Market Outlook #163 (21st February 2022)
Hello, and welcome to the 163rd instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, BNB, Solana, Polkadot, Decentraland, NEO, Oasis Network and Tribe.
Bitcoin:
Weekly:
Daily:
Price: $38,954
Market Cap: $738.705bn
Thoughts: If we begin by looking at BTC/USD on the weekly timeframe, we can see that, as anticipated in last week’s Outlook, the rejection at yearly open from the prior week led to continuation lower, with price wicking back towards the $45k resistance zone and selling off, ultimately closing the week back below reclaimed resistance at $42k into weekly lows at $38.4k. The momentum here has not changed, as I mentioned last week. That is what we are looking for before we can discuss trend shifts. At present, the momentum remains to the downside, despite the albeit laboured breakout above the trendline, particularly in the context of headline risks from the geopolitical situation at present. Looking at this, we are now coming into the area that bulls would want to hold as a higher low: that $36.8-$37.4k region below could provide that support if we are indeed forming a structural shift. However, I remain leaning bearish, particularly given the momentum of selling last week that led to the immediate loss of that important $42k level.
If we drop into the daily, we can see that the short-term trendline support from the $33k low has been broken, as has daily market structure on the breakdown below $42k. We are now driving lower into the area of demand that preceded the trendline breakout, so if you are short, this would be a good area to start to cover. This week, I am particularly interested in shorts back at $42k if we can get the bounce into that level early this week (i.e. today or tomorrow). I would then be looking to cover those shorts around $37k, then looking to re-open on the lower timeframes if we start to close below this area of demand, then looking for $33k to be taken out. If, however, we don’t bounce early this week and instead start to form that support structure around $37k, and then reverse market structure back to bullish (higher-low -> higher-high), I would then look for intraweek longs for that retest of $42k off of support, but I don’t want to be holding longs any further than that. Bias remains bearish until we see both momentum and structure begin to shift in favour of bulls and I just don’t see that yet.
Ethereum:
ETH/USD
Weekly:
Daily:
ETH/BTC
Weekly:
Daily:
Price: $2,723.98 (0.06992 BTC)
Market Cap: $324.855bn
Thoughts: Looking firstly at ETH/USD, we can see on the weekly that the pair followed BTC lower, having rejected off trendline resistance the previous week and failed at prior support turned resistance ~$3000. Since, the pair has closed back below the mid-range at $2850 and again I would expect momentum to continue to take the pair lower, where any push back towards the mid-range or into the trendline would be viewed as an opportunity to short, looking firstly for that $2425 area, followed by $2160, and finally $1750 that the low gives way. If we see support found above $2425, then I’d want to see a mid-range reclaim and trendline breakout before looking for longs back into the yearly open. Dropping into the daily, I have marked out what I would want to see to take that short, where we leave last week’s low intact before rallying into that $2850-2900 area, then looking to cover around $2425.
Turning to ETH/BTC, we can see that the pair continues to consolidate around the mid-range but with weaker bounces off it each week, suggesting that we are likely to move lower from here and see the mid-range act as resistance. In that scenario, I would expect to see the pair return to the 0.059 area to see if range support can continue to print higher-lows – if that level fails, I think 0.0536 will be retested. This scenario is obviously invalidated if the cluster of overhead resistance above 0.075 gets cleared and flipped as support, in which case I would expect outperformance of ETH, at least back into range resistance around 0.083.
BNB:
BNB/USD
Weekly:
Daily:
BNB/BTC
Weekly:
Daily:
Price: $387.10 (0.009918 BTC)
Market Cap: $63.917bn
Thoughts: Beginning with BNB/USD, we can see from the weekly that the pair continues to be capped by trendline resistance, and following last week’s wick into the mid-range at $457, price rejected and moved lower again, closing at weekly lows ~$381. I am still holding my BNB shorts from a couple of weeks ago and am now expecting the support around $340 to be retested, where I would look to cover and then reopen shorts if that level is lost for a retest of $254. Looking at the daily, there is no bullish scenario for me here until we get back above $450, at which point my shorts would be invalidated anyway and market structure would have turned bullish, thus I’d be looking for a bounce back towards $550.
Turning to BNB/BTC, the pair has just closed below the mid-range after a few weeks of testing it as support, but last week saw a reclaim of that 0.00967 area. Whether this is a sign of a bottom forming here I am not yet sure, as we have immediate overhead resistance at 0.01017. Start to close back above there and we would be looking at a slightly different picture, with a swing-low having formed above the mid-range and price having reclaimed resistance as support. Until then, I am expecting further downside from here, where if last week’s low gives way I think we see a 15-20% drop back into major support around 0.0077. On the daily, we are sitting right at the confluence of the 200dMA and 360dMA, so any loss of this area would confirm for me that we are headed towards the bottom of the range.
