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Market Outlook #179

Market Outlook #179 (13th June 2022)

Hello, and welcome to the 179th instalment of my Market Outlook.

In this week’s post, I will be covering Bitcoin, Ethereum, XRP, Solana, Cosmos, Elrond, Lido DAO, Ultra and Telos.

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

Bitcoin:

Weekly:

btcusdweekly

Daily:

btcusddaily

Price: $24,977

Market Cap: $471.437bn

Thoughts: If we begin by looking at BTC/USD on the weekly timeframe, we can see that the rally into $32.9k a couple of weeks ago marked out a lower-high as opposed to the beginning of a sustained move higher off the $29k support. That led to a retest of $31.1k early last week as resistance, where price rejected and moved lower, finally breaking down below range support at $29k and selling off into the weekly close at $26,500. This was the lowest weekly close since before 2021 and was a clear breakdown below that critical support level. Subsequently, this morning we have seen continued selling into and below the $25.3k low, where price is now looking to fill in that void between here and the 200wMA and perhaps as low as the prior cycle high at $19.8k. Structure and momentum on the weekly continue to point to lower here, but I will be looking to scale into spot from $22,500 lower into $20k and – if we are so lucky – below that too, as I now believe we are entering true capitulation for the market.

Turning to the daily, we can see that price had been consolidating for a couple of weeks tightly between $28.6k as hard support and $33k as prior support turned resistance, and as soon as the daily closed below that former level, we saw the capitulation begin and price fill in that wick into $25k rapidly, as was anticipated. If we now see price move lower into that $20-22.5k zone – where there is plenty of technical support – I would expect a bounce of sorts from that area back towards $25k to retest it as resistance, but ultimately I am expecting some consolidation to occur whenever bottom signals appear. That might be at $22k or at $14k for all we know at this moment, but for spot exposure I consider the 200wMA to be a good buying opportunity long-term. I would not look for leveraged exposure until we get those bottoming signals and then start to turn daily structure bullish again.


Ethereum:

ETH/USD

Weekly:

Daily:

ethusddaily

ETH/BTC

Weekly:

ethbtcweekly

Daily:

ethbtcdaily

Price: $1318 (0.05163 BTC)

Market Cap: $159.475bn

Thoughts: Beginning with ETH/USD, we can see from the weekly that price – at long last – capitulated below the equal lows at $1700, leading to last week’s sell-off all the way into the prior cycle highs at $1430 where price closed out the week with no wick. The lack of demand at that level is telling but if we look at BTC and the broader legacy market, there are no signs yet of a bottom so it is unsurprising that $1400 provided no support. We are now, however, coming towards the 200wMA at $1200, where, given the extent of the sell-off since the previous green weekly candle, we may well see some support found and some relief to retest the $1430 and perhaps the $1700 levels as prior support turned resistance. Again, I am looking to begin increasing spot exposure below $1200 incrementally. That said, if we close this week below $1400 also, there is a large illiquid range between here and the $830 level as the next major support below the 200wMA, so I believe that would be the magnet for price moving forward if we continue to break lower from here. And if we look at the daily, we can see this more clearly, with only minor support in between here and the $740-830 zone, where the 2021 open also lies. If price does reach that zone, that is where I will look to load up most heavily on spot. Again, until we see clear bottoming signals, no leveraged longs for me.

Turning to ETH/BTC, on the weekly we can see that price moved lower into that range support at 0.0054 and closed below it marginally, printing the lowest close since April 2021. Given that this range support has now given way, if we hold below it this week, I would expect to see price make its way towards 0.0462 as the next minor level of interest, but ultimately move back towards the 2020 highs and the 200wMA around 0.042. If we look at the daily, there is steep trendline resistance currently capping price and if that continues to hold, we’re looking at 0.0462 some time in early July.


XRP:

XRP/USD

Weekly:

xrpusdweekly

Daily:

xrpusddaily

XRP/BTC

Weekly:

xrpbtcweekly

Daily:

xrpbtcdaily

Price: $0.31 (1281 satoshis)

Market Cap: $15.424bn

Thoughts: Beginning with XRP/USD, from the weekly we can see that major support gave way around $0.50 a few weeks ago and since then price has bled lower, retesting the 2017 range high at $0.41 as resistance and selling off from there last week back towards minor resistance turned support at $0.33, which this morning is giving way. If we hold below $0.33 early this week, I think price continues to break lower, with major support around $0.24. Below that, the next level would be $0.175. If we drop into the daily, the momentum is clearly still pointing lower with no real conviction on any of the pushes higher during the consolidation of the past couple of weeks. If we close today below $0.33, I think that $0.24 level is coming swiftly. Ultimately, I would not be surprised to see XRP erase the entire rally of this cycle back into the $0.11-0.12 zone that marked out the cycle bottom in March 2020.

