Market Outlook #189 (30th August 2022)
Hello, and welcome to the 189th instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, XRP, Dogecoin, Polkadot, Algorand, Synthetix and Harmony.
As ever, if you have any requests for next Monday’s Outlook, do let me know.
Bitcoin:
Weekly:
Daily:
Price: $20,420
Market Cap: $390.78bn
Thoughts: If we begin by looking at BTC/USD on the weekly, we can see that the prior weekly close back below the 200wMA led to another week of decline straight through what could have been considered support, closing the week out at $19550. We are now sitting right back around that previous cycle high and this is a key level to hold if BTC does not want to move for fresh lows below $17.5k. If we now close below $18.9k, I would expect that $17.5k low to be taken out before any reversal can form. However, if we can start to find support here above $19k, it is possible a higher-low begins to form, but it is unlikely we will be able to tell just yet.
Dropping into the daily for more clarity, we can see that both momentum and structure on this timeframe are not yet pointing to a bottom, with the most recent bounce off the prior cycle high at present looking like a retest of the breakdown level at $20,780. Even if the pair is able to get above that, structure is still bearish unless reclaimed resistance at $22k gets broken back above and price holds it as support. Below that level I am bearish short-term and I would expect a lower high to form that leads to the triple bottom around $18.8k being retested, where any breakdown and close below that level opens up further downside, firstly into $17.5k followed by $16.1k if we don’t swing-fail that first level. Taking shorts as close to $21.8k as possible makes sense to me with clear invalidation on a daily close above $22.4k. As many of you will have seen from my tweet a few weeks ago, I exited a lot of the spot I bought back in mid-June and I am now looking for reasons to re-enter. Those reasons would be either a breakdown and continuation below $17.5k, where I start to see a lot of value in the $14-16k range for the long term, or with a wick below $17.5k and immediate reclaim / consolidation above $19k and a reclaim of daily structure, thus confirming a higher-low. That’s what I’m seeing at the moment for BTC.
Ethereum:
ETH/USD
Weekly:
Daily:
ETH/BTC
Weekly:
Daily:
Price: $1588.70 (0.0778 BTC)
Market Cap: $194.23bn
Thoughts: If we look firstly at ETH/USD on the weekly, we can see that price followed BTC lower last week, closing at weekly lows right at the previous cycle high around $1425. We have seen a strong reaction off that level early this week but for now this still looks like a downtrend on the higher timeframes with the most recent push into $2030 looking like a lower-high. Now, if price finds resistance off this bounce below $1730, we have reclaimed the key breakdown level as resistance and I would expect price to return to the 200wMA at $1265 to test it as support and potentially form a higher-low, where, if that fails, we are likely to return to $1000. However, if this bounce has legs and price breaks and closes back above $1730, $1425 all of a sudden starts looking like a higher-low at a historical level, and we can expect the $2030 high to be retested. Any break and close above that level and we are going for that trendline resistance and prior support cluster around $2425. If we drop into the daily, we can see that price is pushing up against minor trendline resistance and coming up into reclaimed resistance around $1620, so clearing both of these would open up the opportunity for an intraday long back into the $1730 area, if the setups presents itself. However, I am more interested in shorts from up near $1730 if we see a sweep and breakdown of the prior swing-high or a lower high form, targeting $1415 firstly, followed by $1290.
Turning to ETH/BTC, following last week’s close at weekly lows ~0.073, price has bounced off prior resistance back towards last week’s high and the 2022 open. Now, if we see last week’s high broken above and price close the week back above 0.08, that would be a strong indicator of further strength from ETH, and I would be less keen on a dollar pair short, as I would then expect to see the 2021 highs retested at 0.086. If, however, we take out last week’s high and then break down and move back towards 0.073 later this week, I would take that as a strong sign of an incoming mid-range retest at 0.0687. Until we get back below the mid-range, I am loathe to call much further downside on the pair, but if we do get below it around the time of the merge going live, that will begin to look more damning for short-term expectations.
