Market Outlook #200 (20th November 2022)
Hello, and welcome to the 200th instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, Cardano, Tron, Avalanche, Cosmos, Arweave and Convex Finance.
As ever, if you have any requests for next week’s Outlook, do let me know.
Bitcoin:
Weekly:
Daily:
Price: $16,634
Market Cap: $319.817bn
Thoughts: If we begin by looking at BTC/USD, we can see from the weekly timeframe that price closed last week firmly through range support at $17.6k and has spent the past week trading inside that range, forming a weekly low around $15.8k – above the 360wMA – and a weekly high around $17.2k, set to close this week at $16.6k. Given this inside week formation, one could anticipate inside week failure next week, which would provide us a setup for playing the other side of the weekly range. So, if we see price push out above $17.2k next week and then close back inside (perhaps retesting $17.6k as resistance and rejecting, for example), then we have a high probability of taking out the bottom of the range also at $15.8k, likely then sweeping the prior weekly low into that $15.1k level where the 360wMA is sitting. If that MA gives way, I am looking at $13.9k and $12.3k as the prior resistance range from which the bull market emerged, and I would very much like to be a buyer within that range.
Turning to the daily, I have marked out a couple of possible trajectories, outside of the inside week failure, including a deviation below $15k followed by a reclaim of $17.6k over the coming weeks, which would be the most bullish scenario. More bearish would be a close and breakdown below $15.5k, leading to us trading down into that $12.3-13.9k range. If the former happens, I am buying heavily and almost immediately, because to me that looks like a failure to move any lower in the face of the worst news cycle we’ve had this bear market, followed by a reclaim of a long-term range support. If, however, we drop down below $14k, I will be looking to buy incrementally as a new range begins to form down there.
Ethereum:
ETH/USD
Weekly:
Daily:
ETH/BTC
Weekly:
Daily:
Price: $1209.19 (0.07267 BTC)
Market Cap: $147.94bn
Thoughts: If we begin by looking at ETH/USD, we can see that price closed last week right around local support at $1220 and has spent this past week in consolidation between $1166 and $1290, but given how that prior weekly candle closed (i.e. firmly back below the 200wMA and making fresh lows in the downtrend since the September high), I would be inclined to expect further lows are imminent, particularly if we look at the daily timeframe. Here, we can see that price was capped by the 200dMA yet again and that resistance appears to have been reclaimed at $1290 following the breakdown, with a clean double bottom still in play at $1000. Given both the structure and momentum here, alongside the liquidity at $1000, I would be very surprised if we don’t get another leg lower soon that takes those out. Subsequently, if we can find demand above $830 and then reclaim $1000 as support, the range has held and we could look for upside from there back towards $1290 and $1420. However, if $830 fails to hold price, I am looking at the 2021 open at $737 as the next important level. To be honest, below $830 I would rather wait for the formation of a new range before buying, unless we see another capitulation-style wick towards $550, where I would happily buy blind.
Turning to ETH/BTC, surprisingly amid all the chaos the pair has held above the mid-range and above 0.072 as reclaimed support, although only marginally this week, with resistance having been found at 0.0754. If we drop into the daily for more clarity, we can see that price bounce sharply off 0.066 as support during the move lower, immediately reclaiming the 200dMA and mid-range as support, then continuing to rally higher into 0.075, which held as resistance and has now formed a lower-high. Price has since retraced back to 0.072 as support, above the 360dMA, and there is the possibility here of a higher-low formation. If, however, we see price break lower once again and lose 0.072, I would expect the mid-range to be lost again at 0.069 and price to take out the 0.0658 double bottom into 0.0642, where any close below that level opens up another 10% of downside. This is a really key spot for ETH/BTC to be honest. If it can hold its own, it would be very impressive indeed, but I expect we will see further downside into 0.0594.
Cardano:
ADA/USD
Weekly:
Daily:
ADA/BTC
Weekly:
Daily:
Price: $0.325 (1954 satoshis)
Market Cap: $11.183bn
Thoughts: Let’s begin with ADA/USD on the weekly timeframe. As you can probably tell, this looks dreadful. Not only do we have long-term trendline resistance still intact, but the pair has now formed local trendline resistance which is now pushing price to fresh lows, with ADA retesting the $0.42 breakdown level as resistance and rejecting, leading to a move this past week into $0.30, above which it is marginally set to close. If we look at the daily, we can see how price poked above $0.42 before breaking down below support at $0.376, turning structure bearish once again off a key level. Bears are very much in control here and despite the RSI divergence down here, structure is poor and if we do get a bounce off this minor exhaustion, I would look to be a seller back around $0.38, with clear invalidation above $0.43. I would be looking for $0.27 to be traded followed by major support down at $0.20.
