Market Outlook #226 (26th June 2023)
Hello, and welcome to the 226th instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, Uniswap, Algorand, WOO Network, Blur, Merit Circle and Perpetual Protocol.
As ever, if you have any requests for next week’s Outlook, do let me know.
Market Cap: $595.309bn
Thoughts: If we begin by looking at the weekly chart for BTC/USD, we can see that this past week has been a big one – rallying off the open at $26.3k, price broke straight back above the 200wMA and didn’t stop for the entirety of the week, taking out the entirety of the multi-month retracement in a single candle, where we are set to close around $30.7k. Whilst some momentum was required following last week’s strong reversal off key support, this much momentum was obviously not expected and the narrative here has been largely related to the BlackRock ETF. However, all we need to know is that since November 2022, Bitcoin has been in an uptrend, and this is simply the third leg higher that we are seeing unfold within that broader trend. A weekly close here firmly back above prior range support around $28.8k is huge, and I would expect that $28.2k-28.7k area to hold as reclaimed support on any move lower this coming week. If we can form a higher-low above that area, I think we see expansion above $31k towards the 38.2% retracement of the entire bear market at $36k.
Looking at the daily, we can see how explosively price moved through resistance levels, but we have now taken out the April highs into resistance around $31.4k and I would be surprised if having swept a key high we did not now retrace a little to refuel before another move higher. If we start to break down here early next week, I would expect to see a move lower into $28.7k to retest that level as reclaimed support, and that’s where I will look for long setups for a move higher to fill the gap towards $33-34k, with $36k the main target above that. Daily structure and momentum are obviously bullish here, and unless we see some sort of black-swan-esque reversal of this entire move higher over the next week, it is likely the monthly, quarterly and six-month candles will be closing above key historical levels. In short, unless you’re looking for intra-week downside, there’s not a lot of value in having short exposure, in my view, and we likely continue to rip higher into July.
Price: $1,911.75 (0.06232 BTC)
Market Cap: $229.842bn
Thoughts: Looking at the weekly chart for ETH/USD firstly, we can see that the pair has also broken back above some key levels, having found support above the 200wMA the prior week. We are now set to close back above $1900, and I would now be looking for $1850 to act as support early next week. If we drop into the daily for greater clarity on this market structure, we can see how price bounced right at the 200dMA and v-reversed the entire breakdown, rallying back into prior support turned resistance at $1763, consolidating and then pushing higher, through trendline resistance and back above $1847. Price is now consolidating between $1847 as reclaimed support and $1950 as reclaimed resistance. I would like to see a sweep of the weekend lows into $1847 (and potentially a little lower to retest the trendline as resistance turned support) and then see a higher-low form, from which I would expect $1950 to be taken out and price to retest major resistance around $2037. Once we’re above that level, I think we see continuation into $2425, as has been the target for several months.
Turning to ETH/BTC, naturally given the strength of the BTC move, this pair has continued to suffer, now set to close right around the prior swing-lows at 0.062, hovering just above the 0.0594 area that I have been waiting for. Given we continue to have bearish weekly structure, I would be very surprised if the next BTC move higher does not lead to ETH/BTC dropping towards the bottom of the multi-year range, where there is a significant amount of support between 0.055-0.059. That’s where I am expecting the pair to begin to bottom out and begin a period of ETH outperformance, but let’s see what happens as we approach those levels. Alternatively, we have swept the 0.062 support here, and if bulls are able to now push back above this level next week and reclaim it as support, we would have some indication that a bottom is already forming. Turning to the daily, we can see how we broke and closed below 0.0622 and are now retesting it as resistance, so any rejection in this area will likely lead to that next leg lower, in my view.
Price: $5.39 (17,579 satoshis)
Market Cap: $4.046bn
Thoughts: Looking at UNI/USD, on the weekly timeframe we can see that the pair found support above the May-June ’22 lows and bounced at $3.55, rallying from there back above prior resistance turned support at $4.78 and right into long-term trendline resistance this past week, set to close right below that area at $5.40. Naturally, this is not where we should be looking to add long exposure, given the confluence of resistance in this area and the fact that this trendline has capped the highs for two years – however, it is promising to see the demand at those May lows and we have the makings here of a cyclical bottom if we can now continue this momentum through trendline resistance. I want to see a strong close above it and above prior support at $5.69, and then look to re-enter spot on a retest of this $4.80-5.12 area as reclaimed support. Dropping into the daily, we can also see the confluence in this area with the 200dMA and 360dMA, so a strong impulse move through $5.70 would be very telling for the mid-term trajectory, in my opinion, with that July 22 high at $9.90 the first target.
