Market Outlook #143 (6th September 2021)
Hello, and welcome to the 143rd instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, Solana, Avalanche, Tezos, OMG Network, Illuvium, Alchemix, Tixl and Coldstack.
As ever, if you have any requests, please do drop me an email or leave a comment.
Market Cap: $975.364bn
Thoughts: If we begin by looking at the weekly for BTC/USD, we can see here that price found support last week above the prior weekly low and April low at $46.9k and rallied into the weekly close, breaking above the resistance zone between $50-51k and closing at $51.8k on higher volume than the preceding week. This is very promising and precisely what we wanted to see in order to expect a further squeeze towards the 78.6% fib area around $57k. Given that $46.9k has now held on multiple tests and preceded the breakout beyond $51k, I would now like to see that area continue to hold as support in order for the move into the high $50ks to be valid. Break below $46.9k and I think we get that unwind back into a range high retest at $42k. Further, if we do push on this week beyond $52k towards $57k, I would like to see weekly volume increase again; lower volume into significant resistance would be our signal to look for short setups at $57-58k.
Dropping into the daily, the 200dMA continues to act a support and price has now broken out of the two-week range between $46.9k and $50.7k, with yesterday’s price-action closing firmly through that resistance zone. I would expect to see a dip back into the prior resistance area early this week and continuation higher from there, where those on the sidelines should look for long entries with a target of $57k. Invalidation here for longs would firstly be a daily close back below $50k, as we would then have a false breakout from the range, but hard stops should be below the 200dMA, in my opinion. If we do drop below $50k, I will be looking for signs of strength to add to my position, as it is possible we see an immediate reclaim of the level and then push off, much like the multiple rejections at key levels in August that were followed by strong buy-ups the next day. Onwards and upwards into the most important resistance cluster below the all-time high…
Price: $3960.30 (0.0763 BTC)
Market Cap: $464.02bn
Thoughts: Beginning with ETH/USD, we can see from the weekly that price finally closed through resistance at $3360 after several weeks of consolidation below, rallying for the entire week and closing at weekly highs above the 78.6% fib, just shy of $4000. This occurred on higher volume than those previous consolidation weeks, which, coupled with the new all-time high weekly close, suggests to me that we will be pushing beyond $4400 in due time. If we can now hold above $3800, I would expect the next leg higher to take out the all-time highs and the reaction there will naturally be very important. Any signs of a swing-failure of the all-time high on the weekly timeframe would not look great, but I will be looking for signs of a bear trap in that instance given the momentum ETH is trading with at present. If we see a weekly close above $4400, I expect the next major resistance to be found at the 1.618 extension at $6060.
Turning to ETH/BTC, the pair was the driving factor this past week for ETH/USD pushing higher, with price closing firmly through resistance at 0.0734 and thus confirming bullish market structure, again on higher volume than recent weeks. Given the structure we see here, with higher-highs and higher-lows, I would expect to see the yearly highs now taken out over the coming weeks, with 0.086 the first target, followed by the fabled 0.1 BTC area later this year. Turning to the daily, we can see that price closed firmly above 0.0734 and above 0.0778 and is now consolidating around this latter resistance. As long as we now hold above 0.073 I think we just push on for another leg higher into the 0.083 swing-high. If we fall back below 0.073, I would expect the pair to retest support at 0.069 before forming higher-lows and moving higher from there.
Price: $145.06 (0.0028 BTC)
Market Cap: $42.271bn
Thoughts: If we look firstly at SOL/USD, the pair has been on a tear since breaking through prior all-time highs at $62 a few weeks ago, closing firmly through the highs and rallying into new all-time highs at $155 last week, just shy of the 3.618 extension of the previous range at $176. That latter level is where I expect the pair to find some resistance this week, but given the expansive candles following the breakout I think this still has legs to squeeze even higher into that 500% extension at $236, which I would expect to provide significant resistance. Dropping into the daily, we can clearly see the parabolic curve here for SOL/USD, and those with heavy positions should be watching for a breakdown from the curve for the first signs of exhaustion, where a breakdown in daily bullish market structure subsequently would be the signal for the end of the rally.
