Market Outlook #208 (20th Feb 2023)
Hello, and welcome to the 208th instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, Avalanche, Algorand, Fantom, Synthetix, Merit Circle and Acala Token.
As ever, if you have any requests for next week’s Outlook, do let me know.
Market Cap: $472.347bn
Thoughts: If we begin by looking at the weekly timeframe for BTC/USD, we can see that price bounced hard off of prior resistance turned support at $21.5k and retraced the two weeks of decline back into $24.3k, wicking above that into the 200wMA but ultimately closing right at that $24.3k level. Given the increase in volume against the prior week and the reclaim of a key resistance level, this is very promising for another week of attack against the 200wMA. We know how heavy this resistance is: prior support turned resistance at $25.4k has capped BTC since June last year, whilst price has held below the 200wMA for most of that period also. Nonetheless, there are no signs on the weekly as of yet that we’re done moving higher – I would however begin to be cautious about immediate upside until we see a weekly close above $25.4k, which opens up that next leg higher to fill the gap back into $28.7k. As long as $21.5k now holds as support, however, weekly structure is pointing higher.
Dropping into the daily, we can see that price wicked below $21.5k and then rallied off it following the sweep, immediately reclaiming $22.4k and $23.4k. We pushed as high as the prior weekly high at $24.3k before finding resistance, then wicking higher into the 360dMA and major resistance cluster around $25.4k, rejecting and now consolidating above $23.4k as resistance turned support. I would not be surprised to see price move a little lower from here given how heavy this overhead resistance is, but as long as we now form a higher-low above the $21.5k area I think this is going to take another crack at a strong breakout. If we see $23.4k swept early this week and demand step in, that may well be all we need to move higher. I am looking for a strong close through $25.4k before getting too excited however. No bearishness unless we lose $21.5k.
Price: $1698 (0.06885 BTC)
Market Cap: $203.468bn
Thoughts: If we begin by looking at ETH/USD, we can see from the weekly that price wicked below four weeks of lows at $1508 towards the 200wMA as support and then rallied hard, closing marginally back above resistance at $1664. We are now consolidating in an extremely tight range between $1664 and trendline resistance around the prior support at $1730. The strength of the move following the sweep indicates to me that we are likely to move through $1730 and look to fill in the gap higher into $2037. Turning to the daily, we can see how the bearish divergence played out, leading to that sweep of support and then the strength of the subsequent move higher – very promising indeed. We are now seeing daily closes through resistance at $1664, where that level had previously been capping the daily price-action, with price now wicking higher into trendline resistance, the 360dMA & historical support at $1730. I don’t need to reiterate how key an area this is, and, if we do see price reject here, I am looking for the weekend lows to be swept back towards $1619, price catch a bid and then push higher, firmly above this cluster. If we do close above, I think we get another 20% rally from there back into $2037.
Turning to ETH/BTC, last week saw price barely move at all, sat between the mid-range at 0.0687 and 0.07. If we do see an impulse move higher from BTC, it is likely this mid-range gives way and we start to move lower towards 0.064 as support. Beyond this, there really isn’t a lot to add at the moment – BTC is leading this for now. Obviously, if we see ETH/BTC start to push higher despite BTC/USD moving above $25.4k, that will be a key momentum shift in favour of ETH.
Price: $20.64 (82,930 satoshis)
Market Cap: $6.501bn
Thoughts: Beginning with AVAX/USD, we can see that price printed bullish divergence on the move below $12 into $10.50 as support and has since rallied 100% into prior support turned resistance at $21.50 a few weeks ago. Price wicked through this level but rejected and is now sat consolidating between it as resistance and $18 as support. Weekly structure is bullish following the clean break and close back above $14.95. All we are now awaiting is that $21.50 level to give way, as there is a 40% range between it and the next level of resistance up above $30. If we drop into the daily, we can see that price closed above the 200dMA for the first time since March 2022 a couple of weeks ago and has held above it since, retesting it as support last week and bouncing. This is now a key level, aligning with $18, and bulls want to see it continue to hold or else we’re heading back into that $15 area. If it does hold, a daily close through $21.50 will turn daily structure bullish and I would expect that next leg higher to begin from there into the 360dMA and prior support and $30.
