Market Outlook #214 (2nd April 2023)
Hello, and welcome to the 214th instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, BNB, Dogecoin, Axie Infinity, Oasis Network, Harmony and Decentral Games.
As ever, if you have any requests for next week’s Outlook, do let me know.
Market Cap: $549.335bn
Thoughts: If we begin by looking at BTC/USD on the monthly timeframe following the March and Q1 close, we can see just how impactful last month was to the overall structure here. We saw higher volume that in February, but more importantly price wicked below the February low into trendline resistance from the all-time high now turned support at $19.5k, then rallied all the way into the monthly close, breaking firmly through $25.4k resistance to close right at prior range support ~$28.5k – a bullish engulfing of February off key support and prior cycle highs. Moreover, the close through $25.4k turned monthly structure bullish – quite literally never has that happened in a previous cycle and then price move to new cycle lows. Obviously, there is the possibility of it happening for a first time, but probability suggests not. Now, as long as can hold above $25.4k on the monthly timeframe as reclaimed support, I would expect to see price break back above $28.5k and eventually push on into ~$42k over the coming months.
Turning to the weekly, we can see that price consolidated for a second week below range support turned resistance at $28.5k and above the 200wMA at $25.5k. We continue to hold well above the breakout area and this past week saw the prior weekly range low and high taken out but we are set to close right at resistance. If this resistance proves too difficult to crack here, any break below $26.6k would suggest to me that we are getting a proper breakout retest at $25.4k, which would be a nice buying opportunity, though I would imagine that gets front run or price actually dips below it into $24.3k to bait breakdown shorts before reversing. Either way, holding above that breakout level on the weekly is key here. If we start to push higher and through $28.5k, I think we see price trade into $34k before the next area of resistance is found.
Turning to the daily, we are firmly above the 360dMA now and price continues to chop around inside this $26.5-28.5k range. A daily close through either side of the range is the signal for trend continuation (above $28.5k) or for a deeper retracement and breakout zone retest (below $26.5k). There really isn’t a lot else to add here – this is super clean market structure. I think if we close through $28.5k, all of those swing-highs around $31.5k-33k get taken out, as those were the final highs that preceded the leg lower into $17.5k in June. We could potentially squeeze as high as $37.5k if we take those out, as there a large liquidity void between there, but I would expect some resistance to be found at prior support ~$34k.
Price: $1,818 (0.0641 BTC)
Market Cap: $218.942bn
Thoughts: Beginning with ETH/USD, we can see from the weekly that price is coiling up above reclaimed support at $1730 and below resistance at $1850, with this past week taking out prior weekly lows but set to close right around resistance. Volume is down on the prior week yet again and I would expect next week to bring expansion. Looking at the daily, we are also continuing to find resistance at the trendline that has capped the highs most of this year, but I did like the fake-out below $1730 this past week that immediately got retraced, with price back at range resistance. This suggests to me that we are more likely to clear the top of the range and make a push for that $2037 swing-high to get taken out before any local top formation. If, however, we wick through $1850 next week and break down, I would expect to see this week’s low below $1730 to get swept again into that trendline resistance breakout and 360dMA area right around $1660, where I would punt a long, as any close back below $1620 for me would make this look like a deviation, so it’s great risk/reward.
