Market Outlook #167 (21st March 2022)
Hello, and welcome to the 167th instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, BNB, Solana, Dogecoin, Algorand, Axie Infinity, Synthetix and Immutable X.
As ever, if you have any requests for next Monday’s Outlook, do let me know.
Also, now that the subscriber poll has ended, I can confirm that there will be a subscriber-exclusive Coin Report published on Gelato later this week.
Market Cap: $783.911bn
Thoughts: If we begin by looking at BTC/USD, we can see from the weekly that price again found support above the $37.4k level last week, marking out the weekly low from which price rallied back into reclaimed resistance at $42.1k, where it failed to close above once again. In doing so, we have printed an inside week, with both the weekly high and weekly low trading inside the prior weekly range. As such, we have the possibility of inside week failure this week, where if we see either last week’s high traded above and price close back below $42060, or price take out $37365 and then close back above it, we are likely to then take out the other side of the range next week and can look for setups accordingly. However, for now we remain range-bound and I am now awaiting a clean break of either side to position aggressively, as I am not willing to take the scalps back towards either end anymore as these levels have been tested numerous times over recent weeks. If don’t see inside week failure but rather close beyond range resistance or range support, I would be looking to add spot in the first scenario and then look for pullbacks to get leveraged fills towards the yearly open and potentially beyond, or, in the case of a close below $37.3k, looking for shorts back into $34k and then $29k as a final target.
Turning to the daily, there is not a great deal to add here as we continue to chop around with no real momentum to either side on this timeframe, with every rally seeming to trade back into the origin. If we break and close beyond $42.1k early this week, I won’t be taking a long given the possibility of a fade into weekly close and thus formation of inside week failure. I would rather wait it out and see how the picture looks come Sunday. If we accept above $42.1k and start pushing up towards the yearly open, however, that would be an area to look for scalp shorts for me for an immediate pullback into the $42.1k area, where I would look to cover and re-assess next week. Obviously, if that latter scenario plays out later this week but price closes the week above $42.1k, I would look to close any filled shorts from up near $45k with the view that we have now broken out of the multi-week consolidation and are likely to continue moving higher.
Price: $2900.34 (0.0703 BTC)
Market Cap: $348.562bn
Thoughts: Looking firstly at ETH/USD, as mentioned last week we were beginning to see signs on the BTC pair of a potential momentum shift and these appear to be playing out following last week’s move, with the Dollar pair rallying above the prior weekly high and back above the mid-range, closing marginally above the trendline resistance on slightly higher volume. This is promising but bulls need to hold the ground here, as we are facing significant resistance and it would be easy to get slapped back down and back below mid-range. If the pair can hold this week above $2850 and begin to push above $3000, I would be much more confident in the likelihood of further relief for ETH, but would not be looking to get involved unless we saw a favourable pullback from that area to long into, the reason for this being the cluster of resistance levels just beyond the $3000 area. If we drop into the daily, we can see this resistance more clearly, as price again poked at the $3000 area last week but rejected, with the 360dMA also overhead. It has since pulled back towards the mid-range, where a higher low formation would lead to another test of $3k later this week, with any breakout and close beyond confirming a reversal for me, at least towards the yearly open area; as such, I would then look to long any wick back below $3k or any lower timeframe long setup (SFP / triple tap sort of thing) between the $2850-3000 area, looking for $3425 as a first target followed by $3675. If, however, bulls lose control once again, I would expect to see price lose the mid-range this week and move back below $2660.
Turning to ETH/BTC, the 0.064 level acted as support once again and price rallied into and marginally beyond the mid-range at 0.0688, closing at 0.0694. We are now pushing up again trendline resistance and so this is a critical area on both pairs. A show of strength here would take the pair beyond the trendline and a weekly close above 0.0733 would turn structure bullish. If we look at the daily, this lines up with a reclaim of the 200dMA, with daily structure having already turned bullish. If price rejected between here and 0.0733 and then broke down back below the mid-range, it would look like a bull trap to me, following which I would expect resumption of the downtrend back into 0.064 and likely below. Key levels here…
Price: $393.78 (0.00954 BTC)
Market Cap: $65.02bn
Thoughts: Beginning with BNB/USD, we can see from the weekly that despite last week’s rally off support, price has only rallied into that trendline that has capped price for months, but if it can find momentum this week we may have a breakout. That being said, it remains range-bound between $317 and $460, as it has been for this entire year, and until that mid-range acting as resistance at $460 is reclaimed, I don’t see much of interest here for BNB. Dropping into the daily, we can see the range more clearly, with the 360dMA and 200dMA acting as a zone of resistance, within which the mid-range currently sits. This adds confluence to the idea that a reclaim of $460 is the ultimate indicator of a longer term reversal. Flip that area and longs become favourable into $550. Until then, I am not really interested in longs, but would look for fresh shorts at $437 with invalidation above the 200dMA and again would look for shorts on a daily close below $357, as that would look like a break down and rejection from trendline resistance, with a target of $317, followed by $254 if that gave way.
