You are currently viewing Market Outlook #176

Market Outlook #176

Market Outlook #176 (22nd May 2022)

Hello, and welcome to the 176th instalment of my Market Outlook.

In this week’s post, I will be covering Bitcoin, Ethereum, Cardano, Monero, Fantom, Kadena, Lido DAO, Oasis Network and Oraichain.

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

Also, keep your eyes peeled for a subscriber-exclusive Coin Report on Merit Circle later this week.

Bitcoin:

Weekly:

btcusdweekly

Daily:

btcusddaily

Price: $30,421

Market Cap: $579.446bn

Thoughts: If we begin by looking at BTC/USD on the weekly, we can see that price – following a significant expansive range on historically high volume – had a week of consolidation, but within that managed to hold above the $29k support once again. Whilst we do have an inside week here, it was highly unlikely that anything but an inside week was going to form given just how large the prior weekly range was. As such, I am not so interested in inside week failure here as a setup. What is key here is that, for now, price appears to be holding above range support following the wick below it, which is promising for short-term trajectory. As long as we don’t start to trade below it early this week, I think it is now more probable that we see relief towards the 38.2% retracement at $34.1k, potentially squeezing into the 50% at $36.8k where there is significant resistance at prior support.

If we drop into the daily, we can see the demand at $29k more clearly with even the daily candles failing to close below range support. If we now break and close above last week’s high at $31.3k, I think we’ll see that push higher into the aforementioned range, and I would be looking for fresh shorts as close to $37k as possible provided the lower timeframes then break down from there and give us a setup. For longs, one could conceivably find a 1:1 trade on a dip back into $31.3k following a close above it, with invalidation below $29k and a target of $34k. If we do fail to break higher and start to lose $29k, I think the wick gets filled in and price begins another leg lower towards $22k as major support.


Ethereum:

ETH/USD

Weekly:

ethusdweekly

Daily:

ethusddaily

ETH/BTC

Weekly:

ethbtcweekly

Daily:

ethbtcdaily

Price: $2067.23 (0.06759 BTC)

Market Cap: $249.916bn

Thoughts: Looking firstly at ETH/USD, on the weekly we can see consolidation, as expected, with price holding above prior resistance at $2037, around which price has opened this week. The structure and momentum here still look bearish on the higher timeframe, particularly with that quadruple bottom at $1700 still sitting pretty. As such, I view any relief as an opportunity to short, and if we look at the daily, I like that $2420 area of prior support as a possible lower high from which – if price was to break down – we could look for a swing short position into $1700 and below. Whilst we are effectively printing lower-highs into flat support, I don’t think this looks good for a longer-term reversal, so the bias remains bearish for now.

Turning to ETH/BTC, we are still sat on that trendline support from the May 2021 lows, but price closed below the mid-range once again last week. This coming week is important for the pair as we have the opportunity to either print a higher swing-low above the trendline or close below it, opening up the likelihood of a full retrace back to range support at 0.054. If we look at the daily, we are now consolidating tightly around the trendline and I would expect expansive price-action to be imminent. If we break and close above 0.069 on the daily, that might be an early indicator for a swing-low being in, from which we could expect another rally into 0.075, but I think the weekly close is paramount here. Close below the 0.064 level and I think it’s very clear where ETH (and likely the rest of the market) is heading.


Cardano:

ADA/USD

Weekly:

adausdweekly

Daily:

adausddaily

ADA/BTC

Weekly:

adabtcweekly

Daily:

adabtcdaily

Price: $0.55 (1802 satoshis)

Market Cap: $18.591bn

Thoughts: Beginning with ADA/USD, we finally fell into the area I have had marked out for months now, with price wicking below the 200wMA a couple of weeks ago into the 1.618 extension of the downtrend, right at prior resistance turned support ~$0.42. Price then rallied back above the 200wMA and closed above it, with last week seeing consolidating above the MA also. I think it is likely we see some relief from here, given the extent of the sell-off and price holding above key levels, and if we look at the daily we can see that prior support at $0.74 is a likely area for resistance to be found to the upside. We also have trendline resistance capping the pair since the all-time high, so if we get anywhere near that and the 200dMA over the coming weeks, I will be looking for swing short entries. For long entries, I would still want to see a longer period of consolidation at or around a historical level before being convinced of any cyclical bottom being in. I think the likelihood of a v-reversal to all-time highs off this capitulation is very slim but famous last words…

Turning to ADA/BTC, again we have finally come into that key zone at the 2020 high and 200wMA between 1500-1600 satoshis, which is where I would expect some relief to be found given how significant the zone has been historically. And again, whilst the pair is making lower highs and capped by that trendline, I think bounces remain shorting opportunities. If we see price flatten out here as opposed to just bounce higher into the trendline and begin to consolidate at the 200wMA, that would look far more attractive as a potential bottom. Failing that, I would want to see 2500 satoshis reclaimed and weekly structure turned bullish before expecting any long-term reversal to follow.


