You are currently viewing Market Outlook #217

Market Outlook #217

Market Outlook #217 (24th April 2023)

Hello, and welcome to the 217th instalment of my Market Outlook.

In this week’s post, I will be covering Bitcoin, Ethereum, ImmutableX, Synthetix Network, GMX, Convex Finance, LooksRare and X2Y2.

As ever, if you have any requests for next week’s Outlook, do let me know.

Bitcoin:

Weekly:

btcusdweekly

Daily:

btcusddaily

Price: $27,446

Market Cap: $531.387bn

Thoughts: If we begin by looking at BTC/USD on the weekly timeframe, we can see that last week retraced the entirety of the prior weekly breakout after a three week consolidation below $28.7k, with price closing back below that level. This is not what you’d want to see after that sort of consolidation and key breakout, and the price-action this week will be really important, in my opinion, with any rejection off $28.7k as reclaimed resistance cementing the failed breakout. If we see that occur and price then close below $26.6k, my bias would shift to neutral from bullish here, as we would be caught in no man’s land there, with the $25.4k untested breakout level and the 200wMA just below that potentially providing support, particularly given that even if we reject $28.7k, the market structure is still bullish with a series of higher-highs and higher-lows since the November bottom. If, however, we continue to retrace through $26.6k and start to close back inside that $25k area, I would be looking to cut all spot exposure, with the expectation that we likely return to mid-range around prior cycle highs ($20k) in that scenario; I would rebuy around there and scale in if we moved lower, or rebuy on a reclaim of $25k. Now, for the bullish scenario, as mentioned in my Wednesday post, any sweep of $26.6k followed by a rally back above $28.7k and I would consider that a bottoming formation from which we are likely to begin that third drive higher into the 38.2% retracement area ~$36k.

Dropping into the daily, I have marked out the most bullish scenario from that mid-week Outlook, whereby we deviate back below $28k and then start to break back above it and retrace back into $31k and beyond, but given how last week closed I am far less convinced of that trajectory from here, rather expecting the second scenario the more likely if we are to remain bullish here. If we start to break below that $26.6k low, I will be looking for reasons to long around $25.4k and then looking to add back above $26.6k and $28.7k, looking for a swing position into $34k as a first target, followed by $36k. For the short side, if we do start to break and close back inside prior range resistance at $25.4k, I will look to short a retest of that level from below, targeting $22.4k as a first target, followed by $20k. Let’s see how the next week plays out…


Ethereum:

ETH/USD

Weekly:

ethusdweekly

Daily:

ethusddaily

ETH/BTC

Weekly:

ethbtcweekly

Daily:

ethbtcdaily

Price: $1,849.91 (0.06738 BTC)

Market Cap: $222.743bn

Thoughts: Beginning with ETH/USD, we can see from the weekly that price retraced the entirety of that prior weekly rally but for the moment remains marginally above resistance turned support at $1847. Start to close back inside that level and I would expect these recent weekly lows to be taken out back into major support around $1715, potentially as low as $1665, before trend continuation higher – assuming the trend remains intact – with a target of the gap fill into the 38.2% retracement at $2425. However, my view turns bearish if we close the weekly below $1665, reclaiming prior range support as resistance, with $1508 the first level of interest below that, where the 200wMA sits. Dropping into the daily, both bullish trajectories from the mid-week Outlook remain mapped here, and unless we get a break back above $1944 early this week, I would expect to see that deeper retracement play out, taking out all the untested lows into $1665-1715 before finding a bottom.

Turning to ETH/BTC, for now, that trendline resistance continues to cap the rallies and the mid-range is resistance once again at 0.0687. Until we clear this cluster of resistance levels, I think it is reasonable to assume the weekly downtrend from the September 2022 highs remains in play, with the next leg lower likely to take the pair into that 0.0594 area. However, close the weekly above 0.073 and I think the picture changes and ETH becomes the outperformer for a sustained period. Looking at the daily, we rejected off that 200dMA and 360dMA confluence around the mid-range and have retraced into reclaimed support at 0.066. Bulls want to see this area hold as a possible higher-low formation, particularly given that we do have bullish market structure here on the daily timeframe at present. Hold 0.066 and rally back above 0.07 and I think we are ready to reverse this downtrend, but until then it remains a bearish trend.


ImmutableX:

IMX/USD

Daily:

imxusddaily

IMX/BTC

Daily:

imxbtcdaily

Price: $0.967 (3525 satoshis)

Market Cap: $884.8mn

Thoughts: Given that IMX has only traded for a little over a year, I will focus here on the dollar pair.

