Market Outlook #215 (9th April 2023)
Hello, and welcome to the 215th instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, Cardano, Algorand, Fantom, dYdX, Fetch.ai and XCAD Network.
As ever, if you have any requests for next week’s Outlook, do let me know.
Bitcoin:
Weekly:
Daily:
Price: $27.885
Market Cap: $539.334bn
Thoughts: If we begin by looking at BTC/USD, we can see from the weekly that price is set to close a third consecutive week within a tight weekly range right below prior range support turned resistance at $28.7k. Volume has fallen once again and the pair has actually formed an inside week here, assuming no crazy swings in the next 12 hours or so. As such, we can consider the possibility of inside week failure next week, where if price takes out this week’s low at $27.2k early next week and then closes the week back above it, we would expect the top of the weekly range ($28.8k) to get taken out the following week, and vice-versa. This is assuming we do get inside week failure. If, instead, we see price close next week above $28.8k, I would expect to see another leg higher from there into the $34k area, and if we close below $27k, I think we have another ~5% drop into the as of yet untested breakout zone around $25.4k – this is why the short side seems unfavourable to me here, as even if we do start to break down, there is a huge untested support cluster between $24.3k and the 200wMA at $25.6k that I would expect to catch a bid. Only if we start to close the weekly back inside that range would I begin to get more bearish on BTC/USD. Momentum is also still pointing higher on the weekly timeframe.
Turning to the daily, whilst we do have a confluence here since mid-March of declining volume, falling RSI and falling AO, what we don’t have – in my view – is rising prices to make that a legitimate bearish divergence; instead, price has literally just been flat for three weeks between $26.6k and $28.7k. If we do start to break down here early next week, I would watch for that sweep of $27.2k leading to a flush of resistance turned support at $26.6k, because if we swing-fail that level I think the bottom is in and shorts get trapped at that level, providing fuel for the breakout beyond $28.7k. Not much else to add here at present.
Ethereum:
ETH/USD
Weekly:
Daily:
ETH/BTC
Weekly:
Daily:
Price: $1,835 (0.0658 BTC)
Market Cap: $221.009bn
Thoughts: Beginning with ETH/USD, from the weekly we can see that volume has declined once again as price has swept resistance at $1850 and rejected. Momentum indicators still seem to be pointing higher on the weekly timeframe but I don’t really like this deep wick through the prior three weekly highs and a subsequent close back around resistance. If we drop into the daily for clarity, we can see that price is still struggling to break above that trendline resistance that has capped the highs this year, but if we do see the pair break down here all I would expect is for these untaken lows to be swept into the 360dMA, shorts to get baited on the move below $1717 and then price to reverse and rally higher, with a first target of $2037, followed by a gap fill into $2426. Unless we start to close back below $1717 and then reject it as reclaimed resistance, I see no reason to be bearish on ETH for anything more than the short-term price-action.
Turning to ETH/BTC, we did get the expected rally into prior support turned resistance around the mid-range at 0.069 but, also as anticipated, the pair rejected that move and is now set to close marginally below 0.0664. Weekly structure and momentum are still bearish here, which is why I would continue to expect ETH to underperform BTC for a little while longer, and if we drop into the daily we can see how that trajectory is currently playing out. Now, if this 0.0647 area acts as reclaimed support next week, the tables could be turning, front-running the bottom around that 0.0594 area. Bulls want to see a higher-low form above 0.0647 leading to a strong close back above the mid-range and the 200dMA/360dMA confluence at 0.0699 – effectively, above 0.07 you would expect ETH to start leading the march higher. If, however, we break back below 0.0647 here, I would expect to see 0.062 get taken out and price to dump into that untested 0.0594 area as has been marked out for months.
Cardano:
ADA/USD
Weekly:
Daily:
ADA/BTC
Weekly:
Daily:
Price: $0.386 (1384 satoshis)
Market Cap: $13.411bn
Thoughts: Beginning with ADA/USD, we can see that the pair has closed above trendline resistance from the all-time high on the weekly timeframe but has spent this week consolidating between the breakout level and reclaimed resistance at $0.42, which is a huge level. We do now have a confirmed higher-low at $0.30, but until we see that weekly close above $0.422, structure is not yet bullish. Get that close through the level and I will happily become a Cardano bull for the range play back into the 200wMA at $0.60. Turning to the daily, we can see the pair has also reclaimed the 200dMA and is currently precariously sat above minor trendline support. If we break that trendline, I think there’s a good chance $0.35 acts as support and we push for $0.42 from there, with the 360dMA sat just ahead at $0.44. Any move above that cluster of resistance and I will be longing dips all the way into $0.60. Break and close back below $0.35 and I think we retest the $0.30 higher-low.
