545, which may well prove too tough to crack on the first attempt after 5 weeks of expansion. However, a local top in this area would be totally healthy and a short period of consolidation potentially back into the prior highs at 0.046 would be a buying opportunity. If we see a weekly close above 0.055 and possibly above channel resistance, however, I would be looking for a blow-off top scenario to play out, with 0.086 the first resistance overhead. Looking at the daily briefly, we can see that the 1.618 extension of the trend would take price to 0.0666 as an area of resistance, which would certainly confirm the multi-year channel breakout and support the Livermore accumulation cylinder idea. For bears, the only bearish scenario I can envisage here is for a local top to form up here around 0.055, and for price to then retest and close back below 0.046, thus opening up the likelihood of a more protracted retracement akin to those throughout the channel, back into the 200dMA perhaps. As long as 0.046 holds as support, however, I wouldn’t give any weight to that.


Polygon:

MATIC/USD

Weekly:

MATICUSDWeekly

Daily:

MATICUSDDaily

MATIC/BTC

Weekly:

MATICBTCWeekly

Daily:

MATICBTCDaily

Price: $0.83 (1417 satoshis)

Market Cap: $4.299bn

Thoughts: Beginning with MATIC/USD, we can see that the pair has been one of the best performers in 2021, rallying from $0.017 at the beginning of the year to the all-time high printed last week at $1.04. The pair broke new all-time highs above $0.047 in February, leading to a monster rally into the 1000% extension of its prior bear market at $0.41, where for 7 consecutive weeks it failed to close above. Last week, the pattern was broken and the pair closed firmly through the level and right at the 2000% extension at $0.81, wicking into $1.04 as a new ATH. Naturally, I would not be a buyer up here at all, given the extent of the run and size of the project at present, but I see no reason why this cannot run to the 3000% extension at $1.20 over the next couple of weeks. Moreover, if we look at the daily, that level lines up with the 3.618 extension of the most recent range between $0.55 and $0.29 as support. If you are a spot holder of MATIC and have been throughout this entire run, then it may be wise to take significant profits at regular intervals over the next few weeks, because whilst the momentum is strong and the weekly does not yet look like a top is in, it could turn on a dime after rejecting a level overhead.

Looking now at MATIC/BTC, the chart is near-identical, with 582 satoshis having been the all-time high since inception until in March the pair broken firmly above and rallied into 936 satoshis before consolidating above the prior all-time highs, now turned support. Last week, the pair broke higher once more, closing through the 936-satoshi high and rallying into 1775 satoshis, having traded as low as 50 satoshis just 16 weeks ago. That’s over a 35x return against BTC in less than four months and again, if I were a spot holder throughout this rally, this would be where I look to book significant profits. If you turn to the daily, you can see that the pair has extended into the 2.618 extension of the bear market and beyond, with 2k satoshis the next likely major resistance at the 3.618 extension area. Any move into that area would be ideal for profit-taking, in my opinion. If the pair loses the current support at 1317 satoshis, then it is a long way back down to the next area of support at 936.


Swipe:

SXP/USD

Daily:

SXPUSDDaily

SXP/BTC

Daily:

Price: $5.35 (9,150 satoshis)

Market Cap: $490.377mn

Thoughts: If we begin by looking at SXP/USD, we can see that the pair has been flirting with the historical all-time high at $5.17, having taken it out in early April, rejected, taken it out again, rejected again and sold off into support at $2.56 and now taken it out a third time but finally managed to close above it, with a new high printed at $5.72. I would like to see $5.17 now flipped an area of support after so many tests of the level, which would make it a perfect base for the next leg higher into price discovery, with the 1.618 extension at $8 the main area of interest. If the pair fails to hold above here, I would expect to see $4.22 retested as support at least. Unless the pair loses the support at $2.55, however, this is simply consolidation below an all-time high with generally rising lows.

