You are currently viewing Market Outlook #130

Market Outlook #130

Market Outlook #130 (21st June 2021)

Hello, and welcome to the 130th instalment of my Market Outlook.

In this week’s post, I will be covering Bitcoin, Ethereum, Chainlink, Tron, Algorand, Compound, Ren, Band Protocol and Chromia. I will also be providing updated analysis on Altcoin Market Cap.

Bitcoin:

Weekly:

BTCUSDWeekly

Daily:

BTCUSDDaily

Price: $32.454

Market Cap: $617.374bn

Thoughts: If we begin by looking at the weekly chart, we can see that price did indeed sweep the range highs last week, taking out the cluster of wicks at $40,900, just shy of resistance at $42k, before rejecting and closing the week out at $35,585, below the Monthly open. This was the scenario I was hoping would not play out, preferring a clean break above $42k to open up that larger squeeze into the April low. However, given the rejection below $42k, I began selling some spot all through last week. As of today, price is again pushing lower, attempting to break below trendline support and towards range lows at $30k. Looking at the weekly closes for the past month, it is imperative for short-term bulls that price close this week above $34k – the level that has supported BTC since capitulation on every weekly close. If this area fails to hold and we close the weekly anywhere below the trendline, I’d expect range lows to get taken out next, as that is where there is likely to be plenty of liquidity. Close the weekly below $30k and that opens up a larger retracement back to the previous all-time high at $19,900, as there are no major weekly levels between the two except the swing-low at $28,645. However, sweep $30k and print a swing-failure and I think we may have the beginnings of a bottom.

Looking at the daily, price is still very much range-bound and sandwiched between the 200dMA as resistance and above the 360dMA. Today’s price-action has been incessant selling from the open, taking out the weekend lows but now trading into an area of support. *If* BTC can find some support here and form another higher low, we are likely to remain within the range and retest the monthly open as resistance again; climb back above $37.3k and I think we do pop above the top of the range into $47k in July at some point. However, the picture is more bearish than it is bullish following last week’s rejection at range highs, and a daily close down below $33k would likely lead to the $31k lows being swept, with the probable outcome being a liquidation cascade into the May low at $30k and likely below that into the 360dMA. The reaction in that $28k-30k area will be key as to whether BTC is cooked for the next few months and will trade back towards $20k, or whether the 360dMA can support the trend and allow for re-accumulation above $30k before continuation higher later this year. I would consider a swing-failure of $30k on the daily a solid long setup back into resistance around $34k initially; if the swing-failure prints on the weekly too, that would be my signal for a mid-term bottom in this area.


Ethereum:

ETH/USD

Weekly:

ETHUSDWeekly

Daily:

ETHUSDDaily

ETH/BTC

Weekly:

ETHBTCWeekly

Daily:

ETHBTCDaily

Price: $1996 (0.0605 BTC)

Market Cap: $231.346bn

Thoughts: Beginning with ETH/USD, we can see from the weekly that a lower-high was put in at $2913, with price now trading back into resistance turned support at $2050 – an area that must hold if we are not to revisit the $1728 May low. Looking at this, if we do see the pair retrace back into that swing-low, there are a lot of swing-lows at key levels one after another back into the previous all-time high around $1400, and we could see any sustained push below $1728 lead to a liquidation cascade back into that 2018 high. Again, what is important if we trade into those areas is the reaction, and if price sweeps $1728 and closes back above it on the weekly, thus likely holding trendline support, that would look like a bottom to me, with price likely to re-accumulate above the prior all-time highs and continue higher later in the year. If, however, we see a weekly close below $1728, thus a lower-low subsequent to a lower-high, market structure will be bearish and I would expect price to trade back into $1415, with any close back inside that prior all-time high leading to a return to $832 at the very least. Looking at the daily, price is still holding above the 200dMA and I will be looking for a higher-low to form in the $1857 area to trade back towards $2050 on an intraday basis; beyond that, I don’t want to be holding any longs unless I  see a sweep of $1728, to buy those liquidations possibly back into range resistance around $2900. As I said, if we lose $1728 and close below it, price will no doubt trade back towards trendline support, with $1546 the next swing-low I expect to get taken out. For bullish continuation to all-time highs, the low risk play now that the lower-high has formed is to simply wait for a clean break above $2913.

