Market Outlook #201 (28th November 2022)
Hello, and welcome to the 201st instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, Polygon, Uniswap, Quant, NEAR Protocol, Flow and Energy Web Token.
Mostly requests this week, which is always great! This week’s post is also the penultimate Outlook for the year, and in addition to next week’s post I will also be publishing longer-term analysis on my favourite altcoins for the next cycle in a separate post, most of which are based on narratives I expect to be popular.
As ever, if you have any requests for next week’s Outlook, do let me know.
Bitcoin:
Weekly:
Daily:
Price: $16,183
Market Cap: $310.983bn
Thoughts: If we begin by looking at BTC/USD, we can see from the weekly chart that price printed inside week failure last week, marginally sweeping the lows before closing back inside the prior weekly range, and holding above the 360wMA. From here, based on that inside week failure, we could see the top end of that range also get taken out back at $17.2k, and whilst the pair holds above $15.5k I believe this is the most probable scenario. However, if we start to accept back below $15.5k I would consider the inside week failure invalidated and would be looking for shorts into $13.9k as a first target, followed by $12.2k.
Dropping into the daily, I have marked out the scenario that would really mess with everyone but make sense given current structure. We have the $15.5k sweep from last week that occurred on declining volume and momentum, opening up a nice setup for a three-drive on a sweep below last week’s low, which would make for a nice long if we get another divergence on volume and momentum. I would look to play this long to the top end of the inside week range around $17.2k, where any rejection and breakdown back below that level off key support turned resistance begins to look like the beginning of the next leg lower into $13.9k. Obviously, this is assuming we get perfect setups, which rarely occurs, but given how price-action looks right here it is definitely something I am paying attention to. If we start to accept on the daily below $15.5k I would consider this scenario invalidated and look for reasons to short into that range marked out.
Ethereum:
ETH/USD
Weekly:
Daily:
ETH/BTC
Weekly:
Daily:
Price: $1170.05 (0.07231 BTC)
Market Cap: $143.279bn
Thoughts: Looking firstly at ETH/USD, we can see from the weekly that price has formed another equal low at $1073 as of last week, remaining capped by prior support around $1217. This is not the most promising setup for bulls, particularly with another set of equal lows just below that at $1000, but we do have inside week failure following the weekly close and so the top end of that weekly range near ~$1287 comes into play. However, given the scenario just marked out for BTC, if we see another push lower here, I would be very surprised if taking out the $1070 double bottom does not lead to the flush of the $1000 double bottom too, and it then becomes far less probable, in my opinion, that we rally higher to take out the $1287 weekly range high subsequently. If we instead see price push up early this week to take out that high, I will be looking for rejection and a breakdown back below $1217 to take shorts into those two liquidity zones.
Turning to ETH/BTC, we continue to hold above the mid-range as support and the pair spent much of last week consolidating between that level and the 0.075 area as resistance. Turning to the daily, we can see how pivotal that mid-range is, with the 200dMA also supporting price around that level. The less convincing thing for bulls here is that the bounces appear to be getting weaker off the mid-range with a series of lower-highs continuing to form. If we remain capped by 0.0753, I would expect to see another attempt at 0.069, where any daily close below that level invalidates the higher-low and opens up another leg lower into 0.064 at the very least, in my opinion, with the more likely level of support at 0.0594.
Polygon:
MATIC/USD
Weekly:
Daily:
MATIC/BTC
Weekly:
Daily:
Price: $0.82 (5061 satoshis)
Market Cap: $7.155bn
Thoughts: Let’s begin by looking at MATIC/USD. On the weekly timeframe, we can see that price attempted a breakout beyond $1, closed the weekly firmly through it into resistance at $1.31, then rejected the subsequent week, closing back below $1 and confirming a deviation above range resistance. That $1 continues to act as resistance since, with support coming in around $0.74. If we drop into the daily, we can see that price rejected at the 360dMA and the retracement took it into the 200dMA, where we initially found support but price is now consolidating just above it. Given that the bounces off this MA and above reclaimed support at $0.74 are getting progressively weaker, I would expect to see the support base give way and lead to a sweep of $0.74. The bullish scenario here would be a swing-failure of that level and subsequent reclaim of the 200dMA; the bearish is obviously a daily close through the level, which would likely lead to the untested prior resistance at $0.61 being tested as support.