Turning to SXP/BTC, this is where we can see how price discovery might manifest against the dollar, with the pair still over 80% below its all-time high at 43,750 satoshis. Since forming its all-time low at 1965 satoshis in January, the pair has reclaimed the support area that preceded the initial bull cycle at 5600 satoshis, rallying into support turned resistance at 10k satoshis following a successful retest of the 200dMA and 5.6k-satoshi area as support last week. I would expect to see a little more consolidation below this minor resistance followed by a breakout towards the 12.3k satoshis area, with any daily close above that level opening up significant upside into the 38.2% retracement area at 17,864 satoshis. Whilst the pair holds above the 200dMA and 5.6k area, I am a SXP bull.


Energy Web Token:

EWT/USD

Daily:

EWTUSDDaily

EWT/BTC

Daily:

EWTBTCDaily

Price: $16.16 (27,260 satoshis)

Market Cap: $485.721mn

Thoughts: If we begin with EWT/USD, we can see that the pair has been chopping around above previous all-time highs at $14, having broken above the high in February and printed successive higher highs but each failing to close above the prior, with resistance being found around the 1.618 extension of the bear market at $20. Price spiked higher into $23.50 but rejected hard, leading to a sell-off over the past couple of weeks to retest the prior ATH at $14 as support, with the pair capitulating lower into $12.93 but ultimately reclaiming $14 as support, indicative of a bottom. Now, the pair is wrestling against prior support at $15.50, but if we can see a daily close back above this level and above last week’s high, I’d be confident that EWT will be moving back towards $20 over the next couple of weeks, with any daily close above that level opening up a move to new highs. Lose $12.93 from here and the next area of support below is down at $11, which I would be looking to bid.

Turning to EWT/BTC, the pair has been in a downtrend its entire history, having formed an all-time high at 0.00129 and then trended down towards the all-time low at 15,800 satoshis in January 2021. Since, it has formed a bottom and printed-higher highs and higher-lows into support turned resistance at 38,730 satoshis, where it has struggled. A new range is in play now, with support at 24,700 satoshis and resistance at the 200dMA, around 31,500 satoshis. The pair has never closed above the 200dMA, so I am looking for this to be flipped as support as a sign that the bear cycle is over and thus EWT will likely be entering a period of outperformance. Looking ahead, if it can flip 31.5k satoshis, no doubt we see 38.7k satoshis retested, with any close above that opening up a much larger reversal into the 38.2% retracement around 59k satoshis. Lose 24.7k and reject here below the 200dMA and I would expect to see new all-time lows, to be honest.


NKN:

NKN/USD

Weekly:

NKNUSDWeekly

Daily:

NKNUSDDaily

NKN/BTC

Weekly:

NKNBTCWeekly

Daily:

NKNBTCDaily

Price: $0.767 (1310 satoshis)

Market Cap: $447.46mn

Thoughts: Beginning with NKN/USD, from the weekly we can see that the pair closed at new all-time highs above the prior high at $0.51 a few weeks ago, rallying into the 2.618 extension at $1.48 and rejecting. This occurred on all-time high weekly volume and the pair sold off on significantly lower volume for the subsequent two weeks, back into the prior all-time high at $0.51, which held as support. As long as NKN can hold above that prior ATH, I would expect another leg higher to follow from here, particularly with RSI now reset. The next target above would be $1.94, as the 3.618 extension. Looking at the daily, if $0.51 gave way, there is zero support all the way back down to $0.24, so it is critical that level holds for bulls.

Turning to NKN/BTC, following the breakout rally into 2544 satoshis, just shy of the 38.2% retracement of the bear market at 2790, the pair has consolidated around prior triple top resistance at 1300 satoshis. Consolidation above these highs does suggest to me that they are becoming a base for another leg higher, with 3k satoshis the next area of support turned resistance, and the 50% retracement level at 3630 satoshis the area above that where the pair might top out. Ultimately, if in these market conditions does end up closing the weekly above that final support turned resistance at 3k satoshis, it would not be out of the realms of possibility that a blow off top could briefly send it to new all-time highs above 7200, as there is illiquid price action above from early trading. Nonetheless, I think anyone still in a heavy position would be wise to look for exits above the current yearly high into 3k satoshis.


