Market Outlook #144 (13th September 2021)
Hello, and welcome to the 143rd instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, Cardano, Algorand, Cosmos, The Graph, SushiSwap, COTI and MarginSwap.
I will also be publishing either another Altcoin Special or something related to NFTs later this week. Feel free to let me know which you’d prefer…
As ever, if you have any requests, please do drop me an email or leave a comment.
Market Cap: $833.075bn
Thoughts: If we begin by looking at BTC/USD on the weekly, we can see that despite the breakout the preceding week, last week saw precisely the price-action that bulls did not want to see, where the prior weekly high was swept and price rejected, leading to a sell-off and dump straight through the April low at $46.9k, with price dumping into ~$42.5k before closing back around $46k, printing somewhat of a bearish engulfing. Importantly, price closed the weekly below the April low support, which is not the most promising sign. Given this weekly close on rising volume, I would expect the $46.9k area to now act as resistance, where any rejection off a retest there would lead to the range high retest I have mentioned previously, down at $41k, which would be a must-hold area, in my opinion. However, given the bearish price-action last week, we now also have a scenario where the April low could be immediately reclaimed, so this week’s close is rather important – if the pair can break and close back above $47k and then hold above it next week, this past week’s move will look more like a bear trap than a breakdown.
Turning to the daily, I have provided two possible bullish trajectories, as I remain bullish whilst we remain above that $40.5k-$41k area. The first would be the reclaim just mentioned, whereby price breaks (likely forcefully) back above $47k, trapping any shorts below the level and then that area is retested as support before price pushes to a new monthly high above $53k. The second scenario is that this breakdown is legitimate and we see $47k now act as resistance – along with the once-again lost 200dMA – and price moves lower to sweep up some swing-lows into the $41k range high area before basing and moving higher later this year. Naturally, there is a bearish scenario, which is that the breakout above $50k into $53k was the complacency high, and if we start trading back below $40k, this will look more likely, where I would then expect the bottom of the range down at $31k to be retested as support, with any future breakdown below there confirming the beginning of a longer-term bear market.
Price: $3225 (0.0722 BTC)
Market Cap: $377.198bn
Thoughts: Beginning with ETH/USD, on the weekly we can see that the picture remains brighter than BTC, with last week’s price action seeing the pair rejecting at the ATH weekly close ~$3960 and dumping below the prior weekly low and support at $3240 but ultimately closing back at $3400, inside the prior weekly range and *above* support. Nonetheless, if BTC/USD does continue to drive lower, no doubt ETH will follow here and the level I am looking at is $2900, where there are now several weekly lows sitting that look primed for a sweep. If we drop into the daily, we can see this more clearly, where a drive lower from here would take out a number of swing-lows and likely cause a liquidation cascade potentially into the 200dMA + trendline support around $2750, which would be ideal for a new long entry, in my opinion. That is where I will be scattering some bids this week, and whilst we remain above that trendline support and 200dMA I continue to expect dip-buying to pay off for ETH.
Turning to ETH/BTC, last week was one of consolidation following the clean break through 0.0733, with price now hovering below 0.078 but above prior resistance turned support at 0.069. The picture is pretty much the same as last week, where I would expect this series of higher-highs and higher-lows to lead to an upside breakout above 0.085. Looking at the daily, the pair just appears to be consolidating in a manner similar to the prior leg higher, where I would now expect 0.069 to continue to act as support as the pair forms a macro lower-high, with the next push higher from here likely to be the one that retests the yearly high at 0.0826. Only when we see the reaction at that level will we know if there is immediate continuation to be had, but I am expecting some continued strength from the pair going into Q4. Primary target is 0.1 followed by 0.12 by 2022.
Price: $2.40 (5402 satoshis)
Market Cap: $77.94bn
Thoughts: If we begin by looking at ADA/USD, the pair sold off with the rest of the market following its all-time high print at $3.15 but was bought up well, with price dumping into prior resistance turned support at $1.94 and ultimately closing the week back above the prior all-time high at $2.52. This is impressive given how the rest of the market fared and the pair should now hold above $1.94 if it is to see trend continuation from here, with the next area of resistance at the 2.618 extension of the bar market at $3.64. If, however, the pair begins to close back below $2.52 and the level acts as resistance again, we might want to begin looking for shorts back into the $1.94 level, where a break and close below would make the all-time high breakout look like a deviation and I would be keen to compound shorts for a move back towards $1.55. Looking at the daily, we can see the breakdown more clearly, with price now forming a lower high following the bounce off of support; for ADA bulls, it is paramount that price now push back above $2.80. If the lower high holds, I’d expect the bearish scenario to follow, where I would look for shorts into $1.94 at first and compound for a 200dMA retest depending on the reaction at that level. Break back above $2.80, however, and bulls are still in control and I’d expect price discovery shortly thereafter.
