Market Outlook #138 (9th August 2021)
Hello, and welcome to the 138th instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, Cardano, Solana, Monero, Algorand, Siacoin, Golem, NKN and Burency.
As ever, if you have any requests for next week, please do drop me an email or leave a comment.
Market Cap: $815.073bn
Thoughts: Beginning with BTC/USD on the weekly chart, we can see that price continued to rally off of support at the June open last week, forming the low of the week right at the level and pushing beyond range resistance at $42k, as anticipated, before closing firmly above the range at weekly highs ~$43.8k. Volume was roughly equivalent to that of the previous week, which was good to see given that this is now elevated beyond the meagre trading volumes of the previous month. What I am now expecting to see is trend continuation following the range breakout, whereby we may see price form the low of the week today or tomorrow (Tuesday) and then continue higher towards the April low at $46.9k, which is the first area I would expect to see resistance found. If we are able to break above $46.9k, the next major resistance is naturally the $50k level. Assuming resistance is found between $47-50k, where it is possible we put in a macro lower-high, I would be looking to cover any longs and begin looking for shorts at least back into $42k to retest the breakout zone over the next couple of weeks. For bears, whilst a lower-high in the $47-50k region is a promising sign for bearish continuation, really what you are looking for is a weekly close back below $42k – given how long price has now spent inside the range, it would be bearish if this breakout fails and price returns back inside the range, in which scenario I would look to play it all the way back to range support. Until that point, however, even a swing-high below $50k does not invalidate potential continuation higher, as we would be looking for a higher-low to then form above $42k to push off from towards the next major resistance at $58.4k.
Turning to the daily, we can see that price did initially fake the breakout the week before last, then dumping all the way back into the June open at $37.3k, where it found significant support and rallied back towards $42. Price then closed back above range resistance and continued higher towards the 200dMA at $45k, where it is now finding some resistance. I would be looking to get long any dip today or tomorrow back into the $42-42.5k area should it come to hold for a push above the 200dMA into $46.9k. Again, the important level here is $42k, as if we see price begin to reject up here and break back inside that range resistance, that would not look particularly promising. For now, onwards and upwards, but we are fast approaching the real test, in my opinion.
Price: $2947 (0.0674 BTC)
Market Cap: $341.437bn
Thoughts: The EIP-1559 event has now been and gone and, with a successful launch, ETH continued to climb higher.
If we begin with ETH/USD, we can see from the weekly that price closed last week firmly above the all-important resistance area at $2913, with the pair finding significant support at the prior swing-high ~$2426. The fact that we bounced off that swing-high after successfully turning market structure bullish and have since continued through a fundamental event beyond the next major resistance is particularly promising, and there is now only minor resistance at $3240 capping the upside back towards the all-time high weekly close at $3955. Further, volume has been increasing week-on-week during this rally off support, which is great to see. If we drop into the daily, we can see the structure more clearly, whereby price made a high at $2720 a couple of weeks ago, sold off early last week into that initial breakout level at $2426 and has since pushed beyond the cluster of highs at $2912. At present, prior support that preceded the capitulation day at $3240 is the only level capping price, but prior resistance at $2912 seems to be holding as support, so this is a good area to look for longs in my opinion for a breakout above $3240, where any close above that level opens up another 15-20% of upside. Bears would want to see $3240 hold as resistance here and lead to a breakdown back below $2912, which would begin looking like a deviation; in that event, we could wait for a retest from below as reclaimed resistance and look to get short as close to $2912 as possible, but given the momentum at present I am leaning heavier towards trend continuation.
Turning to ETH/BTC, finally we have some movement beyond the trendline resistance, which is what I have been waiting to see. Last week, upon successful launch of EIP-1559, ETH/BTC broke above the short-term trendline resistance that has been putting in lower-highs since May, with the pair closing above this trendline and right around the 0.069 swing-high on the highest volume in six weeks. What I would like to see from here is for continuation this week to take the pair towards last week’s highs, with a weekly close firmly above 0.069 confirming the shift in market structure, following which I would expect ETH to continue to outperform, at least into the 2021 highs. Turning to the daily, we can see this breakout more clearly, where price retested the trendline as support on the daily and pushed towards 0.0733, now consolidating between 0.064 and 0.07. I would like to see price hold above 0.064 now on any dip and begin to form a higher-low there before pushing off to 0.0733 and beyond, with any daily close above that latter level likely to lead to a squeeze beyond the June high at 0.0779. Bears only really begin to regain control below 0.064, a breakdown below which would no doubt lead to the May lows being retested and the trendline breakout potentially being a trap.
