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Market Outlook #149

Market Outlook #149 (11th October 2021)

Hello, and welcome to the 149th instalment of my Market Outlook.

In this week’s post, I will be covering Bitcoin, Ethereum, Terra, Cosmos, yearn.finance, Badger DAO, DIA, Komodo and Umbrella Network.

As ever, if you have any requests for next week’s Outlook, please do let me know.

Also, later this week will mark the return of my Coin Reports, with a subscriber-exclusive report on Tarot to be published by Friday. Following this one, I will be running a monthly poll again for readers to vote on which project they would like featured.

Bitcoin:

Weekly:

BTCUSDWeekly

Daily:

BTCUSDDaily

Price: $56,365

Market Cap: $1.061trn

Thoughts: If we begin by looking at BTC/USD, we can see that we’re all going to make it.

In all seriousness, last week’s price-action was precisely what we wanted to see following the macro higher-low that formed above the range high at $41k, with the pair rallying from weekly open all the way through what many (including myself) had considered *could* be the complacency shoulder at $53k, assuming that we had broken down back inside the $41k range high from there. That never happened, and instead we saw bulls hold firm at $41k and catapult BTC higher with a relentless bid over the past couple of weeks, with last week seeing price close firmly through $53k, wicking into $57k but closing the week at $54.7k. This weekly close confirms bullish market structure on the weekly timeframe, with a macro higher-low having been followed by a higher-high, and on increasing volume. Now, from here, we are pushing up against the final resistance cluster before all-time highs and unless we get an ETF approval as a catalyst over the next 7-10 days, I think it will be a difficult one to crack on the first attempt. I am looking at the range between the 78.6% retracement at $57.1k and the swing-high at $58.4k, and I am looking for a weekly close above the latter level. If we see that occur, new all-time highs are a given, in my opinion, as there is no real resistance between there and $65k. If, however, we see price wick into that range this week and start to break down on lower timeframes (which I think is the more likely scenario), I’d expect to see price dip back towards $53k and potentially a little lower to form another higher-low before the run on all-time highs begins.

If we look at the daily, I have marked out this possible trajectory, where we see the last few days of consolidation swept to flush some longs and then consolidate at prior resistance turned support before pushing to new highs towards the end of the month. Once we break out beyond $65k, the next major resistance is at the confluence of fib levels around $87k, which is where I will look to sell a little bit of spot and continue to sell if and when we push beyond that level. As long as we now hold above the macro higher-low at $41k, this chart is about as bullish as it gets.


Ethereum:

ETH/USD

Weekly:

ETHUSDWeekly

Daily:

ETHUSDDaily

ETH/BTC

Weekly:

ETHBTCWeekly

Daily:

ETHBTCDaily

Price: $3,580 (0.0635 BTC)

Market Cap: $422.105bn

Thoughts: Beginning with ETH/USD, we can see from the weekly that price consolidated below minor resistance at $3690 last week but held above reclaimed support at $3240. This tight range was accompanied by lower volume and I would expect to see expansion from here, with price likely to break beyond $3690 to retest the ATH weekly close at $3955 as long as we hold above $3240. Turning to the daily, there is a clean double top at $3690, which is precisely what we want to see when expecting higher prices, as there will shorts with stops resting above that level that will act as a magnet. From there, I would want to see a daily close through the level to confirm the breakout, and subsequently we’d be looking at $3960 as the final level of resistance before an all-time high breakout beyond $4400.

Turning to ETH/BTC, we can see that price broke weekly market structure to the downside, closing below support at 0.06476. We remain within the larger range between support at 0.054 and resistance at the yearly highs at 0.0826, but given the breakdown below support I would now expect to see the pair move lower towards range support. If we do get down there, I’d be looking for reasons to open a synthetic ETH/BTC leveraged long, expecting range support to hold, with invalidation on a daily close below 0.053. And if that invalidation comes, this range has failed as a bull-flag and I would expect price to return to the next level of support below at 0.046 before forming any potential higher-low. If we drop into the daily, we can see that price is being capped by minor trendline resistance and is sitting on the 200dMA, but the important thing here is that structure is bearish short-term and it is likely we see the pair bleed lower from here. In order for bulls to regain control, we’d want to see a higher-low form followed by a higher-high, and, ideally, a breakout beyond trendline resistance, at which point I’d expect continuation higher towards the top of the range.


Terra:

LUNA/USD

Weekly:

LUNAUSDWeekly

Daily:

LUNAUSDDaily

LUNA/BTC

Weekly:

LUNABTCWeekly

Daily:

LUNABTCDaily

Price: $40.06 (71,020 satoshis)

Market Cap: $16.097bn

Thoughts: If we begin by looking at LUNA/USD, from the weekly we can see that price broke out beyond the all-time high at $23.55 and continued higher to the 200% extension at $44, where it found resistance a few weeks ago and dipped lower to retest the prior ATH as support. Since, the pair has continued to consolidate below resistance, with price wicking through but failing to break out, with last week printing a new all-time high at $51.76 but again failing to close beyond $44. Given this persistent breakout failure accompanied by bearish divergence, it is looking like LUNA may need to move lower here back towards support before it enter price discovery again. If we drop into the daily, we can see that a higher low formed at $23.50 after the initial push to $44 and now price is consolidating between prior resistance turned support at $36 and the all-time high. If we break below $36, then I would expect the pair to move back towards support at $25.71, where I would look for longs. If, however, these failed breakouts are psy-ops and LUNA is going to head higher despite divergence, I would wait for a daily close beyond $46.35 before entering any longs – this right here is no man’s land in my opinion.