Turning to ADA/BTC, we have rallied off support around 1175 satoshis for three weeks but have failed to break above trendline resistance from the September 2022 highs and prior support turned resistance at 1500 satoshis. This is a major resistance cluster and I would not want long exposure right here, as rejection here (formation of a lower-high within this downtrend) would open up another 30-35% of downside towards 950 satoshis as the next level of support. Close firmly back above 1500 and I think we have the makings of a bottom, particularly with how the Dollar pair is currently structured. If we do see that, I think the 200wMA at 1800 satoshis is the next major level to be contested, and I would then expect 1500 to act as major reclaimed support in the event of a rejection at that MA to confirm the bottom is in.
Algorand:
ALGO/USD
Weekly:
Daily:
ALGO/BTC
Weekly:
Daily:
Price: $0.215 (767 satoshis)
Market Cap: $1.539bn
Thoughts: Looking firstly at the weekly chart for ALGO/USD, we can see that price continues to be capped by trendline resistance from the all-time high, although we are now moving sideways through it, thus invalidating it as major resistance now, in my opinion. We currently have bearish structure on the weekly but have put in a higher-low at $0.182 above the December low at $0.16. If this low holds, bulls want to see a rally and close back above support turned resistance at $0.28, which I have marked out with an arrow, because if we do close above that level I will be looking for any dip back towards it as an opportunity to buy reclaimed support with a target of $0.40, followed by $0.67. Looking now at the daily, we can see the 200dMA continues to be a struggle for the pair to hod above, after two consecutive fake-outs. However, daily structure is now bullish, with a series of higher highs and higher lows off the $0.18 level, but currently the $0.236 area is proving difficult to crack and price is chopping around $0.215. Start to break lower from here and I think that daily bullish structure gets invalidated and we move lower into $0.195. To be honest, I think the clearest signal here to look for long exposure is that breakout above $0.28, so I am happy to sit on the side-lines until wee see that.
Turning to ALGO/BTC, weekly structure is firmly bearish, as is momentum, but we are now sat right above all-time lows at 700 satoshis, with a range having formed between 730 as support at 850 as resistance. I don’t like the idea of this range formation right above the low, because I would imagine we see that low get swept and reclaimed before the cyclical bottom has formed. Dropping into the daily, we can see that price is just chopping around at present and no doubt if BTC breaks through $28.8k we will see new all-time lows for ALGO/BTC. But, in that scenario, we then just have to wait for a weekly close back above 700 satoshis to start looking for long exposure. Until we see either a sweep and reclaim of the lows or a strong rally back through ~1000 satoshis, I am not touching this.
Fantom:
FTM/USD
Weekly:
Daily:
FTM/BTC
Weekly:
Daily:
Price: $0.446 (1593 satoshis)
Market Cap: $1.236bn
Thoughts: Beginning with FTM/USD, we can see on the weekly timeframe that price continues to consolidate above resistance turned support at $0.42 but below $0.53, effectively chopping around the 200wMA in between those levels. We already wicked below $0.42 all the way into $0.29 several weeks ago but found strong support there and immediately broke back above $0.42, so in my view there is no reason to now start breaking down to go retest that area as support if we are bullish here. If we do start to close the weekly below $0.42, I would expect all of that wick to get filled in and we could look to play that short into $0.29. From the daily timeframe, we can see that both the 200dMA and 360dMA have acted as support for higher-lows, and price has broken above short-term trendline resistance. This is promising and we would now want to see a daily close above $0.53 to confirm continuation higher, where I would then expect the pair to rally towards $0.90. Not much reason to get bearish for me unless we lose this most recent higher-low above the 360dMA…
Turning to FTM/BTC, this is very much looking like the first major pull-back within a new market cycle. Structure is bullish on the higher timeframes and we are now consolidating above prior resistance turned support at 1500 satoshis, still firmly above the 200wMA and trendline support. If we drop into the daily for clarity, we have also marginally broken above trendline resistance from the Feb highs and the 200dMA is about to cross above the 360dMA, with both sat right around that 1500-satoshi support area. This is a major support cluster and I would not be surprised to see it now get swept and then price reverse off it, breaking back above 1877 satoshis to then rally back towards 2420, followed by 3600 satoshis later this year. I am keeping a close eye on the pair for that sweep, as I would love to get involved around 1480, with an invalidation on a weekly close below the 200wMA at 1200 satoshis and looking for both of those major targets as a swing position.
