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Market Outlook #158

Market Outlook #158 (16th January 2022)

Hello, and welcome to the 158th instalment of my Market Outlook.

In this week’s post, I will be covering Bitcoin, Ethereum, Solana, Avalanche, Polygon, Harmony, Zilliqa, Utrust and QuickSwap.

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






Price: $43,399

Market Cap: $821.601bn

Thoughts: If we begin by looking at the weekly chart for BTC/USD, we can see that price swept last week’s low this week into and below that prior range resistance at $42k, falling as low as $39,650 before bouncing, thus leaving that $39.6k low untapped but looking very likely to close this week with a reversal hammer of sorts. Now, given that I am not one for the reliability of traditional patterns, this set-up is screaming for failure and a sweep of $39,600 next week to trap early longs. If we do start to see a push higher early next week followed by a lower timeframe breakdown, I’d be looking to short towards that area.

Conversely, longs become very attractive next week if we can sweep $39.6k and then start turning lower timeframe market structure bullish, which, if we drop into the daily, would consist of a move below $39,600 followed by a swift rally higher and breakout back above the 2022 open and 360dMA/200dMA confluence around $46-47k. Longer-term, that would be the ideal scenario for a reversal for me back towards the $59k major resistance. If, however, bearish momentum continues to play out here, I would expect to see that 2022 open hold as resistance on any rally and price to make new lows below $39.6k, falling towards range support and the 2021 open around $29k.












Price: $3,355 (0.07749 BTC)

Market Cap: $402.334bn

Thoughts: Beginning with ETH/USD, we can see here on the weekly that price sold off last week into the mid-range, above which it marginally closed, with this week’s price-action sweeping last week’s low at $3000 and rallying higher. If we see a weekly close in this area, the picture looks quite a bit better than BTC, with no clean lows left untouched and the possibility of a higher low above $2641 having formed in the uptrend since the May lows. Dropping into the daily, price is now sandwiched between the 360dMA as support and 200dMA as resistance and if this trend is to continue higher, that 360dMA has to continue holding as support, with the last line of defence at $2641. The reason for this is that loss of those two levels sends us not only below the mid-range but also through the most recent higher-low, and I would then expect the bottom of the range at $1700 to get tagged – whilst the possibility of longer-term range-bound price-action between $1700 and $4400 still exists at that point, the short-term uptrend has failed. Until that happens, I think this looks okay and bulls should be looking for this week’s low to be defended next week and for price to break back above that support turned resistance at the 2022 open around $3675. Get above that and I think $3950 is the last level of real resistance before another charge for new all-time highs.

Turning to ETH/BTC, nothing much has changed this week, as the pair remains above its parabolic curve and has bounced off of trendline resistance turned support. If we look at the daily, we can see that prior support turned resistance around 0.07715 is being reclaimed as support here, but confirmation of a reversal won’t occur for me until we break this trend of lower-highs by climbing back above 0.0827; above there, I think ETH makes another leg higher to 0.1 and beyond. If we fail to break higher here and lose the 200dMA, as mentioned last week, I think we see a full range retrace back towards the May lows, and so I would look for intraweek shorts post-breakdown below 0.069 into 0.055.












Price: $150.01 (0.00347 BTC)

Market Cap: $47.381bn

Thoughts: If we look firstly at SOL/USD, on the weekly we can see that price has retraced into support around $131 and bounced, but market structure is bearish following the lower high and subsequent breakdown last week. Whilst the pair holds above that $115 area, however, I don’t see too much cause for concern here, but if we get a weekly close below that I think a much deeper reversal is underway, with only minor support at $83 followed by major support all the way down at $62. Looking now at the daily, trendline resistance continues to print lower highs but we have now bounced off the 200dMA, which marked the bottom of the previous cycle, so I am now looking for daily market structure to turn bullish with higher-lows and higher-highs coming next week to even remotely be interested in any longs. If we see that, I’d be looking to long a breakout above trendline resistance and the mid-range and target the prior ATH at $222 followed by the current ATH at $265. If, however, trendline resistance holds, we could look to take shorts up in that $175 area and look for $131 to be taken out. Lose that and I think $115 is on the cards, which really is the last support of this entire range.

Turning to SOL/BTC, the pair continues to be range-bound below all-time highs, which is why I am not convinced that SOL/USD has topped quite yet for the foreseeable future, as we see support holding around the mid-range at 0.0035 and price jut bouncing between there and the ATH weekly close levels around 0.004. If we start to break down here on the daily, for example, and retest 0.0035 as resistance and break lower, then I would consider this a distribution range where I would then look to play SOL short towards those support clusters around 0.00275. Dropping into the daily, we can see that the past two and a half months have just been tight consolidation and signs of reversal here would be the breakout beyond 0.004 and subsequent higher-low. Really, there isn’t a great deal of clarity here for me to take any longs as I don’t think R/R would be all that great when we get near 0.004 anyway, so I’d rather wait and see if we break down rather than break out and then play this short.