Turning to LUNA/BTC, we can see a similar pattern here, with a breakout beyond prior all-time highs at 40k satoshis, with price then running for several weeks into resistance at the 200% extension ~89.2k satoshis, wicking beyond on several occasions but failing to close beyond and now printing bearish divergence after swing-failing the cluster of highs. We do see higher lows forming, however, so if the pair can now hold above 59.5k satoshis and make another higher-low I think we see an all-time high breakout follow. If, however, we see price break below 59.5k satoshis and close below it, I’d expect the low at 48.7k to also get taken out. Looking at the daily, we can see that price has closed the daily below the ascending triangle trendline support here, which could be a fakeout; if it is, we will know very shortly and price will reclaim the trendline and prior resistance turned support at 76k satoshis. If we see that, it is game on for price discovery and I’d be looking for LUNA outperformance (and then also start looking at smaller projects within Terra’s ecosystem for outperformance of LUNA itself).


Cosmos:

ATOM/USD

Weekly:

ATOMUSDWeekly

Daily:

ATOMUSDDaily

ATOM/BTC

Weekly:

ATOMBTCWeekly

Daily:

ATOMBTCDaily

Price: $33.55 (59,470 satoshis)

Market Cap: $7.483bn

Thoughts: If we look at ATOM/USD on the weekly, we can see that price rejected at the 1.618 extension at $48.68, printing an all-time high just shy of it at $47 and now retracing towards the prior all-time high at $32.88, now acting as support. If we drop into the daily, what we want to see here is consolidation occurring between $28 and $33 and price holding firm above the former level, thus confirming prior highs as a new support base. If we see that, I am looking at $58 as the next target for ATOM. If, however, we start to see price close back below $27.85, this breakout and rally to new highs will begin looking like a deviation above the prior range and I’d be looking for shorts back towards the long-term trendline support.

Turning to ATOM/BTC, price found resistance at 95.9k satoshis and printing a new yearly high at 104k, then printing a reversal candle and now moving lower, returning to within spitting distance of the breakout level at 55.3k satoshis. This has the potential of forming a macro higher low but I want to wait to see the reaction here before stepping in. If we drop into the daily, as we know that 55k level capped price for over a year and bulls do not want to see it give way on the first attempt, so I will be looking for signs of strength as price comes into the level. What I want to see is price hold above that level, print a swing-low and then either sweep that swing-low and reverse sharply or simply print a higher-high from there, turning daily market structure bullish. In that event, I would expect trend continuation towards new yearly highs.


yearn.finance:

YFI/USD

Weekly:

YFIUSDWeekly

Daily:

YFIUSDDaily

YFI/BTC

Weekly:

Daily:

YFIBTCDaily

Price: $33,910 (0.6014 BTC)

Market Cap: $1.242bn

Thoughts: Beginning with YFI/USD, we can see from the weekly that the range continues to hold, with price failing to break below range support at $23,700 and largely holding above local support at $30,865. Minor resistance is being found at $38,413 and I would now like to see a weekly close above this to indicate that a range breakout beyond resistance at $44,444 is likely. I have building a spot position here at range support and I will be looking to add when we get the break beyond that latter level. If we look at the daily, we can see that price is also being capped by the 360dMA and 200dMA, though the former is beginning to give way here. There is confluence between resistance at $38.4k and the 200dMA, so that level is particularly important and if price can close the daily above that level, I don’t think $44.4k is going to hold on its third test for a breakout. Can’t be bearish YFI/USD unless we lose range support at $23.7k, so that’s invalidation.

Turning to YFI/BTC, this support at 0.58 has now been holding the pair up for 287 days, but given the movements in BTC/USD, what we may see before a reversal is this support level get swept into the final major support at 0.48 before a sharp reclaim of range support, which is the trigger that might be worth waiting for if you are on the sidelines and considering an entry. If we look at the daily, we can see that trendline resistance from the yearly high at 1.67 is capping price, with it looking likely that 0.58 gives way here into 0.478. If we do see that occur, what I do not want to see is a close below that level, as there is no real support below it. Instead, we are looking for a sweep of this area followed by a high volume breakout beyond trendline resistance and a reclaim of the level above it. Eyes on range support…


Badger DAO:

BADGER/USD

Weekly:

Daily:

BADGER/BTC

Weekly:

BADGERBTCWeekly

Daily:

BADGERBTCDaily

Price: $30.60 (54,240 satoshis)

Market Cap: $314.721mn

Thoughts: If we begin by looking at BADGER/USD, we can see that price formed a higher low above prior resistance turned support at $13, bouncing through $23.56 and now pushing up again significant resistance at $35.30. Given the higher low and high volume push off of support, I would expect this level to be cleared out and for price to close the weekly above it; if we see that, I think BADGER is going to go for new all-time highs, with the main level of resistance at the ATH weekly close at $66.76. If we drop into the daily, the 200dMA has been reclaimed and tested as support, and price also formed the macro higher-low right on trendline resistance turned support, providing confluence to the idea that BADGER is in the midst of its second bull cycle now, with reclamation of $35 as support confirming this.

