Market Outlook #16 (16th December 2018)
Hello, and welcome to the sixteenth instalment of Market Outlook, and the final blog post for 2018. As of tomorrow, I will be taking the remainder of the year off. That being said, I’ve got a lot of interesting material planned for the New Year, including more Coin Report and Market Outlook posts, but also some one-off ideas, like a lengthy discussion of ‘risk’ and all that comes with it; an article on passive income in the cryptosphere and its numerous pitfalls; and a post detailing my thoughts on why the price paid is the most important part of any trade or investment, particularly in this space.
But, for today, I will be covering the past week’s price-action in Bitcoin, Monero and Ethereum, as well as taking a look at how beautifully Waves has played out. I hope you enjoy the read!
Market Cap: $57.645bn
Thoughts: In last week’s Market Outlook, I mentioned that a failure to breakout above the $3750 resistance would likely send price towards $3200. From the 4H chart, we can see that a double top formed at this resistance level, and price has since remained below the short-term trendline resistance, dumping below the local low from last week. Zooming out to the Weekly, we can see that price is in a precarious position, sitting just above a swing-low that has been untouched for over a year at ~$3000. There is a high likelihood that we, at least momentarily, sweep those lows before forming any significant reversal, especially considering the orderblock that lies below it. However, volume has been decreasing as new lows are made, implying that sell pressure is decreasing and that a bottom is likely nearby…
Price: $39.82 (0.01218 BTC)
Market Cap: $662.031mn (202,881 BTC)
Thoughts: Monero has reached an interesting spot against the Dollar this past week, finally dipping into the weekly bullish orderblock and trading below the equilibrium (50%) point of the range that formed back in summer 2017. When price last traded in this area, it was shortly followed by an injection of heavy volume and significant upwards momentum. Looking at XMR/BTC, the Weekly has broken below trendline support for the first time in two years, sweeping below the low that formed late in August, into a bullish orderblock. This breakdown from such a significant area of support is not great for bulls… but it could be price manipulation to coax retail holders into capitulation. We’ll see what the case is over the next week or two; if price can catch a bounce on high volume and break above the trendline resistance and back above the trendline support, this was likely a false breakout; if price fails to find support here, it is quite likely that we see 0.01 BTC broken.
Price: $86.64 (0.02655 BTC)
Market Cap: $8.995bn (2,757,251 BTC)
Thoughts: ETH/USD continues to experience decreasing volume alongside its decreasing prices, with peak sell pressure occuring weeks ago. The 4H chart shows a breakout above short-term trendline resistance, but the equal lows make me wary. I wouldn’t get too hopeful for a reversal until the Daily closes above $100. ETH/BTC, however, is in a great area for buyers, trading at an area of signficant prior resistance turned support. Price is still trading below trendline resistance, but a period of high volume during the dump to 0.0245 BTC indicates that this may have been the bottom against Bitcoin. Short-term support has formed at 0.0258 BTC, but it will take a higher time-frame close above 0.028 BTC before this could be confirmed as a bottom.
Price: $2.47 (75502 satoshis)
Market Cap: $246.898mn (75,502 BTC)
Thoughts: I first mentioned Waves in this Market Outlook series in the 10th instalment, when it formed a double bottom below 25k satoshis. Following this, I mentioned it a couple of weeks later, in the ‘Altcoin Special‘ post. Prices then bounced from the low-volume selloff, breaking out of the downtrend on high volume. In the 14th Market Outlook, prices were above 35k satoshis, and we have since seen a continuation of the reversal, with a steep increase over the past week. Waves is now trading above 75k satoshis, over 3x where it was in that first post, in the depths of a macro bear market. Opportunities are everywhere for further price-action such as this to follow. Selling any positions in Waves here is probably a wise idea, given the heavy resistance ahead.
That concludes this sixteenth Market Outlook. I hope you’ve found some value in it. See you in the New Year!
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