Turning to ETH/BTC, whilst we do have EIP-1559 coming up in a few weeks, it is looking more and more likely that the event itself will be a non-event, with price likely to move higher *after* the even as opposed to into it. In my opinion, that is better for ETH bulls mid-term, because a rally into the event would no doubt culminate in a ‘sell on news’ scenario; if we bleed into it and begin to form a macro higher-low, there is plenty of scope for upside later this year into that 0.105 area that I am expecting to get hit. Looking at the weekly, the May low is still key for market structure, with any close below that indicating that the pair wants 0.046 or potentially lower into the 2020 high and 200wMA at 0.0406. As long as that area holds over the coming weeks, I think the picture remains bullish for ETH/BTC later in 2021. If bulls really turn up before mid-July and price is able to hold above the May low, I’d expect 0.078 to be tested with 0.055 as the macro higher-low; any break above that and we have our trend continuation. Dropping into the daily, the 0.06 area is holding at present as daily support but if we close below that I think we retrace back into May’s low swiftly, with support just below at 0.0536. The most bullish scenario there would be a weekly swing-failure of that May low followed by a higher-low and higher-high (thus bullish market structure) on the daily. Close below 0.055 and I do think we trade back into 0.046.


Chainlink:

LINK/USD

Weekly:

LINKUSDWeekly

Daily:

LINKUSDDaily

LINK/BTC

Weekly:

LINKBTCWeekly

Daily:

Price: $18.27 (56,300 satoshis)

Market Cap: $7.981bn

Thoughts: Beginning with LINK/USD, we can see that price has now broken out of the rising wedge-esque pattern that has been forming for over a year, with price having put in a lower-high at reclaimed resistance ~$35.83 a few weeks ago and now looking to trade back into the May low at $15. We are still above prior resistance turned support around $17.27, but this is the last support before that $14.98 low gets taken out. If we close the weekly below that, things look very bearish for LINK/USD, with the next major support at $9, followed by $7.26. If, as with everything else, the May low gets swept and prints a swing-failure we may be looking at a bottom, but the picture looks more bleak in my opinion than other large-caps. If we look at the daily, we can see how trendline resistance from the all-time high continues to cap price and lead to lower-highs, with price now hovering above the 360dMA, which has supported price for over a year, with the previous correction from Q4 2020 having bottom above the 360dMA. As such, if we do break lower from here and lose $17.27, I’d expect $14.97 to be taken out, with any close below that likely leading to another lower-high and continuation down towards $9 in Q3. If, however, the $15 area can hold and we print a higher low or a swing-failure, I’d then be looking for a breakout above trendline resistance to signal more upside, but – to be honest – I don’t think it’ll look like a great long until $27.85 is flipped as support again.

Looking at LINK/BTC, we can see that price is now in a channel, with higher-highs but price rejecting at the long-term trendline on both attempts and with higher-lows to boot, with the most recent higher-low at 48.5k satoshis. If the pair is able to hold above that previous swing-low and print another macro higher-low, it is likely we see a push higher back towards 80k satoshis. However, break below channel support here and I think that 48.5k low gets taken out, with any close below that leading to a deeper retracement towards the 2021 low at 35k satoshis. Looking at the daily, the pair is now finding resistance at prior support ~60.5k satoshis, which aligns with the 200dMA. If we break above this a print that higher-low, I’d be looking for 80k satoshis to be tagged as resistance over the coming weeks. Print a lower-high below 88.8k satoshis in that scenario and it is likely game over, with any move below 35.7k satoshis opening up the likelihood that 27k satoshis gets tagged as the next major support.


Tron:

TRX/USD

Weekly:

TRXUSDWeekly

Daily:

TRXUSDDaily

TRX/BTC

Weekly:

TRXBTCWeekly

Daily:

TRXBTCDaily

Price: $0.0592 (184 satoshis)

