Market Outlook #210 (5th March 2023)
Hello, and welcome to the 210th instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, Cardano, Chainlink, Axie Infinity, THORChain, Fetch.ai and Magic.
As ever, if you have any requests for next week’s Outlook, do let me know.
Bitcoin:
Weekly:
Daily:
Price: $22,445
Market Cap: $433.405bn
Thoughts: If we begin by looking at BTC/USD, we can see from the weekly that price is set to close the week right around minor support at $22.4k and marginally below last week’s low at $22.5k, with volume declining for the third week. We are still sat above the key resistance turned support at $21.5k – a level which remains pivotal as we go into next week’s price-action. For weekly structure to remain bullish, the pair cannot close below that level. Rather, bulls ideally want to see a higher-low form here above $21.5k, or for price to wick through that low and then close the week back above it, ideally on higher volume than the last couple of weeks. If we do see price break and close back below $21.5k, I would expect to see another 5-10% decline back towards $20k to retest prior cycle highs as support – if that gives way, no doubt we back fill the breakout rally back into $18.2k, which is a blind bid level for me.
Turning to the daily, we can see that price is sat right on trendline support but that daily structure is now very much bearish with the clean break and close below $22.4k. We now have a series of lower-highs and lower-lows coming into this trendline support, but if we look back just a couple of weeks ago we had a not too dissimilar move into support that led to a push higher. Unlike then, however, we now have bearish divergence across momentum indicators and unless we see price start to break back above $24k, I think it is more likely that we do move a little lower from here, if only to clear out the consolidation of lows around $21.5k before reversing. I will be looking for that wick and close back above the level for signs of a bottom formation. If we do see that, I will be looking for opportunities to long back towards the 360dMA, then hedging around $24.5k to reopen if we can clear $25.3k. Until we get a weekly close below $21.5k, I do still think the PA points to further consolidation below $25.3k as opposed to a full retrace of this rally back into $18k.
Ethereum:
ETH/USD
Weekly:
Daily:
ETH/BTC
Weekly:
Daily:
Price: $1,570 (0.06996 BTC)
Market Cap: $192.189bn
Thoughts: Beginning with ETH/USD, this week has seen price reject around $1664 resistance and push a little lower towards last week’s low at $1554, having wicked marginally below that and now set to close marginally above it. More broadly, ETH/USD is still just range-bound between $1510 as support and $1664 as resistance. Until we see a weekly close through either side of the range, there’s not a huge amount to do here. What we do have is price still being capped by that trendline resistance, but plenty of support nearby should we lose $1510, as the 200wMA and prior cycle highs are sat at $1430. If we drop into the daily, we can see that this range is also sandwiched between the 200dMA as support and the 360dMA as resistance. I think as long as we remain above $1430, a breakout above $1730 and a gap fill into $2037 seem the more likely trajectory for the next couple of months; however, break and close back below $1430 and all of a sudden this looks more like a distributive range at historical support turned resistance and those clean double bottoms that remain untouched come back into play.
Turning to ETH/BTC, what a fucking surprise – there has been no movement once again. The pair continues to consolidate on the mid-range as it has done for many weeks now. Let’s see if we get any movement next week…
Cardano:
ADA/USD
Weekly:
Daily:
ADA/BTC
Weekly:
Daily:
Price: $0.337 (1505 satoshis)
Market Cap: $11.718bn
Thoughts: Let’s begin by looking at ADA/USD, where from the weekly we can see that price rallied off the lows at $0.24 all the way back into the original breakdown area at $0.42, where it has struggled for a couple of weeks and has now turned lower, rejecting once again off trendline resistance from the all-time high. Price has now retraced into what could be reclaimed support at $0.33. However, if this level fails to hold, I think it is likely we retest the $0.27-$0.30 range to potentially form a higher-low. If we drop into the daily, we can also see that price failed to hold above the 200dMA and that there was no momentum at all on the push into trendline resistance, hence the reaction. The prior support at $0.30 is now the key level to hold if $0.33 does fail, as that was the support that preceded capitulation into the eventual bottom at $0.24. Hold that as reclaimed support and I think we have the makings of that higher-low. From there, bulls would want to see the next crack at the 200dMA and trendline resistance actually lead to a breakout and close through both, where I would then look to get on board. That is still likely several weeks away, but it is something to keep in mind,
Turning to ADA/BTC, more distressingly for Cardano holders the pair has found itself turning 200wMA support into resistance at 1800 satoshis and now retesting 2022 support at 1500 satoshis for the third time. The weaker bounces and lower-highs leading to this retest do not look promising, and if we do now close the weekly below 1486 and not immediately reclaim the level, I would expect another 20-25% of downside back towards the next support around 1125 satoshis, which obviously has implications for that bottom on the Dollar pair too. If however we see price wick below 1486 here and then print a strong reversal candle and range reclaim, I think we have our cyclical bottom forming, and it would then be a case of awaiting a 200wMA reclaim as support at 1800 satoshis before this gets really attractive again for long exposure.
