Market Outlook #212 (19th March 2023)
Hello, and welcome to the 212th instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, Litecoin, Uniswap, The Graph, Immutable, Ankr and Rainicorn.
As ever, if you have any requests for next week’s Outlook, do let me know.
Market Cap: $532.542bn
Thoughts: If we begin by looking at BTC/USD on the weekly timeframe, we can see that price is set to close at weekly highs following one of the largest weekly rallies in recent history, on higher volume than the past six weeks. Price rallied off the weekly open at $22.2k all the way through support turned resistance and the 200WMA at $25.4k, continuing higher towards the $28.7k range support turned resistance below which it is currently sat. Given that we are extremely likely to now close firmly through $25.4k and the 200wMA, both of which have capped the pair since May 2022, we are looking at a continuation of the uptrend following a strong sweep of support into prior cycle highs at $19.8k. There is literally no reason to overcomplicate this at present – we have momentum pointing higher, we have bullish weekly structure and we have closes through key levels on good volume. With all that being said, we are now pushing right up into the next major resistance cluster between $28.7k and $30k, which I do expect to cap price on the first push into that range, so looking for long exposure up here does not make sense to me. Rather, what bulls want to see here is a higher low form above the $25.4k if we reject up here, in which scenario we could expect to see a breakout through $30k on a subsequent attempt.
If we look at the daily, we can see that there is no indication amongst momentum indicators that the trend is slowing up here and we have closed firmly above the 360dMA and above channel resistance from the January highs. I would expect to see an early spike up into that $28.7k to $30k range next week followed by some sort of rejection and retracement back towards the $25.4k region over the next couple of weeks, where bulls would want to see a higher-low form to maintain this structure. For those on the sidelines, that would be the key level to look to increase long exposure. If and when we do start to close above $30k – though I want to be clear that it would be extremely surprising if it was on the first attempt – I am looking at a the $39.6k level as the next major resistance. I am fully of the belief that we are forming the disbelief rally of the next cycle, where we usually run towards the 61.8% retracement of the bear market (this cycle at $48k) before correcting ~50% and then making the attempt at all-time highs. My bias will shift back to neutral if we close back below the 360dMA, 200wMA and prior range resistance ~$25k on a weekly timeframe.
Price: $1821 (0.065 BTC)
Market Cap: $220.163bn
Thoughts: If we look firstly at ETH/USD, we can see that price is set to close firmly through trendline resistance from the all-time high after weeks of consolidation below, on higher volume than the previous 6 weeks in which price has consolidated. This is promising and given how long we have been consolidating under resistance, I would now expect to see the gap filled into $2030, where there is strong resistance. As long as we can now hold above $1730 as reclaimed support, I think it makes sense to have a bullish bias and I would look for any dip back into that area early next week as an opportunity to long. If we drop into the daily, we can see that price is currently sat right at channel resistance following the breakout beyond trendline resistance, the 360dMA and prior support at $1730, but I would expect this to be the least significant resistance of the lot on route to $2k – if we do dip early next week from up here, I’d be looking to buy $1730 with invalidation below $1610 and looking for $2000. Not much else to add here.
Turning to ETH/BTC, we have finally seen price move beyond the tight consolidation range and we have now lost the mid-range at 0.0687 and are set to close the week through minor support at 0.066. Given this movement, I would now expect to see continuation lower from here towards 0.0594 as a stronger support base, where I would be looking for a bottom formation to come into play. If we look at the daily, I have marked out this level, and it is key to note that following the original breakout beyond that level back in July 2022 we never retested it as support, and so there is quite a large gap below 0.0642 into that level with no support in between. Whilst I would expect a small bounce in this area perhaps back towards 0.068 as support turned resistance, I do expect this gap to now be filled in unless we can get back above the mid-range.
