Market Outlook #183 (18th July 2022)
Hello, and welcome to the 183rd instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, BNB, Solana, Polkadot, Litecoin, Decentraland, Aave and Fantom.
As ever, if you have any requests for next Monday’s Outlook, do let me know.
Bitcoin:
Weekly:
Daily:
Price: $22,043
Market Cap: $421.811bn
Thoughts: If we begin by looking at BTC/USD, we can see from the weekly that price bounced off support last week at $18.9k, running the prior weekly low marginally and bouncing into the weekly close at $20,791. Since, price has bounced hard this morning, at present rallying up through resistance at $21,870, whilst remaining below the 200wMA. Whilst this is a good show of strength and may well finally bring that relief rally towards untested prior support at $25.4k, for now we are still under significant resistance. If we wick above the 200wMA and then break back below and close the weekly below $21,870 once again, this would look like a failed breakout and we remain range-bound, with price likely to return to support at $19k. However, if we can get a weekly close up above $22k on good volume, I think we have ourselves a successful breakout of the range and I’d be looking to play longs towards $25.4k as a first target, followed potentially by $28k if we can get up through that former level.
Turning to the daily, we can see that momentum is finally picking up as we push on through $21.9k and I am considering three scenarios here for the next couple of weeks: firstly, there is the possibility of a swing-failure of the range highs and thus an immediate break back lower and return to the mid-range around prior cycle highs, where we could wait for the close back below $21.9k and look to short it as reclaimed resistance; secondly, we close cleanly above $22k and we run towards $25.4k, rejecting and returning to the range; or thirdly, that $25.4k level gets reclaimed as support and we run into prior range support at $28.7k to retest it as resistance, and that is where I would look to open swing-shorts for the coming months if we get it. For now, there are some promising signs for relief going into August.
Ethereum:
ETH/USD
Weekly:
Daily:
ETH/BTC
Weekly:
Daily:
Price: $1,453 (0.0654 BTC)
Market Cap: $177.488bn
Thoughts: Looking firstly at ETH/USD, we can see from the weekly that price is leading the charge, having rallied off support at $992 last week to break above the 200wMA and close back above resistance at $1255, closing the week up near $1338. Since, price has continued higher, rallying into the prior cycle highs at $1416 and now continuing beyond them. If we see price continue to hold above $1416 early this week, I think the next target is on track at $1700 – the original breakdown level that remains untested, which I would expect to cap the rally on a first attempt. Dropping into the daily, we can see that the $1255 resistance was closed firmly through last week as ETH picked up momentum and I am now looking for a daily close above $1416 to play the range towards $1700. If, however, we close today back below $1416, resistance has held and I would be looking to buy a dip back into $1255 to retest the breakout zone as support, then play that back into $1416 for another attempt. If we do get up near $1700, the plan is simply to look for signs of exhaustion and a reversion to bearish market structure and then open swing shorts.
Turning to ETH/BTC, we can see that the May lows held and price reclaimed the range in style, rallying off range support all the way into the weekly close, taking out minor support turned resistance at 0.064 and continuing to the mid-range at 0.068. This is where we have to pay attention, as there is significant overhead resistance whilst the Dollar pair is contesting its own historical level; if we start to see the mid-range act as resistance once again and price begin to break down on the lower timeframes, we may see a dip back towards range support to see if the pair can form a higher-low – as of now, weekly structure remains bearish as we approach resistance, and weekly RSI is still pointing at a downtrend, so let’s not get too carried away. If price can climb and close back above the mid-range and paint a trendline breakout, things look a little different and we can start to look at the top of the range to be retested up near 0.082. If we drop into the daily briefly, we can see that the mid-range has confluence with the 200dMA and 360dMA, hence significant overhead resistance – this is where I would be looking to hedge long ETH exposure as opposed to opening exposure.