Turning to ADA/BTC, we can see that price bounced at 4600 satoshis after rejecting for a second time at the all-time high weekly close at 6100 satoshis, with the weekly then closing right around the 61.8% retracement of the bear market at 5600 satoshis. If the pair can continue to hold above prior range resistance now turned support at 5060, I’d expect this to get another leg higher and for the 6100-satoshi area to give way on the next test, with the 78.6% retracement at 7060 satoshis the next area of resistance (and the final one below the all-time high at 8860). If we look at the daily, the bearish scenario here becomes clear following the multiple rejections at 6100, where, if price were to break back below 5000 satoshis from here, I would expect to see a full retrace of this leg higher back into the 200dMA at 3500 satoshis.
Price: $2.12 (4802 satoshis)
Market Cap: $11.576bn
Thoughts: Beginning with ALGO/USD, finally the pair broke out above range resistance last week to new yearly highs, as we have been anticipating since range support at $0.77. The clean break and close through resistance at $1.80 on all-time high volume is very promising for trend continuation, particularly given the close occurring at weekly highs at $2.50. I would now be looking to add to my position on whatever dip we get from here, which, if we look at the daily, would ideally be back around the $1.50 level, although I don’t know if the market will be that kind. If it is, we can look to get long just above that, with invalidation below support at $1.15 and the 200dMA, looking for an all-time high retest around $3.20. If the dip isn’t as deep as that, perhaps we see this cluster of recent daily lows get swept into the breakout point at $1.80, which again would make for a nice long providing the lower timeframes give us a setup at that point.
Turning to ALGO/BTC, we can see that the pair broke above minor resistance at 3721 satoshis and traded into long-term resistance at 5000 satoshis, above which it closed (just about). A dip back into 3700 to retest it as support would be the dip to buy here and I would be looking for another leg higher into the 2020 high at 6500 satoshis, above which the final resistance level would be 8565 satoshis. Not much else to add here – onwards and upwards at last for ALGO.
Price: $36.44 (82.3k satoshis)
Market Cap: $8.065bn
Thoughts: Beginning with ATOM/USD, the pair finally broke to new all-time highs, and our reclaimed support buys around $18 have been rewarded, on top of the range support position at $10.55. Looking at the weekly, the pair closing firmly above the prior all-time high at $32.88 on the highest weekly volume since May and this despite dumping with the rest of the market into the $17 area. The demand showed up at that level and sent into above $30 and price has since made a new all-time high as of today at $37.87. If we look at the daily, the dump into $17 coincided with a 200dMA retest and was a perfect entry for those that weren’t already in, with price now moving in parabolic fashion. I would now like to see ATOM hold above prior resistance at $27.85, with my primary area for profit taking at the 1.618 extension of the range at $48.50.
Turning to ATOM/BTC, after an entire year of being capped by 5500 satoshis, the pair finally broke through on good volume and closed right at the 2020 high at 7640 satoshis, with the next resistance levels above at 8560 and 9590. I would expect the pair to consolidate here above 5500 before moving higher to take those two levels out, and I expect the wick at 12,900 satoshis to be retested at some point later this year, assuming we get a weekly close above 9600. LFG, ATOM!
Price: $0.84 (189 satoshis)
Market Cap: $3.958bn
Thoughts: Looking firstly at GRT/USD, we can see that the pair had been consolidating between range support at $0.48 and resistance at $0.80 for several months before breaking out above $0.80 in August and now forming a new range, with that latter level as range support and resistance below the 200dMA and prior support at $1.30. I am keen to be a buyer of spot GRT here given this move into a new range and acceptance above prior resistance and I would look to add to my position on a close back above $1.30, at which point I would be looking for a retest of $2.34 as my primary target. If the pair breaks back below $0.80 and fails to reclaim the level soon after, I would look to exit and rebuy at range support ~$0.48.
