Market Outlook #192 (25th September 2022)
Hello, and welcome to the 192nd instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, BNB, XRP, Solana, Cosmos, Elrond and Acala Token.
As ever, if you have any requests for next Monday’s Outlook, do let me know.
Bitcoin:
Weekly:
Daily:
Price: $19,025
Market Cap: $364.919bn
Thoughts: If we begin by looking at BTC/USD, we can see from the weekly that price retraced pretty much the entire rally of the previous week into last week’s close, having swept resistance into the 200wMA and rejected. Price thus closed out near $19,400, right back near prior cyclical highs and current support. Following that, this past week has led to some further downside, taking price through the support base around $18,600, taking out all those lows towards the $17.6k swing-low but falling short of this, putting in the current weekly low at $18,153. This is on higher volume than last week and currently continues to indicate protection of that $17.6k swing-low, particularly in the context of a weekly swing-failure that is due to form if price can hold above $18.6k here. In that instance, we could expect relief next week given the lack of impetus to break the lows – even amongst macro chaos this past week. Relief is unlikely to last, however, given the macro conditions we find ourselves in at present, and if we do catch a bid next week I continue to expect the $25k highs to cap any upside going into the final quarter of 2022. Until we get a weekly close below $18.6k, however, it is difficult to expect much beyond chop, but if and when we do see that occur I am looking down towards that $14-16k region for the next leg lower.
Turning to the daily, we can see that price is really choppy down around these lows, having closed below $18.6k and then immediately reclaimed that minor support, leading to a retest of prior cycle highs from below as resistance and a couple of days of consolidation between those two levels, with market structure still bearish here on this timeframe. If we fail to break and close back above $20k early next week, or even wick through it and break down, that might be what leads to that next move lower into $17.6k, where the reaction will determine trajectory for the following few weeks: if we wick through $17.6k and find demand to close back above it, I would be looking for longs at least back towards $21.8k from there; if, however, we start to close below it, there is minor support at $16k before the major support cluster around $14k.
Ethereum:
ETH/USD
Weekly:
Daily:
ETH/BTC
Weekly:
Daily:
Price: $1326 (0.06952 BTC)
Market Cap: $162.488bn
Thoughts: Looking firstly at ETH/USD, we can see from the weekly that price broke bullish structure last week as it closed back below $1416 into $1335, confirming a lower-low following the lower-high. This is not promising at all for ETH, particularly given the merge narrative has now passed, but we are currently sitting right on the 200wMA as support at around $1290 – a level I have had marked out for many weeks now. If we do find support here, I can only expect the relief to take the pair towards another lower high below $1700 before we see further downside towards the $1000 area as the next support, and ultimately lower towards the $740-830 region if $1000 does not hold the pair. Ultimately, following the break in weekly structure, it is hard to be bullish ETH/USD until we reclaim $1700. Looking at the daily, we can see that price has been trending lower this past week, turning support into resistance, and that we are currently consolidating above prior resistance at $1290, now acting as support. If price can break back above $1416 from here, I think we can play another 10% to the upside into $1560, but I do expect that area to cap price and form a lower-high, from which we can look to short back towards $1300 and then $1000. If, however, we see little upside this coming week and $1416 continues to cap price, I would like to look for shorts on a move below this week’s low, all the way back into that $1000 area.
Turning to ETH/BTC, we can see from the weekly that price has again turned bullish structure bearish following last week’s close below 0.072, with the pair retracing all the way back into the mid-range at 0.0687, around which it closed. This past week has seen consolidation around the mid-range, which is to be expected following such a sell-off as the prior week. However, given the structure we now have and the loss of momentum, I would not expect any relief from this mid-range support to lead to much beyond a retest of 2022 open at 0.079 as reclaimed resistance. I am now fully expecting to see the pair unwind back towards the support of this range back near 0.057.
BNB:
BNB/USD
Weekly:
Daily:
BNB/BTC
Weekly:
Daily:
Price: $277.89 (0.01456 BTC)
Market Cap: $44.832bn
Thoughts: If we begin by looking at BNB/USD, we can see from the weekly that price is continuing to chop above reclaimed support at $254, but is generally trending lower, with last week closing back below trendline resistance and this week only barely pushing back above it. Overall, we are still in a long-term downtrend (despite BTC-pair strength) and nothing is as of yet pointing towards a sustained reversal. If we break back below $254, I would expect to see $210 retested as support, where we may see more demand step in to protect the current cycle low at $182 just above the 200wMA. I do not expect the 200wMA to be lost as support this cycle given the implications for BNB/USD subsequent to that, particularly in the context of the strength of the BTC pair.