Turning to AVAX/BTC, we can see that the pair formed a higher-low above 61k satoshis back in early January and has since reclaimed the 82k level as support, continuing to find resistance between 87-97k satoshis. If we turn to the daily for clarity, we can see how the 200dMA is also providing resistance within this range, and so it would be a clear sign of strength if we now see a push through the 200dMA back above 87k satoshis and through that 97k double top. If we do close through 97k, I think the longer term view is that we are emerging out of an Adam & Eve-style bottom that began in May/June last year, with 135k satoshis as the next major resistance.
Price: $0.28 (1137 satoshis)
Market Cap: $2.009bn
Thoughts: Beginning with ALGO/USD, we can see from the weekly that price has reclaimed minor support at $0.24 and is now sandwiched between there and prior support turned resistance at $0.28, albeit with last week closing marginally above that level. In order for this to now look like a reclaim of that long-term support level, we want to see this week close above last week’s high. If we do see that, I think ALGO is going to move towards the other end of that prior range, with resistance around $0.39, where we could look for longs at $0.29 with hard invalidation at $0.23 (but likely cutting on any sustained moved back below $0.27). Dropping into the daily, we can see that the 200dMA is also still capping price, with the pair having failed to hold above it since losing it at the beginning of 2022. We are also seeing bearish divergence into resistance, which may already have played out with that small dump back into $0.23 as support. This will be confirmed if we do start to close above the 200dMA here, and it also gives me some confluence for an entry.
Turning to ALGO/BTC, the pair has been consolidating between 970 satoshis and prior support turned resistance at 1175 for all of 2023, and I think the first sign of a reversal – and that the move into 970 was a deviation or spring – would be a reclaim of 1175 as support. I want to see the weekly close firmly through this area and then hold above it, with minor resistance above that at 1380 likely to cap price a little while longer. If we drop into the daily, we can see that the structure is now bullish with the break and close above 1175 and subsequent higher-low formation above 1074 satoshis; this low must now hold for the trend to remain bullish on this timeframe and we should see the next swing higher take the pair towards the 200dMA and that 1380 resistance. If we see that, I am looking to long the next dip on the Dollar pair.
Price: $0.53 (2139 satoshis)
Market Cap: $1.477bn
Thoughts: If we look firstly at FTM/USD, we can see that the pair broke and closed above the 200wMA a few weeks ago, rallying through prior resistance at $0.42 all the way into support turned resistance at $0.66, before rejecting and now consolidating between those two levels. The 200wMA and prior resistance is now acting as support and this is a pivotal level to now hold above. If we start to see the pair break back below $0.43, I would expect much of this rally to be retraced back towards $0.29, where we could look for long entries for another swing higher back into $0.66 and beyond into the $0.91 resistance cluster. If we drop into the daily, we can see that $0.57 is now capping price, so any higher-low here above $0.43 that leads to a daily close above $0.57 would suggest to me that the pair is ready to crack $0.66 and move to fill the gap into $0.91, which was where capitulation began back in May.
Turning to FTM/BTC, we can see that the trend is very much pointing higher, with bullish structure and momentum, as well as a slowly accelerating parabolic curve. We have reclaimed the prior resistance cluster at 1750-1900 satoshis now as support and are range-bound between there and resistance at 2420. Any weekly close above 2420 would begin a more parabolic leg higher, in my opinion, with this chart now very much reminiscent of a classic bull cycle post-disbelief. If we turn to the daily, I have marked out two trajectories: one more bullish short-term than the other. The first would see the 1750-1900 range continue to hold as support, along with the 360dMA, from which price will turn higher again and move towards 3600 satoshis; the second would see this initial rally fade out and price ‘return to normal’ over the coming weeks, then looking to form a third successive macro higher-low above that trendline support and above 1155 satoshis, from which we see a longer-term reversal emerge later this year. 1750 is key.