Solana:
SOL/USD
Weekly:
Daily:
SOL/BTC
Weekly:
Daily:
Price: $94.72 (0.002427 BTC)
Market Cap: $30.1bn
Thoughts: Looking firstly at SOL/USD, on the weekly we see that price broke below that range support at $114 and has since been consolidating between it as new resistance and support at prior resistance ~$85.50. This could well be a distributive range below the previous range, or could be the opposite – a re-accumulation zone prior to a longer-term reversal. Whilst I am leaning towards the former in the context of market-wide conditions, we don’t actually know until we see either a weekly close above or below this range. If we see SOL bounce higher off range support here and reclaim $114, I would be looking for more relief and play it back towards $130. If we close below $85, I think we see $62, and I would be looking for intraweek short setups within that range. Looking at the daily, we can see that the trajectory I marked out a couple of weeks ago is playing out pretty accurately thus far and we could look for high reward shorts at $104 if that bounce comes, with invalidation on a close back above $106 and looking for $85. A bullish scenario would be for price to move lower here and wick below $85 but then we see demand step in a reclaim range support, at which point I would start considering longs back into $114.
Turning to SOL/BTC, whilst the range support at 0.00234 was holding for a couple of weeks, the pair lost the level recently, closing firmly below it and then only marginally reclaiming it last week during an inside week on very low volume. Now, if this week can build on that fractional reclaim from last week and push firmly back inside the range, we may have seen a deviation and thus can expect SOL outperformance back towards resistance at 0.003, in my opinion. However, if we lose 0.00234 again this week and break below last weeks low at 0.00219, I think we see capitulation follow in SOL, as the next level of support is down at 0.0018 but the next major support is even lower at 0.00137; there really is not a great deal holding the pair up here. We do see bullish divergence on the daily timeframe, on both RSI and AO momentum, suggesting that we could see some sort of bounce this week, but if we bounce early in the week and thus the Dollar pair retests that $104 area, I would take that short in expectation that selling momentum continues to take the pair lower later into the weekly close.
Polkadot:
DOT/USD
Weekly:
Daily:
DOT/BTC
Weekly:
Daily:
Price: $17.53 (44,730 satoshis)
Market Cap: $17.21bn
Thoughts: Beginning with DOT/USD, we can see from the weekly that pair continues to be capped by trendline resistance as it has pushed below mid-range at $26 down towards the bottom of the range, with price currently finding support around $16.40 but making lower-highs. This is not too dissimilar from the price-action that preceded the previous leg lower, with support holding around $23.22 before eventually giving way after successive lower-highs. If we see $16 give way here, I would be looking for intraweek short setups on the lower timeframes back into major support at $13, which is the final support above the bottom of the range at $10.30. Alternatively, if we get a bounce here into the trendline, as seen on the daily, I’d also look to short there as the third tap, much like the previous consolidation. No longs here unless we reclaim $20.
Turning to DOT/BTC, we can see from the weekly that price recently broke back below historical resistance at 60k satoshis, leading to support at 52k satoshis being flipped as resistance also, confirming weekly bearish structure. We then saw consolidation below that 52k level with 47.5k acting as support, but two weeks ago that level also failed and price has since moved lower into prior support at 44k satoshis. We are now approaching major support levels between 33.2k and 40.5k satoshis: I would expect that zone to provide some demand if we move lower from here. Looking at the daily, there is nothing much to add here – we have clean bearish structure with price flipping support as resistance on each leg down, with price now consolidating around 43k. If we pop up from here into prior support at 47.1k, I would look at the Dollar pair to see that aligns with any short setups for another leg down.
Decentraland:
MANA/USD
Weekly:
Daily:
MANA/BTC
Weekly:
Daily:
Price: $2.89 (7367 satoshis)
Market Cap: $5.267bn
Thoughts: Beginning with MANA/USD, unlike much of the rest of the large-cap market, we see a strong uptrend still in play here, albeit with structure beginning to turn a little more bearish. We saw price pop into $4.65 several months ago, leading to a breakout beyond that high to the all-time high at $6.10, and then a subsequent breakdown back below the level. Since, MANA has sold off with the rest of the market, closing below $2.19 and turning weekly structure bearish, with the wick coming into prior resistance at $1.64 now acting as support. Since, the pair has been consolidating above this support base but not managing to really push any higher. Given where we sit – above historical resistance acting as support but with weekly structure bearish – I would not be looking at any positions here on MANA. However, close back inside $1.64 and I would be keen to short back into $1.13 as a first target. If, however, we see a rally back through $4.65, I think we get another leg up and I’d be looking at longs towards $7.56. Turning to the daily, we are sitting above the 200dMA, which also acted as support on that push lower into historical resistance turned support, and given how that 360dMA / 200dMA range acted as re-accumulation in the previous correction, this gives confluence to the bearish scenario should $1.64 give way, where I would look at that as a likely trend shift and shorts would become favourable for the foreseeable future.