Market Cap: $4.282bn

Thoughts: If we look firstly at TRX/USD, we can see that price broke below support at $0.089 after printing a lower-high below $0.188 and has since found support at the 2020 high at $0.054. Since that May low formed, price has bounced back into the breakdown area at $0.089 and formed another lower-high there, now looking to retest the 2020 highs as support, as well as trendline support since March 2020. Hold above both of these and the pair still looks good for continuation later this year, with any weekly close back above $0.089 the signal for another run at yearly highs and the all-time high weekly close above at $0.205. However, if $0.054 fails to hold as support and wee see a weekly close back inside the 2020 high, I’d expect the level to act as resistance – along with the trendline breakdown – for bearish continuation towards the $0.027 area. Looking at the daily, we can see that the 360dMA, which has remained untested for the bulk of this bull run, aligned with trendline support, lending confluence to that area being key to hold. Price is now breaking below the 200dMA after holding above it for several weeks, which isn’t promising, and a close down beneath last week’s low would likely lead to that retest of $0.054. If we do hold above the 200dMA here, however, I’d like to see bulls step in and push price back above $0.071, with any higher high above that leading to a retest of the break down area at $0.089, which is critical to reclaim for trend continuation.

Turning to TRX/BTC, the pair barely looks like it has had a cycle on the weekly, having been range-bound between 134 satoshis and 260 satoshis for a year before breaking below the range into 71 satoshis, finding support and then rallying into range resistance at 260, where price rejected in April-May. At the moment, the pair is holding above support at 168, but if we see a close below that level I would expect range support to be retested at 134. Nonetheless, the pair has not had anything like a parabolic blow-off this cycle, and if – later this year – that 306 satoshi high gets taken out, I’d expect a more traditional parabolic run against BTC to follow, with the next major resistance at 475, followed by 865. Lose 134 and price will return to the yearly lows around 71 satoshis, where I would be happy to begin a longer-term bag. Looking at the daily, the pair is holding above the 360dMA but is capped by that resistance at 260; whilst it is range-bound here, there is no clear play for spot, but as I said if we see a breakout above 306 or a move back into 134, we can look for buys, with a tight stop on those 134 buys unless we want to hold a draw-down into 71…


Algorand:

ALGO/USD

Weekly:

ALGOUSDWeekly

Daily:

ALGOUSDDaily

ALGO/BTC

Weekly:

ALGOBTCWeekly

Daily:

ALGOBTCDaily

Price: $0.83 (2566 satoshis)

Market Cap: $2.663bn

Thoughts: Beginning with ALGO/USD, the pair remains inside the range that has been in play since late February, with range resistance at the yearly highs around $1.90 and range support at the 2020 high at $0.77. That said, a couple of weeks ago, we did see the mid-range around $1.27 get tested and price rejected, printing a lower-high, with price now returning to range lows. Given the rejection, if this $0.77 area doesn’t hold now, I’d expect bearish resolution to the range, with the May low at $0.67 the first to get taken out, but with major support further down in the $0.50 area, where we might look at forming a macro higher-low. Looking at the daily, the pair reclaimed the 200dMA as support on the push higher into the mid-range but has lost it since the rejection, with the 360dMA now aligning with the May low. As such, if we do drop into that area, I am looking for buyers to step in and print a swing-failure to show me that the range is still in play and then we can look for longs back into the mid-range at $1.27. Lose the 360dMA and I will look for intraweek shorts into $0.50 in July.

Turning to ALGO/BTC, much like TRX/BTC, this pair hasn’t really had much of a cycle at all, and following rejection at 4k satoshis in late February, has been range-bound between support around 2k satoshis and resistance at 3k for the best part of four months. If we see 2k satoshis lost as support, I’d expect to see a full retrace back towards the all-time low, where I would look to be a buyer of spot. If, however, we see the range resistance give way and price close the weekly above 3k, that is my breakout signal for continuation higher towards the cluster of resistances between 4.9k and 5.3k satoshis.


Compound:

COMP/USD

Daily:

COMPUSDDaily

COMP/BTC

Daily:

COMPBTCDaily

Price: $250.47 (0.0077 BTC)

Market Cap: $1.331bn

Thoughts: Beginning with COMP/USD, we can see that price had a monster rally from November 2020 into May 2021, where we saw price move from an all-time low at $78.42 to the all-time high at $935.25. When that all-time high formed, however, it swept the previous week’s high and printed a strong swing-failure, with price then break down and trading back inside range resistance at $601, which acted as resistance on the next test  a few weeks ago. Initially, the pair held above range support at $315.50 and the 200dMA, but following a fake-out push back above $421 (prior support), the 200dMA gave way and price has now taken out that May capitulation low into historical resistance turned support at $256. This is a critical area for COMP, as losing this level suggests a much deeper retrace towards the next support area between $162 and $185, but if this area can hold and we see bullish market structure begin to form now that the May low has been taken out, I’d look for longs back towards $421; reclaim that level and I think we retest $601 as resistance.