Price: $2.79 (11,170 satoshis)
Market Cap: $702.344mn
Thoughts: Looking firstly at SNX/USD, we can see that price is just breaking through trendline resistance that has capped the pair since September 2021, as well as above support turned resistance around $2.60. If we can see the pair close the week above $2.81, we now have a clean trendline breakout after turning weekly structure bullish, and I would be looking at every dip moving forward as an opportunity for longs, with the first resistance cluster above at $3.30-3.50, followed by $4.32. SNX has been in a bear market for longer than most, having set its all-time high against the Dollar back at the beginning of 2021. It would be unsurprising if it begins to accelerate out of this bottoming formation once we clear $3.50. Dropping into the daily, we are now sandwiched between the 200dMA (now acting as support for the first time since May 2021) and the 360dMA as resistance. Any close above the 360dMA would suggest to me that we are entering the disbelief phase of the cycle for SNX, with invalidation on long entries on a move back below $2.30/
Turning to SNX/BTC, the pair has reclaimed support at 9680 satoshis and continues to be capped by support turned resistance at 12,600 satoshis, where any close through that level will turn weekly structure bullish and open up a 20-25% move higher into the 200wMA. We can see just how extensive this bear market has been for the pair, with price having spent the entirety of the last year (and some) capped by that 200wMA, with the all-time high having formed back in August 2020. Now, whether the pair reaches that prior all-time high every again is currently unknowable, but I would be very surprised after such a drawn out bear market if we do not eventually see trendline resistance from the high retested, back towards that 33k area over the next 12 months or so. Dropping into the daily briefly, we can also see that minor trendline resistance from the July 2022 high has now been broken and retested as support and that price is capped by both the 200dMA and 360dMA as resistance; clear 1260 satoshis and I think the pair begins to accelerate higher.
Price: $0.39 (1578 satoshis)
Market Cap: $140.018mn
Thoughts: As Merit Circle has only been trading for a little over a year, I am going to focus on MC/USD here.
As you will already know from recent Outlooks, MC is one of the tokens I have been buying of late, and if we look at MC/USD, we can see that price formed a double bottom at $0.295 above the all-time low and is now attempting a third strike at prior support turned resistance at $0.44. This is a key level for the pair, having capped it since November 2022 and I would view a strong close through it as a clear sign of a reversal from the lows, with the next sign being a move above the 200dMA and subsequent test as support, with it never having being traded above in MC’s price-history. Ultimately, I am going to be adding to my position upon both those triggers, adding finally once we get above $0.60 and then looking to hold for a cycle, with major resistance coming in at $0.98, followed by $1.86. I will not be looking to exit until we at least see the original support level from the first trading day at $2.70 retested as resistance. I think there is plenty of upside ahead for this one… let’s see what 2023 brings.
Price: $0.149 (598 satoshis)
Market Cap: $91.192mn
Thoughts: Similarly to MC, ACA has only been trading since February 2022 and so I will focus on the Dollar pair here.
Looking at ACA/USD, we again have never seen price trade above the 200dMA and volatility has flatlined since putting in the all-time low at $0.094. From there, the pair has been range-bound above $0.11 and below the 200dMA and prior support turned resistance at $0.16, so naturally I am looking for a strong close through the $0.16-0.18 resistance cluster before looking to add to my position. From there, I am looking to hold for a cycle, with Acala never having had a bull cycle, and thus I am looking for a move to fill the gap into $0.82 at the very least before offloading anything. Invalidation on fresh lows, where I would exit and then look to re-enter on a reclaim or a new range formation lower, but I think that’s getting beyond greedy following a 97% drawdown…
And that concludes this week’s Market Outlook.
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