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Market Outlook #225

Market Outlook #225 (19th June 2023)

Hello, and welcome to the 225th instalment of my Market Outlook.

In this week’s post, I will be covering Bitcoin, Ethereum, Solana, Lido DAO, ImmutableX, Frax Share, dYdX and Gains Network.

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

Bitcoin:

Weekly:

btcusdweekly

Daily:

btcusddaily

Price: $26.263

Market Cap: $511.611bn

Thoughts: If we begin by looking at BTC/USD, we can see from the weekly that price wicked below recent support at $25.7k, dipping below the breakout zone at $25.4k before finding demand and closing the weekly back above that key support cluster. In fact, the pair closed right at weekly highs around $26.3k on decent volume, but marginally below the 200wMA. Whilst this is somewhat of a promising turnaround to what was looking like a tough week for crypto, we are still very much trapped between $25.4k as support and $27k as resistance, with a series of lower-highs and lower-lows since late March. From here, bulls want this momentum to spill over into this coming week and take the pair back above prior support turned resistance at $27k and the 200wMA – close the weekly above both of those levels and I think we have the makings of that third leg higher off the November 2022 bottom. However, reject here early this week and close the week below $25.7k and I think we’re going to run last week’s low towards $24.3k as the next support, with any acceptance in that area opening up $22.5k as a high probability magnet, in my view.

Dropping into the daily for clarity, I have kept in the two trajectories I marked out last week and we can see how the early part of this is playing out with that strong rally following the sweep of support. Daily structure is still bearish here and the pair remains capped by prior support and trendline resistance, so the reaction in this area over the next couple of days is super important. If we see price break above that trendline, we then want to see acceptance above that $27.7k area and then I would be looking for longs off a $27k retest to hold up into $31k and then $34k. If, however, we see price rally through the trendline, encourage breakout longs and then retrace back inside that $26.6k level, I would look to short that level to hold towards $22.5k. If we simply reject in this area itself without faking out above the trendline, once we close the daily back below last week’s low I think we drop quickly into that 360dMA at $22.5k.


Ethereum:

ETH/USD

Weekly:

ethusdweekly

Daily:

ethusddaily

ETH/BTC

Weekly:

ethbtcweekly

Daily:

ethbtcdaily

Price: $1720.21 (0.06525 BTC)

Market Cap: $206.82bn

Thoughts: Looking at ETH/USD, we can see from the weekly that price wicked below prior resistance around $1664 and caught a bid just above the 200wMA at $1556, then closing the weekly back near $1720. Weekly structure is still bearish here with the firm close below $1763. If we look at the daily, we can see exactly how this has played out, with a fake-out above trendline resistance leading to that leg lower into the 200dMA at $1643, with price briefly wicking below that into $1616 before finding demand and now reversing back into that trendline resistance, where it is currently struggling. We are now trapped right around prior support turned resistance at $1763 and below trendline resistance, and so bulls want to see a strong move back above this resistance cluster and then a higher-low to form above that $1716 level, leading to a push back into the $1850 area. If we see that, I would expect to see another test of reclaimed resistance at $1945. If, however, this area continues to cap price or – much like BTC – we fake out above it and then retrace back inside $1716, I  am expecting to see price take out last week’s low at $1616 and dump into support around $1508.

Turning to ETH/BTC, we can see that the weekly printed another red candle after rejecting off the trendline, confirming another lower-high is in place and potentially opening up that next leg lower into 0.0594. Bears want to see a weekly close through support here at 0.064, which I believe will lead to that flush lower to the bottom of the long-term range. If we drop into the daily, we can see that the pair is currently range-bound between reclaimed support at 0.064 and support turned resistance at 0.0663. What bulls want to see is this area hold as support and price begin to turn daily structure bullish again, which would required a higher-high and higher-low following a breakout back above 0.0663; if however we see reject a move above that level and start to close the daily below 0.064, I think it is highly likely we sweep 0.0622, with any daily close beneath that opening up that larger leg lower into the levels marked out.