Turning to SOL/BTC, again the pair has been on a tear, closing firmly through prior highs at 0.00137 and continuing beyond the 2.618 extension last week at 0.0027 into a new all-time high at 0.003. There are no signs of exhaustion just yet and I expect we see more SOL outperformance from here, with 0.0034 the next area above to potentially shave some profits if you are long. Looking at the daily, the rally is extremely steep at present, with no real support being formed on the push up, with the next major support down at 0.0018 at present. As such, I would be wary – whilst the latter stages of a cycle are always the most profitable and most extreme, this lack of support could lead to a swift unwind when SOL forms its local top, although that could still be another 50-100% rally away for all we know…
Price: $50.46 (96,940 satoshis)
Market Cap: $11.053bn
Thoughts: Beginning with AVAX/USD, we can see on the weekly that a significant amount of volume has come in over recent weeks, pushing the pair from reclaimed support at $15 all the way back to the top of the range, printing a double top at the all-time high at $60 and ultimately closing at a new all-time high weekly close of $43.33, above which the pair is currently consolidating. If this prior resistance at $43 can continue to hold as new support whilst price consolidates below all-time highs, I think we see AVAX push towards the 1.618 extension of the range at $91.80 over the coming weeks. Looking at the daily, the pair is printing somewhat of a bull-flag below this key resistance whilst holding firm above that key $43 area on significant volume – if we see a daily close above $51 (again, an all-time high close on that timeframe), I’d expect to see the next attempt at a $60 ATH breakout swiftly, where any close above that would give us a period of price discovery. If the pair fails to break out and loses $43, I’d expect a serious retracement back towards the next major support down at $21,70, above which the 200dMA also sits.
Turning to AVAX/BTC, the picture is almost identical and again we find that the pair has retested prior all-time highs at 0.00134 but fallen short, but managed to close above the prior ATH weekly close, above which it is currently consolidating. I think the trajectory for both pairs is pretty much the same, whereby we see a bull-flag forming here that could lead to an all-time high breakout above 0.00134 or a retracement back into 66k satoshis as support if we get a daily close back below 80.7k satoshis. Nothing more to add here, but I am certainly leaning towards the bullish scenario for AVAX.
Price: $5.65 (10,910 satoshis)
Market Cap: 4.857bn
Thoughts: Beginning with XTZ/USD, our buys several weeks ago have been rewarded this past week as the pair rallied straight off the weekly open at prior resistance ~$3.95 and pushed into the 61.8% retracement area of the down-swing at $6, slightly below which it closed, all occurring on serious volume. This is very promising indeed for Tezos, and I would now expect the ATH weekly close at $7.08 to be retested as resistance, where I will look to shave off some profits. That said, if we see a weekly close above $7, I’d expect those all-time highs at $8.42 to give way too, so I will be retaining half of my position for that scenario. For those on the sidelines, if we look at the daily, prime entries might be found if price sweeps the lows at $5 and reclaims it, or entries on a lose above $6.13 with stops on the swing-low at $5, although risk/reward won’t be as attractive there.
Turning to XTZ/BTC, we can see that despite the rally off of range support at 7500 satoshis the pair is still trapped inside the 250-day range, with range resistance at 12k satoshis still capping price. As soon as we see this level give way, I expect 14.6k to be retested, followed by a gap fill into the 38.2% retracement at 18.4k satoshis. Looking at the daily, the pair has just broken back above the 360dMA for the first time since last September and is ow retesting it as support, so this may be the best entry before a full range breakout occurs. Alternatively, if we do dip further, I have bids stacked around 9100 satoshis, where the 200dMA is currently sitting.
Price: $9.63 (18,430 satoshis)
Market Cap: $1.338bn
Thoughts: Beginning with OMG/USD, we can see from the weekly that the pair has returned to resistance from August 2020 at $10, having rallied off of prior resistance turned support at $2.78. Bulls should now be looking for a weekly close above this level in order for the pair to squeeze higher towards yearly highs at $15. If we see this weekly close, I’d expect to see resistance found at the yearly high and then look to buy a dip back towards the $10 area, though likely a little higher as the area gets front run. Subsequently, if OMG is able to take out the yearly high without printing a swing-failure, I think we see the pair push on for the next major resistance cluster below the all-time high weekly close at $24.66.
Turning to OMG/BTC, we can see here that the pair is still very much taking off from the support base that held throughout 2021, now pushing beyond resistance at 17.9k satoshis, with the next resistance area at 29k. If the pair can close beyond that 29k area, I’d be looking for the 200wMA at prior support ~42.5k satoshis as the major resistance zone and where longs should be looking to pay themselves, as I don’t think that level will give way lightly. Looking at the daily, the pair has another 25% of runway before coming into any resistance, so a short-term play we could look for is to buy a retest of 18k satoshis over the next couple of days (assuming it comes before price tags 24.6k) and place our stop at the 200dMA ~12.7k satoshis, looking for 24.6k as an initial target followed by 29k satoshis as the second target.
