Market Outlook #202 (4th December 2022)
Hello, and welcome to the 202nd instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, XRP, Polkadot, Solana, Cosmos, Axie Infinity and Fantom.
This is the final Outlook for 2022.
Thank you to everyone for continuing to support this blog and I’m looking forward to sharing more analysis in January of the New Year. Hope everyone has a great Christmas!
Look out for the final post of the year to be published next week with some of my favourite picks for the next cycle…
Bitcoin:
Weekly:
Daily:
Price: $16,961
Market Cap: $329.049bn
Thoughts: If we begin by looking at BTC/USD on the weekly timeframe, we can see that inside week failure played out to a tee, with price rallying through the inside week high at $17.2k into $17.3k before rejecting, now set to close back below that high on declining volume. Now that the inside week failure has played out, I would expect to see upside capped below $17.6k, with price only turning bullish for me with a weekly close firmly back above that prior support turned resistance. If we see that, then we can expect to see a squeeze back towards $19.8k to retest previous cycle highs.
However, if we look at the daily, the more probable scenario for me, as marked out on the chart, is for price to take out recent highs early next week into that $17.6k area, and then reject and break back below $17.2k. If we see that deviation and subsequent breakdown, I would look to short a retest of $17.2k from below all the way through the $15.5k double bottom into $13.9k. Not much else to add here as the structure is very clean to both sides of the range…
Ethereum:
ETH/USD
Weekly:
Daily:
ETH/BTC
Weekly:
Daily:
Price: $1,255.80 (0.07408 BTC)
Market Cap: $153.694bn
Thoughts: Beginning with ETH/USD, we can see that price pushed higher this past week, rallying through minor support turned resistance at $1217 into reclaimed resistance around $1300, which continues to cap the pair, just shy of the 200wMA at $1344. Structure here is still firmly bearish with lower-highs and lower-lows, and with the liquidity zones below as we have previously discussed I do not feel comfortable holding long exposure as ETH comes into resistance. If we drop into the daily, we can see this more clearly, with the two double bottoms marked out. We have now got bullish daily market structure having reclaimed support at $127 but with price now pressing up against $1294 and having rejected a move back above it, there is a real possibility of marking out another lower high here. There are two possible bearish scenarios I am awaiting, one of which involves sweeping the $1294 area and then breaking back below the level, with the other being an immediate loss of $1217 here, which would confirm the deviation for me and indicate lower prices into $1073 and $1005. To be honest, below the 200dMA and $1430 prior cycle highs, I don’t think there is much yet to be excited about for ETH/USD. If we take out all of this downside liquidity and then mark out a low and turn structure bullish, then I think we have a case for further upside.
Turning to ETH/BTC, we cab see that support at the mid-range continues to hold but price is tightening its range with higher-lows and lower-highs on the daily timeframe. We did rally off the 0.069 level and turn daily structure bullish, but price is still capped by resistance at 0.0753 and that is where we rejected hard yesterday. Right now, this is just chop, and we could expect to see price now retest 0.072 as support and as the higher low within this short-term uptrend. Looking ahead, however, until we break back below the mid-range and the 200dMA at 0.0692, I don’t think we can expect too much of anything – if we lose that level, it becomes apparent that all of this has been distribution and we are likely to move back towards the bottom end of the range at 0.0594.
XRP:
XRP/USD
Weekly:
Daily:
XRP/BTC
Weekly:
Daily:
Price: $0.389 (2297 satoshis)
Market Cap: $19.583bn
Thoughts: Beginning with XRP/USD, we can see from the weekly that price bounced off historical support at $0.33 and has since rejected at reclaimed resistance around $0.42, with price consolidating below that level this past week. If we are able to squeeze higher and break through this level, I think we see another 20% of upside towards the major resistance cluster at $0.51, where the 200wMA and trendline resistance currently lie. Structurally, we are bullish here having closed above $0.40 back in September and not making a new lower-low since. That said, there is a heavy wall of resistance between $0.51 and $0.54, so I would look to hedge any long exposure if price does squeeze up there and re-add if it is able to close firmly through $0.58, as that changes the picture entirely. If we reject here and move lower, I would expect yet another test of $0.33 as support, with any weekly close below that opening up a significant leg lower towards $0.24 as the next major support.