Price: $1.45 (3255 satoshis)
Market Cap: $46.639bn
Thoughts: Beginning with ADA/USD, we can see that price is still tightly consolidating below the resistance zone between $1.39 and $1.55, albeit with price closing last week marginally beyond that first resistance level. Given the outlook on BTC/USD and ETH, I expect the market to continue to be dragged up with them, so I would not be surprised to see price now close beyond the $1.55 resistance cluster and then potentially push on for that macro lower-high at $1.94, where we might look to play the range between those levels long. Again, I am not looking for any ADA shorts unless we see a breakdown below $0.98, which at present does not look imminent. If we turn to the daily, the 200dMA continues to act as support after the brief fake-out below, with price now tightly consolidating inside that resistance zone between $1.39 and $1.55 – a daily close above the latter and I will look to buy a dip back into the level with a target of $1.90 and a stop loss below the 200dMA.
Turning to ADA/BTC, unlike the dollar pair, which is being dragged to more attractive levels by BTC/USD, this pair is not reflecting the optimism, having put in a lower high last week in a series of lower highs and closing at weekly lows, albeit marginally above the important prior resistance turned support at 3200 satoshis. Whilst we hold above this level, it would be jumping the gun to expect serious capitulation, as we could now simply consolidate whilst the dollar pair gets pushed higher by BTC. Instead, a breakdown below 3200 on the weekly timeframe is what I would consider the signal for further downside, where at least a 22% drop into 2530 satoshis would be expected, which could have implications for the dollar pair. If, however, the pair does manage to hold above support here, I would be looking for a daily close above 3640 satoshis, which if we turn to the daily we can see is the prior swing-high; close above that and market structure begins to look bullish again.
Price: $38.95 (87,230 satoshis)
Market Cap: $10.618bn
Thoughts: If we look firstly at SOL/USD, we can see on the weekly that the pair has continued to find support at the $24.63 level, with ultimate support below it at prior resistance ~$18.73. This range has been holding the pair up throughout the past three months and price is finally looking ready to break higher beyond the series of lower-highs. If we drop into the daily for clarity, we can see that bounces off of range support have been increasingly weak, leading to lower-highs, with $38.43 being the last lower-high. However, the most recent push off both the 200dMA and range support has led to a battle being commenced at this prior lower-high around $38.43, with price closing above the level on the daily and now consolidating near it. I would like to see another daily close firmly above this cluster of candles, towards the next high at $44.63, to confirm the reversal of the trend, following which I would fully expect to see $50 retested as significant resistance; any daily close above $50 and we would be looking at new all-time highs. Start to falter here and perhaps swing-fail last week’s high and then break back below $38 and I would be looking for shorts back towards the 200dMA.
Turning to SOL/BTC, the picture is almost identical, with the pair finding resistance at 0.001 and range support at 71.7k satoshis, with each bounce off that support leading to a lower-high forming since the all-time high. However, if we again look at the daily for clarity, the BTC pair is yet to catch up with the dollar pair in that we are still very much forming lower-highs at present, with the current rejection from prior resistance at 0.001 being the latest case. The swing-high prior to that sits at 0.00112, so we’d be looking for another 12% push beyond resistance before we can start getting excited about a longer-term reversal and a push for new all-time highs. If we do see that, I have no doubts that SOL/BTC would be pushing for 0.00137 over the next couple of months.
Price: $263.97 (0.00591 BTC)
Market Cap: $4.726bn
Thoughts: Beginning with XMR/USD, as expected, the pair continued to push higher off of support at $215, rallying towards the next resistance area at $287.50 last week but rejecting just shy of it. I would expect to see this resistance cracked this week, with any weekly close above $287 then opening up the possibility of a weekly market structure shift, where we would be looking for a close above $316 to confirm the higher-high. In that instance, I’d expect to see Monero continue higher towards significant resistance (the 2018 complacency high) at $380, which is also around the high for the weekly capitulation candle in May. Looking at the daily, the pair has now climbed back above the 200dMA, after rejecting it as resistance a couple of weeks ago, now looking as though it wants to form a new base above it before attempting resistance at $287.50. If we can hold above the 200dMA here, I would be surprised if that $287 area doesn’t fall, with the lower-high at $316 then in sights. If, however, we begin to form another lower-high below $316 and then break back below $287 after conquering it, I would be look to short any retest from below back towards the cluster of prior resistance turned support at $226.
Turning to XMR/BTC, we continue to consolidate around the 0.006 area, with each weekly close tending to chop just above or below the level. Last week was the second consecutive weekly close below the level after rejecting at support turned resistance ~0.0065, which is beginning to look more bearish than bullish, but whilst we remain around the level I don’t see any reason to expect further downside. If anything, we now have a fairly clear range to work within, where local range resistance (as seen on the daily) is found at the 360dMA and range support at the 200dMA; if we begin to close above the former or below the latter, I would be more inclined to expect a push towards 0.0084 or down to 0.005, respectively.