Chainlink:
LINK/USD
Weekly:
Daily:
LINK/BTC
Weekly:
Daily:
Price: $6.95 (30,980 satoshis)
Market Cap: $3.595bn
Thoughts: Beginning with LINK/USD, we can see that price has held this range between support at $5.25 and resistance at $9.75 for 294 days at this point, spending much of that time just chopping around the mid-range at $7.30. At present, we have the makings of a week uptrend off of range support, having broken back above $7.25 into $8.46 but now rejecting and breaking lower once again. In short, more chop. If we look at the daily for greater clarity, we can see that price has finally broken and held above the 200dMA, with it current acting as support, with the 360dMA now acting as resistance. To be honest, unless we return to range support, I don’t see any value here in a bid given just how choppy this has been until we see a clear breakout back above $9.75; flip that as support and I can get more excited about a sustain reversal for Chainlink, but until then it doesn’t look as appealing as many other altcoins.
Turning to LINK/BTC, again we have some confusing signals here with price having broken above long-term trendline resistance from the 2020 highs, consolidated into the 200wMA as resistance and then rejected and now broken back below the trendline, albeit with it not really having much of an effect on price anymore. We are now sat on support at 29k satoshis, with a huge gap below should this level give way back towards 23.6k as the next support. We have also turned prior support at 35.4k satoshis back into resistance, with weekly structure now bearish. Dropping into the daily the 360dMA and 200dMA are sat overhead around that 35.4k level as confluent resistance. Clear all of that and reclaim it as support and I think we take another crack at the triple top at 44.7k satoshis, but again this is not exactly a super interesting chart from a risk/reward perspective.
Axie Infinity:
AXS/USD
Weekly:
Daily:
AXS/BTC
Weekly:
Daily:
Price: $8.92 (39,722 satoshis)
Market Cap: $1.01bn
Thoughts: Looking firstly at AXS/USD, on the weekly we can see that the pair broke out above trendline resistance from the all-time high following a multi-month consolidation at the lows, with price rejecting at support turned resistance ~$13. Following that rejection, price has been bleeding lower slowly but surely, but with the trendline breakout being respected as support on the way down. We are now retracing back towards reclaimed support at $7.98 and I would expect this level to hold here to retain weekly bullish structure, particularly if that multi-month consolidation below $8 was indeed the accumulation range preceding this next cycle. Closing back inside $8 would look weak here and I’d expect the bottom of the range to be retested in that case. As such, we want to see momentum start to diverge as price comes towards $8, which would be the first signs of a higher-low / bottoming formation above it. If we see that, I am adding to my position with an expectation that the next leg higher sees $13 broken and price retest the 360dMA and prior resistance at $18.50. If we break and close back inside $8 on the weekly, I will exit my position and wait to see what happens.
Turning to AXS/BTC, we can see from the weekly that price bounced into support turned resistance at 55.8k satoshis, right around trendline resistance, wicked through it and then rejected and has been bleeding lower since, back towards the support base of the original range down at 35.3k. Now, I would expect to see this range support retested now that we are back down here, and likely that we wick through it before a proper bottom is formed, where if we see demand step in on the move through 35k, I would expect that to mark out the cycle lows. If we close through 35k, the gap is unreal down to the next support at 20k satoshis. I very much doubt we fill this gap in even if we do break below 35k, but there really isn’t any key support below it to bolster price, so again I would be looking to exit any AXS I have and wait for a cleaner structure to form with a clearer signal…
THORChain:
RUNE/USD
Weekly:
Daily:
RUNE/BTC
Weekly:
Daily:
Price: $1.49 (6652 satoshis)
Market Cap: $488.281mn
Thoughts: Beginning with RUNE/USD, we can see that price capitulated below prior resistance turned support at $1.22 into $1.05, formed something of a spring and has since been trending higher, reclaiming the May 2022 low at $1.43 as support and recently rejecting at $1.95, with the next resistance up near $2.35. We have since retraced back into that May low, above which the pair is currently sat, and this would be where those who have been patiently waiting on the side-lines should begin to be interested. The range between $1.22 and $1.44 should now hold as strong support if we have formed the cycle bottom, and we should see price form a swing-low in this area and then start to push higher. If we drop into the daily, we can see that price meekly broke above the 200dMA before it rejected and is now back below it, but we haven’t got any signs just yet of a bottom formation: momentum is still pointing lower and daily structure is still bearish. What bulls want to now see is a lower-low form or price to wick below $1.44 and momentum to show bullish divergence, from which we then go on to break back above $1.74 as key resistance. That would be my signal for another leg higher, likely towards the historical support turned resistance and the 360dMA just shy of $3.
