Market Outlook #223 (5th June 2023)
Hello, and welcome to the 223rd instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, Solana, Stacks, ImmutableX, Osmosis, Ethereum Name Service and Akash Network.
As ever, if you have any requests for next week’s Outlook, do let me know.
Bitcoin:
Monthly:
Weekly:
Daily:
Price: $26,832
Market Cap: $520.374bn
Thoughts: If we begin by looking at BTC/USD on the monthly timeframe, we can see that May saw BTC wick below the April low at $27k and then close marginally back above it on slightly lower volume, but we do know have a swing-high formation into that April high. What bulls want to see from here is for June to continue to hold above $27k, with a monthly close below that opening up some more downside into July; hold above it this month and I think we see BTC take another crack at $31k if it has not done so already by month-end.
Turning to the weekly, we can see that price rejected right around that $28.2k area last week, around the weekly open, and sold off into $27k as the week closed, holding marginally above that support level and above the 200wMA. Early price-action this week has seen the pair dip below that support level, but unless we begin to accept below it as reclaimed support turned resistance I am not expecting much lower prices just yet. What would be more bearish is a weekly close below that 200wMA, which would open up a sweep of the double bottom at $25.8k into the $25.3k level, with any weekly close below $25.8k confirming that bearish weekly structure remains intact. Alternatively, if – as mentioned earlier – we do hold above this support cluster and begin to push back above $27k into the weekly close, I would expect next week to see another test of range support turned resistance; close back above $28.2k on the weekly timeframe and we have the beginnings of a reversion to bullish structure on this timeframe.
Dropping into the daily, we can see that price faked out above trendline resistance and rejected, and so the opportunity to look for shorts as discussed last week is now present, assuming we get the setup – that setup for me would be a daily close below $26.5k here, where I would then look to short into and below the double bottom at $25.8k with invalidation on a daily close back above $27k and thus back above the trendline. Alternatively, if we don’t see that play out, I am looking for longs at $25.4k or back above $27.6k.
Ethereum:
ETH/USD
Weekly:
Daily:
ETH/BTC
Weekly:
Daily:
Price: $1,873.54 (0.06983 BC)
Market Cap: $225.285bn
Thoughts: Beginning by looking at ETH/USD, unlike BTC the pair remains firmly above that key reclaimed support level at $1847 with last week retesting it before bouncing and closing out near $1890. As long as $1850 continues to hold here, I don’t see any reason to flip super bearish. Rather, I would expect any sweep of last week’s low to be met with demand that takes this back towards $2037 for the retest of reclaimed resistance in that area. Dropping into the daily, we can see that again unlike BTC, ETH/USD cracked firmly above its trendline resistance, rejected at $1945 but has since held above that trendline, testing it as support and bouncing, with price now range-bound between $1850-1945. Again, any sweep of $1850 and subsequent reclaim on the lower timeframes would look to me like an opportunity to get long for a run through $1945 towards $2037. Now, if we do start to accept below $1850 and price reclaims that level as resistance, then we have to flip bias and look for the bottom of that range support at $1760 to get cleared out, with price likely heading much lower into $1620 from there.
Turning to ETH/BTC, we finally saw a stronger rally last week in the series of consecutive green candles, albeit on lower volume and with price still remaining below long-term trendline resistance and the prior swing high. Nonetheless, we got a marginal close back above that mid-range and if this rally is to have legs, we would want to see a strong close through the trendline and above 0.071 – as I have mentioned for weeks – before looking to play that continuation trade higher into the top of the range and 2022 open around 0.08-0.082. Dropping into the daily, we closed beyond the 360dMA and 200dMA confluence and are now sandwiched under the trendline and above those MAs, so if the momentum is here for a breakout we should see this area form a higher-low and price close the daily through last week’s high on decent volume. If we see that, look for a close above 0.071 on the weekly to confirm a shift to bullish market structure. Momentum indicators are not pointing to exhaustion yet.
Solana:
SOL/USD
Weekly:
Daily:
SOL/BTC
Weekly:
Daily:
Price: $21.64 (80,645 satoshis)
Market Cap: $8.601bn
Thoughts: Looking firstly at SOL/USD, on the weekly we can see that the pair has been compressed for weeks under that long-term trendline resistance from the all-time high, but a couple of weeks ago price bounced off key resistance turned support at $19 and last week that bounce turned into a marginal breakout above the trendline on slightly higher volume. This is a weak breakout for now and price remains capped by prior support at $22, but this is promising. Bulls want to see a clean break and close through $22 this week, which in turn opens up a retest of the $26 level that has capped the pair for all of 2023. Weekly close through that and I think the SOL begins a period of outperformance from there to fill in the entire capitulation candle back into $36, and I want to be long within that range. Looking briefly at the daily, we can also see that daily structure is turning bullish here as price found a bottom above the 200dMA, with that MA having supported price since breaking above it back in April. Coincidentally, the 360dMA is sat right at $26, providing confluence for the important of that level if and when we see a breakout.