Turning to UNI/BTC, again we can see that price found support above the May lows and above prior trendline resistance turned support, with price refusing to close below that trendline for three successive weeks and now breaking back above 17k satoshis, sat marginally below prior support here at 17.6k. If we look at the daily, we can see how strong the push has been off the 15.5k satoshi support area, and whilst daily structure remains bearish here, it does look ready for that reversal. We want to see a strong close through 17.6k satoshis followed by a higher-low for daily structure to begin looking bullish again, and I would then expect to see price rally through all these minor support turned resistance levels back into 22.2k satoshis, with a big gap between there and the next resistance at 26.7k satoshis. Obviously, if this 17.6k region is not broken cleanly and we begin to close back below 16.9k satoshis as resistance, I would expect further downside into 15.5k and below into the May lows.
Price: $0.138 (452 satoshis)
Market Cap: $1.006bn
Thoughts: Beginning with ALGO/USD, we can see that price marginally pierced below the all-time low a couple of weeks ago, finding support at $0.094 – a 97% drawdown from the 2021 highs – and has since bounced into prior support at $0.144, currently acting as resistance. We also have trendline resistance from the November 22 highs to contend with imminently if this does see continuation higher. What bulls want to see is this momentum take the pair through prior support at $0.144 and $0.16 into and beyond trendline resistance, with a weekly close above $0.18 beginning to look much more promising for a sustained reversal. If we do see that, I would be looking to buy a higher-low above $0.16 and hold that towards resistance at $0.27, with any weekly close through that opening up another 40-50% of upside into the next major resistance cluster. Turning to the daily, we can see that the 200dMA is also confluent with trendline resistance here, and other that a brief fake-out above it in November, the MA has capped the highs since 2022 began. As such, closing convincingly above both the 200dMA and trendline resistance would look very much like a bottom to me, given we have just sprung off an all-time low.
Now looking at ALGO/BTC, we can see the pair made a fresh all-time low below 722 satoshis several weeks ago and continued to bleed lower, culminating in a capitulation candle into the all-time low at 355 satoshis three weeks ago – a 94% drawdown from the 2021 highs. Price then bounced and is now consolidating around 450 satoshis, but with no real structure in place here to get excited about. If we drop into the daily, we can see some structure forming, with a short-term range in play between 412 satoshis and 465 satoshis, with any daily close through 465 turning daily structure bearish and opening up further recovery of this move lower back towards 575 satoshis as the next resistance. Above that level, I think we retest the prior all-time low at 722 as resistance, which will be the key test for a longer-term reversal. Not much else to add here…
Price: $0.212 (693 satoshis)
Market Cap: $364.185mn
Thoughts: Beginning with WOO/USD, we can see that price has retraced into reclaimed support at $0.15 and bounced, with this level having supported the pair for all of 2023 thus far. We are now sat around $0.21 and given the structure here I would be expecting continuation higher back into $0.31, retesting that historical support as resistance once again. Clear that level on the weekly timeframe and I think that $0.40-0.45 region is the magnet. Dropping into the daily, we can see that price has reclaimed the 200dMA and 360dMA, with the former now having crossed back above the latter, and once we see a daily close above $0.24 I think we’ll accelerate into that $0.31 retest, as there isn’t much resistance between those two levels. Reject here at $0.23 and I would expect this weekend’s lows to get taken out and price to go form a higher-low above $0.15 before making that push higher. Irrespective of short-term trajectory, this very much looks to have bottomed out in my view and we are likely heading towards much higher prices for WOO later this year.
