Market Outlook #233 (14th August 2023)
Hello, and welcome to the 233rd instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, The Sandbox, GMX, WOO Network, Akash Network, DODO and Decentral Games.
As ever, if you have any requests for next week’s Outlook, do let me know.
Bitcoin:
Weekly:
Daily:
Price: $29,359
Market Cap: $571.787bn
Thoughts: If we begin by looking at BTC/USD, on the weekly timeframe we can see that price continued to consolidate last week, spending the bulk of the week inside the prior weekly range, having found support above $28.7k. We saw a minor drop in volume but I don’t think there’s much to gleam from that, to be honest, given that we continue to chop around between that reclaimed range support and prior support turned resistance at $29.4k, below which price marginally closed last week. We are now also sat right on a trendline, with this being the first opportunity for a higher-low to form above it following the June low. Looking at this, I would expect to see continuation higher this week given the lack of impetus to move below the prior weekly low and reclaimed range support at $28.7k; with that level holding firm, I am inclined to believe this trendline gets solidified and we bounce towards $31.1k resistance from here over the coming weeks.
If we drop into the daily, we can see this chop a little more clearly, but we do have some nice structure with the wick below $28.7k followed by the push through $29.4k into $30k, followed by confirmation of $28.7k as reclaimed support and a subsequent push higher again above $30k. This looks to me ready for the next push through $30k, with any close above $30.2k turning daily structure bullish and opening up the rest of that range into $31.1k as mentioned previously. Unless we now start to close below $28.7k, I don’t think being bearish has much value here short-term; if we do lose that level, I think we drop into $27.2k, however. Looking further ahead, I am expecting a stronger test of $31.1k this time around, as opposed to that distributive range formation, particularly now that we have something of an ascending triangle forming into that (refusal to break fresh lows + flat highs primed for at the very least a sweep into the next major level at $32.8k).
Ethereum:
ETH/USD
Weekly:
Daily:
ETH/BTC
Weekly:
Daily:
Price: $1,846.47 (0.0629 BTC)
Market Cap: $221.863bn
Thoughts: If we begin by looking at ETH/USD, on the weekly we can see that nothing much has changed at all over the past week, with price still sat right around that local pivot, consolidating within tight weekly ranges on low volume. Contraction leads to expansion, as we all know, so whichever way we move from here is likely to be more volatile. If we drop into the daily for clarity, we can see that the pair is now just consolidating above the 200dMA as support, with local resistance having formed around $1887. I am looking for a daily close above that level to open up the next move higher, where we could look to play the long side into $2037 as a first target, followed by $2425 if we find acceptance above that. As mentioned, we have been really tightly compressed and so I am not looking to fade the direction we move in from here, and whilst we hold above that 200dMA I am very much expecting that move to be higher. Lose $1800 and we have $1616 to aim for with the short side.
Turning to ETH/BTC, as has been the case for weeks now it continues to consolidate between reclaimed support at 0.0622 and resistance at 0.0645. Last week saw price compressed within an even tighter range but hold above that support. As I have stated, given this structure – which we can see clearly on the daily – there is no reason to be bearish ETH/BTC here unless we start closing back below 0.0622. Until then, I am expecting this range-bound chop to resolve in another push higher into that long-term trendline, which is where you would want to hedge long exposure until we get a clean breakout. Simple.
The Sandbox:
SAND/USD
Weekly:
Daily:
SAND/BTC
Weekly:
Daily:
Price: $0.397 (1351 satoshis)
Market Cap: $816.132mn
Thoughts: Beginning with SAND/USD, on the weekly timeframe we can see that price has been consolidating form months above support at $0.37, having briefly wicked below it but immediately closed above it, finding resistance at prior support around $0.53. As one might expect, this very much looks like a bottoming formation after a two year bear market and a 96% drawdown. Structurally, I would actually be keen to get involved around $0.38-0.40 because the invalidation is so clean and so close: if we close below $0.33, there is no support below that into $0.156, and this $0.37 area hasn’t been breached since forming in December 2022. As such, I will be opening a small spot position around these prices with the above invalidation and looking to add on a weekly close back above $0.56, which will confirm to me the cyclical bottom is in. If we drop into the daily, we can see that price is also capped by short-term trendline resistance from the Feb highs, with the 200dMA up near that $0.56 also. Hence, a strong weekly close above that would be a really promising signal for that cyclical reversal. Not much else to add here with this structure in place.