Price: $86.22 (0.00307 BTC)
Market Cap: $6.25bn
Thoughts: Beginning with LTC/USD, we can see from the weekly timeframe that price has been trending higher since May 2022 and has recently rejected off prior support turned resistance and the 200wMA around $100-105. That range capped price earlier this year and last week saw price retrace all the way into prior resistance turned support at $65.75, catch a bid and close up near $77. This last week, price has been consolidating within the prior weekly range and thus we have the possibility of inside week failure: if we see price break below $74 next week and close back inside that level, I would expect to see the top end of the range at $89 to be taken out the following week, and vice-versa. Now, if we don’t see inside week failure form, I think it is important to remember here that structure is still bullish and we remain in an uptrend, and so I would expect to see another test of the 200wMA in the coming weeks, where any close through that level opens up $147 as the next major target.
Turning to LTC/BTC, the pair has been in a downtrend since 2018, spending most of that time capped by the 200wMA, which also capped price back in November 2022. Weekly structure is now bearish with price having closed back below support turned resistance at 0.00362 but we are now coming right into major historical support around 0.003, retesting it for the first time since breaking above it late last year. If the trend is shifting, one would expect to see price catch a bid in this region and turn higher, reclaiming 000362 and then taking another crack at the 200wMA. To be honest, this is not something I am keen to catch given the 5-year downtrend that remains in play and the abundance of other opportunities in the market.
Price: $6.64 (23,650 satoshis)
Market Cap: $5.061bn
Thoughts: If we begin with UNI/USD, we can see on the weekly that price is currently consolidating right below trendline resistance from the all-time high and that price recently retested support at $5.60, caught a bid and spent this past week rallying back above $6.40. Weekly structure is bearish at present but if we can close the weekly through trendline resistance here, I would expect that major resistance around $7.50 to be taken out next, above which weekly structure turns bullish and I would want to add to my UNI position. As long as we continue to hold above $4.75, I am holding some UNI, but reject up here, turn lower and break that support and I am exiting with a view to rebuy back near $3.50. Looking at the daily, we can see that the 360dMA is also capping price here and price has struggled to get beyond it for well over a year, so any sustain move above it and the trendline is a really clear signal of a shift in trend for me, but I will await that close beyond $7.50 to add to my position.
Turning to UNI/BTC. we can see that rice broke below support at 26.7k satoshis and this past week has turned lower, with weekly structure and momentum now bearish and price set to close around no man’s land at 24k. We have some support below at 21.3k satoshis, which may well start to mark out a macro higher-low above the May 2022 bottom, but failing that I would expect price to fall back towards 17k satoshis over the coming weeks, where there is more support. Dropping into the daily, we have retraced back below the 360dMA after consolidating around it for several weeks and there is nothing much bullish about this at present, thus indicating that UNI is likely to underperform BTC for a while yet – until we break and close back above 26.7k satoshis, I would not get excited about another period of outperformance and, if you are currently on the side-lines, that is likely the signal you should be waiting for before looking for any entries.
Price: $0.167 (594 satoshis)
Market Cap: $1.481bn
Thoughts: If we begin by looking at GRT/USD, from the weekly we can see that price retraced from prior support turned resistance at $0.23 into reclaimed support at $0.11 last week, caught a bid and has bounced off that weekly open this past week back towards $0,16, with momentum and structure firmly bullish but price still below key trendline resistance from the all-time high. For me, this is starting to look like buy-the-dip environment for GRT, at least whilst we hold above $0.11 and even more so if we can start to closer through trendline resistance and $0.23; once those level are cleared, I think we are very much in a bull cycle, and given the pair has been in a downtrend since February 2021, I would want to be on that train moving higher. So, for greater clarity, let’s look at the daily, where we can see that [rice front-ran a 200dMA retest and instead found support at $0.11 – which is very promising – and has since broken back above the 360dMA after the initial failed breakout above it. That said, we are currently in no man’s land and so I would not want to be looking for exposure here. IF we retrace early next week towards $0.13, that is an area I would want to see a higher-low form from which we make another pop at $0.23 and so I will be watching price-action keenly for that. Alternatively, if we keep ripping higher into $0.23, I am going to wait for a clean flip of that level and trendline resistance and then look to buy dips higher and ride it up into $0.48 as a first target.