BNB:
BNB/USD
Weekly:
Daily:
BNB/BTC
Weekly:
Daily:
Price: $261.61 (0.01178 BTC)
Market Cap: $42.715bn
Thoughts: Beginning with BNB/USD, we can see from the weekly that price has bounced off range support at $210, consolidated for a couple of weeks and now is seeing some relief, with price now pushing into prior support turned resistance around $254. There is nothing yet that points towards a longer-term reversal, but if price is able to reclaim $254 as support, I think we squeeze back into that trendline that has capped price all year, around the prior support turned resistance at $317. Looking at the daily, that sort of squeeze would also likely align with a 200dMA retest as resistance, where if we saw momentum exhaustion and price beginning to break down, we could look for shorts back towards $210. For the long side, a daily close above $254 turns structure firmly bullish as daily RSI is indicating a shift in momentum, and we could look to buy a dip back into $254 early this week to play it into $317.
Looking now at BNB/BTC, unlike most BTC pairs, BNB is looking on the verge of an all-time high breakout, but in practical terms it is simply sitting right up near range resistance at the all-time high of 0.0124. Again, much like ETH/BTC, right at historical resistance is not where you want to be looking to get significant long exposure, but if we do see a close above the all-time high, as wild as it is to say we are in price discovery for the pair. If however we wick above the range highs and close back below them, that is likely it for the BNB/BTC rally and I would expect a return towards the mid-range where support has been forming around 0.0096. The resilience of BNB has been impressive and no doubt highlights the confidence the market has in CZ and Binance as market leaders, so if we do print a range high fake-out and then breakdown and the broader market turns lower once again, then BNB is a spot position I will be taking over the coming months.
Solana:
SOL/USD
Weekly:
Daily:
SOL/BTC
Weekly:
Daily:
Price: $42.22 (0.0019 BTC)
Market Cap: $14.585bn
Thoughts: Looking firstly at SOL/USD, we can see from the weekly that price bounced above prior range support at $26, then consolidated around a higher-low at $35.60 and is now turning higher once again, with the next major resistance up near that $54 to $62 range. Nothing has changed drastically on the weekly timeframe as of yet but if we look at the daily, we can see the structure more clearly, with daily RSI pointing towards a momentum shift and price having found solid support above $31, with daily structure now turning bullish as price breaks above trendline resistance. If we close today above $43, I think that the squeeze will continue into $53.60, and I would be looking for signs of exhaustion above $54 along with a reversion to bearish structure on the daily before looking for shorts again. If we look at the previous consolidation, there are many similarities, culminating in the pair retesting the 200dMA as resistance and then puking the entire rally back into fresh lows. If we see something similar here going into August, we may get a retest of the prior support at $75 before price reverses. That isn’t to say that we will go for fresh lows from there, but I certainly see a return to range support around $26-30 if we are printing a cyclical bottom; if we aren’t, the next level below would be $18.90.
Turning to SOL/BTC, price bounced off prior resistance turned support at 0.00111 and then rallied into support turned resistance at 0.002, below which it is currently consolidating. Close back above that level and I think we squeeze another 15% into 0.00235 as prior support, which would lend itself to the Dollar pair pushing up into that resistance zone marked out. If price is unable to get back above 0.002 here and begins to break down on the daily below support at 0.00161, market structure is bearish once again and we will likely return to 0.00137 to retest that reclaimed support level, which is a nice area for a higher-low to form if the bottom is in at 0.00111. On the daily we can also see that the 200dMA and 360dMA are right around that 0.00235 level for added confluence.
Polkadot:
DOT/USD
Weekly:
Daily:
DOT/BTC
Weekly:
Daily:
Price: $7.50 (33,830 satoshis)
Market Cap: $7.406bn
Thoughts: Beginning with DOT/USD, we can see from the weekly that price has printed a three drive bottom formation into that prior resistance turned support level at $6.90 and is now turning higher, although structure and momentum are not yet pointing to bullishness – nonetheless, this is a nice pattern for some relief, particularly in the context of wider market relief. If we do see price push up from here this week, prior support at $8.60 is a key level as it has capped price as resistance since June; reclaim that and weekly structure turns bullish and then we have some real confluence for sustained relief, with key levels above that at $10.30-$11.20, followed by $13.10-$14.07. Looking at the daily, we can see that there is bullish divergence on those three drives with RSI now indicating a shift in momentum as price is hitting trendline resistance; break above this resistance and close above $7.60 today and I think that $8.60 retest follows swiftly. I will be looking for longs in that scenario with a first target of $8.60, followed by $10.30.