Looking at COMP/BTC, the pair has lost trendline support that held this entire year on the most recent dump, and it has now lost the 200dMA, with trendline resistance from 0.0163 now capping price. That said, we are still above the April low at 0.00658. If the pair can form a higher-low above there, the trend of macro higher-lows looks intact, with any breakout above trendline resistance and back above the 200dMA then looking like price is primed to retest the trendline support as resistance, up above 0.01064. Lose 0.00658 over the next couple of weeks, however, and it becomes key that 0.0555 holds as support, else I would expect a full retrace of the year’s run back into 0.00393 and potentially lower.


Ren:

REN/USD

Weekly:

RENUSDWeekly

Daily:

RENUSDDaily

REN/BTC

Weekly:

RENBTCWeekly

Daily:

RENBTCDaily

Price: $0.357 (1096 satoshis)

Market Cap: $358.078mn

Thoughts: Firstly looking at REN/USD on the weekly, the picture looks bleak at best, with price having broken its parabolic curve since the bull run began for REN in March 2019 on the most recent break down from the all-time high at $1.93 in March. Since, the pair has put in consecutive lower-highs and broken down below the prior all-time high now reclaimed resistance at $0.59. This break down and rejection back inside the previous range has led to bleeding back towards the May capitulation low at $0.288, but price is holding above this and around local support at $0.37 for now. If REN is able to form a higher-low above $0.288 or a swing-failure of that key area, I’d expect this range to hold, with price likely to retest the resistance zone between $0.59 and $0.66, with any weekly close above that the signal for another move towards the all-time high. However, lose $0.288 and I think REN sees prior range support at $0.206 taken out, with support below that at $0.136 – a 93% decline from the all-time high. Looking at the daily, the pair has lost both the 200dMA and the 360dMA, the latter of which had remained untested since Q2 2020. The rejection at $0.59 aligned with the 200dMA and price is now looking at closing below daily support at $0.37 – a daily close below that level would likely lead to the May low getting taken out, and as I said it will be the reaction there that is telling, with no real support below for another 25-30% decline.

Looking at REN/BTC, the pair looks in the midst of its macro bear cycle, having formed euphoria  in September 2020 and since putting in lower highs on the weekly on every push higher, with support currently holding at 900 satoshis. If 900 satoshis gives way, I’d expect we see the depression phase of the cycle kick in, with re-accumulation likely to occur between historical support at 300 satoshis and range resistance at 900, which will be where I will be looking to buy at least a couple of months from now if it does break down here. If, however, this area holds as the new range support, I’d be looking for contraction of the range for several week if not months, with 1411 likely to become range resistance – if in Q3 we have that tight range between 900 – 1400 holding, I’ll also look to be a buyer for potential disbelief and a new cycle in Q4 2021 to Q1 2022.


Band Protocol:

BAND/USD

Weekly:

Daily:

BANDUSDDaily

BAND/BTC

Weekly:

BANDBTCWeekly

Daily:

BANDBTCDaily

Price: $5.35 (16,400 satoshis)

Market Cap: $188.311mn

Thoughts: Beginning with BAND/USD, from the weekly we can see that the August 2020 high at $18 became historical resistance as price printed swing-failure after swing-failure of that area in 2021, with the all-time high forming at $23.74 but printing a massive rejection candle that led to complacency above $18 and then a breakdown several weeks ago. The pair traded through prior support at $9.58 into range support at $5.27, which held in May. Since, prior support at $9.58 was retested as resistance and price rejected, now looking to take out the May low. Close the week below this low and I’d expect the November 2020 low at $3.65 to be taken out next, with major support coming in around $2.36. Looking at the daily, like REN/USD, the pair has lost both the 200dMA and 360dMA, the latter acting as resistance, and unless we see $5.27 swept and then reclaimed by bulls with a big show of force, I think this unwind will continue back into the November low.