XRP:
XRP/USD
Weekly:
Daily:
XRP/BTC
Weekly:
Daily:
Price: $0.33 (1620 satoshis)
Market Cap: $16.433bn
Thoughts: Beginning with XRP/USD, we can see that price continues to consolidate above $0.30, having rejected around the 360wMA at $0.39 a few weeks ago to return to range support. Price has failed to close much below this level on successive attempts since June, so I am awaiting a strong close below the level to open up the likelihood of another leg lower into $0.24, but if we don’t see that and instead the pair starts to consolidate, I will instead be looking for signs of a higher-low above $0.287. If we drop into the daily, there is absolutely nothing yet to get excited about and price has reclaimed resistance at $0.37 after spending some time above it, with daily structure firmly bearish. Until that $0.37 level is broken again with force, there is really nothing here to suggest we don’t continue lower, particularly if the daily starts to break below $0.30. In that scenario I would be looking to sell any rallies all the way into $0.24.
Turning to XRP/BTC, the pair has been tightly consolidating for several weeks between 1540 and 1650 satoshis and if we see the bottom of that range give way, I think we continues to follow the trajectory marked out, with 1250 satoshis the next swing-low that needs to give way for another leg lower to follow. Not a lot has changed on this pair beyond that – I am still looking at a possible cyclical bottom above the 2021 lows if 1250 does give way.
Dogecoin:
DOGE/USD
Weekly:
Daily:
DOGE/BTC
Weekly:
Daily:
Price: $0.064 (313 satoshis)
Market Cap: $8.484bn
Thoughts: If we begin with DOGE/USD, on the weekly we can see that price deviated above the 200wMA but immediately rejected and closed back below it, continuing to consolidate between it as resistance and the current swing-low at $0.049. We also remain below long-term trendline resistance. At present, this still looks like a downtrend, particularly after the forceful move lower over the past two weeks, and so I am expecting to see the 360wMA at $0.042 retested as support sooner rather than later, where the reaction will be critical, as there is no support below it for another 50% move lower. If we look at the beginning of where that MA formed, we can see that it has never been traded below and that it roughly aligns with the previous cycle bottom; as such, if we do sweep $0.049 into the 360wMA and then see signs of strength, that will begin to look like a bottom for me and I will start looking for reasons to buy spot. If we look at the daily, there isn’t a huge amount to add here except to reiterate how important the $0.10 level is – any break and close above it would reclaim not only long-term trendline resistance and daily structure, but also the 200dMA. That’s what we want to see for a sustainable reversal, but I think we’re still a way off that yet.
Turning now to DOGE/BTC, we can see that price wicked above the prior swing-high at resistance ~368 satoshis and rejected, closing back below that level and now price is sitting just above resistance turned support at 295 satoshis, which is an important reclaimed support level. If we were to now break back below that level, I think we see the May-June lows retested around 245 satoshis, where the formation of a higher-low followed by a 295-satoshi reclaim once again would confirm for me a longer-term bottom. If that 220-satoshi low were to fail, however, the 200wMA at 193 satoshis is next, with prior resistance just below that at 182. Lastly, assuming we do hold here above 295, I want to see a weekly close above 368 to get excited for DOGE strength, as weekly structure would then turn bullish off a key reclaimed support level.
Polkadot:
DOT/USD
Weekly:
Daily:
DOT/BTC
Weekly:
Daily:
Price: $7.32 (35,820 satoshis)
Market Cap: $8.135bn
Thoughts: Beginning with DOT/USD, we can see that price has returned to prior resistance turned range support at $6.86 after deviation above resistance at $8.57 and rejecting. That being said, there is an argument to be made that weekly structure is technically bullish following the marginal close above that level, but to be honest looking at the reaction subsequent to it I do not feel confident in that. If you did want to take a long, this would be the level to do so at, with invalidation below $6. If we see a weekly close below $6.86, I do think that $6 swing-low is getting taken out and there really is not a lot of support below that, so I am loathe to get involved just yet. That being said, what would really start to paint the picture of a longer-term bottom here is a wick below $6 followed by a $6.86 reclaim and consolidation back above the level – in that scenario, breakout shorts get trapped whilst a longer-term range continues to form in an area prime for re-accumulation.
Turning to DOT/BTC, we can see that price is hovering above resistance turned support at 33k at present, and looking almost like forming a higher-low above 31.7k at present, but this is yet to be confirmed. If we close this week firmly above 35k satoshis, it will indeed confirm that higher-low and the case for accumulation on the dollar pair becomes stronger. If, however, we start to break below last week’s low and take out 31.7k, what bulls do not want to see is a weekly close back below that level, as that indicates a retest of the May lows at 27k is very likely. If we drop into the daily, we can see how the 200dMA capped price on the most recent bounce, and so if we were to see 40.5k broken and closed above, we then have the makings of an uptrend and I would be very keen to start jumping on board, particular with only minor resistance between there and 52k satoshis.