Turning to MATIC/BTC, incredibly, the pair retested its all-time high at 6650 satoshis a few weeks ago, rejecting right at the level and now consolidating below the ATH Weekly close and above prior channel resistance turned support. This has, in effect, been a multi-year range for the pair between the all-time high as range resistance and support around 2000 satoshis. As such, if we were to now break lower and close back below the mid-range at 4300, I would start favouring downside towards the bottom of the range. If we turn to the daily, we can see how price is consolidating right above that trendline and holding above prior resistance at 4750. If this area gives way, I think we drop another 10% into the mid-range to retest it as support; lose that level and there is some more key support at 3650, where the 200dMA and 360dMA are currently floating, but I would expect to see rallies begin to be sold below 4300 and price to make its way towards the bottom of the range. Given the cluster of support above 3650, I do think it makes sense to be a buyer of MATIC as a last ditch effort around 4300 with a hard stop at 3600, so let’s see what happens…
Uniswap:
UNI/USD
Weekly:
Daily:
UNI/BTC
Weekly:
Daily:
Price: $5.27 (32,530 satoshis)
Market Cap: $4.005bn
Thoughts: Beginning with UNI/USD, we can see from the weekly timeframe that the pair broke below minor support at $5.63 and has since been consolidating above support at $5.06, with more support just below at $4.75. This is a key area for the pair, but looking at how we deviated to the upside into resistance at $7.42 and have since sold all the way back into support, I would not expect this level to hold here. If it does, I will want to see price just flatten out with low volatility for a few weeks in this area before looking for spot exposure. I do still have some UNI from around this area but I am looking to exit it at a small loss if we lose $4.75. If we do lose that level, I want to be a buyer back near $3.50, where I would then look to hold for the next 12-18 months, if not longer.
Turning to UNI/BTC, we are still sat with bullish weekly structure above reclaimed support around 29k satoshis, and most importantly above the swing-low at 26.6k. Whilst we remain above that latter level, there is a chance that the Dollar pair also holds its current range and just starts to flatten out; however, if we start to break below 26k satoshis, all of a sudden weekly structure is once again bearish and there is a large gap to fill back into 21.4k satoshis, which would likely give us that $3.50 sweep that would be oh so attractive for a long-term position. I do think the BTC pair has bottomed for the net cycle and so I am expecting to see a macro higher-low form from which the pair will emerge into disbelief whenever the broader market is ready.
Quant:
QNT/USD
Weekly:
Daily:
QNT/BTC
Weekly:
Daily:
Price: $112.07 (0.006931 BTC)
Market Cap: $1.352bn
Thoughts: If we begin by looking at QNT/USD, we can see from the weekly that price is currently sitting right above strong reclaimed support at $86, having formed an uptrend since the May lows above the 200wMA that took price through resistance at $190 several weeks ago. This led to a deviation above key resistance and a subsequent break lower, with price having retraced into the support based as mentioned. This is now pivotal support for the pair’s market structure. If the weekly closes below $86, this uptrend is finished and I would expect to see a return to the May-June based at $50, with some support above that at the 200wMA. If the pair is able to hold above this level, the uptrend is still intact, as is weekly bullish structure, so, based on that, being a buyer around $86-98 with a stop on a close below the bottom of that range makes sense to me, even if only for a bounce into reclaimed resistance at $147.
Turning to the BTC pair, we can also see that price deviated above the all-time high at 0.0095 into a new high at 0.0117 a few weeks ago, leading to an immediate rejection and close back below the prior high. Since, the pair has retraced back into resistance turned support at 0.00572, which is holding for now and has produced a small bounce. If from here the pair continues to bounce (and one has spot exposure), I think it would be wise to hedge that exposure on a retest of 0.0095, as I would imagine that caps the pair and then leads to another move lower towards 0.0048. If we lose that support level, I think the pair retraces into 0.0031, which is an untested level of prior resistance during this year’s rally.