Turning to ADA/BTC, the pair has been consolidating below support turned resistance at 1975 satoshis but above the 200wMA as support, and whilst we do remain above that 1750 level I think downside is likely to be driven by BTC/USD moving lower. However, we then have to consider whether ADA/BTC can hold support if BTC/USD starts to break below $15k. Given that alts like stability not volatility, I would be inclined to expect lower prices on the pair if BTC breaks key support. That said, let’s turn to the daily for greater clarity. We can see here that price is rejecting a move back above the key support at 2085 satoshis, right where the 200dMA sits, with the pair now sat above 1881 as minor support. If we lose this level, I do think we take out the 1740 swing-low, and with it the 200wMA, to retest the June lows at 1620 satoshis, which is ~15% of downside from here. That coupled with possibly 20% of downside on BTC/USD would certainly put us in the realms of $0.20, with then all three pairs (BTC/USD, ADA/BTC and ADA/USD) sat at historical support in that scenario, where long exposure becomes far more favourable.
Tron:
TRX/USD
Weekly:
Daily:
TRX/BTC
Weekly:
Daily:
Price: $0.0515 (309 satoshis)
Market Cap: $4.742bn
Thoughts: Beginning with TRX/USD, we can see that long-term trendline resistance continues to cap the pair, with it now looking like somewhat of a descending triangle from the May 2021 highs into resistance turned support at $0.045, right where the 200wMA also sits. This level is clearly critical support, and the fact that we have rejected another test of trendline resistance and fallen straight back into it is a little alarming, given how many tests it has had over the past 18 months. What would be really bullish for me here would be to wick below $0.045 and then reclaim the level as support and begin consolidation above it, where it would then look like a failed breakdown at historical support and I would favour longs. If, however, we begin to close below $0.045, I am looking to short this for another 40-50% of downside back towards the pre-Covid crash high at $0.027, with little to no support in between those levels.
Turning to TRX/BTC, we can see from the weekly that the pair has been range-bound between support at 284 satoshis and resistance at 356 for the best part of the year, having broken above multi-year resistance at 306 and then consolidated around the level. We remain above the 200wMA and structure technically is bullish. We also remain above trendline support from the beginning of the bull market in early 2021. That being said, there is a possibility that this range is distributive rather than accumulative above this historical resistance, and in the context of the current market conditions this would make more sense. If we see the weekly start to close back below 284, I would expect the trendline to be retested somewhere around 215 satoshis, which is ~30% lower from here. Now, if Justin is able to keep TRX above 284 and we see that Dollar pair capitulation wick below $0.045 lead to a range reclaim, this starts to look far more attractive for another leg higher, however long it may be before then. I would look to buy a weekly close above 356, particularly if TRX/USD is still above the 200wMA.
Avalanche:
AVAX/USD
Weekly:
Daily:
AVAX/BTC
Weekly:
Daily:
Price: $12.83 (77,140 satoshis)
Market Cap: $3.858bn
Thoughts: Beginning with AVAX/USD, we can see that the pair broke down below summer support at $15 last week and closed firmly below it into $13, with this week consolidating between $15 as fresh resistance and $12 as minor support. I do expect we see price take another leg lower given we are currently in no man’s land and the next major support is down at prior resistance between $9.31-$10.47. This was the range that form the prior cycle bottom in June 2021. What I would expect to see given the market conditions is a wick below that $9 area followed by a reclaim and consolidation back above it, forming a long-term accumulation range with low volatility. If we see this develop over the coming months, I am very much a buyer as close to $10 as possible. If we close the weekly below $10 and retest it as resistance, things will get a lot more bloody, with no major support all the way back into $4.34.
Turning to AVAX/BTC, the picture is equally bleak short-term, with price looking ready to retest that June low at 61k satoshis, which would likely line up nicely with a $9 sweep. If that low gets taken out and price holds below it, I think we see further bloodshed towards support at 42k satoshis. If, however, we do find demand around 60k, I want to see either the beginnings of an Adam & Eve bottom above it with a higher-low or a SFP and reclaim of the level followed by low volatility consolidation. Looking at this, it could still be 6 more months of ranging down near 60k before this look anywhere near ready for a reversal.