Turning to XRP/BTC, again we have closed below key weekly support levels at 1650 satoshis and now at 1380 satoshis, printing a lower-low following a lower-high, and there is effectively no support here back into 940 satoshis, which it self is minor support, with the next major support at the swing-low that preceded the last major rally at 730 satoshis. Looking at the daily, there is a huge gap to fill at least back into the 1000-satoshi area, so I would not expect a bottom formation any time before then, and would look at any rallies as selling opportunities until we reach those levels.


Solana:

SOL/USD

Weekly:

solusdweekly

Daily:

solusddaily

SOL/BTC

Weekly:

solbtcweekly

Daily:

solbtcdaily

Price: $27.75 (0.00111 BTC)

Market Cap: $9.492bn

Thoughts: If we look firstly at SOL/USD, on the weekly we can see the decimation that Solana has undergone over the past three months, with last week printing fresh lows below support at $35 and closing out at $30.60. We are still not quite into the minor support at $24.25, with major support below that at $19. I do expect SOL to find some demand as we come into that zone, given the extent of the sell-off since the previous lower-high back in late March. Trendline resistance is also capping price and pointing towards the bottom end of that support zone being tagged over the next few weeks. As we break below $24, I will look to start adding spot SOL exposure, looking to add more heavily at $19. However, if we close the weekly below $19, I will look to cut this exposure and either re-enter on a reclaim of that level or lower at $12. Either way, we are now beyond a 90% draw-down for Solana and given that I do expect it to survive for another cycle, I think we’re approaching decent value. That said, I don’t expect anything to begin cyclical reversals until the macro picture returns to accommodative monetary policy.

Turning to SOL/BTC, the picture is quite similar here, with price coming into minor resistance turned support last week at 0.00112. There is nothing much here to hold the pair up and I do expect to see another move lower this week into that 0.001 area. If that gives way, there is no support for another 30% drop into 72k satoshis, which is the prior range support and where I would expect demand to step in. Looking at the daily, the 0.001 level doesn’t look particularly supportive so we shall see what the reaction is in that area, but if the daily closes below it, there really is no support back into that 72k area so another leg of capitulation would likely follow swiftly, and it’s that capitulation that I want to be a more heavy spot buyer within. To reiterate, no leverage longs on any of these likely for a couple of months yet – bottoms take time to form.


Cosmos:

ATOM/USD

Weekly:

atomusdweekly

Daily:

atomusddaily

ATOM/BTC

Weekly:

atombtcweekly

Daily:

atombtcdaily

Price: $6.24 (25,013 satoshis)

Market Cap: $1.774bn

Thoughts: Beginning with ATOM/USD, we can see that price lost the prior range support zone between $7.77 and $9 last week, retesting $9 as resistance and closing out at $7.07. We are now coming into minor resistance turned support at $6.38 but there is not much indicating that this is going to hold, and I am looking at the next major level below at $4.58 as a magnet now. If that level does not hold, it is another 30% lower before the next level of support at $3.25. If we drop into the daily, we can see that a daily close below $6.38 here would open up that gap into $4.58, with no support in between those two levels. As we come into that area, I do expect some relief to be found even if it is not the ultimate bottom, as that was a range that preceded the Q1 2021 rally. We may see a bounce back into $6.50 to retest it as resistance before moving lower from there or simply begin to consolidate. Ideally, I would want to be a spot buyer closer to that $3.25 level but I am not sure we see it.

Turning to ATOM/BTC, the pair has close below support at 30.7k satoshis and traded into significant support between 25.6k and 26.9k, which – other than a fake-out below in January 2021 – has held the pair up since February 2020. That zone is now giving way early this week and we have no support between 25k and 17.8k satoshis as major historical support. If we close this week below 25k, I think that bottom level is getting tagged and that is where I would want to start looking at adding spot exposure for ATOM.


Elrond:

EGLD/USD

Weekly:

egldusdweekly

Daily:

egldusddaily

EGLD/BTC

Weekly:

egldbtcweekly

Daily:

egldbtcdaily

Price: $40.99 (0.00166 BTC)

Market Cap: $924.251mn

Thoughts: If we begin by looking at EGLD/USD, we can see that price closed below prior range support at $50 last week, and has now begun selling off into prior range resistance turned support at $33.20, currently holding above it around $40. I expect we see that $33 level traded this week and likely see price move below that into major resistance turned support at $23, where we may see the brutal sell-off abate for a while. If that level fails to hold, however, there is a lot more pain to come, with no major support level all the way back into $6.76 and nothing below that all the way back into $2.67. As such, that $23-$33 zone that is just below us is critical for EGLD – if you’re looking at spot exposure, buying as close to $23 and exiting on a close below that level makes sense to me, with re-entry on a reclaim or down at the $7 area.