Turning to BAND/BTC, we can see a similar cyclical profile to that of REN, albeit with euphoria forming in August 2020 and price since printing a classical bear cycle, with the current range between support at 15k satoshis and resistance at 38k satoshis looking like anger. If the range support here at 15k gives way, I’d expect a much deeper unwind back into the original breakout area above 5270 satoshis, which implies another 65% decline if we get that weekly close below this support. If it holds, however, we could see the range begin to contract and depression or re-accumulation begin to form above the level. If we look at the daily, we have not yet flattened out sufficiently for this to look like re-accumulation to me, with lower-highs and lower-lows forming since rejection at the 360dMA retest. If, however, 15k satoshis continues to hold as support and price forms range support at 23,500 satoshis, I’d look to buy within the next couple of months. Break that support and I’ll be a buyer at 5270 and be looking for shorts on the Dollar pair in July.


Chromia:

CHR/USD

Weekly:

CHRUSDWeekly

Daily:

CHRUSDDaily

CHR/BTC

Weekly:

CHRBTCWeekly

Daily:

CHRBTCDaily

Price: $0.15 (461 satoshis)

Market Cap: $64.821mn

Thoughts: Looking at the weekly chart for CHR/USD, we can see here that the pair is losing its parabolic curve, having turned weekly market structure bearish on the lower high at $0.51 followed by the breakdown and close below $0.163 into $0.108 in May. Price has since formed lower-highs week on week and is now looking to retest support at $0.127, above which price closed in May. Hold above this level and we may well see a period of accumulation occur here before a third leg higher, with a breakout above trendline resistance and a reclaim of $0.267 on the daily the first sign for continuation. If we break down here and lose $0.108, I’d expect a retracement all the way back into $0.04.

Looking at CHR/BTC, the pair rallied above resistance at 790 earlier this year into 1350 but rejected and has since reclaimed resistance at the former level on successive attempts, with support having formed at 343. If support gives way, I would be placing bids between 120 to 180 satoshis for the next cycle. If you are holding, a weekly close below 343 would be a key exit indicator unless you are looking to hold all the way back to the original ranges. If, however, the support holds here, I would expect to see further chop between 343 and 790 for the coming weeks, with any push towards that range resistance an opportunity to exit, with a view to rebuy at historical support or on a weekly close above 790.


Altcoin Market Cap:

ALT/USD

Weekly:

ALTUSDWeekly

Daily:

ALTUSDDaily

ALT/BTC

Weekly:

ALTBTCWeekly

Daily:

ALTBTCDaily

Market Cap: $722.077bn (22.685mn BTC)

Thoughts: Looking at ALT/USD on the weekly, the market has broken its parabolic curve after only a ~180% rally beyond the previous all-time highs ~$560bn, with altcoins having retraced much of the post-breakout rally. May capitulation sent the market tumbling back towards that $560bn area but alts held up above it, albeit now looking as though complacency is forming. If we see a weekly close back inside that prior all-time high, I’d expect the trendline support from March 2020 to be retested next, with a loss of that opening up the 80+% bear market scenario back to the 200wMA. If we do lose the $560bn area, I’d be exiting the bulk of the altcoins I still have left at that point and looking to rebuy either much lower or if we start to form a bottoming pattern above that trendline support and reclaim $560bn in Q3.

Turning to ALT/BTC, if we look at the weekly we can see that resistance was found where it was also found in June 2017, around 27.6mn BTC, with the market now consolidating below that resistance area but still not printing any shift in weekly market structure. Lose last week’s low and close below and I think we see altcoins unwind against Bitcoin back into the 200wMA and prior resistance at 14.7mn BTC, where I would expect a higher low to form before continuation to new all-time highs for altcoin dominance much later this year. If, however, altcoins simply range in their current area below 27.7mn and above 20mn, I’d expect to see upwards resolution of the flag and continuation higher in Q3, which may well align with BTC/USD being range-bound lower than where it currently sits. Ultimately, alts against BTC look much better at the moment than they do against USD because of the battering BTC/USD has taken in recent weeks, but the real tell will be if BTC/USD loses $30k; if alts start selling off against BTC in that scenario, we are very likely to be in the midst of an altcoin bear market, and most altcoins will likely lose another 70+% against the dollar and like 50% against BTC from here. If, however, altcoins hold their value against BTC on a breakdown in BTC/USD, we could see another leg higher for alts in Q3 when BTC find a bottom and begins a new range.

And that concludes this week’s Market Outlook.

I hope you’ve found 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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