Turning to GRT/BTC, we can see that price has rallied through trendline resistance from the all-time high and broken a two-year downtrend after a 95% drawdown, rallied into resistance at 756 satoshis and since bled lower on low volume back into resistance turned support at 593. If this level begins to from a higher-low and we push off from here, any weekly close through 756 is another clear signal that we are in buy the dip mode and invalidation becomes a close back below 590. Dropping into the daily, we have confluence here for the formation of that higher-low as price is testing the 360dMA from above as support, having never closed above it in its history prior to February 2023. For those keen to get involved, this does seem a good spot with a very tight invalidation on a close below 530, as in that case we are likely to return to the 200dMA and untested prior resistance around 450 satoshis, where I would look for a blind bid should we get that level.
Price: $1.52 (54,091 satoshis)
Market Cap: $1.316bn
Thoughts: As IMX has only been trading since January last year, I will focus here on the dollar pair.
Looking at IMX/USD, it has without doubt entered its first bull cycle for me following the recent higher-low above reclaimed support at $0.76 and subsequent rally to fresh yearly highs above $1.31, with price stalling around $1.60. This is exactly what I was hoping to see (and, if we look closely, we can see a similar front-run of that 200dMA retest that may also be occurring on GRT). I would expect to see price continue to squeeze higher into the major resistance cluster above between $1.83 and $2.17, where it is likely the pair takes a breather and retraces to form another higher low. This is more broadly positive for the NFT market too, in my opinion, and I would expect to see other NFT tokens begin to enter their disbelief stages of the new market cycle shortly. I still hold my entire position of IMX and will only look to sell a small portion around $2 given that this is its first bull cycle, looking to hold the majority for a stab at all-time highs later this year. Long and strong.
Price: $0.0365 (129 satoshis)
Market Cap: $352.441mn
Thoughts: Beginning with ANKR/USD, we can see from the weekly that price has retraced from reclaimed resistance between $0.042 and $0.047 into reclaimed support at $0.024 last week, rallying off that level and pushing back towards $0.036 this week, where it is set to close. Momentum and structure are bullish here on higher timeframes and I would fully expect to see price break higher from here through that resistance cluster to take another stab at $0.057, where there is currently a double top. Whilst we hold above that $0.024 reclaimed support, I do not think there is any reason to get bearish – obviously, lose that level and it is a different story, but until then I expect continuation of what appears to be a new cycle with $0.072 as a target for the coming weeks. Not much else to add here, as this is very clean structure.
Turning to ANKR/BTC, the pair is a little more confusing here, having rejected prior support turned resistance at 210 satoshis and now sitting right around resistance turned support at 135, set to close the week marginally below this but above the 200wMA. Looking at this, it does look more likely that ANKR underperforms BTC for the next few weeks at least, as if the 200wMA doesn’t hold as support it is likely we retrace towards the December 2022 low at 86 satoshis to find support. If BTC/USD really starts to squeeze higher, it may be that the Dollar pair just chops around consolidating below resistance whilst ANKR/BTC retraces before any meaningful continuation of the cycle takes place. Not one I’d particularly want exposure to at present given the better opportunities elsewhere.
Price: $0.0467 (166 satoshis)
Market Cap: $23.358mn
Thoughts: Given that both pairs look virtually identical for RAINI, I am going to focus here on the Dollar pair.
Looking at RAINI/USD, we can see that a new cycle looks well and truly underway, with the disbelief rally pushing the pair into trendline resistance from the all-time high back in February, price retracing from that high into the 200dMA and since rallying higher through trendline resistance and the 360dMA into new yearly highs above $0.04. I would fully expect this level to be flipped sooner rather than later and price to fill in the gap from here into $0.064, where there is resistance, but I am keen to hold onto this one for the whole cycle, as I expect new all-time highs either late 2023 or early 2024. If you are on the side-lines, I would look for any retracement back into $0.025 as a major opportunity to get on board with invalidation back below $0.014.
And that concludes this week’s Market Outlook.
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