dYdX:
DYDX/USD
Weekly:
Daily:
DYDX/BTC
Weekly:
Daily:
Price: $2.42 (8692 satoshis)
Market Cap: $378.654mn
Thoughts: Beginning with DYDX/USD, we can see that price has been consolidating right around the prior range resistance turned support at $2.37 for several weeks, having wicked below it into support at $1.77 and immediately reclaimed the level. We remain capped by support turned resistance at $2.97, but to me this very much looks like re-accumulation above the multi-month range prior to continuation higher. Looking at the daily, we can see that price is holding above both the 200dMA and 360dMA – much like Fantom – but is capped by trendline resistance at present. I think any long exposure here should now have invalidation below $1.60, with a view to add on a clean break and close back above $3 and a first target of $7.15.
Turning to DYDX/BTC, we are sat on reclaimed support around 8240 satoshis, with major resistance having capped the pair at 15k back in late January. We have been forming higher-lows since June 2022 and as such one would expect to see this area now act as a higher-low also, with any weekly close below 7925 opening up a retest of the 6400-satoshi support area, and potentially breaking this longer-term uptrend. If we do hold here for a higher low, I think any weekly close above prior support at 11.8k satoshis will lead to another attempt at a breakout beyond 15.1k, with a weekly close above that level likely leading to a period of parabolic outperformance for DYDX…
Fetch.ai:
FET/USD
Weekly:
Daily:
FET/BTC
Weekly:
Daily:
Price: $0.33 (1192 satoshis)
Market Cap: $270.028mn
Thoughts: Beginning with FET/USD, we can see from the weekly timeframe that the pair has rejected at historical resistance around $0.54 and has since turned lower, bleeding out for most of this year, with this week taking the pair back below prior resistance at $0.35. Weekly structure is unclear due to the choppiness around this top formation, but the clean weekly close back below $0.35 makes this unattractive in my view, with the most likely trajectory for the pair back towards the 200wMA and reclaimed support around $0.23. Looking at the daily, we do have bearish structure here following the rejection at $0.48 resistance, with price now breaking below $0.35 to retest the March lows at $0.31. Close the daily below that and I do think we continue to retrace, with $0.23 the first major support below it, aligning with the 200dMA also.
Turning to FET/BTC, we have a similar situation here with the rejection around 2700 satoshi resistance and the failure to close beyond 1920, with price bleeding for five consecutive weeks since and now looking to retest some minor support around 1080 satoshis. Again, looking at this I don’t actually think this looks attractive at all until we come back into that 800-satoshi area where the 200wMA sits. Dropping into the daily, this would also be right around the 78.6% retracement of the entire rally off the lows, which would not be unusual in the first major pull-back of a new cycle for an altcoin. For now, both daily structure and momentum are pointing lower and I at the very least see a dump from here into the 200dMA at 940 satoshis before any relief is found.
XCAD Network:
XCAD/USD
Weekly:
Daily:
XCAD/BTC
Weekly:
Daily:
Price: $1.52 (5447 satoshis)
Market Cap: $62.238mn
Thoughts: If we begin by looking at XCAD/USD on the weekly timeframe, we can see that the pair broke out beyond trendline resistance from the all-time high, with price now pulling back towards the breakout zone and reclaimed support at $1.38. This is a key area to now hold above, as we have a high-volume breakout and bullish weekly structure to maintain; as such, I think $1.40 would make a nice entry for those on the side-lines looking for an area of opportunity, with a tight invalidation on a close below $1.25. I am holding XCAD spot and looking for the next leg to take price into $2.48, above which I think we teleport to $4.75.
Now, looking at XCAD/BTC, we can see that the pair has been range-bound between support at 4750 satoshis and reclaimed resistance at 6920 for several months now, and price is set to retest the bottom of this range. Given that BTC looks like it could potentially squeeze higher through $29k, I wouldn’t be surprised to see the bottom of the range swept here and price then reclaim the range and rally higher from there. I think the clearest signal for the next cycle of outperformance beginning for XCAD will be a weekly close beyond 7000 satoshis, so that is something to keep an eye on from here…
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.
