Market Outlook #228 (9th July 2023)
Hello, and welcome to the 228th instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, Avalanche, Monero, The Graph, Convex Finance, Illuvium and Ocean Protocol.
As ever, if you have any requests for next week’s Outlook, do let me know.
Bitcoin:
Weekly:
Daily:
Price: $30.264
Market Cap: $587.020bn
Thoughts: If we begin by looking at BTC/USD, we can see from the weekly timeframe that price is looking a little weak after this past week’s price-action. We saw the pair push through resistance at $31k into $31.5k, sweeping recent highs and then rejecting, now set to close the week back below that key resistance level. This is currently looking like a local top formation, given the rejection after the sweep of liquidity, and if we continue to push lower next week I would be looking at that $28.7k level to be retested as reclaimed support.
If we drop into the daily, we can also see some bearish divergence here on the most recent push up and price is now finding resistance at $30.8k, which has capped most of the daily ranges for the past couple of weeks (and capped the highs in April. If we do now push lower, a daily close through local support at $29.5k would open up that retest of the $27.6-28.7k area, as a key pivot; if this most recent leg higher is to lead to continuation up, we should see a higher-low form within that zone, from which I would be expecting a test of $31k and eventual breakout. If, however, we start to close the daily back below ~$28k, I think that looks a little more bearish from there and I would expect major support down near $25.4k to be retested, aligning with that 200dMA. Now, if this is a bear trap with this SFP formation, we should see price wick through $29.5k early next week, bounce and start to close above $30.8k on the daily timeframe, with that likely to provide the fuel required to push into the $33k area.
Ethereum:
ETH/USD
Weekly:
Daily:
ETH/BTC
Weekly:
Daily:
Price: $1864.83 (0.0616 BTC)
Market Cap: $224.13bn
Thoughts: If we begin by looking at ETH/USD, we can see from the weekly that price has sold off from the weekly open at $1937 and is now pressing right up against that local pivot around $1847, hovering marginally above it for now but having traded little volume this week. If we drop into the daily for greater clarity, we can see that there isn’t actually the same bearish divergence appearing here on the most recent push up, but more importantly we did sweep local highs into reclaimed resistance at $1951, wicked marginally higher and then rejected and retraced the leg higher back into support at $1847, where we are stalling at present. This is a really key area to hold structurally – close back below this and daily structure turns bearish again and I would expect at least the 200dMA to be retested around $1710. If, however, we wick below $1847 next week and close back above, that would look like a signal to get some long exposure in my view, with $1951 as the first target, followed by $2037. Only with a weekly close above that latter level would I start getting excited about $2425.
Turning to ETH/BTC, we can see that price bounced last back above reclaimed support but rejected at 0.0644 this week and has turned lower again, set to close back below 0.0633. Currently, this looks like the sort of structure I’d expect for that leg lower into 0.0594. If we drop into the daily, we can see this rejection from prior support at 0.0644 more clearly, and price is now consolidating above June lows at 0.0606 but below prior support at 0.0632 – bulls would have wanted this level to hold as reclaimed support from which another push higher through 0.065 would follow, but at present it looks like that is not the case. If we do start to close back above it next week, I would want to then see a move above 0.0645 to turn daily structure bullish, as that would confirm for me that we are moving to retest that long-term trendline and the 200dMA up near 0.068. However, close the daily below 0.061 and I think we flush lower into 0.0594, followed by 0.0578 if that does not hold.
Avalanche:
AVAX/USD
Weekly:
Daily:
AVAX/BTC
Weekly:
Daily:
Price: $14.04 (46,246 satoshis)
Market Cap: $4.842bn
Thoughts: Beginning with AVAX/USD, we can see from the weekly that price has played out almost a perfect classic altcoin cycle, with most of 2023 looking like the depression period of a bear market, culminating a few weeks ago with a sweep of the December lows at $10.46. Since, price has rallied higher and reclaimed support at $12.07, now sandwiched between there and reclaimed resistance at $14.96. Given this sweep and reclaim on the higher timeframes, I would consider the cyclical bottom to now be in, particularly given the significance of that $10 area historically – and, when we look at momentum, it appears to be indicating higher prices. So, we now have a very clear level of invalidation for any long-term spot exposure: close the weekly below $10.46 and it is likely we move much much lower. So, I am looking to build out a spot position over the next couple of weeks with that area as invalidation (a hard stop around $9.25) and I will be targeting $21.50 as the first target, followed by $30.61. Dropping into the daily briefly, we can see that the 200dMA and 360dMA have also flattened out now and a close through the 360dMA at $17 would be a strong indicator for a sustained reversal. Let’s see how things unfold.