Turning to XRP/BTC, we can see that price continues to be capped by the 200wMA and that weekly structure is currently bullish, having reclaimed resistance at 1900 satoshis as support and not broken to a fresh low since. Whilst the pair remains trapped between these two levels, I think we continue to see sideways price-action with direction likely being driven by the rest of the market. If we are able to hold above 1900 satoshis and push higher, I think we can see a weekly close above the 200wMA at 2586, which would lead to a retest of historical resistance at 3072 satoshis. Only above that do I think things get much more exciting for XRP. More likely, however, I think we see this rejection below the 200wMA mark out a lower high below the September highs and price move lower towards 1900 satoshis from here, with any close below that turning structure bearish again and making a full retrace of this rally into 1540 more probably.
Polkadot:
DOT/USD
Weekly:
Daily:
DOT/BTC
Weekly:
Daily:
Price: $5.52 (32,550 satoshis)
Market Cap: $6.301bn
Thoughts: If we look firstly at DOT/USD, we can see from the weekly that price broke down below long-term support at $6 a few weeks ago, closing below the level and since consolidating between $6 as resistance and $5.06 as support. Long-term trendline resistance from the all-time high continues to cap price and right now the pair is sat in no man’s land, with the next major historical support down at $3.50 – another 35% retracement from here. Given the momentum and structure here, I do not think this is looking like a bottom, and I would expect any push into $6 to be rejected and lead to that final leg lower towards $3.50, where I think it makes a lot of sense to start picking up some DOT long-term. What we’d want to see is that next leg lower then lead to a new range formation and diminishing volatility through that trendline, which would be my signal to get involved. Alternatively, if we are marking out a bottom in no man’s land, I would expect to see a swift reclaim of the $6 area and a clean close through trendline resistance in the next week or two, leading to further consolidation above that support zone and confirming this breakdown as a deviation. Then we have a clear invalidation level at $5.06 for any long exposure.
Turning to DOT/BTC, we can see that the pair has largely just been range-bound since June, marginally breaking below support at 31.7k satoshis in October but reclaiming the level as support recently and now holding above it. Price is currently capped by prior support at 35.3k satoshis and I would say, looking at this structure since the May lows – alongside the lack of volatility – that the cyclical bottom is likely to be in here. What we are basically waiting for is the Dollar pair to bottom out and the rest of the market to start pushing higher for DOT/BTC to break out the top side of the range. I would still rather wait for the Dollar pair to show us that the bottom is in before getting involved but this is promising, particularly given recent volatility in the market. One to keep a keen eye on. Briefly dropping into the daily, we can also see that the 200dMA has capped price on every attempt in recent months and is capping price now, so if we were to move up through that MA and close above 35.3k satoshis, I would be very confident that the reversal is beginning for the pair.
Solana:
SOL/USD
Weekly:
Daily:
SOL/BTC
Weekly:
Daily:
Price: $13.39 (78,900 satoshis)
Market Cap: $4.868bn
Thoughts: Looking at SOL/USD on the weekly timeframe, we can see that the pair has spent three weeks consolidating above minor support at $11.60 following the FTX chaos, with price capped by minor resistance at $15.15. Right now, there is nothing to suggest the bottom is in except for the marginal sweep of the $11.60 low last week, but I would want to see this range start to hold for a much longer period of time and likely be deviated below again before expecting any bottom to be in, particularly as we are only sat on minor historical support. More likely, if the rest of the market takes another leg lower, SOL will continue to perform weakly and likely fill in most of the gap back towards historical resistance turned support between $4-5, which is 60% lower from here. It seems excessive given the recent volatility, but if the wider market takes a dive, SOL is still one of the least favoured coins at present and is intertwined with the FTX narrative. If we were to retrace into that $4-5 range, I would absolutely be a buyer there. If we hold $11.60, I want to see more range-bound price-action before jumping in.
Looking at SOL/BTC, the picture is largely the same, but we have come into an area of historical support – the June 2021 range lows around 72k satoshis. We now have 0.001 as reclaimed resistance overhead and 61k satoshis as major support below. If the bottom end of this range falls out, there is another 30% of downside before we reach the next important level at 42.5k satoshis, which is where I would expect to see demand step in. Alternatively, if we deviate below 61k and then begin to reclaim 72k as support, that will start to look like a bottom to me. Not much else to add here but I certainly would not be rushing into anything with SOL.