Turning to ETH/BTC, we consolidated within the prior weekly range this week, capped largely by 0.0647. If we look at the daily, I have marked out a possible trajectory for the coming weeks, with a possible fake out of the current range leading to a 0.0664 retest as resistance, followed by a final leg lower towards that untested 0.0594 level. No reason to get bullish unless we reclaim 0.069, in my opinion. Trend is pointing down…
Price: $314.87 (0.0111 BTC)
Market Cap: $49.713bn
Thoughts: If we begin by looking at BNB/USD, we can see from the weekly that price has been largely range-bound since the May 2022 capitulation low, with the entirety of the past 10 months being capped by ~$340. We did wick beyond that range resistance once but immediately rejected, and have since found support at $220, above the 200wMA. Price has been in a small uptrend since November but remains capped by that range resistance, and until we see a clean close through $340 and subsequent confirmation as support, I wouldn’t really want to be involved. That said, dropping into the daily we can see that the 200dMA and 360dMA are converging here and so I wouldn’t be surprised to see a dip into the $290-300 range to test that confluence, possibly form a higher-low above the $265 swing-low and then take another crack at $340, particularly given that daily structure is currently bearish following another fake out above that range resistance. Clear the top of the range and I think we see another 35% of upside towards the major resistance level at $450…
Turning to BNB/BTC, now this is where we see why we currently wouldn’t want to have long exposure to BNB, as it is looking like underperforming BTC for a while yet, with a strong downtrend in play since the all-time highs, bounces capped by trendline resistance and structure and momentum still pointing lower. Dropping into the daily for clarity, we can see that price is firmly below the 200dMA and 360dMA and that we are currently sat around minor support at 0.011. I would expect to see the pair continue lower if BTC jumps above $30k, and I am eyeing up that 0.01 level as a magnet. That said, until the pair starts reversing some of this bearish structure and – ideally – breaking above trendline resistance, I see no reason to own BNB.
Price: $0.0802 (284 satoshis)
Market Cap: $11.127bn
Thoughts: Beginning with DOGE/USD, we can see that reclaimed support at $0.067 continues to hold price but that we remain capped by major resistance between $0.092 and $0.10. We have spent much of the past year in a larger range above $0.04 and below $0.10, but we have recently swept support and bounced, and I would be looking for a weekly close above the 200wMA and above this resistance cluster to really want to pay attention. If we see a weekly close through $0.10, weekly structure turns bullish after weeks of chop and we then have a clean invalidation for longs – a loss of $0.067. Dropping into the daily, this recent chop has led to ever-tightening ranges and we are now set to break beyond both the 200dMA and 360dMA, the latter of which has capped every bounce since November except that first one, though we did immediately retrace back below it then. If we can start to close and hold above this confluence of MAs, I would expect to see that $0.10 resistance give way on the next attempt and any daily close above to open up the next leg higher towards $0.135, where I would expect a disbelief rally to begin playing out. Above $0.165, however, is where things get most interesting, as we then have a huge gap into $0.36 as the next major resistance, and best believe I want to be involved for that range play.
Turning to DOGE/BTC, we can see from the weekly that price is finding support above the 200wMA at 245 satoshis, as well as reclaimed support from the May capitulation low, indicating that a macro higher-low is forming here. However, we are literally pressed up right against reclaimed resistance right now at 295 satoshis – this is not where I’d want to be long DOGE at all, but if we start to close the weekly back above this level and turn it into support, I would look for long exposure with invalidation below 245 satoshis and looking for at least 488 satoshis to be retested as major resistance. Not much else to add here…
Price: $8.49 (29,960 satoshis)
Market Cap: $982.713mn
Thoughts: Beginning with AXS/USD, we can see from the weekly that price is currently consolidating above reclaimed support at $8.20, having broken above trendline resistance from the all-time high and then retested it as support. We have been sat around here for a month now, and whilst we continue to hold $8.20 as support I am inclined to believe that this is a higher-low formation from which the pair will move higher to take a crack at $13 once again. If and when we get that $13 breakout, a weekly close through the level will be my signal that a new cycle has start for AXS/USD and I would expect price to begin a more sustained reversal, with $41 as the first major target from there. Invalidation on this idea at present is a close below $8, which opens up a retest of the 2022 lows at $5.80. Turning to the daily, we can see that the 200dMA continues to cap price as it has done since the beginning of 2022 and daily structure is currently bearish. If we are able to close firmly through the 200dMA, that would be my first sign that a local bottom has formed with $8.20 as major support, but, when we look at the BTC pair, we’ll see why this isn’t necessarily a signal for immediate outperformance.