Monero:

XMR/USD

Weekly:

xmrusdweekly

Daily:

xmrusddaily

XMR/BTC

Weekly:

xmrbtcweekly

Daily:

xmrbtcdaily

Price: $194.01 (0.00633 BTC)

Market Cap: $3.519bn

Thoughts: Beginning with XMR/USD, we can see that price sold off below the 200wMA and support cluster at $134 during capitulation but bounced and closed above trendline resistance now turned support and reclaimed support at $172, which is promising. Last week wicked below that level but again closed above it and rallied into the weekly close at $187. This does look far more attractive than other large-caps at present, as we effectively now have a range between $134 as support at $251 as resistance, with price having wicked both above and below those levels. If we can now hold above $172, I think it is likely we see Monero make another attempt at range resistance at $251, with any weekly close above that looking like a momentum shift to the upside, where we can then likely expect a push towards all-time highs. Looking at the daily, we have broken above short-term trendline resistance but are now pushing right into resistance at the 200dMA and prior support – getting above this and holding it as support would give me more confidence in a run at $251, but if I was long into this, I would likely be looking to hedge around here to be honest. That said, I think a pull-back into $173 – if it happens – is a nice opportunity for a long with clear invalidation at ~$150.

Turning to XMR/BTC, we can see that price did manage to hold prior resistance as support following the first rejection post-trendline-break, which is very promising, with last week seeing that become a higher-low and leading to another close above that trendline on good volume. This now looks like the beginning of a new trend to me and whilst we see the pair holding above that 0.0055 area, I do think it is likely we see further upside into 0.0084 as resistance.


Fantom:

FTM/USD

Weekly:

ftmusdweekly

Daily:

ftmusddaily

FTM/BTC

Weekly:

ftmbtcweekly

Daily:

ftmbtcdaily

Price: $0.50 (1644 satoshis)

Market Cap: $1.278bn

Thoughts: If we look firstly at FTM/USD, we can see that price bounced off historical support at $0.24 and closed above $0.29 a couple of weeks ago, then consolidating above that level last week but trading below reclaimed resistance at $0.57. That said, clearly the previous accumulation range continues to provide demand for Fantom and I would expect the pair to continue to find relief (as long as BTC plays ball), with the $0.57 to $0.67 zone looking like primary resistance, as well as the trendline if price can squeeze that high. Nonetheless, structure and momentum on the higher timeframes are still bearish and I would view any bounce as more likely to form a lower high, and as long as the pair holds below $0.91 I think we see another push lower follow. Again, if we look at the previous correction and subsequent rally, capitulation was followed by multi-week consolidation within a range, so if we are to see a sustained rally, that’s what I’m looking for. If price just bounces off that support as it has done and continues higher, it looks more like a high probability short setup.

Turning to FTM/BTC, following the bounce off 900 satoshis, price is now retesting prior all-time highs as reclaimed resistance around 1750-1880 satoshis, which is a critical zone, as we also have trendline line resistance right in this area. If the pair can get a weekly close above this huge cluster of resistance levels and hold above it as support, that would be very impressive indeed and I would expect another 30% bounce towards 2600 satoshis to retest it as resistance. If, however, price fails at 1880, I think we see the pair fall towards that historical pivot at 500 satoshis, which is where I would be looking for a longer-term range to form if we are close to a cyclical bottom.


Kadena:

KDA/USD

Weekly:

Daily:

kdausddaily

KDA/BTC

Weekly:

kdabtcweekly

Daily:

kdabtcdaily

Price: $2.62 (8564 satoshis)

Market Cap: $484.216mn

Thoughts: Beginning with KDA/USD, we can see from the weekly that price has sold off into prior range resistance turned support at $1.82, then bouncing and closing above $2.48. This held above (albeit log) trendline support but price remains capped by trendline resistance. Looking at this structurally, we have lower-highs and lower-lows but are finally into an area of historical support. If we are to bottom out here, I would expect a tight consolidation range to now form above $1.82, much like the ranges that preceded the previous two bull cycles. If we look at the daily, price has drawn down 95% from the all-time high, but the bounce off support is currently being capped by prior support turned resistance at $3.50. If we are bottoming out, I would expect to see price bleed lower back towards $1.82 and then flatten out and re-accumulate. If instead we see price bounce again from here towards $4.45 – prior support and trendline resistance – that would look more like a lower-high before another leg lower to me.

Turning to KDA/BTC, trendline resistance has capped price tightly from the all-time high and continues to do so, so a weekly close above that would be the first strong indication of a bottom being in. However, if it continues to cap price, we won’t see much beyond that 11k level traded into before another move lower back towards 5000 satoshis, where price initially bounced. What I would like to see for a cyclical bottom is price to return to range resistance between 2200-3000 satoshis and form a long-term re-accumulation range around there, but I may not be so lucky and price may instead now consolidate above 5k. Either way, we want to see consolidation, not just sharp relief, as it is the long-term consolidation that allows for euphoric expansion. If we glance at the daily, we can see that the 360dMA is acting as resistance here, providing confluence at that 11.4k satoshi level. If we do see price break above it, I wouldn’t chase it, personally, as I don’t see any high R setups in that scenario as of yet.