Cosmos:
ATOM/USD
Weekly:
Daily:
ATOM/BTC
Weekly:
Daily:
Price: $9.92 (59,640 satoshis)
Market Cap: $2.942bn
Thoughts: Beginning with ATOM/USD, we can see on the weekly that the pair has just turned weekly market structure bearish following a rejection at $14.60 resistance and subsequent close below $10.55 support. We now have a lower low at ~$9 following what has been a low-volume grind up from the June lows. I would expect to see price continue to bleed lower from here back towards $7.77 over the next couple of weeks where have our next support level. That level has historically been both support and resistance if price were to fall back below it, I would expect a near-full retrace of this weak rally back towards at least $5.45. Dropping into the daily, we can see that we faked a move back above the 200dMA and it is now capping price once again, and I would look to sell any wick back above it back towards $7.77, if that opportunity presents itself.
Turning to ATOM/BTC, we have a rejection from historical resistance at 86k satoshis leading to a lower-high at 72k and now a move into support at 59k satoshis, which is unlikely to hold here in my opinion. If we close below this swing-low, we have bearish weekly structure in confluence with the dollar pair, and I would expect price to fill in the gap back to 47k satoshis where the next level of support is sitting. What happens when we get to that level I have no idea at present – I think it will largely depend on where the Dollar pair is sitting alongside BTC/USD, but I fully expect we see 47k traded before the end of the year. Not much else to add here.
Arweave:
AR/USD
Weekly:
Daily:
AR/BTC
Weekly:
Daily:
Price: $10.18 (60,700 satoshis)
Market Cap: $337.216mn
Thoughts: Beginning with AR/USD, we can see from the weekly that price faked a breakout above long-term trendline resistance into range resistance at $16.50 before the FTX fiasco led to an immediate rejection and move back below the trendline, with price closing back at historical support around $8-9 last week. This week we have seen a small bounce off that support but it has largely been a week of consolidation, where we remain capped by key resistance below $11.72. What is interesting is that this range above all-time lows has held for 154 days now, and if we can see price continue to flatten out above it over the coming weeks, I would look to scale into a position on a deviation below $7 and a subsequent reclaim. It is likely we see price just consolidate through trendline resistance and the 200dMA, which currently cap price, as opposed to breakout of both with any vigour, and that’s usually the sign you look for that volatility is dying and price is finding a bottom, particularly when you are at historical support.
Turning to AR/BTC, we can see that price rejected a move above prior support at 75k satoshis, then closing back below reclaimed resistance at 65.4k, with the pair then selling off into 50.5k, between which we saw price consolidate this week. Dropping into the daily for clarity, we can see that structure is actually bullish here with higher-lows and higher-highs since October, with the 200dMA recently acting as support following the breakout beyond it. We have since rallied into reclaimed resistance today at 65.4k satoshis and rejected, and this could be the lower-high below the 360dMA that turns the tide, if we are to move lower. I would now be watching for a breakdown back below 50k satoshis to turn structure bearish, from which point I would expect the June lows to be retested at 38k satoshis, which is ~40% lower from here. This would no doubt blow that Dollar pair ATL out the water and we would then want to see a reclaim of range support. If, however, we continue to consolidate above the 200dMA from here and flatten out above 50k, the cyclical bottom is likely in and we are just waiting for the same to be said of the Dollar pair…
Convex Finance:
CVX/USD
Weekly:
Daily:
CVX/BTC
Weekly:
Daily:
Price: $3.87 (23,240 satoshis)
Market Cap: $272.603mn
Thoughts: Looking firstly at CVX/USD, we can see that price has been holding above support at $3.80 for 154 days now, much like AR, but price looks ready to push lower to retest the June low at $3.10. We remain above the all-time low at $1.86 and I want to see price wick through $3.10, find support above the all-time low and then reclaim $3.10 before looking to get involved. If instead we close below $3.10, I think we take out the all-time low too before finding a cyclical bottom, but given we are already sitting on a 95% drawdown for a fee-earning protocol, I would be (pleasantly) surprised if we were offered $1.85 for a long-term position. Let’s see what happens over the next month or two…
Turning to CVX/BTC, the picture is largely the same, with price forming range support at present above 23k satoshis, as has been the case since August, but with price set to close the week right at that support and primed to break lower. Lose this level here and I think we fill the gap in back to 16k satoshis, where the June low sits above the accumulation range from the first cycle. I would love to be a buyer around that 14-16k satoshi range, assuming we start to flatten out around then, with a view to add to my spot position at 11k if we get into that area. In short, I am a buyer of CVX for the long-term, but not just yet.
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.