Turning now to SOL/BTC, on the weekly timeframe we can see that price continues to find support above that historically significant level at 70k, with the pair range-bound between there and local resistance at 87.4k satoshis. If Solana is to mount a sustained reversal, we should see continuation of this momentum off support through 87.4k, with a weekly close firmly above that level turning weekly structure bullish. I would very much be of the view that SOL is in dip-buying season if we can break back above reclaimed resistance at 92k satoshis, and would be looking for continuation of what would appear to be a new bull cycle with a rally into the liquidity gap at 137k satoshis. Obviously, the bearish scenario here is rejection at 87.4k and a weekly close back below 70k, opening up a retest of at least 61k satoshis as support, if not the December 2022 lows. Dropping into the daily, we can see how the 200dMA has capped rallies since February 2022, and we are about to press up against it as resistance this week; close the daily above that and then hold it as support and we have the makings of a sustained reversal…
Stacks:
STX/USD
Weekly:
Daily:
STX/BTC
Weekly:
Daily:
Price: $0.60 (2241 satoshis)
Market Cap: $832.376mn
Thoughts: Beginning with STX/USD, on the weekly timeframe we can see that the pair topped out its rally in March and has retraced into the 61.8% fib level at $0.63 since, consolidating around here for several weeks but closing marginally below this support level last week. We are now slipping below that level, and if we see it act as resistance early this week, I would expect to see price retrace another 20% towards reclaimed support at $0.49, with the 78.6% fib just below that. We would then want to see a swing-low begin to form in that area on the higher timeframes and volatility begin to diminish around there to form a bottom for the next leg higher. If we don’t see that but rather price begins to close the weekly below $0.44, I would expect most of this rally to be retraced back into prior resistance turned support at $0.325, right near the open of the huge impulse candle. That’s where I would want to look for spot entries if we are granted the opportunity. Dropping into the daily, we can see that trendline resistance from the 2023 high continues to cap the rallies and daily structure is bearish but momentum looks to be printing divergence as we move lower now. I am hoping/expecting to see a flash dip below this level into the cluster of support between $0.49-$0.56 and price to then find some demand. If we do see that and price then rallies back through $0.63, I will be looking to bid that level with a target of $1.71.
Turning to STX/BTC, we can see a similar setup to the Dollar pair, with price having retraced after rejecting at historical resistance around 4900 satoshis. We have now returned to 2220, which is a minor level of prior resistance, and price is beginning to stall. If we lose this level, again I think we see a good drop into the next major support level down at 1700, which would begin to look attractive to me for spot buys. Dropping into the daily, we can see that price is sat on the 200dMA but the 360dMA is sat below with confluence on the 78.6% fib level around 1900 satoshis. Again, much like the Dollar pair, if we dump into that area and reverse, turning daily structure bullish and reclaiming 2600 satoshis as support, I would be very interested in STX and would consider it to be in dip-buying season.
ImmutableX:
IMX/USD
Daily:
IMX/BTC
Daily:
Price: $0.814 (3035 satoshis)
Market Cap: $812.686mn
Thoughts: As IMX has only been trading for a little over a year, I will focus here on the dollar pair.
Looking at IMX/USD, we can see that price retraced into the area I had been waiting for right around $0.72 and the pair has formed a range between that level as support and $0.80 – also the 200dMA and 360dMA – as resistance. The pair was capped by trendline resistance from the high in March but we are now seeing price break marginally through that resistance and above $0.80 – nonetheless, at present, this is a very weak breakout and I would want to see a strong impulse move higher before looking to buy a retest. If we do push up towards $0.89, I would be looking to bid $0.81-0.82 with invalidation below $0.72 and looking for $1 as a first target, followed by $1.31 and $1.62.
Osmosis:
OSMO/USD
Daily:
OSMO/BTC
Daily:
Price: $0.573 (2137 satoshis)
Market Cap: $339.475mn
Thoughts: Similarly for OSMO, I will be focusing here on the Dollar pair.
Looking at OSMO/USD, we can see that price broke below the 324 day range and made fresh all-time lows below $0.685, continuing to bleed lower into the current low at $0.545. This is a 95% drawdown from the all-time high and I am now looking for a reason to re-enter the spot I exited. If we see a sweep of $0.54 followed by a reversal and market structure turn bullish, that would be a start, but I am particularly keen on getting involved if and when we see that prior ATL at $0.69 reclaimed, at which point my invalidation becomes the all-time low on a spot position and I would be looking to hold for a full cycle, with majority of the position being shed at $4. Not much else to add here until we get clearer structure as this could continue bleeding for a while.
Ethereum Name Service:
ENS/USD
Daily:
ENS/BTC
Daily:
Price: $9.93 (37,004 satoshis)
Market Cap: $256.125mn
Thoughts: Focusing solely on ENS/USD here, we can see that the pair had been holding above $11 for most of the past year but turned that level into resistance early in May, with price now range-bound between it and support at $9.44. We are starting to see volatility flatten out here, which is a good sign, but I would be looking for further confirmation of a bottom before jumping in. In my view, that would be a strong move above $11.20, likely into the 200dMA/360dMA cluster, and then look to rebuy $11.20 as reclaimed support with invalidation at $9.45. If we don’t see that and we break below this support level, I want to buy ENS at all-time lows on a sweep and reclaim.
Akash Network:
AKT/USD
Daily:
AKT/BTC
Daily:
Price: $0.64 (2398 satoshis)
Market Cap: $137.624mn
Thoughts: And finally, again focusing on the Dollar pair here for Akash Network, we can see from AKT/USD that the pair had been forming a range around all-time lows at $0.16, with support just above that at $0.19 and range resistance around $0.48. Price then faked out above that level earlier this year and then retraced back inside and below key support at $0.33, losing the 360dMA and 200dMA and eventually bouncing at $0.23. Since, price has been up only, rallying back above that cluster around $0.33 all the way through the prior 2023 high at $0.62, finding resistance at $0.75 and now consolidating right around that $0.62 high. Bulls want to see $0.48 now hold as a higher-low on any dip and price to then push up beyond $0.75, with $0.95 as the next target. I continue to hold my spot for this one and will be looking for $1.40 before I begin exiting anything.
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.