Algorand:
ALGO/USD
Weekly:
Daily:
ALGO/BTC
Weekly:
Daily:
Price: $0.298 (1474 satoshis)
Market Cap: $2.05bn
Thoughts: Looking firstly at ALGO/USD, we can see that price has close below support at $0.294 last week for the first time during this consolidation, rejecting the marginal breakout above trendline resistance. If we now see an immediate reaction to the upside from here and break and close back above that trendline this week, it will look more like a trap than a breakdown to me and I would be looking to buy that level for another push into $0.38. If, however, price fails to push off from here, I am looking at $0.26 as the next minor support below, but with major support down at $0.216, which is where I would expect more of a reaction. Dropping into the daily we can see that price close firmly below support but a move back above that impulse leg down around $0.32 would turn structure bullish again and that would open up another squeeze higher.
If we turn attention to ALGO/BTC, on the weekly we can see that price continues to consolidate in a tight channel above key reclaimed support levels, which is promising to see, but weekly structure is still bearish for the time being. A break and close back above 1800 satoshis and trendline resistance would change this and I would then expect to see the major zone between 2050-2200 satoshis retested as resistance. If, however, we break down here below 1343 satoshis, I would expect to see the swing-low at 1175 taken out into the support level from December 2020 at 1075 satoshis, which is the final major support above the all-time low. But we are in historical value territory here for ALGO so I am not too keen to be looking for many shorts.
Synthetix:
SNX/USD
Weekly:
Daily:
SNX/BTC
Weekly:
Daily:
Price: $3.20 (15.7k satoshis)
Market Cap: $743.064mn
Thoughts: Beginning with SNX/USD, we can see from the weekly that price is sitting below support turned resistance at $3.54, having reclaimed support at $2.53 last week, with that level at present looking like a higher-low following the return to bullish weekly structure. As such, if we now see $3.54 give way, I would expect both the trendline resistance and 200wMA around $4.93 to be retested as resistance, with any close above both confirming the longer-term reversal for me and opening up a move into $7.92. Dropping into the daily, we can see how the 200dMA continues to cap price for now and so if the downtrend is to continue and weekly structure is to fail and revert to bearish, bears want to see $3.80 act as a lower high and price now break and close back below $2.54, opening up another stab at the June lows at $1.60.
Turning to SNX/BTC, this pair is starting to look more bullish as it curls up below the 200wMA, having spent the best part of the year below it. If we now can see a push higher from here and another close above 17k satoshis, I think we begin a new uptrend, but there is immediate overhead resistance at 21.2k satoshis that will need to be cleared before we can look to get involved for the meat of the move between there and the next major resistance at 33.4k satoshis. SNX is certainly shaping up well at present…
Harmony:
ONE/USD
Weekly:
Daily:
ONE/BTC
Weekly:
Daily:
Price: $0.021 (101 satoshis)
Market Cap: $252.24mn
Thoughts: Beginning with ONE/USD, we can see from the weekly that price rejected at reclaimed resistance around $0.032 and has since returned towards the base of the move at $0.0167, hovering above it for now around $0.021. If this low can hold, or price can wick below it into the 2020 highs around $0.15 and then form support back above it, I think we are forming the cyclical bottom here. However, close the weekly below $0.14 and I think there is another brutal leg down to follow, with no real support all the way back into $0.009. If we drop into the daily, we can look to play the long on the formation of a swing-failure of $0.167 if it comes, or wait for a higher probability long much higher up: this scenario would involve the pair breaking and close above $0.04 and thus turning weekly structure bullish and reclaiming trendline resistance, from which point I would be confident that a longer-term bottom is in and I would look to heavily add spot with invalidation at $0.015 and looking to hold for a new cycle.
Turning to ONE/BTC, we can see that price is sitting above range support at 85 satoshis in a very similar manner to the dollar pair, having rejected around the historical pivot between 124-140 satoshis. Reclaiming the top end of that range as support would be a strong sign of reversal for me and look like this range below the pivot has been re-accumulation, from which we could again hope to hold for another cycle with invalidation on a close below 77 satoshis, as the next major support below that is down at 53.
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.