Turning to GRT/BTC, we can see the 117-day range between support at 1320 satoshis and resistance at 2260 satoshis, which makes me more confident in purchasing spot here. Invalidation is clear on a break below 1320 and I would look to add to my position on a reclaim of the 200dMA and 2450 satoshis, then looking for a move into 3300 satoshis, followed by a higher target of 4936 satoshis. This certainly looks like depression from a cyclical perspective.
Price: $10.534 (23.7k satoshis)
Market Cap: $1.34bn
Thoughts: Beginning with SUSHI/USD, we can see that price formed a range throughout May to August where support was found at $6.20 and resistance at $10, with the pair breaking above this resistance in mid-August and finding new resistance at prior support ~$13.63, where the 200dMA sits. SUSHI did manage to poke above this cluster on the first attempt but has printed a lower high since and is now retesting $10 as support, which is a must hold area for another leg higher beyond resistance at $13.67. If we break back below $10, I’d expect to see price move back towards the bottom of the range unless the level was immediately reclaimed. However, hold above it and I think we see SUSHI push beyond $14 into the next resistance level at $16.28, with any daily close above that level likely to lead to a push for new all-time highs.
Turning to SUSHI/BTC, we can see that the pair has been holding above support at 19.8k satoshis since April, which is promising, with price now contracting in a range where the 200dMA at 28k satoshis is acting as resistance. If we see a breakout above 28k satoshis I would be looking to buy the retest for a bounce higher into yearly resistance at 45k satoshis. This is a very clean setup if we get it, so I’ll be keeping a keen eye on SUSHI here.
Price: $0.30 (683 satoshis)
Market Cap: $264.291mn
Thoughts: Beginning with COTI/USD, we can see strong demand came in last week following the sell-off with the rest of the market, with the pair dumping below the trendline breakout back into reclaimed support at $0.22 but ultimately closing back above the trendline at $0.35. This is promising, but I would now like to see COTI hold firm above the $0.30 area as reclaimed support, with trend continuation into new all-time highs above $0.58 likely if we can. The daily provides a clearer picture here, where price sold off into the 200dMA and held above it but is printing lower-highs at present (as you can see by the local trendline resistance). I would like to now see the 200dMA act as the base for the breakout above this trendline resistance, with any higher high from here indicating the market structure shift we want to see for the next leg higher, where both the trend-based extension and the range extension mark out $0.90 as the 1.618 area and as such that is where I will be looking to take some profits on my COTI position.
Turning to COTI/BTC, we cab see here that the support level at 550 held strong last week but price remains capped by historical resistance at 844 satoshis. The daily is what we’re interested in here as the weekly is simply a view of the long-term range, and on the daily we can see the bounce at the 200dMA, where I would now expect to see momentum carry COTI towards 840 satoshis once again. The next time we do test that level, I would want to see a weekly close above it, which has evaded the pair on most historical attempts. On a cyclical view, as long as COTI is hold above the support cluster between 450 and 500 satoshis I think it is likely we see another leg higher beyond the 2021 highs.
Price: $1.01 (2260 satoshis)
Market Cap: $6.28mn
Thoughts: Marginswap is a relatively new low-cap token that I found recently and I am buying it here as a proxy for outperformance of the AVAX ecosystem.
If we look at MFI/USD, we can see that the pair lost 96% of its value in the April to July trading period, bottoming at an all-time low of $0.17, before rallying in a parabolic fashion off the base into resistance at $3.25, just below the all-time high of $4.05. It has since retraced back into a key pivot area at $0.56, which acted as support and price is now moving higher again. I am buying this level as I see invalidation as a clean break through $0.56, where I would then expect a deeper retrace into $0.36 and potentially a full retrace of the pump. If, however, support holds, I expect the top of this range to get blown out as the AVAX ecosystem continues to outperform, with $5.40 as my first target, followed by $8.34.
Turning to MFI/BTC, you can see my setup here, with entries around this 2100 satoshi area and a stop on a daily close below 1100 satoshis, with a first target of 6000 satoshis, followed by price discovery beyond that. This is an illiquid coin given its market cap, so not one to attempt to ape into. I will be buying over several days and holding as long as required providing the 1100 satoshi support holds. I won’t be tweeting about this one for a while for obvious reasons.
And that concludes this week’s Market Outlook. Keep an eye out for the other post coming later this week.
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