Turning to AXS/BTC, this is (much like BNB/BTC) the reason why I am not currently positioned in AXS, despite having had a position a couple of months ago. This does not look attractive at all and has not looked attractive since rejecting trendline resistance and losing 42k satoshis. That led to the bottom of the range getting taken out at 35.3k a few weeks ago and price is now in no man’s land, with no major support all the way down to 20.6k satoshis. The likelihood is that if BTC pumps through $30k and continues squeezing, this pair will suffer and be drawn towards that major support before a bottom is found. Alternatively, if we just chop around in no man’s land, it makes much more sense to await both a 35.3k reclaim, as well as a strong close through trendline resistance, before looking for long exposure again on AXS, as that will be the clearest signal that a period of outperformance is set to begin. On the daily, you can see these two trajectories marked out. No need to rush anything here…
Price: $0.0604 (213 satoshis)
Market Cap: $345.371mn
Thoughts: Now, for ROSE, there really isn’t a huge amount to discuss, because those who have been reading these Outlooks know my position on it clearly. However, I wanted to include it today because there is really clean structure here that has prompted me to take a separate position – beyond my long-term cyclical play – and I wanted to share it.
Looking at ROSE/USD, we can see that the pair is sat above reclaimed support at $0.052, which is the May capitulation low that has been range support since then except for the capitulation in December that was V-reversed back above the May low. Weekly structure is bullish and this very much looks like a bottoming formation to me, so I am buying ROSE here with an invalidation on a weekly close below $0.042 and a target of the gap fill into $0.174 for a ~5R play.
Clean structure + clean invalidation + huge gap fill.
Price: $0.021 (73 satoshis)
Market Cap: $274.94mn
Thoughts: If we begin by looking at ONE/USD, we can see that structure looks fairly similar to ROSE/USD, with the May low currently acting as reclaimed support at $0.17. Weekly structure is currently bullish, but if we lose that reclaimed support the picture begins to look more bleak. For now, however, this looks like a clean breakout beyond trendline resistance after a 98% drawdown, following by a weekly structure break to the upside and now a potential higher-low formation above key historical support. Any long exposure would be wise to have an invalidation on a loss of $0.15, as moving back below that level opens up another 35% of downside back into the December lows before any further support is found. Conversely, rallying from here through reclaimed resistance at $0.032 would be a confirmation of a cyclical reversal for me, from which point I would expect one to begin the road back to fill the gap in at $0.11.
Turning to ONE/BTC, we have just closed the weekly below reclaimed support at 77 satoshis but are set to close a bit of a reversal hammer in this region. To be honest, I doubt this will make all that much difference if BTC pops $30k resistance, as we are likely to then return to wards that December low at 57 satoshis, where there is significant support. Unless that low gives way, it is likely we form a double bottom in that region and then ONE begins to outperform from there. However, a real show of strength would be for this hammer to stick and price to rally back above 85 satoshis despite BTC pushing higher, in which case I would be jumping on board and looking for a continuation higher into 125 satoshis followed by 185 satoshis – above that, no resistance back into 286.
Price: $0.032 (113 satoshis)
Market Cap: $21.186mn
Thoughts: As DG has only been trading since early 2022, I will focus here on the Dollar pair.
Looking at DG/USD, we can see that price has been in a bear market since inception and fell 97% from the all-time high into a low in January 2023 around $0.021. Since, it has rallied above the 200dMA for the first time in its history, found resistance at $0.0526 and then retraced back below that MA, now finding resistance below it and below prior support at $0.04. We are currently holding just about above reclaimed support at $0.032 but I would expect to see price return to $0.028 from here, where there is so more support. Keen readers of the Outlook will know that I have been building a DG position in the $0.022-$0.028 range and will be looking to add to my position if we return to that range, as I believe this rally off the all-time lows was the test pump, following which we often see a return to range and then a continuation higher into a disbelief rally and new cycle. This is one of those positions I expect to hold for up to 18 months from now, with invalidation on fresh all-time lows and looking to hold the majority at least into $0.27 as an untested historical support level. Let’s see how the next couple of weeks go, but I expect this next leg lower to be a good opportunity for those on the side-lines to get involved.
And that concludes this week’s Market Outlook.
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