Turning to EGLD/BTC, we just closed below major range support at 0.00198 and are now sitting in no man’s land with structure and momentum on the weekly pointing firmly lower. We have minor resistance below at 0.001337 that may provide some support, with another minor level 50% below that 73k satoshis. Ultimately, there is no major support level for this pair all the way back into 38k satoshis to be honest. As such, I would be much more patient with this one even with spot exposure. If we start to see BTC forming a bottom and then EGLD/BTC begin to reclaim 0.00198, that would be attractive for spot exposure. If not, see ya at 38k satoshis.


Ultra:

UOS/USD

Weekly:

uosusdweekly

Daily:

uosusddaily

UOS/BTC

Weekly:

uosbtcweekly

Daily:

uosbtcdaily

Price: $0.265 (1062 satoshis)

Market Cap: $80.015mn

Thoughts: Beginning with UOS/USD, we can see on the weekly that price is in the midst of its first major bear cycle following a near two-year bull market, now losing minor support at $0.30 as it moves towards major resistance turned support at $0.23. Whilst that level may well mark out a short-term bottom for the pair, I would be looking at the $0.063 to $0.078 zone as an area of interest to build a longer-term position in UOS. If I don’t get those prices, I would want to see price begin to flatten out around the $0.17-$0.24 area and larger holders buying within that range, with invalidation on a close below $0.17.

Turning to UOS/BTC, we are seeing a more classical altcoin cycle formation here, with price looking like the Panic stage of a market cycle, which means Anger and Depression is to come. Usually, we would expect to see BTC pairs start to flatten out and form tight accumulation ranges, and I’d either be looking for this to form at 840 satoshis, or more ideally back at the original range support around 390 satoshis, which would make for a more opportune long-term entry. Either way, this is now on my radar and I will be looking for signs of a bottom to begin buying into UOS over the next couple of months.


Lido DAO:

LDO/USD

Daily:

ldousd

LDO/BTC

Daily:

ldobtc

Price: $0.65 (2601 satoshis)

Market Cap: $203.785mn

Thoughts: If we begin by looking at LDO/USD, we can see that price lost major support now turned resistance at $1.28 and has since broken lower, moving below $0.77 today and now stretching towards the final support level at $0.59 above the all-time low at $0.50. I am going to begin buying LDO as we approach that all-time low but with a tight invalidation on a close and breakdown below that level, as we then enter bearish price discovery and I would prefer to wait out for a bottom to form. If we don’t break down below the $0.50 level but instead start to flatten out around it and form a new range, that would be a good sign for a bottom formation and I will be DCA’ing over the coming weeks in that scenario. Either way, we’re approaching pay attention time for LDO in my opinion.

Turning to LDO/BTC, the picture is largely the same except that we still have another 30-35% drop into the next major support level at 1900 satoshis, which I do expect to get tagged as we sit here with a huge gap to fill. As such, it may be that my USD pair expectations are too generous and we may have to capitulate below $0.50 before we can start to form a bottom. If we do come into that 1900 satoshi level and we’ve capitulated below $0.50 on the Dollar pair and both start to flatten out, that will be the most opportune entry for a longer-term position, in my opinion.


Telos:

TLOS/USD

Weekly:

tlosusdweekly

Daily:

tlosusddaily

TLOS/BTC

Weekly:

tlosbtcweekly

Daily:

tlosbtcdaily

Price: $0.20 (807 satoshis)

Market Cap: $54.048mn

Thoughts: Beginning with TLOS/USD, we can see on the weekly that price was range-bound between prior range resistance turned support at $0l.47 and now reclaimed resistance at $1.20 for months, breaking below that support a few weeks ago and closing into $0.37 as prior resistance. Price continued to bleed from there and remains in a no man’s land, sitting at $0.22 but with no support until $0.137 as prior resistance, with some support just below that at $0.10. As we come into that zone, I would want to see price begin to form a range and flatten out if that is to mark out a cyclical bottom – if I don’t see that and we close below $0.10, I don’t expect the minor support level at $0.067 to hold and I would be looking at $0.037 – prior range resistance for the previous accumulation range – as a place to look for entries.

Turning to TLOS/BTC, much like UOS we can see that panic stage of the bear cycle here as we come into historical support at 770 satoshis, which may be an area for some relief to occur for a lower-high to form. That said, we are nowhere near the depression stage of the cycle yet looking at this price-action and I would expect to see the bleeding soften and slow down as price break below 770 and approaches major support at 380 satoshis, where we may start to see the pair flatten out and begin to form a new accumulation range. That is what I am looking for before I enter a position in any of these midcaps or lowcaps.

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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