Turning to DOT/BTC, we can see on the weekly that price has found support around 27k satoshis, bounced higher and reclaimed prior resistance a support around 33k satoshis and is now consolidating above it, with weekly structure still bearish below 40.5k; if that level is reclaimed, I think we see another 25-30% of relief towards the 52k satoshi area. Looking at the daily, we do have some nice structure here with the low being rang at 26.9k before price rallied and turned structure bullish, with 31.7k currently acting as a higher-low; lose that and the bullish scenario looks invalidated to me as we have reclaimed key support and then immediately lose it and broken down. If we can continue to bounce from here we can see just how much confluence there is for resistance in that 40.5k to 44k satoshi range, where any signs of exhaustion with a breakdown in price on the lower timeframes sets up a nice swing short back into support at 27k satoshis. If that range gets cleared, however, we have clear skies into 52k satoshis, where the 360dMA also sits.
Litecoin:
LTC/USD
Weekly:
Daily:
LTC/BTC
Weekly:
Daily:
Price: $58.56 (0.002623 BTC)
Market Cap: $4.142bn
Thoughts: Looking firstly at LTC/USD, we can see from the weekly that price found support around $41.70, then bouncing and reclaiming $51.86 and now pushing towards $60.34, which remains a lower-high and thus weekly structure is still bearish. Close the weekly above that level and we have a higher-high after the high-low and we at least have another 15% in it from there with reclaimed resistance sitting at $69. Above that, there is minor resistance at $85 but the next major level is of course the 200wMA and prior support cluster around $96-100, which would be the primary target if that $69 level doesn’t cap price. Looking at the daily, momentum is turning bullish but the structure is quite unclean and I’d only really want to be long this above $69 to be honest, looking for the range play back into the 200dMA and 200wMA confluence at $96. Below $69, I don’t think the risk rewards is favourable for longs as we have LTC/BTC also sitting right at historical resistance.
So, turning to LTC/BTC, price broke below historical support at 0.003 at the beginning of the year and then puked lower into an all-time low at 0.00172 a few weeks ago, bouncing hard off that level but finding resistance below 0.0029, below which it is currently consolidating. Whilst this consolidating is promising for a breakout and reclaim of that historical level, we are still just sitting below resistance and I would not want to have significant long exposure here, as this could easily wick into 0.0029 to take out the prior weekly highs, then reject and retrace back towards support around 0.002 to form a higher-low. If we wait for a 0.003 reclaim, there is 20% of upside into the next major level and invalidation is clear (don’t close back below 0.0029). So, I am sitting on my hands with LTC at present and waiting for the market to decide which path it wants to take, and if we briefly look at the daily we have the 200dMA currently capping price and the 360dMA right ahead at that 0.003 level, reinforcing my lack of desire to be long exposed here. Let’s see how the next week or two unfolds. If we break down below 0.00237 I think there is a high probability short for another 15% of downside.
Decentraland:
MANA/USD
Weekly:
Daily:
MANA/BTC
Weekly:
Daily:
Price: $0.89 (4017 satoshis)
Market Cap: $1.657bn
Thoughts: If we begin by looking at MANA/USD, we can see from the weekly that price bounced off the 200wMA around $0.60 and has since been consolidating above $0.72 in tight weekly ranges, opening up the likelihood of expansion to either side in the near future. If we see price break and close below $0.72, it is likely the expansion is to follow to the downside and the 200wMA is getting blown out, with the next major support down at $0.39. If, however, MANA runs with the rest of the market and can get a weekly close above $1.14, there is significant upside to play for longs into $1.69 as the next major level of resistance. However, dropping into the daily we do have a lot of overhead resistance in that $1.14 to $1.25 area, with trendline resistance from the all-time high also potentially capping price again. Momentum is also not pointing towards anything yet but continued chop. Ideally, what I’d want to see here for the long side is another week of chop to follow and then price to break through trendline resistance and $1.14 and close above them both, with longs then becoming favourable towards that reclaimed resistance at $1.69.
