Market Outlook #18

Market Outlook #18 (13th January 2019)

Welcome to the 18th Market Outlook. After a few weeks of breakout rallies, short-term reversals and general upwards momentum, this past week has found the market, as a whole, losing steam and dropping off. With that said, local lows across-the-board remain intact, as we shall see.

In today’s Market Outlook, I’ll take a look at the past week’s price-action in Bitcoin, Ethereum and Monero, followed by a quick glance at an opportunity in Cloakcoin.

Bitcoin:

Price: $3672

Market Cap: $64.188bn

Thoughts: So, in last week’s Market Outlook, I suggested we price may seek out the equal highs that were resting around $4100 on resolution of the ascending triangle that was forming; and we certainly cleared those out this past week. However, price then swiftly broke down, confirming the upside breakout as false, and has since dropped off towards a significant historical level at ~$3700. This level has been support, resistance and support again all within the past couple of months…

Convention would suggest that this level would be one where we would catch a bounce, but price has lingered and consolidated here. With the swing-low from December 28th still pretty much intact – and price hovering above a Daily and 4H Breaker – I’d be surprised if we didn’t drop further over the next few days, towards $3550, before finding a real direction. Given the sheer number of equal highs on the 4H and Daily charts, I’m inclined to believe that any dump from here will be swift and temporary, serving as the catalyst for further upside above and beyond $4400 over the coming weeks.

I’ve depicted two possible scenarios from here on the Daily chart (one bullish, one bearish); both see price trade under $3600 soon, but how price reacts around that Daily Breaker is what I believe will indicate the path going forward. A sustained loss of the $3500 level would likely see new lows; a bounce in the Breaker would likely see price trade above the double top at $4400 shortly after.


Ethereum:

ETH/BTC

Price: $125.97 (0.03433 BTC)

Market Cap: $13.144bn (3,582,297 BTC)

Thoughts: As anticipated last week, Ethereum’s recent rally lost its momentum and price has dropped off ~20% against BTC. However, the market structure clearly remains bullish on the higher time-frame charts. The Weekly depicts a strong break of bearish market structure, followed by a retracement (this past week) towards the breakout level. The Weekly Breaker is being respected, though I wouldn’t be surprised to see a small further drop towards 0.033 BTC; the close price of the Breaker.

The Daily chart shows a sweep of the swing-low at 0.0354 BTC into the Daily Breaker and Daily Bullish Orderblock. Key support lies at 0.0313 BTC, and this is a long opportunity if ever I saw one. Only a higher time-frame close below this support level would invalidate the current bullish market structure. I expect further upside before the end of the month.


Monero:

XMR/USD

XMR/BTC

Price: $45.30 (0.01234 BTC)

Market Cap: $756.413bn (206,066 BTC)

Thoughts: Monero continues to move slowly relative to Ethereum, and remains range-bound. The Adam & Eve bottom I expected to form has not, and the rally I expected to come for XMR this past week also has not. Major resistance against Bitcoin remains at 0.0136 BTC, and a Daily close below 0.012 BTC would indicate new lows incoming.

XMR/USD depicts a cleaner breakdown from the uptrend on high volume, and I would expect price to at least retest the trendline support as a level of resistance. This would see price trade around $52 before either dropping off to form new lows below $40 or reclaiming the ascending triangle and breaking above ~$57 resistance.


Cloakcoin:

CLOAK/BTC

Price: $1.11 (30251 satoshis)

Market Cap: $5.82mn (1,586 BTC)

Thoughts: Cloakcoin is a low-supply privacy coin that has been around almost as long as I have. I have traded it numerous times in the past, but it hasn’t looked buy-worthy since late 2017… until now. Price has dropped off from highs formed in April/May 2018 towards a significant historical area of resistance, now turned support. Further, the actual opening price of the Cloakcoin market on Bittrex (from June 2014) has formed the range resistance; a range which has been in play for 5 months. Short-term resistance is around 38000 satoshis, with range support at ~25000 satoshis. Upside potential from current prices is over 1000%. A Weekly close below 24000 satoshis would negate this range and thus the trade, but that gives ~20% of downside risk versus a great deal more upside…

That concludes this week’s Market Outlook. I hope you’ve enjoyed the read. Please feel free to leave to any comments and questions below!


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