Turning to SAND/BTC, we have a similar structure in place here but with the current range having held since the May capitulation candle into support at 1293 satoshis. This level then acted as support for 10 weeks with reclaimed resistance capping the range at 1554 satoshis. We are still well below that long-term trendline resistance and weekly structure is bearish, so it’s not all sunshine and rainbows just yet. If this current support fails, we do have a level just below at 1140 but below that there is air all the way into 784, much like the USD pair. If you’re playing this to accumulate BTC and therefore keen on focusing on the BTC pair, I would probably look at waiting for a weekly close back above 1554 before looking for long exposure. If we drop into the daily, we can see how this would also turn structure bullish, with the 200dMA then aligning with that trendline for the next major area of resistance. Invalidation on this pair for a position on a weekly close above 1554 would of course be ~1280.
GMX:
GMX/USD
Daily:
GMX/BTC
Daily:
Price: $47.33 (0.00161 BTC)
Market Cap: $423.626mn
Thoughts: As both pairs for GMX are looking virtually identical here, I will focus my analysis on GMX/USD.
Looking at the chart for the dollar pair, we can see that price formed an all-time high at $91 in April and has since retraced 54%, losing the 200dMA and 360dMA into resistance turned support at $41 in June, which marked out the bottom, leading to a sharp v-reversal into the 200dMA at $62 where the level acted as resistance. Price has since turned lower since July, moving all the way back towards that June low, but currently forming a swing-low at $43.75 just above it. We are sat right beneath reclaimed resistance at $48 here, with prior support at $50 also a level of interest. If we start to push above $50, and then see a higher-low form above this current one, we have the makings of a bottom in my view, particularly once daily structure turns bullish from here above that June low. In that scenario, I think it makes sense to look for long exposure once again for GMX, as the long-term trend continues to point towards higher prices, and we have a clean invalidation in that $41 area for any cyclical spot positions. Let’s see how the next couple of weeks unfolds, however, as I don’t want to jump the gun with this one whilst structure is still bearish and there is no momentum to the upside on the lower timeframes…
WOO Network:
WOO/USD
Weekly:
Daily:
WOO/BTC
Weekly:
Daily:
Price: $0.189 (645 satoshis)
Market Cap: $328.469mn
Thoughts: If we begin by looking at WOO/USD, on the weekly we can see that the pair has been broadly range bound above cycle lows at $0.10 but below resistance at $0.27 for the best part of 462 days, deviating above that resistance but immediately rejecting and moving lower during that period. We have recently retested reclaimed support at $0.15 and made a higher-high above $0.24 resistance, rejecting once again at $0.27 and turning lower, back towards that $0.15 area, above which we currently sit. This is precisely where I would be looking to load up if I was on the sidelines, as we have clean invalidation on a close below $0.15, and I would be looking to add on a weekly close above $0.271, which would indicate to me that the next leg of the bull cycle is underway – the disbelief rally – with $0.45 the target for that. Not much else to add for this pair.
Turning to WOO/BTC, we can see that much like the Dollar pair this has been sat within a clean range for over 400 days, having formed the cycle low at 435 satoshis back in June 2022 and since been range-bound between support at 647 and resistance 1133 satoshis. More recently, the pair closed below 647, but consolidated in a tight range between 600 and 647 last week, now pushing back into that prior support level. If the pair can immediately reclaim 647 this week, that would look very promising and make for a nice range support to range resistance play, as a separate trade – we could look to buy the reclaim of 647 with invalidation on a close below 600 and a first target of 961 satoshis, followed by 1133. If this support turns resistance here, it is likely we move lower, back into the June 2022 lows at 435 satoshis. Looking ahead, it is a weekly close through this range that I am waiting for before I get really excited about WOO, with an expectation that the next cycle takes this back towards 2600 satoshis at the very least, if not fresh all-time highs.