Price: $0.845 (1893 satoshis)
Market Cap: $2.595bn
Thoughts: If we begin by looking at ALGO/USD, from the weekly we can see that the range that has been tightening for weeks if not months continues to tighten, with the pair trapped firmly between support at $0.77 and now resistance at $0.92, with price often wicking above or below those levels but never closing beyond them. As such, naturally the first sign for mid-term trajectory will be when we see a weekly close either side of this range on higher volume than is currently being traded, which is near historical lows. If we get a breakout beyond $0.92 on the weekly, I’d then want to see a higher-high beyond $1.04 form on the daily (around the 200dMA) to confirm the move out of the range, where we could then expect to see a move to $1.27 to follow. Looking at the daily, again the pair is being supported by the 360dMA, with lows rising as the moving average pushes higher, so if we see a break down below the 360dMA I would expect continuation lower into the final support at $0.67 (which has been tested three times already), before a potential breakdown and move towards $0.50 begins.
Turning to ALGO/BTC, the support level I have been watching for months has now fallen, after two weeks of selling has printed a weekly close below 2000 satoshis for the first time since March. This level was important as it is the reclaimed range support from 2019-2020. Bulls will be hoping this is a fake-out below the range support, which would be evidenced by a weekly reclaim of the level this week or next. Lingering below 2000 satoshis, however, would convince me that the pair will be pushing lower towards the significant support sitting between 1430 and 1560 satoshis, which is the last bastion of hope before an all-time low retest at 1067 satoshis.
Price: $0.016 (37 satoshis)
Market Cap: $799.772mn
Thoughts: Beginning with SC/USD, we can see from the weekly that the pair found support at $0.011 and has since reversed sharply, closing above trendline resistance from the 2021 high and back above prior resistance now turned support at $0.0147. The pair is now capped by historical resistance at $0.018, where a weekly close above that level would likely lead to a push beyond the breakdown level at $0.022, where resistance was also found recently. Any weekly close above $0.022 over the next few weeks would indicate to me that the pair wants another 25-30% push higher towards resistance at $0.03, beyond which there is no resistance back towards the complacency high that formed at $0.047. Looking at the daily, the pair is still also being capped by the 200dMA, so a flip of this $0.0184 area is a key signal for the momentum to push beyond $0.022 towards $0.03, in my opinion. Reject here again and break back below reclaimed support at $0.0147 and I think we see the base at $0.011 retested, if not a push lower into $0.009.
Turning to SC/BTC, here on the weekly we can see that the pair is back inside the long-term accumulation range, having been capped in 2021 by the 200wMA. For clarity, let’s drop into the daily timeframe, where we can see the structure is very clean. The pair formed classical euphoria at 103 satoshis, followed by a complacency shoulder at 80 satoshis and has since been playing out a shortened market cycle, where by the dumps into prior resistance turned support at 29 satoshis – right around the 360dMA – appear to be anger or depression, with reclaimed resistance at 45 satoshis capping the pair since mid-June. The one clear sign for disbelief to follow would be for 45 satoshis to be reclaimed as support, at which point I would be looking to enter a position to hold for another cycle towards the 2021 highs and potentially beyond. Alternatively, we could wait for a breakdown below 29 satoshis and buy the capitulation back towards long-term range support at 16 satoshis. If you are looking to buy inside this range between 29-45 satoshis, the obvious invalidation is a close below 29 satoshis, which opens up the possibility of another 45% retrace, so you would not want to remain a holder if that fell.
Price: $0.41 (922 satoshis)
Market Cap: $412.616mn
Thoughts: Beginning with GLM/USD, from the weekly we can see that the pair actually looks a lot better than many midcaps, having initially been capped by historical support at $0.165 for years before breaking out after several attempts (and beyond the 200wMA at $0.186) in early 2021, with price then turned prior resistance into support all the way into resistance at $0.75. Since, the pair has retraced back into the 200wMA and historical support at $0.165 and bounced off the zone, reclaiming support at $0.25 and then continuing higher over the past couple of weeks. If we look at the daily, the pair has now reclaimed the 200dMA as support and is holding above prior support at $0.37; if the pair can hold above this cluster of support, I would expect to see trend continuation back to yearly highs to have another stab at $0.75. In the even that the weekly can close above $0.75 later this year, the next major resistance is at $1 before the $1.35 all-time high.