Turning to AVAX/BTC, we have found support around prior resistance at 42k satoshis and price is now pushing off that level, facing trendline resistance up ahead that has capped every rally this year. Break and close the weekly above that and I think we retest the June 2022 lows at 60.4k as prior support turned resistance, where any move above that begins a disbelief rally that begins the next cycle of outperformance for Avalanche, in my view. Reject at the trendline, however, and we likely move lower once again towards the next support at 35.4k satoshis.
Monero:
XMR/USD
Weekly:
Daily:
XMR/BTC
Weekly:
Daily:
Price: $167.66 (0.05525 BTC)
Market Cap: $3.041bn
Thoughts: Beginning with XMR/USD, we can see that price has recently broken out above long-term trendline resistance from the all-time high and has reclaimed the 200wMA, having found support above the 360wMA on four successive tests, forming a series of higher-lows. This is promising, and we now have a clear invalidation on any long exposure at $133 – close back below that level and we also lose that 360wMA that has supported the pair since June 2022, so I would be looking to get involved on a pull-back. If we drop into the daily, we can see that the 200dMA and 360dMA align around $154, so any sweep of the past week’s lows into that area would be a long for me, with invalidation at $133 and a first target of the April 2022 highs around $288.
Turning to XMR/BTC, we can see how price recently wicked below resistance turned support at 0.00533, retested 0.0046 and bounced, printing momentum divergence on the move lower and then reclaiming support. This again looks promising for bulls, and I would now expect to see that major support turned resistance at 0.00605 get retested, where any close through that opens up a move into 0.0073. Clear that latter level and I think we accelerate higher into the top of the multi-year range, where 0.01 has the pair since 2020. Not much else to add here.
The Graph:
GRT/USD
Weekly:
Daily:
GRT/BTC
Weekly:
Daily:
Price: $0.115 (379 satoshis)
Market Cap: $1.043bn
Thoughts: If we begin by looking at GRT/USD, we can see from the weekly that price put in what appears to be the cycle low at $0.051 in December – a 98% drawdown from the all-time high – and has since rallied higher into historical support turned resistance at $0.22 (still shy of long-term trendline resistance) and then retraced from there for most of this year, eventually bottoming out at reclaimed support around $0.085 a few weeks ago. This is the most important level now for the pair, as losing $0.085 would suggest a retest of the December 2022 lows is on the cards; hold above it and I think we start to push through reclaimed resistance at $0.16, above which the trendline is the primary resistance to pay attention to. Once we get a weekly close through that trendline, I think the next cycle begins to play out – the first full bull cycle for The Graph. If we briefly look at the daily, we can see that daily structure has now turned bullish and price has reclaimed the 200dMA and 360dMA as support, aligning nicely with this $0.115 level of prior support. Hold above this next week and I think we see that push into $0.16.
Turning to GRT/BTC, we can see that price retested the Q4 2022 bottom around 327 satoshis last week and bounced, but this past week the momentum took the pair higher into local trendline resistance where price rejected and is now right back at the weekly open around prior support at 390 satoshis. We are clearly just chopping around at present but obviously holding above the Nov/Dec bottom is very important here, as there is quite literally no support below it all the way into the all-time low of 103 satoshis. Now, what I expect to be the most likely outcome if we do move lower off this rejection is a strong sweep of 327 followed by a reclaim and eventual trendline breakout: if we see that, I am jumping in and looking for 750 satoshis as the first major resistance.