Price: $557.32 (0.0107 BTC)
Market Cap: $352.461mn
Thoughts: Beginning with ILV/USD, we can see here that despite spending the first couple of months of its existence range-bound, the pair bumped the bottom of the range at $39 into an all-time low at $29 and then reversed sharply, taking out the top of the range at $127 within a few weeks and flipping it as supporting, leading to the bull run we are now seeing. Since, the pair has been rallying incessantly, only briefly consolidating below $558 last month to form an ascending triangle, from which it has now broken out and printed a new all-time high at $628. I would expect to see the rally continue as long as the pair now holds above trendline support and ideally the flipped range resistance at $550; if we break below both of those, we may see a dip back into range support at $390, which has to hold if the cycle is to continue; lose $390 and I think the pair unwinds most of this rally back towards $127. If, however, the new support holds, I think we see ILV continue towards the 1.618 extension of the trend at $767.
Turning to ILV/BTC, here we see an almost identical picture given that the token has inly been trading since April, and support for the pair is at 0.0087, which has to hold on a retest or else I think we see the pair return towards the previous range highs at 0.004. Hold above 0.0087 and I think we see 0.016 over the coming weeks. I certainly wouldn’t be looking for any new positions in ILV up here given the run its has and the lack of key support levels nearby, but if you are already positioned I see no reason why the run can’t push further into that 1.618 extension and potentially beyond.
Price: $437.62 (0.00845 BTC)
Market Cap: $124.107mn
Thoughts: Beginning with ALCX/USD, we can see that most of the past few months has been spent trending lower, with price taking out support at $343 in mid-June, finding new support at $253 and then taking that out in July into an all-time low of $229, where it then reversed and is now printing bullish market structure and what appears like a bottoming formation, as the pair has now reclaimed support at $343 and is breaking beyond resistance at $428. I would like to see prior support turned resistance at $554 now be reclaimed, which would lead to a retest of $660; above that, the pair is in the clear for another 60-70% rally back towards $1110, where the next major resistance sits, and I would definitely be keen on playing that range.
Turning to ALCX/BTC, again the picture is very similar due to the token being relatively recent, but I very much like the three drives lower into the all-time low at 0.0063 with bullish divergence on each drive, with price now reclaiming historical support at 0.0074. I am willing to be a buyer here given how this pair looks, with a stop-loss on a daily close below the all-time low and looking firstly for a retest of 0.012, followed by 0.018.
Price: $0.39 (757 satoshis)
Market Cap: $20.95mn
Thoughts: If we look firstly at TXL/USD, we can see that the pair found formed a new accumulation range at prior resistance turned support at $0.11 throughout May to August, with range resistance being found below $0.24. Since, the pair has broken above this range resistance and appears to be in the midst of a second bull cycle, now trading back above prior support turned resistance at $0.35 and the 200dMA. I would expect to see some resistance found at the 50% retracement and prior support at $0.46, but dips would be opportunities for entry looking at this, where any move from $0.46 back towards the 200dMA would look attractive for the next leg of the move higher into major resistance at $0.65. Ultimately, this looks like it wants price discovery if it can start closing above $0.65, where I would then expect to see the all-time high at $0.82 taken out.
Turning to TXL/BTC, here we see a very similar pattern and a textbook altcoin cycle having played out, with a new range having been found between 324 satoshis as support and resistance at 586, with the pair breaking out above the range last week. I would now expect to see 791 provide some resistance and for price to then push on towards 1054, above which there is very little resistance back towards the yearly highs and all-time high at 1472 satoshis. Very promising…
Price: $3.83 (7392 satoshis)
Market Cap: $5.97mn
Thoughts: Coldstack has not been trading for very long at all and I have no idea about its fundamentals as it was a request by a subscriber. Further, it is a $6mn market cap token, so likely to be highly illiquid.
That said, looking at both CLS/USD and CLS/BTC, which are naturally identical, we can see that CLS lost 80% of its value following launch, dropping from $6.68 to an all-time low of $1.34 in early August. Since, the pair has rallied back above key support levels at $1.61 and $1.82 and broken back above prior resistance at $2.85, now turned support. Whilst the push higher occurred on significant volume and shows clear buyer interest, we are now seeing lower-highs form as price pushes lower, so those positioned in CLS want to watch for a break beyond the previous lower high to indicate the next leg higher is imminent. Alternatively, looking at the BTC pair, we may see another lower high form and price return to key support at the base of the rally ~4712 satoshis, which would be a great spot for an entry.
And that concludes this week’s Market Outlook.
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