Utrust:

UTK/USD

Weekly:

UTKUSDWeekly

Daily:

UTKUSDDaily

UTK/BTC

Weekly:

UTKBTCWeekly

Daily:

UTKBTCDaily

Price: $0.75 (1281 satoshis)

Market Cap: $336.99mn

Thoughts: Looking at UTK/USD, we can see that the weekly is clinging to trendline support from March 2020, with last week providing an impulse higher on all-time high volume that sent it to new yearly highs above $0.77, where it is consolidating at the 50% retracement of the bear market. Given the strength shown last week, I’d expect to see continuation in May towards the all-time high at $1.43, with a weekly close above $0.80 printing a new ATH weekly close and leaving only illiquid price-action into the high. If we do see this, I’d expect UTK to go parabolic fast. Above the ATH, I am looking for the 1.618 extension to be tagged at $2.30, where I will take significant profits on my spot position.

Turning to UTK/BTC, we have just closed the weekly above historical support turned resistance at 1140 satoshis, which was the level that preceded the 2018 cycle into all-time highs. This is a key trigger, as it indicates that the consolidation (re-accumulation) period is concluded and the pair is ready to retest the 2020 high at 2050 satoshis, lagging behind many other midcaps which have already extended beyond that high. I am looking for over-extension into the 1.618 extension around 3560 to follow over the coming weeks, but with 3k satoshis likely to provide some resistance on the way. Weekly RSI also reset significantly on the sell off and we have a lot of room to the upside before we return to extremely overbought conditions, so that is something I will be paying attention to. If you look at the daily, you can see that the 1300 satoshi area looks ready to be flipped as support, and I’d expect some consolidation above this high followed by expansion into 2k satoshis by mid-May.


Vertcoin:

VTC/USD

Weekly:

VTCUSDWeekly

Daily:

VTCUSDDaily

VTC/BTC

Weekly:

VTCBTCWeekly

Daily:

VTCBTCDaily

Price: $1.46 (2487 satoshis)

Market Cap: $87.093mn

Thoughts: Vertcoin has been around an age at this point but looks ready to make a move towards new dollar ATHs.

Looking at VTC/USD, we can see that the weekly closed firmly above the 200wMA a couple of weeks ago, printing a new yearly high at $3.25. It has since sold off, and if we look at the daily we can see that the pair retested the $0.97 high as support, holding firm and bouncing back towards $2, below which it is currently chopping. Now, if the pair can hold above $0.97, I’d expect another leg higher to follow towards the 38.2% retracement of the bear market at $3.93. Ultimately, I think VTC will go the way of many other legacy alts, although it is lagging behind at present, with new dollar highs on the horizon in 2021, or at least a retest of $10, which may well mark the cyclical top.

Turning to VTC/BTC, this is quite an attractive chart from a risk/reward perspective, with the pair having reclaimed historical support at 2400 satoshis on significant volume. I’d expect to see continuation higher towards support turned resistance at 7140 satoshis if it can hold above this area, with a weekly breakout above that level opening up a possible retest of the 200wMA and 360wMA, which I would expect to provide significant resistance and would be an ideal area for profit-taking should it get there. Invalidation is clear here – if we drop into the daily, we can see that the pair failed to close above the 360dMA for an extended period but has successfully flipped it as support at 1800 satoshis; lose that level and I would exit any buys in this area, thus providing a tight stop.