NEAR Protocol:
NEAR/USD
Weekly:
Daily:
NEAR/BTC
Weekly:
Daily:
Price: $1.53 (9440 satoshis)
Market Cap: $1.268bn
Thoughts: Beginning with NEAR/USD, we can see from the weekly that price has retraced 93% into prior resistance turned support at $1.51, having broken below key support at $2.70 a few weeks ago and capitulating almost 50% lower as of last week. This zone is currently holding as support, with it also having acted as range support back in July 2021, but given the recent volatility I would not be keen to go anywhere near this until we see that volatility diminish and price find its range, whether that is right here between $1.40 and $1.75 or lower. If we do break lower, there is basically no support below $1.40 all the way back into $0.85, so again I would be loathe to hold any spot exposure if that level gives way and would prefer to wait for a period of low volatility and a tight range at either of these mentioned levels.
Turning to NEAR/BTC, we can see that price recently broke and closed below major resistance turned support at 11.9k satoshis, leading to another leg lower into the 9.1k area where price is currently sat. The pair is currently in no man’s land following a major breakdown, which doesn’t spark excitement for potential buyers, and I would be hesitant to get involved before this fills the gap back into support at 7k satoshis, which would be an 85% drawdown from the all-time high – a common area for a large-cap BTC pair to begin finding support. If that level fails to hold for the pair, I wouldn’t be interested in this until a full retrace back towards the all-time lows at 3.5-3.8k satoshis, which is a 92% drawdown from the all-time high. Sweep that low and then form a range and I am very keen indeed.
Flow:
FLOW/USD
Daily:
FLOW/BTC
Daily:
Price: $1.09 (6748 satoshis)
Market Cap: $1.132bn
Thoughts: Given that FLOW has only been trading since February 2021, both pairs look virtually identical, and FLOW’s existence has primarily consisted of pure downtrend.
Focusing on FLOW/USD here, we can see how price formed an all-time high around $43 after rallying for a few weeks post-launch, then the pair began its perpetual descent from around April 2021. Since, the pair has retraced 98% from the all-time high, continuing to be capped by the 200dMA and most recently breaking below the June 2022 support at $1.20 into $0.85, albeit bouncing but now struggling to get back above that support level. If we drop off from here, I want to see $0.85 taken out and price then reclaim the level and form a range in between $0.85 and $1.20 in order to get interested in this. If $0.85 does not hold, there is a Kraken all-time low down at $0.38 which is the next level of interest, but there’s basically no support at all down here so for all intents and purposes we are in bearish price discovery mode. As such, it makes much more sense to just wait for the volatility to die down here before looking for entries.
Energy Web Token:
EWT/USD
Weekly:
Daily:
EWT/BTC
Weekly:
Daily:
Price: $3.94 (24,330 satoshis)
Market Cap: $118.442mn
Thoughts: If we begin by looking at EWT/USD, we can see from the weekly that the pair retraced 90% from the all-time high into that June low, ranging around $2.40 for weeks before rallying off it into support turned resistance at $5. This level capped price in August and the pair has continued to struggle to hold above $4.43 since, most recently rejecting a breakout beyond resistance and falling lower into $2.95, which held as a higher-low. Price is now sat right below $4.43 consolidating. Until we see a weekly close above $5, I don’t think there is much reason to get over-excited here, as any rejection and move lower off this $4.43 area could wipe out that higher-low with no issue and see the pair trade back inside the June range, which is where I would get excited from a R/R perspective. Alternatively, if we can break higher and close through $5, I am a buyer with invalidation on a close back below $4.43, looking for ~$8 as a first target.
Turning to the BTC pair, we can see strong weekly structure here, with price bottoming in June marginally above the all-time low, turning market structure bullish with a reclaim of 14.8k satoshis and since rallying back above 17.6k, now having formed a range between that level as support with resistance at 24.1k satoshis. Prior to last week, the pair had failed to close above that level on successive attempts since August, but we are now consolidating just above it. Hold above this level here and start accepting above 27k satoshis and I think we begin another leg higher for the pair, which will provide confluence for that Dollar pair if we can start trending higher here. Above 17.6k I think EWT is bullish structurally and I would be looking for upside targets of 38.8k, followed by 55k satoshis.
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.
