Market Outlook #21 (3rd February 2019)
Welcome to the 21st Market Outlook. After this past week’s price-action, we certainly seem to be in a precarious and decisive position concerning the market as a whole. Much has occurred, with local support levels swept across-the-board, but there have been very interesting reactions since, particularly in Ethereum.
In today’s post, I’ll be running through the action in Bitcoin, Ethereum and Monero, as well as taking a look at the price-history of Litecoin, determining whether we may be in for an imminent reversal…
Let’s crack on:
Market Cap: $61.484bn
Thoughts: I’ve provided the Weekly chart for Bitcoin to give a little perspective. It can be easy to get caught up in the lower timeframes when price-action is largely range-bound and ultimately indecisive. In it, we can see that price continues to trade above the Weekly 200MA, with volume declining for the past several weeks. This is highly indicative of an imminent expansion, both in volume and price. But, in which direction?
Well, we can see an untouched swing-low on the Weekly below $3000, with a meaty orderblock sitting just below it. If lower timeframe price-action points to bearishness, this is the area price will expand towards, with $2500 seeming the next level of strong support.
To colour our bias and garner a clearer idea of whether this will take place, we can look to the 4H chart. Here, we can see the symmetry in breakdowns below trendline support over the past 6 weeks. Once again, price is forming a short-term series of higher-lows, with price trending into an area of previous support turned resistance; the symmetry would suggest we get another breakdown and price takes a plunge towards new lows. However, interestingly, peak sell volume is declining with each successive move down, indicating that sellers are drying up and perhaps this symmetry will soon be shattered…
I am looking for a 4H close above $3600 to confirm a bullish reversal. A break of the current uptrend, however, will likely see us trading towards $3200 sooner rather than later.
Price: $108.44 (0.03121 BTC)
Market Cap: $11.363bn (3,267,482 BTC)
Thoughts: In last week’s Market Outlook, I expected that we’d see a breakout in one direction or another from the channel price had been constrained to, with the key support at 0.0313 BTC being the level to be swept if the breakout was bearish. We got that breakdown-and-sweep, followed by the expected retest of that level of support. However, we didn’t see the subsequent bearish reaction that I would have expected, with price instead forming a higher-low on the 4H and then making a move towards reclaiming 0.0313 BTC. This would indicate that the breakdown was perhaps false. I would like to see a 4H close above 0.032 BTC to confirm this reversal. However, this current uptrend is occuring on declining volume, which is a worry for bulls.
Looking at ETH/USD, we see confirmation of the overall bullish bias, with the prior uptrend from December occuring on rising volume (a bullish sign) and the current downtrend from early January occuring on declining volume (another bullish sign). Short-term trendline resistance has also become support but price would need to reclaim $117 on the higher timeframes to confirm this for bulls. I would begin looking for longs after this takes place.
Price: $43.59 (0.01242 BTC)
Market Cap: $723.659mn (208,287 BTC)
Thoughts: Monero remains range-bound against Bitcoin and the Dollar, with XMR/USD in a tight range between $43-48, and XMR/BTC having found range resistance at 0.0136 BTC (a level of prior support). I am currently accumulating Monero in this range, but would exit on a Daily close below 0.0115 BTC. For the more risk-averse, I would wait for breakouts and higher timeframe closes above range resistance for both pairs.
Price: $33.93 (0.00978 BTC)
Market Cap: $2.046bn (589,501 BTC)
Thoughts: Litecoin isn’t a coin I’ve paid much attention to over the past year. Looking at it now, however, and it seems we have an opportunity presenting itself:
The LTC/USD Weekly chart shows that price has trading into prior resistance now turned support (the peak of the previous bubble), with trendline resistance and the Weekly 200MA holding price for now. The downtrend since January 2018 has also been occuring on progressively declining volume.
LTC/BTC is also being held by the Weekly 200MA, with the downtrend again occuring on near-zero volume. The Daily shows us that price is trading inside a bullish orderblock, and is currently pressing up against a level of significant historical resistance at 0.01 BTC (a breakout from which ignited the previous bull cycle). Further, price has broken above the Daily 200MA and successfully retested it. I’ll be buying any higher timeframe close above 0.01 BTC.
That concludes this week’s Market Outlook. I hope you’ve found it somewhat useful. As ever, feel free to leave any comments or questions below and I’ll get back to you!
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