Solana:

SOL/USD

Weekly:

solusdweekly

Daily:

solusddaily

SOL/BTC

Weekly:

solbtcweekly

Daily:

solbtcdaily

Price: $15.47 (58,681 satoshis)

Market Cap: $6.179bn

Thoughts: Beginning by looking at the weekly chart for SOL/USD, we can see that long-term trendline resistance from the all-time highs continues to cap the highs, with price having looked positive a few weeks ago as it pushed off support at $19 into that trendline, closing marginally above it, but the following week saw that brutal rejection off $22 that took SOL right back below $19 and all the way down into prior resistance turned support at $15.14, above which it consolidated last week. This is a really key area for SOL/USD and if we see price continue to consolidate here, I would be looking for a reclaim of $19 as support – and thus also a legitimate breakout beyond that trendline – before jumping into any long exposure. If we see rejection at $19 as reclaimed resistance on any spike up, then a weekly close below $15 would lead me to expect a full sweep of that $7.95 low, to be honest. Turning to the daily, we can also see how the 200dMA is flattening out right along that $19 level as well, providing confluence for a reclaim as support moving forward. What we are currently contesting, however, is prior support at $16.11, now acting as resistance; a daily close back below $15 here and I think we fill in last week’s wick into $12.84, where bulls will want to see buyers step in to protect this area going into the weekly close. Let’s see how things unfold over the next few days.

Turning to SOL/BTC, we can see that the pair has bearish weekly structure and continues to trend lower, with last week closing marginally below support at 61.2k satoshis, making it the lowest weekly close since 2021. This consolidation beneath that support level is less promising, particularly with a clean double bottom now at 48.2k satoshis, but if we start to see demand step in, I am looking for a reclaim of 70k as support before looking for any long opportunities, as that will start to mark out more of a long-term bottoming pattern for me; entering here as we consolidate right below historical support seems low probability to me, as I think it is more likely we fill in those two wicks and move lower into prior resistance at 42.6k satoshis before finding the cyclical bottom. Looking briefly at the daily, we can also see how the 200dMA has capped so many important rallies during this downtrend and is now aligned with trendline resistance that has held for all of 2023, so acceptance above both of those would be a really clear signal that the trend is shifting, in my opinion.


Lido DAO:

LDO/USD

Daily:

ldousd

LDO/BTC

Daily:

ldobtc

Price: $1.72 (6532 satoshis)

Market Cap: $1.514bn

Thoughts: Focusing our attention here on LDO/USD, we can see that the pair has had its highs capped by trendline resistance since the August 2021 all-time high, most recently faking out above it into reclaimed resistance at $3.26 before rejecting, retracing and turning market structure bearish. The pair then broken back below reclaimed resistance at $1.90, found support at $1.60 and then rejected twice at the confluence of trendline resistance and horizontal resistance around $2.40 once again. We are now range-bound between those two levels, with price currently consolidating below the 200dMA, 360dMA and reclaimed resistance at $1.90. If this resistance holds, a daily close below $1.60 will likely lead to the rest of that gap being filled in to $1.29 before any support is found, and that is a meaningful historical level so I would be looking for some sort of long setup on the lower timeframes if we do get down there. Lose that level and I would be very surprised if we don’t clear out the double bottom at $0.87 and move right back to historical support down near $0.58, which I would be extremely keen to load up on spot around if we get that opportunity. The low risk long here is to await acceptance back above $2.40 (trendline breakout + daily structure bullish) with invalidation on a weekly close back inside that level.


ImmutableX:

IMX/USD

Daily:

imxusddaily

IMX/BTC

Daily:

imxbtcdaily

Price: $0.62 (2353 satoshis)

Market Cap: $645.188mn

Thoughts: As ImmutableX has only been trading since Feb ’22, I will focus here on the Dollar pair.

Looking at IMX/USD, we can see that price topped out at $1.60 in mid-March and has been trending lower since, retracing back into the 78.6% fib level from the Nov-Dec bottom, then breaking below that prior support level at $0.64 and now turning it into resistance, with minor support below at $0.57 and all the highs being capped by trendline resistance. The lack of demand around that 78.6% fib confluence prior support suggests to me that we may yet see another flush lower back into the original accumulation range for the Q1 2023 rally, with that $0.53 area looking prime for another wick; if we do see price wick lower into that area and buyers step in, I would be looking for a strong move through the trendline, turning daily structure bullish, and then look to buy $0.64 as a retest with invalidation on that $0.53 area, as we should not go and retest it if we’ve found demand there and turned higher. If, however, we start to accept back inside $0.53, I would be looking to rebuy my IMX down at all-time low around $0.38, waiting for either a sweep and reclaim of the level or another flat range to form around here.


