Market Outlook #185 (31st July 2022)
Hello, and welcome to the 185th instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, BNB, Dogecoin, Polkadot, Uniswap, Elrond and Sushiswap.
As ever, if you have any requests for next Monday’s Outlook, do let me know.
Bitcoin:
Weekly:
Daily:
Price: $23,800
Market Cap: $454.805bn
Thoughts: If we begin by looking at BTC/USD on the weekly timeframe, we can see that price is closing the week below last week’s high at $24,306, despite wicking above it into $24,666. That being said, we saw a good push off of prior resistance turned support at $21,800 earlier in the week and the pair is about to close its first week above the 200wMA in the past six weeks. From here, I think as long as the 200wMA at $22,800 now acts as support, but more broadly we hold above $21,790, I think we are likely to push higher into that $25,375 level to retest it as untested prior support turned resistance. If next week sees us take out this week’s high into that ~$25k area and then break down and close back below the 200wMA, it begins to look weak to me and I would expect the top for the rally to be in. For now, we are still in a bear market and rallies should be met with caution. If, however, we can climb above that level and hold above it, I think a retest of prior range support at ~$29k is on the cards.
Dropping into the daily, we continue to print an uptrend in momentum but price is starting to signal exhaustion, with the SFP of the $24306 level and subsequent retest from below as reclaimed resistance. Hold below that level early this week and I think we sell off to retest the $21.8k support level, and I will be looking to play that range short if I can get a setup tomorrow or on Tuesday. This can be invalidated by a daily close above $24,300, which would trap the SFP shorts and I would expect continuation higher from there. No short-term expectation of drastically lower prices until we close back below $21,800.
Ethereum:
ETH/USD
Weekly:
Daily:
ETH/BTC
Weekly:
Daily:
Price: $1722 (0.07237 BTC)
Market Cap: $209.722bn
Thoughts: Looking at ETH/USD on the weekly timeframe, we can see that price has finally retested the major breakdown level around $1728 and about to close the weekly right around that level, struggling on this first attempt to hold above it. If this is a bear market rally and the long-term trend continues to point lower, we should really see a reaction from here next week and see the pair turn lower. If we do break lower from here, I am looking at the prior cycle highs at $1415 as a first target, where if that fails to hold as support the pair is cooked and likely to make another larger leg lower back towards that $800 area, where there is plenty of confluence for support. If a higher-low can form above $1415, we having the makings of a bottom and I would then be looking for signs on the lower timeframes of a reversion to bullish market structure from there to look for longs back into $1700 and higher. If we don’t turn lower this week, the next resistance level is at $2040, with trendline resistance and prior support above that around $2310-2425.
Turning to ETH/BTC, we are about to close marginally above trendline resistance from the 2021 highs, but volume has been declining on every push higher for the past several weeks, which is not what you want to see as a bull. If we drop into the daily, there is also some degree of divergence on the daily RSI as price struggles around reclaimed resistance at 0.072 but holds above the 200dMA and 360dMA. Break back below 0.069 from here and I think this is a fake-out and we are likely to have topped out for this rally, with a return to 0.0594 to retest that level as support likely. If, however, we can consolidate above that level, I think we continue to squeeze higher and take out resistance at 0.076.
BNB:
BNB/USD
Weekly:
Daily:
BNB/BTC
Weekly:
Daily:
Price: $289.19 (0.01215 BTC)
Market Cap: $46.663bn
Thoughts: Beginning with BNB/USD, we can see from the weekly that price has rallied off support at $210 and has now reclaimed support at $254, but weekly structure is still bearish, momentum indicators have not shifted as of yet and price is still below key trendline resistance and prior support at $317. If that $317 level holds firm as resistance and price begins to break down from a trendline retest, that’s something I would be interested in shorting back towards $210. Until we get a weekly close above that confluence of resistance, this just looks like a short squeeze to me. Dropping into the daily, we also have confluence of the 200dMA around that trendline, so I would expect to see a strong reaction from there.