Turning now to WOO/BTC, we have really clean structure on the weekly timeframe, with price having swept range support at 680 satoshis last week – a level that has held firm since August 2022. We are now set to close back above that support and I think this presents a very high risk/reward play for spot entries here, as invalidation is extremely tight and clear – a close below 680 would be a signal to exit. I would be looking for a push higher into range resistance around 1140 satoshis from here, which has capped price since June 2022. When we see a weekly close through that level, I think that’s when the fireworks begin, as there is very little resistance on the weekly timeframe between there and 1900 satoshis.
Price: $0.357 (1164 satoshis)
Market Cap: $255.516mn
Thoughts: As BLUR has only been trading since April 2023, I will focus here on the Dollar pair, as both charts are identical.
Looking at BLUR/USD, we can see that it has been in a downtrend since launch, losing 60% of its value from the $0.74 all-time high in late April into an all-time low in mid-June at $0.29. Price has since bounced and formed a range above the all-time low but below trendline resistance from the all-time high, with range resistance around $0.38 and support at $0.33. Price wicked through the top of the range but rejected at the trendline and is now back inside that range, and whilst we do have a higher-low here at $0.33, daily structure is still bearish with no higher-high. What bulls want to see here is a daily close above $0.40, thus breaking that trendline resistance and turning daily structure bullish. In that scenario, we could look to buy $0.38 as resistance turned support and hold it into $0.45 as a first target, where there will be major resistance. Beyond that level, $0.57 is the major resistance level I am looking at.
Price: $0.196 (640 satoshis)
Market Cap: $77.543mn
Thoughts: If we begin by looking at MC/USD, we can see from the weekly timeframe that prior broke below the 2023 support at $0.26 and fell to fresh lows, marking out an all-time low at $0.16 last week, from which it has bounced this week into $0.19. I would still be very cautious to jump in just yet, as weekly structure is bearish still, but we do have some momentum divergence down here and, if we drop into the daily, we can also see we’re now at a 99% drawdown from all-time highs, for a coin that has only ever known a downtrend. In short, the point of maximal opportunity is here – it is just a case of determining how and when to re-enter spot for me. I am looking at a reclaim of $0.26 as support as the main trigger for entry, as that would also likely mean a move above the 200dMA for the first time in Merit Circle’s history. Invalidation would then be the all-time low at $0.16. Let’s see how things unfold over the next week or two.
Looking at MC/BTC, on the daily we can see how price is just flattening out here at all-time lows around 580 satoshis – a 97.7% drawdown from all-time highs – and once again I am looking at prior support turned resistance at 970 satoshis as the level I’d want to see reclaimed before getting too excited. There’s not a lot to add here because the two charts are basically identical – however, I do like the idea of adding heavily to spot once MC/BTC reclaims 1340 satoshis, as that would also be a 200dMA breakout, which on the BTC pair would be indicative of that next cycle beginning, in my opinion. Regardless, this is a project I want to be involved in for its first bull cycle.
Price: $0.527 (1720 satoshis)
Market Cap: $38.212mn
Thoughts: Looking at PERP/USD, we can see that price found support above the November-December 2022 lows and made a higher-low at $0.40, from which it has bounced into prior support turned resistance at $0.51. We are still below trendline resistance from the yearly highs, but this is promising – a weekly close back above trendline resistance and prior support at $0.51 would be the signal for continuation higher, in my opinion, with minor resistance at $0.70 but price likely to accelerate into $1.03 as major resistance once that is cleared. My view on PERP is the same as it has been for many months – I am looking to hold all of my position at the very least into a gap fill at $3.60. For those on the side-lines, I would view that weekly close through trendline resistance as the entry trigger, with any retest of that trendline as support likely your best bet to get involved, with invalidation around these June lows.
Finally, looking at PERP/BTC, we can see that price is consolidating above fresh all-time lows at 1517 satoshis, having capitulated below 1940. The play here is very simple – a weekly close back above that prior all-time low following this capitulation and consolidation would be very promising as a bottom formation, in my opinion. If we drop into the daily, we can see that daily structure is still bearish as we only saw an extremely flat week of consolidation at that all-time low before pushing higher – daily structure for me turns bullish once we see a higher-high -> higher-low formation from here. Ideally that will be a break and close beyond 2100 satoshis followed by a higher-low above that prior all-time low at 1940. Let’s see what unfolds.
And that concludes this week’s Market Outlook.
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