Looking at IMX/USD, we can see that following the 94% downtrend, price formed a range in Q4 2022 between the all-time lows around $0.38 and range resistance at $0.53, then breaking beyond that in January to begin an uptrend into $1.60 in mid-March. Price has since been chopping around, largely within another range where $0.95 is support and $1.32 is resistance, with a deviation either side of that range in March. Daily structure is currently bearish but given how choppy this has been I don’t think that’s worth much at present; rather, we have $1 capping price for the last few days and I would expect to see another leg lower from here into the cluster of support below back around $0.77, where the 200dMA, 360dMA and reclaimed support are all sat. If we do see that, I would look at that as a spot buying opportunity with a very tight invalidation; close back below $0.70 and this whole range looks distributive following the uptrend and I would expect to see price return to retest prior range resistance around $0.52 from which the trend emerged. If IMX is still bullish and this is just the first major pull-back/consolidation of its first bull cycle, we should see $0.75 hold and price rally back above $1 from there, with a daily close through $1.31 then opening up another period of trending higher towards resistance around $2.


Synthetix Network:

SNX/USD

Weekly:

snxusdweekly

Daily:

snxusddaily

SNX/BTC

Weekly:

snxbtcweekly

Daily:

snxbtcdaily

Price: $2.49 (9074 satoshis)

Market Cap: $644.471mn

Thoughts: If we begin by looking at SNX/USD on the weekly timeframe, we can see that following the trendline breakout at the beginning of this year, price has largely been range-bound between $3.30 as range resistance at $2.37 as range support, barring a few wicks above and below that range. Unlike many alts, Synthetix has been in a bear market since the beginning of 2021 again the Dollar, putting in an all-time high back then around $30 and losing 95% of its value into the December 2022 lows. We rallied hard off those lows and given the length of time we spent trending lower + the length of time we have now spent consolidating following a breakout, I would expect that the pair begins another leg higher from here in the coming weeks. Confirmation of this is clear: close the weekly above $3.30 and I am longing every dip SNX gets at least back into $8.25. Close the weekly below $2.37 and I think we retest $2.10 as major support, but I do not expect to see the pair move below that, or else this again looks like a distributive range from which we are likely to return to the November-December supports around $1.56. Briefly dropping into the daily, we can see that the 200dMA had capped every rally since August 2021 until the January 2023 breakout and the 200dMA is now acting as support, providing confluence for this $2.10-$2.40 range as major support for the trend. If we lose the bottom of that range, it’s not looking good…

Turning to SNX/BTC, price has been in a bear market for even longer against Bitcoin, having topped out in September 2020 and now going on two and a half years since that high formed. In that time, the pair retrace 89% into the June 2022 lows but has held above them every since, with the bulk of the past year being spent in a huge range between 8000 satoshis as support and the 200wMA around 17k satoshis as resistance. What bulls do not want to see now is a weekly close below those June 2022 lows – anything other than that and this very much looks like a long-term bottoming formation; lose 7.5k and there is no major support all the way back into 4140 satoshis. Given this, I am going to be buying spot SNX if we dump a little lower from here into 8130 satoshis, with invalidation on a weekly close below that June low – if we sweep it and close back above it, I’m expecting the next bull cycle to begin for Synthetix.


GMX:

GMX/USD

Weekly:

gmxusdweekly

Daily:

gmxusddaily

GMX/BTC

Weekly:

gmxbtcweekly

Daily:

gmxbtcdaily

Price: $71.50 (0.00261 BTC)

Market Cap: $618.987mn

Thoughts: Beginning with GMX/USD, we can see that the pair has been in an uptrend since the June 2022 lows – also the all-time lows – at $11 and price has rallied 8x since then into an all-time high at $90.75. Last week saw the pair reject that continuation higher into price discovery and break and close back inside two key resistance levels at $85 and $76.60. We now have triple bearish divergence on RSI as price has moved higher since February, which is not promising for bulls, particularly after an 8x rally. However, weekly structure remains bullish whilst we have these higher-highs and higher-lows. If we look at the daily for more clarity, until the pair closes below $66, the trend continues to point higher, but if we do lose that level I would deem that bearish divergence as validated and would expect to see a deeper retracement, with major support down at the 200dMA at $57, followed by the 360dMA at prior resistance turned support ~$46. Now, if that swing-low holds and the trend remains intact, the next leg higher should take price into $96 at the very least. One other point here is that if we do see bearish divergence validated, I would look to use GMX shorts to hedge other altcoin exposure, expecting underperformance of GMX relative to other alts from there.

Looking at GMX/BTC, we can see that momentum has been diverging on the weekly chart since the late August highs around 0.00287, after which each consecutive push into new all-time highs has given lower-highs on momentum. More recently, price has close back inside reclaimed resistance at 0.00287 after rejecting all-time highs and we are now sat in a range between 0.00246 as support and that 0.00287 area as resistance, If we now close below 0.00246, weekly structure also turns bearish and I think this looks absolutely cooked for the mid-term. I would then expect to see the swing-lows since momentum began diverging get cleaned up, all the way back into 0.00146. If we drop into the daily, we can also see that price is sat not only on the 200dMA but on trendline support here after rejecting 0.00287, so a clean break below this cluster of support would be a very clear indicator of bearish continuation into all those lows beneath.