Turning to BNB/BTC, the picture hasn’t really changed over the past few weeks as we can see, with prior resistance at 0.009 still acting as support but price primarily consolidating around the mid-range at 0.0096. If we close the weekly below 0.009, there is literally zero support back into 0.00774, so that is certainly a range I’ll be looking at playing if it becomes valid and the setups present themselves on the dollar pair, as previously discussed. Alternatively, if we look at the daily, we can see that the 360dMA is just about supporting price at present with the 200dMA now acting as resistance and the two converging at present. Break back above the mid-range and above 0.01017 and structure becomes bullish again, but given the immediate resistance beyond that, it’s really not very appealing for longs from a risk/reward perspective.
Price: $90.49 (0.002198 BTC)
Market Cap: $29.059bn
Thoughts: Beginning with SOL/USD, we can see from the weekly that price bounced off support last week and is pushing back above $90 at present, but the trend continues to point down, and as does weekly structure. Until we see that prior support turned resistance at $114 reclaimed, these continue to look like rallies to be sold to me, but given the range in between those levels, we could begin to look for longs back towards at least trendline resistance from here. If we look at the daily, we can see diminishing momentum on the recent pushes lower, which is favourable for longs, and price has now reclaimed prior resistance as support at $83. If we pullback into that area early this week, I’d be looking at longs with invalidation below $75 and targeting $104 as a first target and $114 as a second, purely based on that risk/reward and shift in lower timeframe momentum. Longer-term, this still looks bearish to me and I would be looking for that $54-62 zone to get tagged in Q2.
Turning to SOL/BTC, we remain below prior range support now acting as resistance at 0.00233, but if we start to push and close back above it after consolidating below it for weeks, it will possibly mark out a deviation and point to higher prices, if we see demand step in subsequently. Close the weekly back above there and I’d want to see a further push and price to hold a higher-low above that range support, at which point I think further relief towards 0.00274 is likely. Looking at the daily, we are consolidating on the 360dMA at present, again with diminishing momentum on recent moves lower, and above 0.00233 the next resistance is 20% higher, so there is a nice range to play there if we get it. If, however, price rejected a break back beyond 0.0023, I would then expect the next leg of the downtrend to begin, with the next area of support down at 0.0018.
Price: $0.121 (291 satoshis)
Market Cap: $15.991bn
Thoughts: Looking firstly at DOGE/USD, we can see from the weekly that price has been playing out a classical bear market following the all-time high, leading to the most recent sell-off into prior resistance turned support at $0.104. If there was a level to mark out an interim bottom, it is likely to be here, but I want to see strength before I get involved. If we can push off from here and close back above $0.154, I would be keen to get long on any pullback for a higher-low, and if we look at the daily, I think we’d see price go back towards $0.24 from there. However, we can also look at this key level from a seller’s perspective, where if price continues to print lower highs and breaks and closes below $0.10, there is no real support all the way back towards $0.04, with the 200wMA somewhere around $0.07 and the 360wMA just below $0.04. There is plenty of downside to come if this level gives way and I will be looking for setups to position for such a move if it comes.
Turning to DOGE/BTC, again we are sitting at a historical cycle high turned support at 295 satoshis, with AO showing diminishing momentum on this most recent push lower. If price can start to flatten out around here and, looking at the daily now, we see the bullish divergence begin to play out with higher prices from here, I’d look to rebuy 295 on a pullback. And just like the dollar pair, if price begins to lose this level, there is no real support for 35-40% lower back into 180 satoshis. I think there are trades to be taken either side here now that we’re at a critical level on both pairs so I’ll be monitoring DOGE more closely for the next week or two.
Price: $0.76 (1832 satoshis)
Market Cap: $5.004bn
Thoughts: Beginning with ALGO/USD, we can see from the weekly that the breakdown below trendline support a few weeks ago led to a retest as resistance and subsequent sell-off back into the Q2 2021 support zone around $0.67, where price is currently sitting. This is a higher R area to look for longs from, but I’d ideally want to see $0.67 swept and then price break beyond trendline resistance to get involved. Alternatively, if we do continue higher from here, I’d want to see a weekly close through reclaimed resistance at $0.92 and then buy a pullback to play the range all the way into $1.27, where the 360dMA also sits. We can see bullish divergence on the daily lending confluence to the idea that the pair is ready for some relief, but if we start to close below $0.67 and break lower, invalidating the divergence, I’d be looking for shorts on a retest from below targeting $0.53.