Price: $94.35 (0.00217 BTC)

Market Cap: $23.055bn

Thoughts: Beginning with AVAX/USD, from the weekly we can see that the pair has been range-bound above prior all-time highs as support and below the all-time high at $153 since November, with price continuing to hold above the $73-81 range. That zone is critical here for me, as currently it looks like we’re seeing re-accumulation above historical highs, which is bullish, but if we start to lose that zone and close the weekly below it (with $64 being the last major support here), then all of a sudden it looks like distribution above prior highs and a failed breakout, which would look like a cyclical top. As such, the play here is to buy support with invalidation below $73 and sell resistance at $131. If we then see a weekly close above $132, that would be a new all-time high weekly close and I would expect new highs and price discovery to follow from there, so I would be looking at lower timeframe setups subsequently that offer that. Until then, the range is the play. For shorts, again you could look to sell a $131 retest with invalidation at $154 and then take profits at range support ~$82. If we then break down and close below range support, sell rallies all the way back towards $40.

Turning to AVAX/BTC, we can see that price is continuing to trend higher, albeit with the all-time high at 0.002575 having acting as resistance for several weeks now, but with higher-lows forming throughout this period. If we look at the daily, the swing-low at 0.0016 is clearly the critical level here, and whilst the pair continues to hold above it I would expect to see this consolidation break out higher, where any daily close through 0.002575 would open up a move towards the confluence of fib extensions at 0.00371, in my opinion, and I’d certainly be looking to be long AVAX for that range. Another area we could look to get long here is if we continue to retrace towards trendline support and that 0.0016 area, where invalidation would be extremely tight and therefore R/R would be highest for long positions. Nothing to be concerned about for AVAX holders as of yet, at least not against Bitcoin.











Price: $2.36 (5428 satoshis)

Market Cap: $17.234bn

Thoughts: Beginning with MATIC/USD, we can see from the weekly that the pair rallied into the all-time high at $2.92 and flicked through it before selling off and now returning to prior resistance turned support at the mid-range ~$1.81, which has acted as support this week. If the uptrend is to continue and MATIC is to continue in price discovery, I would expect this level to now hold as a higher-low, so longs would want their invalidation on a close below that $1.81 area. Looking at the daily, we are pressing up against minor resistance at $2.47 and once that level is cracked, only the all-time high remains, with the next major resistance at the 1.618 extension of the trend at $4.49. I am keen to be long MATIC if we get a pull-back next week to form a higher low above $1.87, where, as I say, I would have a very clean invalidation (which would be extended a little lower into a daily close below the 200dMA, if you want more room to breather).

Turning to MATIC/BTC, the picture is very much the same, with consolidation below all-time highs and with price now looking to form a higher low and push through that ATH weekly close at 5725 satoshis. Looking at the daily, we are pressing up very tightly against that level at present and I would expect to see a breakout through it next week, with the all-time high at 6600 satoshis then very likely to be tagged in the subsequent weeks. All in all, MATIC continues to look like one of the stronger bets among the large-caps at present. IF, however, we sweep that resistance and then start to break down and lose the mid-range at 4320, things begin to look a little less attractive.












Price: $0.35 (806 satoshis)

Market Cap: $4.042bn

Thoughts: Looking firstly at ONE/USD, we can see that price this week has broken through major resistance at $0.31 and is ready to close firmly through that level, which will be the all-time high weekly close. This is of course very bullish for Harmony and I would then be expecting trend continuation higher into the $0.49 area as the next resistance above the all-time high, with the 1.618 extension at $0.71 the following target. The daily shows a strong uptrend remaining intact since the 200dMA acted as the bottom and I don’t really want to be fading this structure, with $0.31 now being flipped as support. If you are on the sidelines, however, I don’t see anything of value here for getting involved whilst we are sitting right below all-time highs; instead, I’d look for setups post-breakout to play the range between $0.39 and $0.49 and then $0.71.