Frax Share:

FXS/USD

Weekly:

fxsusdweekly

Daily:

fxsusddaily

FXS/BTC

Weekly:

fxsbtcweekly

Daily:

fxsbtcdaily

Price: $5.43 (20,580 satoshis)

Market Cap: $393.019mn

Thoughts: If we look at the weekly chart for FXS/USD, we can see that price has re-entered the original accumulation range from Q3/Q4 2022, having closed back inside range resistance at $7.67, and now retraced back below mid-range towards the bottom of the range, finding some support above it at $4.58. I would expect to see the bottom of this range retested from here at $3.88 given we are now below the mid-range with bearish weekly structure, so if we start to see rejection on a push up towards $6.75 I would look to short it with invalidation above $7.67 and a target of the bottom of the range. Obviously, if that gets stopped and we start to close back above $7.67, I would be keen to take the other side of the trade and look for longs towards $16. If we don’t get that spike up to short into and just start moving lower from here, I am looking for a wick below $3.88 and subsequent reclaim as support to get long (and buy spot), but if we close the weekly below the bottom of the range and don’t reclaim it, I think we lose another 30% and drop into $2.79.

Turning to FXS/BTC, we can see on the weekly how price has been capped by trendline resistance since the all-time high and then steeper resistance since the 2023 highs, and we have now returned to the May 2022 support cluster above 16k satoshis. If we reject the trendline here, I think we dump lower and take out the May 2022 low, where the reaction will be very telling about mid-term trajectory; close the weekly below that low and I think we retrace into the next major support level down at 9400 satoshis, but wick through 15.9k and reclaim it and I think we have the makings of a bottom. Looking at the daily, we can see how structure is bearish here, and so what we can expect is another lower-high formation below the trendline followed by that flush lower. If, however, this has already marked out the low, we should see bulls push this straight through the trendline and reclaim 24.2k satoshis as support.


dYdX:

DYDX/USD

Daily:

dydxusddaily

DYDX/BTC

Daily:

dydxbtc

Price: $1.67 (6347 satoshis)

Market Cap: $273.717mn

Thoughts: Looking at DYDX/USD solely here, we can see that price faked out above trendline resistance in April, got slapped back below $2.96 and then retraced back inside the trendline, and has since continued lower, losing the 200dMA and 360dMA before finding support at the May 2022 capitulation low of $1.37, which buoyed price last week. We have since pushed higher off this low, and, if the cyclical bottom is already in for the pair, we should see this low now hold, with any break and close back above that trendline looking like the first indicator of a trend shift; if we then see momentum carry this back above the $2.38 level, I will be adding significantly to my spot position and looking for opportunities to enter levered longs, as I think that’s when we enter dip-buying season for another leg higher towards $5. Now, if all of that does not pan out any time soon and we instead reject below the trendline and break lower once again, a daily close below $1.60 all but confirms for me that the May 22 support is getting taken out and we are likely returning to the bottom of the range – the all-time lows – before bottoming out, which is where we would have to wait for a strong flush of $0.98 followed by a reclaim to get involved again. Ultimately, I think this is going much higher in its first bull cycle so it is just a case of figuring out a high probability entry…


Gains Network:

GNS/USD

Daily:

gnsusd

GNS/BTC

Daily:

gnsbtc

Price: $4.01 (15179 satoshis)

Market Cap: $121.927mn

Thoughts: Gains Network, much like a few others we’ve discussed in this week’s post, has only been trading for around 18 months and so both the Dollar pair and BTC pair look fairly similar.

So, focusing here on GNS/USD, we can see that it has been in an uptrend since inception with two larger retracements within that overall uptrend, the most recent of which has seen the pair lose 70% of its value from the $11.78 all-time high. This has been a super strong trend from its inception and I am very interested in getting involved, but I don’t want to jump the gun too early. Daily structure is still bearish here and we are sat right below the 360dMA, but above prior resistance turned support at $3.60. I want to see daily structure turn bullish here, with a higher-low above $3.57 and then a higher-high through the huge resistance cluster between $4.30-4.60. I’d be happy adding to spot if we see something like that begin to unfold and then look to add more heavily once we break and close back above the 200dMA and prior support turned resistance at $5.60, as that will be a really clear signal for me that the next wave of this uptrend is kicking off. Not a lot else to add here. If the long-term uptrend is over, we should see acceptance below $3, as that opens up a huge amount of downside back into the next major support down at $1.30.

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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