Turning to BNB/BTC, we can see that the pair – against all odds really – has made a new all-time high this week above 0.0124 but is struggling to hold above it and is closing the week back below that level, around last week’s open. If next week sees the pair break higher once again and close firmly above the level, you don’t need me to tell you that the pair is in price discovery, and we could look for the next level of resistance at the 1.618 extension at 0.016. Until then, this is looking like a SFP of an all-time high as the Dollar pair comes into resistance, so if we break lower next week and close below 0.0112, I am returning to a short bias for BNB.
Dogecoin:
DOGE/USD
Weekly:
Daily:
DOGE/BTC
Weekly:
Daily:
Price: $0.07 (297 satoshis)
Market Cap: $9.36bn
Thoughts: Looking firstly at DOGE/USD, on the weekly we can see that price is hovering between the 360wMA as support and the 200wMA as resistance at present, with weekly RSI at all-time lows but no shift in momentum present of yet and weekly market structure still bearish. That being said, this is precisely the sort of range I would want to see DOGE begin to flatten out and consolidate within for a prolonged period, and if we do see consolidation over the coming weeks between $0.04 and $0.08, that is likely to be a range I want to start being a buyer within. Invalidation would be very clear, as a weekly close below the 360wMA opens up another 50% of possible downside, with the next major support down at $0.02. Looking briefly at the daily, we could start to turn more bullish on the pair above both the 200dMA and trendline resistance.
Turning to DOGE/BTC, we can see that price squeezed higher off the 230 satoshi level and rallied into prior support turned resistance at 368, which continues to hold the pair. That said, we do appear to have reclaimed the prior cycle highs at 205 satoshis as support, but only if we can now form a higher-low around this level – if instead we break back below the level, I would expect the whole rally to be retraced and price to make its way towards the 200wMA at 187 satoshis, which lines up with prior resistance and would be an area of interest for longs. Looking at the daily, a break and close above prior support turned resistance at 368 would be the first sign of a major shift in momentum.
Polkadot:
DOT/USD
Weekly:
Daily:
DOT/BTC
Weekly:
Daily:
Price: $9.07 (38,120 satoshis)
Market Cap: $8.957bn
Thoughts: If we look firstly at DOT/USD, we can see the pair bouncing off resistance turned support at $6.86, now coming into and above prior support at $8.57, which would be a key area to reclaim. Hold above that level and we start to look more bullish following the consolidation above support and I would expect to see a further squeeze into the $11 area. Ultimately though, there isn’t much by the way of weekly structure to pin anything on, as we need to close above that $11 area before a weekly structure shift even occurs. Dropping into the daily for more clarity, we can see bullish divergence playing out with the most recent rally, and I would now be looking for one of two things: rejection early in the week to lead to a breakdown back below $8.57 and retest as resistance, leading to lower price and a return to the support base; or and sustained move above that level and the $11 level, where I would then look to play the range back into the 200dMA at $14-15. I don’t want to be a buyer around here because we are coming right into that cluster of prior support turned resistance.
Turning to DOT/BTC, we can see that price has made a higher-low at 31.7k satoshis above the double bottom at 27k satoshis, so it is looking likely at the momentum that at least the BTC pair has bottomed. If however we reject once again at the first resistance level at 40.5k, thus asserting bearish structure, I think we take out this higher-low and move back into 27k satoshis for a retest, where consolidation above that level would really start to cement a bottom for the pair. If we do hold above 31.7k satoshi and can close back above 40.5k, weekly structure turns bullish and it starts to become buy the dip mode, despite how the broader market looks. Looking at the daily, again if we are to have a reaction this is likely to be the spot, given the 200dMA looming overhead – big week ahead indeed.
Uniswap:
UNI/USD
Weekly:
Daily:
UNI/BTC
Weekly:
Daily:
Price: $8.81 (36,970 satoshis)
Market Cap: $6.558bn
Thoughts: If we begin by looking at UNI/USD, the pair has been in a strong uptrend for the past few weeks, rallying off the double bottom at $3.50 into a weekly high this week of ~$9.80, but now closing the week right around reclaimed resistance at $8.80. We remain below trendline resistance from the all-time high but weekly momentum has definitely shift in favour of the bulls unlike many projects, which gives me more confidence that the bottom is likely in on this pair following the 93% drawdown from the high. As such, if we do mark out a top in the coming weeks, I would be looking for a return to $4.80 to retest that level as a higher low and major support. If we start to consolidate above there, I am going to be adding to my spot bag. Invalidation for me would then be a close below $2.90. If we look at the daily, we can see that price has marginally close above the 200dM and prior support turned resistance but is starting to turn lower from here, but even daily momentum is not showing exhaustion as of yet. If the broader market shits the bed, I do think this strength won’t matter all too much and we’ll see a break back below support at $7.40 that sets up the move back into $4.80.