Looking at MANA/BTC, on the weekly we can see similar structure, with price finding resistance at 8060 satoshis, breaking above it to form the all-time high at 10.4k and then subsequently closing back below, with 8060 having acted as resistance for a couple of months since, but with the pair consolidating tightly below it. Support at 5135 satoshis is a higher-low on this pair, so if we do now break out above 8064 (a weekly close above it would be ideal), then I think the trend is very much still in play. If we drop into the daily, continuation through resistance would give me a target for longs of ~12k satoshis. If, however, 8.1k continues to act as resistance and price sells off, breaking below 5160, I would expect to see the range between 3460 and 4000 satoshis retested as prior resistance turned support.
NEO:
NEO/USD
Weekly:
Daily:
NEO/BTC
Weekly:
Daily:
Price: $23.47 (60,100 satoshis)
Market Cap: $1.635bn
Thoughts: Looking at NEO/USD, from the weekly we can see that despite two pushes through historical support turned resistance at $24.65 and the 200wMA, price failed to close above that zone on both attempts, and I continue to lean bearish here, holding my swing shorts with invalidation above $30. The daily provides more clarity here, where we see a sweep of $26 and subsequent breakdown, leading to bearish market structure on that lower-low, with price now sitting right at support ~$22.80. If we bounce from here into $25.88, that is a high R short opportunity, with invalidation above $27.60; however, I would be looking to compound my swing short with greater confirmation, which for me would be a breakdown back below $21.50, at which point I would add to shorts and lower my SL to ~$27.50, looking for $16.91 as a first target, followed by $13.71.
Looking at NEO/BTC, we do see a breakout through trendline resistance, but we also see price rallying straight into prior support turned resistance at 64.3k satoshis, not unlike recent PA in BTC/USD. If this is a bullish reversal, you would expect to see price now continue higher and close above last week’s high, reclaiming 64.3k as support. If this is a false breakout, I would expect sellers to step in here and run this back below 56k this week, then taking out the 48.8k lows to target the 2020 low at 40.4k satoshis. To be honest, right now this could go either way but I am holding my short position against the Dollar as nothing has yet been invalidated and I will add if I see those sellers step in. If we look at the daily, we have reclaimed prior resistance at 59.6k as support for now, which is the first sign of momentum shift on this timeframe, so if that level now acts as support and we do start to push above 68.7k satoshis, I may look to exit my shorts early.
Oasis Network:
ROSE/USD
Weekly:
Daily:
ROSE/BTC
Weekly:
Daily:
Price: $0.26 (663 satoshis)
Market Cap: $897.961mn
Thoughts: Beginning with ROSE/USD, we can see on the weekly that price reclaimed resistance at $0.382 after selling off from the failed breakout to all-time highs, with price now selling off lower and closing last week below historical resistance at $0.256, which bulls would want to see now hold as support. If this level also gets flipped as resistance, I think we’ll see another 20-25% sell-off back into the $0.185-$0.20 region, which should see stronger demand. Looking at the daily, structure is clearly bearish with trendline resistance continue to cap the upside, and with price currently sitting on the 200dMA; any bounce from here into that $0.28 region will likely be short-lived and I would want to see capitulation back towards the support cluster around the 360dMA before getting involved as a buyer, a little like the previous correction, as I have marked out. If we start to see a range form above $0.185 and daily structure turn bearish, I would look to be a buyer, as ROSE is still in a longer-term uptrend. A reclaim of $0.28 following a new range at lower prices would be the opportunity to compound, but that may yet be a few weeks away if it occurs.
Turning to ROSE/BTC, again the weekly trend is still bullish but structure is starting to turn more bearish as price breaks back below historical resistance, with last week rejecting at 718 satoshis. If this level continues to cap price, there really isn’t any support until back near 418 satoshis, which would be a significant retracement and potentially take the Dollar pair through that support cluster I just mentioned. Again, not willing to get involved in this no man’s land, but if we do move lower, I will re-assess.
Tribe:
TRIBE/USD
Daily:
TRIBE/BTC
Daily:
Price: $0.63 (1648 satoshis)
Market Cap: $286.745mn
Thoughts: As this was a reader suggestion, I am unsure on the fundamentals of TRIBE, but the chart is approaching levels on both pairs that begin to look attractive as a speculator.
Looking firstly at TRIBE/USD, we can see that following a bull cycle into historical support turned resistance at $1.25, price has retraced back towards the accumulation range that preceded the rally, with the all-time low at $0.56 acting as range support and price currently sitting at prior range resistance ~$0.64. If I was keen to get involved here, I would want to see this range continue to hold and price consolidate either within it or form a new range here just above it, with a wick below the all-time low acting as a spring for the next cycle. I would want to see large holders also getting involved in this range to confirm my bullish bias. Invalidation would be for price to close below the all-time low and then break lower, as we would then see TRIBE in bearish price discovery with this range having been invalidated. For the BTC pair, the scenario is not too dissimilar, but as we have range support at 1300 satoshis and a deviation below into the all-time low at 1150, I would like to see 1300 hold as range support, looking to buy as close to it as possible and exiting on a daily close below 1150.
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.