So, if we look at BNB/BTC, we can see that price is making new all-time highs amongst all this macro chaos, showing sheer strength and confidence in CZ, with this week set to close at a new ATH weekly close above 0.0143. The next level of resistance overhead is 0.0159, which I would expect to come into play next week if we see continuation from this new breakout. If we drop into the daily, however, we can see continuing bearish divergence on each push higher at present with very little momentum to the upside. Whilst this strength has been notable during market mayhem, it is potentially pointing to downside if we start to see the pair turn here and start moving back below 0.0142. What those bullish BNB do not want to see its this bearish divergence play out alongside further downside in BTC/USD, which could lead to significant downside for BNB/USD, which up until now has been holding up pretty well. I wouldn’t expect to see serious downside, however, unless BNB/BTC retraces the past couple of months of rallies from beyond the prior ATH at 0.0122 and closes back below it, at which point we have confirmed distribution above a prior cycle high and likely a lot more downside to come. For now, price is pointing to at least the 0.016 area being tested.
XRP:
XRP/USD
Weekly:
Daily:
XRP/BTC
Weekly:
Daily:
Price: $0.49 (2566 satoshis)
Market Cap: $24.37bn
Thoughts: Beginning with XRP/USD, we can see that price has unexpectedly rallied off the $0.37 area this week, breaking straight through range highs around $0.40 and the 360wMA all the way into the 200wMA at $0.48 and slightly beyond into prior support turned resistance around $0.55. Price rejected up near that resistance cluster and is now set to close the week around the 200wMA, but we are very likely indeed to now have bullish market structure. That being said, we have also rallied right into the most significant overhead resistance, with the 200wMA, prior support and a long-term trendline capping the pair. If we were to see price retrace from here, longs in the $0.40-0.42 area make sense to target another crack at breaking through all this resistance, but I would be loathe to hold exposure in this area in anticipation of a breakout. Rather, I would prefer to wait for $0.65 to be reclaimed on the weekly timeframe and then look to buy dips and ride the trend higher from there towards $0.92 as a first target.
Turning to XRP/BTC, we can see that price broke through the cluster of prior support turned resistance around 1900-2200 satoshis this past week and has rallied straight into the 200wMA at 2900 and prior horizontal resistance, where it is currently being capped. If we close around this area tonight, I would expect to see another push into 3100 satoshis next week, where if we reject we are likely to move lower to form a higher-low before taking a crack at another level of historical resistance which capped the pair in 2020 and in 2021 at 4000 satoshis. If this move is just a bull trap, we should see price break back below 19000 satoshis within the next couple of weeks and move lower from there back towards 1380.
Solana:
SOL/USD
Weekly:
Daily:
SOL/BTC
Weekly:
Daily:
Price: $33.67 (0.00176 BTC)
Market Cap: $11.944bn
Thoughts: Beginning with SOL/USD, we can see that price continues to consolidate right around that $31 area, as it has done this whole month, with last week rejecting at prior resistance at $35.60 but price retracing most of that prior weekly sell-off this week back towards that key level. From here, bulls want to see a weekly close back above $36 to open up another crack at $47. If, however, we fail to reclaim $36 and break below $31, I do think much lower prices are on the cards, as that $26 swing-low becomes prime for a sweep, with $24.25 the key support below that. Dropping into the daily, we can see how volatility has diminished since the June lows, and whilst this is currently looking like a longer-term accumulation zone above that swing-low at $26, it is too early to say yet, in my opinion, particularly in the context of current macro conditions. Further, given the multi-year bull market, it is unlike a three-month range leads to a new cycle, so we still have plenty of time before sustained reversals begin, one would imagine. As such, the two scenarios from here are that the $26 low continues to be protected and price continues to chop around below $47 and above $26 going into 2023, or we see a break and close below $26 lead to the formation of a new range (and likely the cyclical bottom). Where that range could form is difficult to tell, but there are two levels of importance here: $19 and $12. I sincerely doubt that we see the latter traded given the implications for the drawdown on one of the most prominent and well-funded blockchains, but it is possible we see that range between $19-24 tested and price begin a new accumulation range within it, which is where I would love to get heavily long SOL. If $26 continues to be protected, this $31 area will have to do, but I am not planning to fully load up until Q4.