Turning to UNI/BTC, we have seen price close above long-term trendline resistance and reclaim prior resistance as support at 26.3k satoshis, continuing to rally off that level into resistance at the 38.2% resistance at 41k satoshis. This is where I would expect a local top to begin to form and if now close below the 34.8k level this coming week, I think we see a return towards the support level at 21,4k satoshis to retest that bottom formation, which is where I would want to see further consolidation and an accumulation range form. Following such a drastic drawdown, it is unlikely that even this early strength can be sustained and we would want to see that protracted, low volatility environment play out before a new cycle can begin.
Elrond:
EGLD/USD
Weekly:
Daily:
EGLD/BTC
Weekly:
Daily:
Price: $59.44 (0.00249 BTC)
Market Cap: $1.363bn
Thoughts: Beginning with EGLD/USD, we can see from the weekly that the pair has been in consolidation for 7 weeks above prior support at $50 but below support turned resistance at $65, having drawn down 94% from the all-time high, but remaining capped by trendline resistance with no real shift in structure. This low volatility environment is promising, but anyone looking to scale in here should have a very tight invalidation at $50, as any weekly close below that level opens up a swing-low retest at $36.70, where if that level fails we have the next major level at $23. Looking at the daily, we can see that support continues to be found right around that $50 level and this range is exactly what we want to be seeing, but I do worry that if the wider market pukes, this range means very little and we will likely begin another leg lower, so if you are looking to scale in, it is wise to either dollar-cost in very slowly over the coming months with a much wider invalidation or look to cut very quickly and re-allocate in a new range lower, which is my preferred approach for large-caps.
Turning to EGLD/BTC, we can see that despite the rally a few weeks ago price rejected at reclaimed resistance at 0.00293 and has since been consolidating below resistance, but the pair is looking weak here, which, if we turn to the daily, we can see has manifested in a daily structure break and reversion to weakness in the market. From here, if the 22.6k satoshi support fails, I would expect to see another 20-25% of downside back into major support at 19k satoshis. Until we break cleanly above 30k satoshis, this looks more bearish to me.
Sushiswap:
SUSHI/USD
Weekly:
Daily:
SUSHI/BTC
Weekly:
Daily:
Price: $1.52 (6377 satoshis)
Market Cap: $192.44mn
Thoughts: Looking at SUSHI/USD, on the weekly we can see that the pair has been consolidating around support at $1 for about 11 weeks, with resistance coming in around $1.95, and weekly structure and momentum still bearish. If we look at the daily for more clarity, we can see that the pair is broadly moving how I had anticipated a few weeks ago, with this $1-2 range capping price either side and price now consolidating. As long as we remain between those level, we can start to become more confident in the likelihood of a bottom being in and can begin to scale in with invalidation on a close below $0.89, as a move below that level opens up an all-time low retest. If we break beyond $1.95, we do have prior support and the 200dMA at $2.70, so that would be the next area I would expect to cap price, but structure would have shifted in favour of the bulls at that point and we could more aggressively scale in if position size has not yet been filled, depending on your approach.
Turning to SUSHI/BTC, we continue to consolidate above the all-time low and have now reclaimed support at 5920 satoshis for a couple of weeks but remain capped by trendline resistance and prior support at 7130 satoshis. Break above the trendline and hold above 7130 satoshis and I think that bottom formation becomes quite clear. Looking at the daily, the 200dMA is also capping price at present, so a close above that presents an early indication of shifting momentum. If we continue to hold within this range below the 200dMA, I will indeed start looking at allocation in August.
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.