Lido DAO:

LDO/USD

Daily:

ldousddaily

LDO/BTC

Daily:

ldobtcdaily

Price: $1.32 (4311 satoshis)

Market Cap: $416.636mn

Thoughts: As Lido has only been trading for a little over a year, both pairs look identical and thus I will focus on the dollar pair’s price-action here.

If we look at LDO/USD, we can see that price put in an all-time low at $0.50 in March 2021 and then rallied into an August all-time high at $7.22, then beginning a bear cycle which has led to $5.44 continuing to act as resistance on successive attempts and price then breaking lower, now just about holding above major support at $1.32. This level has held the pair up since May last year and below it there is now support all the way back into $0.76, but really all the way back into the $0.50-0.60 zone as major support. As such, If we start to close below here and break down, I will be looking to be a buyer down at those levels for a longer-term position. If instead we see a wick below $1.32 and then a reclaim and a new range form, I’ll be a buyer around here. Either way, over the coming weeks I am keen to be a buyer of LDO if the right conditions are present.


Oasis Network:

ROSE/USD

Weekly:

roseusdweekly

Daily:

roseusddaily

ROSE/BTC

Weekly:

rosebtcweekly

Daily:

rosebtcdaily

Price: $0.072 (234 satoshis)

Market Cap: $360.837mn

Thoughts: Beginning with ROSE/USD, we can see from the weekly that price has finally returned towards the accumulation range that preceded the previous rally into all-time highs, with price wicking into $0.05 two weeks ago but then holding above prior resistance at $0.08 for the close. Last week saw price close below that level at $0.068, and what I am looking for now is for a similar flat pattern of consolidation to form below last week’s high at $0.088 if we have put in a bottom, where I would then look to scale into a position next month. If however we are not yet at the bottom for ROSE, I would expect to see a lower-high form, potentially as high as $0.12, leading to another leg lower over the coming weeks towards the all-time low  at $0.03. I am keen to be a buyer of ROSE at some point, but I do want to see some sort of range form first. This position – when I do enter it – will likely be held for more than 12 months.

Looking at ROSE/BTC, the picture is quite similar, where we have now traded into that previous accumulation range, but are yet to retest key support between 150-170 satoshis, which would make for a more ideal entry if price has another leg lower in it and that historical zone acts once again as a support base. If that 150 level fails, however, and price closes the weekly below it, I would expect to see the all-time low taken out at 104 and then would be looking for an immediate reclaim and consolidation above it to enter a new position or wait for bearish price discovery below it to come to a halt. Given the extent of both the rallies and the drawdowns we have seen, I do not expect this to be a quick recovery – I am planning for it to take many weeks before the dust settles and we have formed long-term bottoms here, and one of the key signals for me is that flat range in which volatility has disappeared and thus so has retail interest.


Oraichain:

ORAI/USD

Weekly:

oraiusdweekly

Daily:

oraiusddaily

ORAI/BTC

Weekly:

oraibtcweekly

Daily:

oraibtcdaily

Price: $3.75 (12,260 satoshis)

Market Cap: $7.663mn

Thoughts: As ORAI is a subscriber request, I’d like to preface this by mentioning that I am unaware of its fundamentals, but one thing I do know is that only ~10% of the maximum supply is currently in circulation, meaning there may be various significant unlocks that those trading ORAI should be aware of.

If we look at ORAI/USD, we can see that price has drawn down 97% from the all-time high at $106 into an all-time low of ~$2.97, with price having spent almost a year range-bound above $3.33 as support and below $8.57 as resistance, having broken above that a couple of times but failing to move much beyond it, with resistance holding between $12.40 and $16.12 on each attempt. This is quite a large range as ranges go, but the fact that price is now trading right at those all-time lows above which it continues to hold opens up a high R setup. Entries around this level have a clear invalidation on a weekly close below the all-time low. If that low does fall and price breaks down below it, I would look to exit any position and wait for bearish price discovery to play out. If large holders are also buying here, that is a bonus, and I would again urge caution based on the float that there may be unlocks/emissions that we cannot yet see on the chart. If you are aware of those and find them favourable, this setup seems a no-brainer.

Looking at ORAI/BTC, the picture is very much the same, except with the near-year-long range occurring below the prior all-time low at 23k satoshis, now acting as resistance, with range support holding as the all-time low around 10.6k satoshis since June 2021. Again, the setup is very clearly defined here if we are looking at price alone, with a weekly close below 10.6k opening up the likelihood of bearish price discovery and thus that would be my invalidation on any entries here. I will be doing some more research on this myself as I do like this setup but as I say I have no real idea about its fundamentals, in particular the unlocks or emission schedule.

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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