Mirror Protocol:

MIR/USD

Daily:

MIRUSDDaily

MIR/BTC

Daily:

MIRBTCDaily

Price: $10.21 (17,460 satoshis)

Market Cap: $623.288mn

Thoughts: Looking at MIR/USD, we can see that the project has not been trading for very long but has been in an uptrend since inception, with an all-time high forming in April at $12.93, following which the pair sold off into prior range resistance at $7.78 now turned support. The pair has bounced from the level back above $10 and this is textbook uptrend behaviour, with key resistances being flipped as support. Further, the buying volume that showed up as price traded into $7.78 indicates that this has legs to go much higher, with the next area of interest above the all-time high at $16. Get beyond that and I’d look for $21.40 to provide some resistance, followed by another sell-off into prior range highs to re-accumulate for another leg higher. Trend is clearly your friend here…

Turning to MIR/BTC, the chart is a little more choppy here but we do have a clear uptrend with higher-highs and higher-lows since the January low at 2985 satoshis. In mid-April, the pair put in another higher low at 12.5k satoshis, which is now the key level to hold above to retain bullish market structure. We have also reclaimed the February high at 16.7k satoshis, indicating to me that the pair is ready for another all-time high test at 22k sats; however, the lower-high at 20k satoshis is a little concerning here, but as long as MIR does not print a lower low below 12.5k satoshis it is not a problem. Any daily close above 20k will no doubt lead to the all-time high break real fast, with the 1.618 extension above at 30.5k satoshis.


xDai:

xDAI/USD

Daily:

XDAIUSDDaily

xDAI/BTC

Daily:

XDAIBTCDaily

Price: $19.03 (32,610 satoshis)

Market Cap: $99.910mn

Thoughts: If we begin with XDAI/USD, we can see that the pair has been capped by the all-time high at $41 on three instances, initially forming the high in September 2020, selling off into support at $7.70 and then rallying throughout Q1 2021 back into the level, rejecting again. Since, XDAI has retraced into the 200dMA and reclaimed support at $16.30, from which it rallied in April but put in a lower high below the ATH at $37.50 and has since returned to the 200dMA. It is now sitting on this critical support whilst printing lower-highs, capped by trendline resistance. Bulls have to show up here and force a breakout above the trendline, or the 200dMA is likely going to give way over the next week, with the next major support below back at $7.70. If we do see a show of strength here, I would be looking to buy a retest of $20 as support subsequently with a target of the range highs at $40. If XDAI can push on towards that high, I would expect the fourth test to lead to a breakout in these market conditions, with the 1.618 extension at $63 the next target above. Invalidation is crystal clear here following a strong breakout – lose the 200dMA and $16 and it is time to exit.

Turning to XDAI/BTC, the pair is currently sitting around support at 32,400 satoshis, above a major level at 23,850. That said, the 200dMA has capped the pair since December 2020, with it failing to close above it at all. As such, I would want to see the MA flipped as support to suggest that a much larger reversal is underway, with major overhead resistance between 68.5k satoshis and 79k satoshis. Only when that area is cleared would I expect to see parabolic price-action begin into the 38.2% retracement area at 151k, which will make for a great level to level play should we get it. For now, I am expecting more chop until that 200dMA is cleared.

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 10 Comments

  1. J Q

    Excellent read. Thank you so much. If possible, can you please look into xtoken (xtk). The chart may not have much data but the token has quite a bit of utility.

  2. edotrader611

    Hi Nik, what do you think about the new dex Wault Finance and its token WEX?

    1. Nik

      I’ll include it in the Market Outlook post, but I haven’t actually heard of it before so can’t comment on fundamentals!

    2. Nik

      I couldn’t actually find it on any charting platform either mate, so I haven’t been able to include it in this week’s post!

  3. Joao Correia

    Hi Nik! Thanks for this! I’m curious to see your perspective on SYS at this point, perhaps in the next market outlook? Thanks!

  4. Lord Spooky Android

    Thanks for the update Nik! Brilliant as always.

  5. Todd Arnold

    Many thanks.

    Interested in the Dag and Ocean Protocol pairs with ETH.

    Also in promising low caps in web 3.

    Best wishes

    Todd

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