Turning to GLM/BTC, again the pair has not really moved much relative to historical pricing over the past couple of years, having formed range support at 336 satoshis and range resistance around 1505 satoshis, with no discernible market cycle for the BTC pair evident within that range on the weekly timeframe. If we drop into the daily, we can see that a mini market cycle occurred where price formed cyclical support at 460 satoshis before rallying into resistance at 1500, then retracing the entire move all the way into a new all-time low at 160, but swiftly reclaimed both range support at 336 and the support level above it at 460. Since, the pair put in resistance at 1200 satoshis and has been holding above both the 200dMA and 360dMA since, trapped between 700 and 1193 satoshis. Looking longer-term, obviously the first level to conquer is 1500 satoshis; if we can break above 1193 and the pair has the momentum to continue and close beyond 1500, I would expect to see another 20% push into the 200wMA at 1800 satoshis from there, which would likely provide some resistance on the first attempt. Close beyond there and I think we see 2700 satoshis retested as resistance.
Price: $0.28 (629 satoshis)
Market Cap: $198.27mn
Thoughts: If we begin by looking at NKN/USD, we can see that the pair has been forming a rounded bottom above support at $0.187 after retracing for the past few months from the all-time high at $1.52 – a retracement of around 88%. The pair has failed to close below $0.187 on several attempts and has since pushed off the base, now looking to move towards the next major support turned resistance at $0.45, currently sitting in no man’s land on the weekly timeframe at $0.27. If we look at the daily, the pair has more structure, whereby recent resistance has been flipped as support at $0.25 and the pair is now being capped by the 200dMA, with any move above that leaving no resistance all the way into that $0.45 area. Climb aback above that and again there is no real resistance for another 100% move back to the all-time high weekly close at $0.95, which is certainly a range I will be looking to play long should we get there.
Turning to NKN/BTC, here we can see that the pair poked above long-term resistance at 1340 satoshis earlier this year into a 2021 high at 2585 satoshis, having since retraced back towards historical support at 550, above which it currently sits. Whilst the pair continues to form a tight consolidation range above this historical level, it is possible that a new cyclical bottom is forming, where we might see a push back into 1340 follow over the next couple of months, with any weekly close above that level likely leading to another euphoric rally towards 3000 satoshis. Looking at the daily, the pair is sat right at the 200dMA with prior support at 706 satoshis capping the pair for now; flip that level back into support and it may be worth jumping in with a tight stop at 550 to play this back into 1050 satoshis, where the next resistance area sits. For the longer-term outlook, I would either want to be a buyer back towards the cyclical support below 295 satoshis or wait for this range to continue to unfold, where continued consolidation between 550 and say 710 satoshis would begin looking like a long-term accumulation range.
Price: $0.03 (68 satoshis)
Market Cap: $5.887mn
Thoughts: I’d like to preface this section by mentioning that Burency is a reader request and therefore I have zero knowledge about the fundamentals of the project and will thus only be concerned with the price chart and what it is telling me.
Looking at BUY/USD to begin with, we can see that the pair has been in a downtrend effectively since inception in September 2020, rallying for brief period within that time but ultimately pushing to new all-time lows regularly. At present, it has put in an all-time low in mid-July at $0.018 after putting in all-time highs at $1.30 during the first week of trading ten months ago. The pair is beginning to look a little more promising as prior support at $0.028 has since been reclaimed but the May low that preceded the run into $0.19 at $0.034 is currently capping the pair, and I would be waiting for a break back above this level before entering any position, with a first target of historical support turned resistance at $0.073, followed by the 200dMA around $0.10. Naturally, invalidation on a break above $0.034 would be a loss of the support level below it at $0.028, in which scenario I would expect support above the all-time low at $0.02 to be retested. Alternatively, if this is a fundamentally-sound project, given its tiny market cap, one could adopt a fixed-risk approach here and buy following this current all-time low, looking to dollar cost average in a 1 or 2% position and hold for a bull cycle, also assuming that the large holders are buying inside this range too.
Finally, looking at BUY/BTC, the long-term chart from inception is basically incomprehensible due to the decimation of the pair from the first day of trading, with price falling from the all-time high at 12,200 satoshis into the currently all-time low at 53 satoshis, which formed in May and has continued to hold, followed a brief bull cycle run into the 200dMA at 376 satoshis in mid-May, subsequent to which the pair has retraced the entire run and is now flattening out around the all-time low. This is a more attractive chart in my opinion as we do see that all-time low holding and price forming a flat range around it, and so entries here with an exit on a close below the all-time low are attractive from a risk/reward perspective. Alternatively, one could wait for the 200dMA to be closed above at some point in the future before entering, as the pair has never closed above it since inception, so that would be a good reversal indicator.
And that concludes this week’s Market Outlook.
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