Turning to ONE/BTC, the pair is in price discovery without doubt, having broken through to new all-time highs last week and then continued higher this week, with prior highs as support at 640 satoshis, printing a new all-time high at 900. There is still plenty of room to the upside on weekly RSI before we enter the seriously overbought conditions that preceded the April 2021 correction and I would expect to see Harmony now break towards 1000 satoshis and beyond into the 2.618 extension at 1260. If you have been a spot holder for most of this run and have yet to really take profits, I would consider beginning to do so now, even though momentum is strong here, simply because price is up 75x low-to-high since the beginning of 2021 and we are already at a $4bn market cap – it would not be difficult to see the pair retrace 50% and still remain bullish longer-term, so securing some as price over-extends beyond 1000 satoshis makes perfect sense to me, even if only to re-enter with greater size on the next correction.












Price: $0.065 (151 satoshis)

Market Cap: $802.16mn

Thoughts: Beginning with ZIL/USD, the pair is currently sitting above May lows and the 200wMA at $0..05, with price contracting and flattening into this very important level. Having sold my entire ZIL position with an average price of $0.19, I am now beginning to get interested again in building a position down here. However, before that, I would like to see this range begin to flatten out some more as price continues to be accepted above $0.05 as critical range support; if we start to lose that level and close below it, I think we see a deeper retrace into the $0.029 area. Whilst $0.05 holds, it begins to look like re-accumulation if we can see the range start to flatten out here and assuming larger holders are adding to their positions. In that scenario, I’d look to build a new bag as close to support as possible and add to this position on a weekly close above $0.083, which would be a reversal of weekly market structure to bullish, then looking to play this cyclically for another leg higher towards at least $0.18, where the 61.8% retracement level and prior resistance sit.

Looking at ZIL/BTC, we can see that price is again sitting at support around 115 satoshis but continues to print lower-highs, so again I would like to see a new range like that of July 2019 to May 2020 start to form above that old range before getting involved. If we do see that, I’d like to be a buyer around 116-138 satoshis and would be looking to hold for a retest of the 200wMA and historical support turned resistance at 340 satoshis. To be honest, I think there are better opportunities and setups in the market but whilst we sit at critical levels on both pairs I will continue to keep an eye on this.











Price: $0.36 (835 satoshis)

Market Cap: $166.83mn

Thoughts: Looking firstly at UTK/USD, from the weekly we can see that trendline resistance, whilst continuing to put up a bit of a fight, is struggling here to hold the pair down and the main level I am looking at is prior support turned resistance at $0.37 into the 38.2% retracement at $0.51 – if UTK can start to break higher from here and close the weekly above that zone, I think the low at $0.25 will hold as a macro higher low and we will see another leg higher for the pair, similar to that of December 2020 into May 2021, with my target remaining that 2021 high at $1.11 followed by the all-time high  at $1.48, as I struggle to see how the next cycle higher for UTK won’t see price discovery. If we start to lose $0.25, however, I’d look at adding to my position down at $0.17 as the last line in the sand before total capitulation and bear market into $0.082 and lower, with my invalidation being a weekly close below the 200wMA at $0.14. I have high hopes for UTK long-term, however, given its fundamental quality, so I am happy to continue buying as long as we can hold above that critical range support.

Turning to UTK/BTC, this pair is largely a mess but has been consolidating between support at 560 and resistance at 1155 for months. There is very little to discuss whilst we continue to hold this range, as my opinion remains the same: weekly close above 1155 on volume and I think we see a period of serious outperformance, with 3000 satoshis my primary target; weekly close below 560 and I think we see 360 retested as support, at which point I will likely have exited my position already.







Price: $289.65 (0.0069 BTC)

Market Cap: $94.874mn

Thoughts: QUICK has not been trading for very long – only since July 2021, in fact – and so the dollar pair and BTC pair are virtually identical at this point. As such, I will be focusing on QUICK/USD, which if we look at the daily we can see suffered an enormous drawdown after the initial rally into an all-time high at $912, losing over 80% of its value until it formed an all-time low in mid-December at $204, from which it has reversed sharply with a high=volume buy-up just before the new year that took it from support at $236 into prior support turned resistance at $535. Price closed back below reclaimed resistance at $461 and has since returned to form a higher low above the $236 support, which is why I am now interested in getting involved, as invalidation is tight on a close below $236 and the upside is significant, with buyers having shown their interest already. As such I will be looking to build a position here and targeting new all-time highs above $914 over the coming months as long as that support holds at $236, else I think we take out the all-time low and potentially continue lower, so I would not want to be involved for that.

And that concludes this week’s Market Outlook.

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This Post Has 4 Comments

  1. Nick Visser

    Hi Nik,

    Could you do a review on ZAP? BTC pair looks like it is in re-accumulation while USD pair looks like falling of a cliff, curious about your thoughts.

    1. Nik

      Yep, will include it in next week’s post for you!

  2. J Q

    Thank you very much. Can you please cover Lyra Finance in your next post. It is a decentralized options trading protocol built on ethereum.

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