Turning to RUNE/BTC, the pair has been consolidating between prior support turned resistance at 8500 satoshis and support at 6200 satoshis since November last year, with the pair now sat just above that support level. At the worst, bulls want to see price wick below 6200 satoshis and then reclaim it as support, confirming this range as the bottoming zone. If instead we see a close through that level, the next major support is down at 3500 satoshis; again, like AXS, I don’t expect we see that entire gap filled in, but you wouldn’t want to have long exposure regardless in that scenario. If we do wick through the level, however, and then reclaim it, I will be looking to add RUNE to my portfolio with invalidation on a clean close below the range.
Fetch.ai:
FET/USD
Weekly:
Daily:
FET/BTC
Weekly:
Daily:
Price: $0.433 (1929 satoshis)
Market Cap: $354.948mn
Thoughts: Beginning with FET/USD, the pair has no doubt benefited from the AI narrative in crypto and is thus very much in the midst of a new bull cycle, having rallied over 10x off the bottom at $0.053 in November. Price rejected recently at historical resistance right around $0.54 and has since been consolidating below it, but above prior resistance turned support at $0.35. If we drop into the daily for more clarity, we can see that there wasn’t actually much by the way of waning momentum on the push into resistance but the consolidation period since has seen momentum start to diverge. That said, we have a bit of an ascending triangle playing out here for the time being, with $0.48 as resistance and higher-lows into it. If we do crack that resistance, I think it is likely $0.54 gives way too and that the next leg of this trend begins, with major resistance up near $0.91. On the bearish side, if we reject this resistance cluster and break back below $0.35, I think it is possible the pair sees a much deeper retrace back towards major support and the confluence of the 200dMA and 360dMA before continuation of the cycle.
Turning to FET/BTC, this chart is also currently supporting the possibility of higher prices, with the pair having rejected at 2700 satoshi resistance but now consolidating between minor resistance at 1920 and major resistance turned support at 1560 satoshis. As long as the pair is above 1560, I think continuation higher makes the most sense, with the next levels of interest above at 3300-3440 satoshis. Again, much like the Dollar pair, it’s only if we close below 1560 that a much deeper retracement becomes the more probable scenario, with the next support down at 1080. Either way, structure is bullish here on the higher timeframes and as is momentum, both fuelled by the most prominent narrative in the space at the moment. Fade at your peril, I would say.
Magic:
MAGIC/USD
Daily:
MAGIC/BTC
Daily:
Price: $1.33 (5914 satoshis)
Market Cap: $280.822mn
Thoughts: Magic has only been trading for a little over a year, so I will focus here on MAGIC/USD.
If we look at the Dollar pair for MAGIC, we can see that price has very much begun its new bull cycle, having emerged from the long-term low-volatility range in which it found itself between May 2022 and December 2022, with price beginning a rally out of the range at the turn of the New Year. Since, the pair has rallied through the 360dMA all the way into the major resistance cluster between $1.95 and $2.2, where it has now formed a double top and has retraced back towards some support, recently turning daily structure bearish on the close below the $1.33 swing-low. That said, we are coming towards a cluster of prior resistance turned support, as well as the confluence of the 200dMA and 360dMA. As I am sure you are already aware, one of the key signs of that depression to disbelief transition is the pump out of the bottoming range followed by a retest of the range – this is usually coupled by the 200dMA breaking above the 360dMA and signalling a longer-term trend shift. I believe this is what we are seeing begin to play out here, and that we are likely to now find a bottom above $0.95 and continue higher going into May, with any close through $2.20 opening up a huge range back into $3.95 as the next resistance. Exciting times ahead for MAGIC…
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.