Turning to MANA/BTC, we can see that price has marginally turned structure bullish on the weekly, following the higher low at 2900 satoshis and then subsequently rally into prior support turned resistance at 5070 satoshis. Now, bulls want to see another higher-low form during this pull-back, with the range between 3460 and 4010 satoshis looking ideal for that formation. If we do see a higher low form in that range, I think we break higher once again and take out resistance at 5070 satoshis, with 5830 the key resistance above it. What bulls do not want to see (and what would confirm to me another leg lower into that 200wMA and historical resistance around 1970 satoshis) is a retracement back into 2900, erasing this entire rally off the higher-low. Dropping into the daily, we can see that the 360dMA is currently acting as resistance, with trendline resistance and the 200dMA just overhead at 5070, cementing how critical a reclaim of that level would be for sustained relief for MANA.
Aave:
AAVE/USD
Weekly:
Daily:
AAVE/BTC
Weekly:
Daily:
Price: $95.92 (0.004317 BTC)
Market Cap: $1.334bn
Thoughts: Looking firstly at AAVE/USD, we can see from the weekly that price bounced off prior all-time highs turned support at $49 off a 93% drawdown, rallying now back towards the 200wMA and prior support turned resistance at $113, which is the level currently keeping structure bearish. If we can reclaim that level, weekly structure starts to look bullish and the next major level above is at $167, where trendline resistance from the all-time high may also be contested and where we could look to play that 40-50% range long and then hedge into $167 and potentially reverse towards short positioning if the setup presents itself up there. Only above that trendline resistance can we start talking about new cycles etc. but I really do not think we have consolidated anywhere near long enough for that to play out; rather, if we do get a nice rally into $167, i think that caps price and we return to consolidate around $50-60 if that is to be the long-term bottom. For now though, we continue to have weekly bearish structure below the 200wMA and there is a possibility that $113 caps price and we just erase the rally back towards $62 and continue chop city. Looking briefly at the daily, we can also see that the 360dMA is just above trendline resistance, lending confluence to that area making a potential top for this current relief, if we are able to get above $113. If we wick above $113 and break back below it and daily structure turns bearish, I will be looking for setups to short back into $62.
Turning to AAVE/BTC, we do have bullish divergence on the three drives lower into historical resistance turned support at 0.00285 and the 200wMA, which is really promising for bulls, and we have now turned market structure bullish following last week’s close at a higher high, with price now in no man’s land with the next major resistance up at 0.0055. I do expect we continue to squeeze into that level, which would align with that $113 area of the Dollar pair, and the reaction there will be critical; wick above and break back below and I think the relief is likely done and we return towards the 200wMA to potentially continue forming a cyclical bottom; or break and close above it and we see another 40% of upside into 0.00797. One thing to be mindful of here is that we are also pressing up against the 360dMA here as resistance just below that key 0.0055 area, so I wouldn’t be rushing into longs right now nor front-running shorts – patience.
Fantom:
FTM/USD
Weekly:
Daily:
FTM/BTC
Weekly:
Daily:
Price: $0.287 (1290 satoshis)
Market Cap: $729.283mn
Thoughts: Beginning with FTM/USD, on the weekly we can see that the pair has been consolidating right around reclaimed support at $0.24, within the previous accumulation range, with price currently capped by prior support at $0.335. This is beginning to look like a nice bottom formation for some relief over the coming weeks, and I’d be keen to get involved if we can reclaim that $0.335 area, looking to then play the range back towards that lower-high just shy of $0.56. If we look at the daily, we can see we swept support at $0.24 and are now rallying off the sweep, which is what bulls want to see, but structure is still bearish whilst momentum is picking up; close the daily above $0.29 today and I think we are going to see that $0.335 breakout follow, with a good 50-60% of upside from there likely.
Turning to FTM/BTC, we are at present contesting the trendline resistance from the all-time high, having found support around 820 satoshis and now sitting in no man’s land below major resistance at 1600. To be honest, it is the BTC pair that makes me uneasy about getting long Fantom because there is no real structure here to play off, and the trendline breakout is looking less like a breakout and more like consolidation through it due to the passage of time (i.e. no real impetus). If we do start to break higher, we have significant structure resistance between 1575 and 1880 satoshis, the top end of which I would expect to cap any relief, and so if we see that 1800 area tapped whilst the dollar pair comes into $0.56, any signs of exhaustion of momentum and I’ll be looking to build a swing-short. Ultimately, I still expect to see the BTC pair return either to support at 890 satoshis to retest it and really begin consolidation for a cyclical bottom or to break through it into the major support cluster around 500 satoshis, where I would be keen to buy.
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.