Akash Network:
AKT/USD
Weekly:
Daily:
AKT/BTC
Weekly:
Daily:
Price: $1.30 (4444 satoshis)
Market Cap: $282.691mn
Thoughts: Beginning with AKT/USD, we can see from the weekly that the pair has finally begun its bull cycle in full glory, with the past week’s rally confirming it for even the deepest doubters, in my view. We saw price consolidate below resistance at $0.63 for weeks before eventually breaking out last week on the highest ever weekly volume, continuing the weekly bullish structure and taking momentum into very bullish territory. That rally saw the pair push on through reclaimed support at $0.95 into support turned resistance at $1.41, just shy of long-term trendline resistance from the all-time high. This is where I have sold a small percentage of my spot position, with a view to hold the remainder for the rest of the cycle. I would not be surprised to see a retracement from this cluster of resistance back towards $0.95 to form another higher-low, but eventually I expect to see this trendline broken and the pair continue its ascent into $2 resistance as the next major level.
Turning to AKT/BTC, we can see that price deviated below the prior all-time low at 953 satoshis into a fresh low at 850 before reclaiming that support and reversing (a pattern to keep in mind among other altcoins we have and will continue to be looking at). That reversal rally took the pair into major resistance at 2400 satoshis, where it stalled, formed a higher low and then blew the fuck out of the yearly highs, rallying through 3250 into reclaimed resistance at 4500 satoshis. This is as good a place as any for some stalling, and aligns with resistance on the Dollar pair, hence reducing exposure a little. I doubt we see a perfect retest of 3250 as reclaimed support but any movement into that area would be a good opportunity to reload. From here, I expect to see a strong ascent into major support turned resistance at 8000 satoshis, which is the next area for unloading some spot… and all I have to add to this here is to say remain patient and the fundamentally sound projects you have bought into over the past 6 months or so will all begin to come good in this manner, in my view.
DODO:
DODO/USD
Weekly:
Daily:
DODO/BTC
Weekly:
Daily:
Price: $0.127 (432 satoshis)
Market Cap: $77.888mn
Thoughts: If we begin by looking at DODO/USD, we can see that price rallied out and above trendline resistance earlier this year, then retraced the entire rally, deviated below the Dec 22 low at $0.09 into $0.082 and immediately reclaimed it, tightly consolidating between $0.09 as support and $0.105 as resistance for months before last week breaking back above that historical range support on very good volume. Now, whilst the first high-volume breakout was a fake-out, I do not expect this second move to be so. Instead, as long as we can now hold above $0.105 as reclaimed support, I think the cycle bottom is in and we are likely to retest $0.216 from here sooner rather than later, with any weekly close through that level beginning the bull cycle for DODO, with $0.74 as major resistance above that. This is one I am looking to hold for a cycle, given the lack of bull market in its history, so let’s see how things develop over the coming weeks and months. Invalidation is $0.082 but if we start to accept below $0.105 I will likely cut.
Turning to DODO/BTC, we can see that the pair has been in a predominantly flat range since May 2022, most recently capitulating below that prior all-time low (and historically significant support level) into a fresh ATL in June at 274 satoshis, above which it has consolidated for 9 weeks. Last week saw a high volume burst of buying, pushing the pair back into prior ATLs turned resistance at 518, but the level proved too strong on this first attempt. As soon as we reclaim that level on the weekly, I think its game on for DODO, given how historically significant that level is and how long we have now spent just tightly consolidating below it without breaking into fresh bearish price discovery. Above 518 I think we push into 1390 before any meaningful resistance. There is significant upside to be had here, I believe.
Decentral Games:
DG/USD
Daily:
DG/BTC
Daily:
Price: $0.031 (105 satoshis)
Market Cap: $22.007mn
Thoughts: Given that the Dollar and BTC pairs look the same for DG, I will focus here on the Dollar pair, as that is also what I am basing my own spot position on.
Looking at DG/USD, we can see that price deviated below support at $0.02 in June, forming a fresh all-time low at $0.0157, printing momentum exhaustion into that low and immediately reversing and reclaiming $0.02 as support. Since, price has rallied higher through July, pushing through the 200dMA all the way into the 360dMA and prior support at $0.04, where it has rejected, now consolidating above the 200dMA as reclaimed support and below trendline resistance. I would expect to now see this consolidation lead to the breakout beyond that trendline, whilst $0.028 acts as support. When we see acceptance above $0.04, I am going to look to add to my spot position as I believe the bull cycle will begin kicking into gear for it above that level, having never really traded above that 360dMA in its history. From there, I am looking at $0.075 as the next major resistance, but I am not looking to sell any DG until the gap gets filled into $0.26 much later in the cycle. That is my first major target, followed by $0.42 and potentially fresh all-time highs 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.