Cosmos:
ATOM/USD
Weekly:
Daily:
ATOM/BTC
Weekly:
Daily:
Price: $10.08 (59,470 satoshis)
Market Cap: $2.888bn
Thoughts: Beginning with ATOM/USD, we can see that weekly structure is still bearish following the breakdown below $10.55 and that that level is now acting as resistance once again, with minor support at $9. If we hold below $10.55 here, I would expect to see another leg lower follow into the major historical pivot around $7.77. If, however, price is able to close back above $10.55, I would look for longs back up into $14.58 to retest that resistance and fill in the gap. Dropping into the daily, we can see the fake-out above the 200dMA followed by the break back below it and subsequent retest as resistance, with price now firmly capped by the MA. If we were to break and close above it, that would provide confluence for those longs into $14.58, with invalidation on a close back below $10.55.
Turning to ATOM/BTC, we can see that price is chopping around having rejected at historical resistance, printing a lower-high below 77k satoshis a few weeks ago and then pushing lower into minor support here at 57k. This is a key swing-low, and any close below it turns weekly structure bearish, opening up another 20-25% of downside into the next major support level around 47k satoshis, which is where I am expecting to see buyers step in. The bullish scenario here would be for the pair to pump off this marginal sweep of 57k through trendline resistance and back above 71.5k satoshis; close the weekly above that level and I think we see another leg higher begin, but I think the likelihood of that is highly dependent on the broader market.
Axie Infinity:
AXS/USD
Weekly:
Daily:
AXS/BTC
Weekly:
Daily:
Price: $6.74 (39,750 satoshis)
Market Cap: $674.502mn
Thoughts: Beginning with AXS/USD, we can see from the weekly that price is currently sat on prior resistance at $6.60 and has been consolidating around it for a couple of weeks, but this is not an historical support level; rather, we have a major support level 47% lower around $3.30. If the broader market dives lower and this $6.60 level gives way, there is no support back into that area and I would expect another capitulation leg down. If we do get that, I am a buyer of AXS around $3.30 for the long-term. If, however, we are forming a bottom here, there is a lot more I need to see to be convinced, namely that price continues to flatten out around this level for weeks to come. If we drop into the daily, we can see that $8 is currently capping price as prior support, so what we’d want to see is that level become range support and price to just chop between there and ~$6 as support, deviate the low and reclaim and then break the top end of the range. That is my bottom formation if we see it.
Turning to AXS/BTC, we can see that price again is sat in no man’s land following a break and close below key support around 48.5k satoshis, with price now just bleeding lower. I do not expect we see another 50% lower from here into the 20k-satoshi support level (although that would be extremely attractive to buy if we did), but rather that the pair continues to bleed until a AXS/USD bottom has formed, then rallying higher to reclaim 50k as support. Looking at the daily, we have a lot of confluence in that 48.5k to 56k zone, so flipping that as support would be a strong signal to get involved for me.
Fantom:
FTM/USD
Weekly:
Daily:
FTM/BTC
Weekly:
Daily:
Price: $0.24 (1437 satoshis)
Market Cap: $617.45mn
Thoughts: If we begin by looking at FTM/USD on the weekly timeframe, we can see that price rallied this past week off the multi-year support above $0.16, but despite the rally we remain below prior support turned resistance at $0.24, with price marginally poking above the level this week but set to close below it. Structure is still bearish here whilst the pair remains below $0.30, with a lower-high very much possible in the next week or two. That being said, if we do see a weekly close above $0.30 here, we have a trendline breakout + failure to break below 2021 lows + reversal in weekly structure, which would be promising indeed. In that scenario, I think dip-buying FTM makes sense, with no resistance all the way back into the 200wMA at $0.43. I have marked out a possible scenario for this on the daily, particularly with price rejecting at the 200dMA at present, where any retracement into $0.19 looks attractive for a rally into $0.30. I would then look to hedge exposure and re-open on a close above the level, playing that towards $0.43. Invalidation on the first leg for me is a move below $0.16.
Turning to FTM/BTC, we have rallied off the 200wMA after a period of consolidation above it and price is now sitting right below reclaimed resistance at 1470 satoshis. This is looking much more attractive right now than the Dollar pair, which in turn is promising for the Dollar pair, and if we were to close the weekly above 1500, that becomes bullish market structure off the 200wMA, which is very promising. We do then have to contend with significant overhead resistance between 1750-1900 satoshis, so again any long exposure should be hedged up there, but if that gives way I think we see 2420 retested as support turned resistance.
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.