Convex Finance:

CVX/USD

Weekly:

cvxusdweekly

Daily:

cvxusddaily

CVX/BTC

Weekly:

cvxbtcweekly

Daily:

cvxbtcdaily

Price: $5.33 (19,420 satoshis)

Market Cap: $409.106mn

Thoughts: If we begin by looking at CVX/USD, we can see from the weekly that following the 95% decline into the June 2022 low at $3.20, the pair has largely been range-bound above that level as support and below $8.50, for over 300 days. Since sweeping the range support in December, price has rallied back above support at $4.83 and is now capped by $7.26, forming a range within a range here. Whilst this $4.83 level is holding, I expect this consolidation to lead to the next leg higher, through $8.50 into a gap fill towards $14.57. If we close below local support, I am eyeing up a retest of $3.80 as an opportunity to look for longs with invalidation below $3.18. Dropping into the daily, we can also see that the 200dMA has confluence here as a support level and price recently rejected off the 360dMA as resistance, with the two now converging and price sandwiched in between. Any daily close through $6 from here begins to paint a more bullish picture, and daily structure urns bullish again around $6.50. Given this structure and price-action, I would also be willing to long a sweep of $4.80 here followed by a reclaim, looking for $8.50 as the first target followed by $14.50.

Turning to CVX/BTC, the picture is largely the same here, with range support at the June low with local support from the beginning of 2023 currently holding just above that at 17.7k satoshis. If we break that low, no doubt we sweep the June support, in which case bulls would want to see a deep wick through it followed by buyers showing up and reclaiming the range. If the weekly closes below 16k satoshis, I think it is likely we see another 25% of downside into the next major support. Dropping into the daily, we can see that daily structure is actually bullish here following the break above 19.2k satoshis, with that prior resistance now acting as support. If we hold this level and rally up through the 200dMA and resistance at 23k satoshis, I would begin to get much more bullish on Convex.


LooksRare:

LOOKS/USD

Daily:

looksusd

LOOKS/BTC

Daily:

looksbtc

Price: $0.134 (489 satoshis)

Market Cap: $109.096mn

Thoughts: As LOOKS has only been trading since January 2022, let’s take a closer look at the Dollar pair here.

On the daily chart for LOOKS/USD, I first want to mention that I have drawn on the general flow of price action to make it a little clearer to see how the downtrend has unfolded since inception: we had a pump on listing into an all-time high followed by a downtrend, a lower-high, another downtrend into the June low at $0.16, then a much shallower rally into another lower high, followed by a final downtrend into fresh all-time lows below the June low in November, around $0.11. At this point, we rallied once again, forming another lower-high within the broader view of price-history at $0.36 in February 2023, and we have retraced from that back into the November support at $0.125 above the all-time low. Note that thus far we have yet to make that lower-low like every other swing in LOOKS’ price-history. That does not mean another leg lower is not possible, but at present we are holding support at the all-time low and ranging between there and the 200dMA at $0.18 as resistance. IF we can hold this support, I want to see a clean break above the 200dMA to signal the beginning of the reversal, where a higher-low above that $0.18 would be the clearest indicator of a trend shift. In that scenario, I would add to my spot position on a dip back towards the 200dMA as support. However, if this support fails, I will be looking to exit my spot position and re-enter on a reclaim or on the formation of another range lower-down.


X2Y2:

X2Y2/USD

Weekly:

x2y2usdweekly

Daily:

x2y2usddaily

X2Y2/BTC

Weekly:

x2y2btcweekly

Daily:

x2y2btcdaily

Price: $0.041 (149 satoshis)

Market Cap: $7.273mn

Thoughts: X2Y2 has only been trading since March last year and so both pairs look virtually identical – I have provided the weekly timeframe here also just because of how skewed that early price action is post-listing.

Let’s focus on the daily timeframe for X2Y2/USD, as I believe that’s where we can really see what might be occurring. The pair has been in a downtrend since its first week of trading and lost 99% of its value from that ridiculous all-time high print at $4.09. However, even from the first support level at $1.20, the pair lost almost 98% of its value into the all-time low at $0.028 in November 2022. Since, price v-reversed for months, trading above the 200dMA for the first time in its history but then rejecting around the 360dMA and prior resistance just shy of $0.26 in February, from which the pair has retraced much of those gains back into $0.04 at present. Daily structure is bearish and there is no real support here back into the all-time low; however, if bulls step in to protect that low and price is able to get above the prior swing-high at $0.059, daily structure turns bullish and I would expect this $0.04 area to be a macro higher-low in a broader cyclical reversal, where a close back above the 200dMA and prior support turned resistance at $0.078 would confirm this for me. If instead this downtrend persists, I would be looking to add to my spot position on a sweep of the all-time low and subsequent reclaim, or exit on a weekly close below it and look to re-enter on a range formation further down. To be honest, we are at 98% drawdowns from all-time highs with the pair never having had a full bull cycle, so I am very much keen to be involved 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.


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