Turning to BADGER/BTC, the picture is very much the same, albeit with the pair lagging below the August high at 74.2k satoshis, but now looking to reclaim prior resistance as support at 50k satoshis. I’d want to see the weekly close beyond this level, particularly on the back of BTC/USD strength, as this would give me confidence in getting long BADGER as an outlier to the rally in BTC dominance. Targets above are 74k, followed by 85k satoshis, with any weekly close above that latter level leaving clear skies all the way back to the all-time high weekly close at 160k satoshis.


DIA:

DIA/USD

Daily:

DIAUSDDaily

DIA/BTC

Daily:

DIABTCDaily

Price: $1.88 (3329 satoshis)

Market Cap: $77.777mn

Thoughts: If we look firstly at DIA/USD, we can see that price found resistance at the 200dMA ~$2.55 and failed to breach it on three attempts, then moving lower to form a macro higher-low at $1.36, from which price is now reversing, having reclaimed support at $1.79 and pushing into the 360dMA, which is capping price. I think we see continuation higher from here, with the 200dMA the obvious resistance to keep an eye on, as any break and close beyond this would confirm to me that DIA is in its second bull cycle (much like BADGER) with the first major resistance beyond the 200dMA at the 38.2% fib retracement level ~$3. Flip that as support and I think DIA goes to the top of the range where the all-time high is sitting at $6.18, to be honest.

Turning to DIA/BTC, the long-term range continues to hold, with all-time low support around 3200 satoshis having held firm for 282 days. Again, given the context with BTC/USD and the potential for a push towards all-time highs, we may well see the bottom of this range taken out here, and I would not want to be holding if we see a weekly close below range support. Instead, if that occurs, I’d look to re-enter a position on a reclaim of range support. If, however, we do hold here, I won’t be exiting my position, obviously, and I’d be looking for a break beyond the cluster of resistance at 5k satoshis before looking to add, with a view to hold for a first target of 8.6k satoshis, followed by 18k.


Komodo:

KMD/USD

Weekly:

KMDUSDWeekly

Daily:

KMDUSDDaily

KMD/BTC

Weekly:

KMDBTCWeekky

Daily:

KMDBTCDaily

Price: $1.02 (1806 satoshis)

Market Cap: $130.46mn

Thoughts: Looking firstly at KMD/USD, we can see from the weekly that the pair, having found support at the historical level ~$0.45, price has bounced higher, rejected at the 200dMA and prior resistance at $1.74 and is now printing a higher-low at reclaimed support ~$0.88. From here, I would expect to see the pair now push higher beyond the 200dMA, with a weekly close above $1.74 the trigger for trend continuation towards the yearly high at $4.83. As long as this most recent swing-low holds, I see no reason to expect downside from the pair here. I would expect to see consolidation occur between $1.74 and $2.05 as that has historically been an important range; break cleanly beyond the latter and I think we swiftly retest that yearly high, with any weekly close beyond that opening up the possibility of a retest of the ATH weekly close at $11.

Turning to KMD/BTC, the picture is less attractive here given the bouncing-ball action we have seen with every push off of support, leading to lower highs but with the all-time low continuing to hold for now at 1350 satoshis. If we see BTC break beyond $65k, I think it is likely the bottom gets taken out here and I would be wary about holding in bearish price discovery. Whilst the Dollar pair does look good, the BTC pair is not looking like the bottom will hold so it is likely Komodo underperforms until we start turning market structure bullish once again, at which point I will be more interested in having a position here.


Umbrella Network:

UMB/USD

Daily:

UMBUSDDaily

UMB/BTC

Daily:

UMBBTCDaily

Price: $0.55 (972 satoshis)

Market Cap: $40.647mn

Thoughts: If we look firstly at UMB/USD, we can see that price has finally broken above the 200dMA for the first time and retested it as support, with prior support turned resistance currently capping price at $0.57. Close the daily firmly through this level and I think we see trend continuation towards the major level I am looking at: $1, where the 38.2% fib retracement + prior support is sitting. That’s where I will look to take some profits, but I do expect we see price push even higher given this will be Umbrella Network’s first bull cycle, with $1.51 the next target, followed by all-time highs.

Turning to UMB/BTC, the picture is almost identical given the short period that the pair has been trading for, and I am looking for prior resistance turned support here at 820 satoshis to continue to hold, in order for Umbrella to resume outperformance and push on towards the 38.2% retracement level at 2200 satoshis. Not much else to add here – I do think this will be a big winner given the lack of prior bull cycle and the macro context of the market at present.

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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