Turning to SOL/BTC, we can see a similar pattern of consolidation and price is now retesting resistance around 0.0018 from here, but there is no real momentum or structure to the current movements. If we do see price continue to push higher, I am not getting too excited about it until prior support is reclaimed and held above around 0.002. If the opposite occurs and we see price break lower below 0.00161, I Would expect a return to the June low to be on the cards to potentially form a double bottom in that area. Not much else to add here for now…
Cosmos:
ATOM/USD
Weekly:
Daily:
ATOM/BTC
Weekly:
Daily:
Price: $13.88 (72,760 satoshis)
Market Cap: $3.975bn
Thoughts: If we begin by looking at ATOM/USD, we can see that price formed a swing-high around prior support turned resistance at $16.16 last week and has confirmed that this past week, selling off from resistance at that level back into prior support around $13.40, above which it currently sits. If the current uptrend is to continue, this area should now act as a higher low from which price should push on higher back into $16 and beyond, with the next level of resistance above that at $21.40. However, if the trend is done, we should see price break lower from here on the daily timeframe, closing back below $12.46 and confirming a return to daily bearish market structure, following bearish divergence from the 200dMA, which is a strong signal for a local top. Subsequent to that, we could look for shorts all the way back into the double bottom at $10.08, where if that level fails I would expect pretty much the entire rally to be retraced back towards $6.40.
Turning to ATOM/BTC, we can see price rejecting at a similarly significant resistance area, with three wicks into 85.6k that have led to a rejection this week. It is likely a local top is in here on this pair and I would expect price to move lower back into prior resistance turned support around 62k satoshis, where, if a higher-low can form we have the catalyst for another push at breaking beyond 90k satoshis. However, if we now see the pair break back below 62k satoshis, I would expect to see the cluster of support back near 43-47k retested. Briefly dropping into the daily, we can see some momentum divergence up in this area also, confirming a likely return to that 62k area to find support. The lower targets on a break below that level align nicely with the 200dMA to 360dMA range, so I would look to be a buyer of ATOM if we do return down there for a strong bounce play.
Elrond:
EGLD/USD
Weekly:
Daily:
EGLD/BTC
Weekly:
Daily:
Price: $48.41 (0.00254 BTC)
Market Cap: $1.112bn
Thoughts: Beginning with EGLD/USD, we can see that price has been range-bound for around 100 days at this point following the June low, and price is now coming right into long-term trendline resistance, which is likely to be invalidated in the coming weeks given how flat price-action is going into it. If we do see an injection of volatility here and price break lower, the trendline remains valid and we are likely to move through the June low into resistance turned support at $32. If that level fails, there is another 30% drop before the next major support at $23, so this next couple of weeks seems key for EGLD. I would either like to be a buyer on the formation of a new range below the June low, or on invalidation of this trendline and continuation of the chop-solidation around $50 going into late Q4.
Turning to the BTC pair for EGLD, we can see that price has been range-bound between 0.00226 and 0.0029 for months at this point, holding above the key June swing-low that deviated below historical support before an immediate reclaim. As long as this low continues to be protected, it does appear as though a cyclical low is in here and we are simply in for further consolidation until the catalyst for a new cycle becomes apparent. If we do break lower from here, given how long this range has held it is likely the move lower will at least lead to a retest of that 0.0016-0.0019 area, where if it holds once again we have strong evidence for the formation of a cycle low and spot allocation becomes very attractive. Very little to add beyond this as both pairs here are quite self-explanatory.
Acala Token:
ACA/USD
Daily:
ACA/BTC
Daily:
Price: $0.211 (1,111 satoshis)
Market Cap: $107.608mn
Thoughts: Finally, let’s take a look at ACA/USD, as Acala is a token on my watchlist for the next cycle and has spent basically its entire history in a bear market, forming its all-time high back near its inception in January. We have seen some periods of rallying within the last nine months but nothing resembling a bull cycle, and so this is prime for allocation for its first cycle. Having formed a bottom around $0.21 in July, price rallied meekly for several weeks into prior support turned resistance at $0.30 and has since moved lower once again, breaking below that July low and forming a new all-time low at $0.17, from which price has rallied over the past couple of weeks to reclaim $0.21 as support. If this level is lost, I think it is likely we retest the all-time low, where if the bottom is in we should see either a wick through it and swing-failure formation or a close below it and immediate reclaim and consolidation back above it, both of which would be my triggers for spot allocation. If, however, we break and close through the all-time low and continue moving lower, I would prefer to wait for another range formation before attempting spot allocation. Either way, we are now sitting on a 93-94% drawdown on a project that has never experienced a bull cycle, so I am keen to get involved as price continues to move lower or as price volatility diminishes above the current lows.
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.