Convex Finance:
CVX/USD
Weekly:
Daily:
CVX/BTC
Weekly:
Daily:
Price: $4.07 (13,377 satoshis)
Market Cap: $319.76mn
Thoughts: Looking firstly at CVX/USD, we can see that the June 2022 bottom continues to hold as range support, now having held the pair up for 385 days, with reclaimed resistance at $6 having capped the pair for most of that period also. We have recently bounced off range support again and I continue to hold spot CVX here. I have already filled my position for the next cycle and so will not be looking to add, but for those on the sidelines I would now wait for a reclaim of $4.90 as support, which, if we look at the daily, aligns with the 360dMA and 200dMA; close back above that and I think we have a high probability of a range breakout, from which point we enter buy-the-dip season, with my first target a full gap fill into the $20 area, which began capitulation back in late April 2022.
Turning to CVX/BTC, we have retraced below the May/June 22 lows into historical support at 10,900 satoshis, above which we currently sit, with the range that preceded the first bull cycle just below us between 8k-11k satoshis. Whilst structurally it is too early to call a bottom here, looking at this chart, it quite literally looks like this move below 16k satoshis is the depression stage of the market cycle, from which any weekly reclaim of 16k as support will likely lead to the disbelief rally. If we quickly drop into the daily, we can see that the 200dMA will likely align nicely with the 16-17k range by the time we get up there, providing confluence for a breakout. Not much else to add here as I am focused on the Dollar pair for my position.
Illuvium:
ILV/USD
Weekly:
Daily:
ILV/BTC
Weekly:
Daily:
Price: $40.05 (0.00132 BTC)
Market Cap: $223.901mn
Thoughts: Looking at ILV/USD, we can see that price has retraced 98% from the all-time high and is now retesting the Nov-Dec bottom around historical support at $40, with any weekly close below $37 opening up a sweep of the all-time low at $29.73. If we do see that sweep of all-time lows, I am very interested in getting involved on a weekly reclaim of $30 as support, as I do expect outperformance of the gaming sector next cycle. If, instead, we start to flatten out here above the $40 area and then start to turn weekly structure bullish with a close back above $51, that would be another entry signal for me, with invalidation at $37 and looking for a first target of $88, but with a longer-term target of $404. If we look at the daily, we can see how there is some minor bullish divergence on this most recent push into $40 but also that the 200dMA and 360dMA are closely aligned with that $51-55 range – a clean break through all of that resistance would really indicate a sustained reversal to me.
Turning to ILV/BTC, we can see that price continues to bleed lower, now 96% off the all-time highs and stuck in limbo between major support at 0.001 and prior support turned resistance at 0.0016, with the pair hovering around 0.00131 BTC at present. This is not where I would be looking to get involved considering the structure and lack of clear levels, and if we drop into the daily we can see no momentum exhaustion as of yet nor any minor levels of support to look towards. For now, it is best to await either a flush lower into historical support or a reversion to daily bullish structure with a close back above 0.00162 before taking any long exposure.
Ocean Protocol:
OCEAN/USD
Weekly:
Daily:
OCEAN/BTC
Weekly:
Daily:
Price: $0.388 (1278 satoshis)
Market Cap: $168.224mn
Thoughts: Beginning with OCEAN/USD, we can see that price is once again pushing up against the cluster of major resistance below the long-term trendline, 200wMA and horizontal resistance at $0.39. As is obvious, a weekly close through all of this and above $0.45 would be a huge signal for continuation higher for the pair, in my view. If we get that, I would be looking for the pair to move firstly into $0.56 as prior support, followed by major reclaimed resistance at $0.80, which aligns with the 38.2% retracement of the bear market. Weekly momentum also looks to be bottoming out, but for now this resistance cluster is a huge barrier to the second major leg of this cycle. If we reject again, I would be keen to buy a retest of $0.28 as reclaimed support with invalidation below $0.23.
Turning finally to OCEAN/BTC, we are pushing right up against local trendline resistance and marginally below that 200wMA on this pair also, with prior support currently holding price at 1300 satoshis. For weeks we have just been chopping around here and there isn’t a great deal of indication as to trajectory on the weekly timeframe, but if we drop into the daily we can see that price deviated below 1056 satoshis and reclaimed it as support, and is now facing the confluence of trendline resistance, horizontal resistance and the 200dMA. Continue to push higher and close through all of that – and likely above prior support at 1450 – and I think we begin another period of outperformance taking out the yearly high at 2516 and continuing beyond that.
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.