Turning to ALGO/BTC, again the pair is sitting at key support around 1800 satoshis, with historical support turned resistance overhead at 2050. Reclaim 2050 and I think we continue all the way back into prior support at 2644, but lose this level here and there is only the support zone between 1430-1560 holding the pair up (which would align with the ~$0.50 area) before capitulation back towards 1000 satoshis. If we look at the daily, we can see that the pair has begun to flatten out on this level and tighten the daily ranges, a pattern that precedes expansion. Again, there is bullish divergence here and I do think the expansion will be to the upside, so the long setups will become key to look out for, but if both pairs do close below these key levels, there is a clean range to play shorts within for ~20% of downside.
Price: $51.30 (0.00124 BTC)
Market Cap: $3.123bn
Thoughts: Beginning with AXS/USD, we have seen price bleed out from the all-time highs into the September 2021 lows at $45, with price consolidating marginally below that level for a few weeks before now break back above the level, indicating a potential deviation. There isn’t a great deal of clean structure here on the weekly, but we do see a pattern on lower highs into this level. If we turn to the daily, we see that price wicked below $45 into $42, then closed back above, retested as support and is now sitting above it. I would expect to see continuation higher from here back into the $66 area, as that is key support turned resistance, and if that level gets flipped we have structure shifts that would open up further upside into the $95-100 area, in my opinion. Conversely, much like DOGE, it is sitting at key support, and a close below $42 and I think we see another 30% of downside at the very least back into $30.
Turning to AXS/BTC, the picture is pretty much the same given the relatively short duration that Axie has traded for, but we are sitting at support ~0.00125 with further support below at 90k satoshis. It is beginning to flatten out around 120k satoshis and, if we drop into the daily, we can see that we are also sitting on the 360dMA, with the 200dMA sat at the next major resistance level ~0.0019. As such, it is possible we see a bounce back towards that area before any further downside, and I am considering getting involved here, with invalidation on a daily close below 0.0011, looking for 0.0015 as a first target and 0.00189 as a second target. Ultimately, this wouldn’t be a long-term position, as I don’t see any value in these prices for a 12-18 month position, but this is looking much more favourable for relief than over recent weeks.
Price: $5.18 (12,560 satoshis)
Market Cap: $595.241mn
Thoughts: Looking firstly at SNX/USD, we can see that price has retraced the bulk of the November 2020 to February 2021 rally, trading back into the $3.50 area, which acted as support a few weeks ago and has led to a rally last week back into support turned resistance at $5.50. If this is to be an interim bottom, we need to see the pattern of lower highs and lower lows broken, which would require a weekly close beyond $6.12. If we see that, I think we see further relief back towards reclaimed resistance at $8.25 and I would be keen to get involved on a pullback. Dropping into the daily, we can see bullish divergence across indicators and daily structure is now bullish, with a series of higher-highs and lows following the reclaim of $3.55. There are two ways to play this in my mind: the first is to position short here, expecting the downtrend to hold with invalidation above $6.12, looking for at least $4.67 to be retested, if with a second target at $3.55. However, I am uncomfortable with taking that short given the diminishing momentum on the pushes lower since December, especially above the historical support level. As such, I would prefer to wait for that clean break above $6.12, if it comes, and buy a pull-back into $5.50, adding at $4.67 if we drop that low.
Turning to SNX/BTC, we are sitting above a historical pivot at 9700 satoshis, with price having found resistance there in 2018 and then re-accumulated around that level in 2020. We have seen price lose the 200wMA recently and retest it twice as resistance, with the most recent sell-off from that area leading to a deviation below 9700 satoshis and an immediate buy-back on rising volume. This is a good indicator of demand off this level and if we were to see a pull-back into it, I would be looking for spot entries with a stop on a weekly close below 8700 and looking for the 200wMA retest as a first target.
Price: $2.27 (5507 satoshis)
Market Cap: $526.12mn
Thoughts: Immutable X has only been trading for a couple of months at this point and thus there is very little available price-history, with both pairs looking identical over this period. I will be focusing on the Dollar pair, as the structure is a little cleaner. If we look at IMX/USD, we can see that the pair has been in a downtrend since inception, printing an all-time high in January at $6.88 and subsequently bleeding lower over the past couple of months into an all-time low at the beginning of March at $1.10, front-running the psychological $1 level. From there, price has reclaimed prior support for the first time during this downtrend, consolidating between $1.44 and $1.84 and now breaking higher once again, contesting with prior support at $2.17 but with structure now firmly bullish. Whilst price remains above $1.84, I think we can expect higher prices, and with the next area of resistance up at $3.35 I think there is a high R long to be positioned for here. If it can close above $3.35, I think we are in the midst of IMX’s first bull cycle and I would expect the pair to break new all-time highs.
And that concludes this week’s Market Outlook.
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