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Market Outlook #235

Market Outlook #235 (29th August 2023)

Hello, and welcome to the 235th instalment of my Market Outlook.

In this week’s post, I will be covering Bitcoin, Ethereum, Solana, Stellar, ImmutableX, dYdX, LooksRare and Raini.

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

Bitcoin:

Weekly:

btcusdweekly

Daily:

btcusddaily

Price: $25,943

Market Cap: $504.252bn

Thoughts: If we begin by looking at BTC/USD, we can see from the weekly timeframe that price chopped around for most of last week, rallying briefly into prior support turned resistance and $27k but rejecting and closing out the week back near the open, around $26.1k. We remain sat above the prior swing-low and current range support at $25.4k but this is looking precarious given the untested lows from June. If $25.4k begins to give way this week, no doubt we take out that previous swing-low into $24.3k, but the reaction there is what is going to be most telling: sweep and reverse back above $25.4k and I think we have the makings of a bottom, having trapped breakdown shorts and taken liquidity; but close the weekly through that previous swing-low and weekly structure turns bearish, with $22.5k the next level of interest for demand.

Turning to the daily, we can also see how the 200dMA is now aligned roughly with that horizontal support turned resistance level above at $27k, providing more confluence for a possible reclaim – for example, sweeping into $24.3-24.6k and then rallying through $25.4k and back above $27k would be a huge greenlight for the bottom being in, in my view. That’s the more bullish scenario I can envision for the coming weeks. Putting our green-tinted glasses on, the most bullish scenario I am considering here is for this June swing-low to hold as support, with any daily close through $27k and the 200DMA then turning daily structure bullish without sweeping the lows, potentially providing rocket fuel for a move higher as those anticipating the breakdown prior to taking on long exposure rush in – in this scenario, I’d be looking to short $28.7k back towards $27k for an intraweek play but more broadly sitting on my hands until we reclaim $28.8k as support. The more bearish scenario here is that current support above $25.4k fails, and we begin to accept below $24.3k, turning it into reclaimed resistance and also losing that weekly structure and the 360dMA – that, unless it is confirmed immediately as a massive bear trap by reclaiming all of that structure the subsequent week, would point towards another 10-15% of downside at least, if not a return towards historical cycle highs at $20k… let’s see how the rest of the week unfolds.


Ethereum:

ETH/USD

Weekly:

ethusdweekly

Daily:

ethusddaily

ETH/BTC

Weekly:

ethbtcweekly

Daily:

ethbtcdaily

Price: $1,637 (0.06307 BTC)

Market Cap: $196.783bn

Thoughts: If we begin by looking at ETH/USD, from the weekly chart we can see that the pair consolidated within the previous weekly range, capped by the prior weekly close as resistance. We wicked below the 200wMA but also managed to hold above it once again, but looking at this I would not be surprised if we see the 200wMA at $1639 give way this week if BTC makes a move lower. If that is the case, I am looking at $1510 to provide support, where a bounce in that region followed by a reclaim of the 200wMA would be a nice bottoming signal. Alternatively, if we continue to hold the $1640 area as support this week, I am looking for a weekly close above last week’s high for some indication that we’re likely moving higher off this area – close through $1717 and I think we retest $1850 as resistance, with any weekly close back above that level obviously suggesting the next leg of the longer-term uptrend is beginning, with $2425 still the target. Dropping briefly into the daily, we can see that price is consolidating right above the 360dMA also, which aligns with that 200wMA, so this does have some good confluence for a bottoming area, particularly now that we’ve swept the June low, but only if BTC plays ball of course as I do not think ETH/BTC yet has the strength to outperform all by itself…

Turning to ETH/BTC, we continue to chop around inside the multi-month range between 0.0622 and 0.0645, and whilst this continues there really isn’t a lot to add. What I would say, however, is that the trendline from 2022 is now creeping towards the current range, and within a couple of weeks will likely be pressed right up against price within this range if we do not move out of it, potentially opening up for a high-volatility breakout of both key levels. As I’ve mentioned for months, until we get that weekly close through this trendline, it is safer to assume all rallies will be capped by it as they have been since last summer.


Solana:

SOL/USD

Weekly:

solusdweekly

Daily:

solusddaily

SOL/BTC

Weekly:

solbtcweekly

Daily:

solbtcdaily

Price: $20.29 (78,211 satoshis)

Market Cap: $8.276bn

Thoughts: Beginning with SOL/USD, we can see that the pair has now retraced into reclaimed support at $20, above which it has held for two weeks now, and this is precisely the level SOL bulls want to hold following that reclaim and return to bullish market structure on the weekly. Whilst it is a little early to tell whether we are putting in a bottom here, assuming we do hold the $19-20 range as support, I am looking for a retest of $25.76 as resistance to follow, but only looking to re-enter long exposure on a weekly close back through that level, as it has been a huge level of resistance all year. If we lose $20 here, however, I will be looking to buy $15. Dropping into the daily, we have quite a bit of chop here between $20-22.40, with the latter level of prior support acting as resistance, along with the 200dMA and 360dMA. We are now tightly pressed between that confluence of resistance and current support, so clearing $22.40 on the daily would be the first promising sign of a bottom, turning daily market structure bullish. If we see that, I expect that $25.76 retest to follow swiftly.

Turning to SOL/BTC, we can see how the pair continues to consolidate in a very tight range above 78k satoshis but below long-term trendline resistance. Much like ETH/BTC, there is not a lot to add here until we get a clear breakout in either direction; close the weekly below this support level and no doubt we drop into a stronger level of support at 70k satoshis, which could mark out a nice bottom, or we break and close the weekly through trendline resistance which has capped the rallies since 2021 – that would be a massively promising sign for a sustained reversal and a period of outperformance for Solana. Eyes very much glued to this for the next couple of weeks as we will see a breakout one way or another…


Stellar:

XLM/USD

Weekly:

xlmusdweekly

Daily:

xlmusddaily

XLM/BTC

Weekly:

xlmbtcweekly

Daily:

xlmbtcdaily

Price: $0.119 (460 satoshis)

Market Cap: $3.271bn

Thoughts: If we begin by looking at XLM/USD, we can see on the weekly timeframe that the pair is in an uptrend, with clean bullish market structure on that timeframe, having recently rejected at the 200wMA at $0.17 as resistance and since retraced into prior resistance turned support at $0.11, which is currently holding as a possible higher-low within this trend. If we assume the trend is to continue – which we should given the market structure and momentum indicators here – then this is a very nice area for a bottom to begin forming. If we drop into the daily for clarity, we can see how price wicked below that $0.115 area towards the confluence of the 200dMA and 360dMA for the first time following the high volume impulse candle higher; we front-ran a perfect retest of those MAs and bounced back into $0.133, now consolidating between those two levels. If we now hold above $0.115 and then close he daily above that swing-high at $0.133, I think the bottom is in and we begin another ascent into major resistance between $0.16-0.19.

Turning to XLM/BTC, the pair has been capped by trendline resistance from the all-time high back in 2018, with the 2021 high also marked by rejection at the confluence of that trendline and the 200wMA. Interestingly enough, we again rejected at the trendline/200wMA confluence a few weeks ago at 645 satoshis and have since retested 400 satoshis as reclaimed support and bounced. As is quite obvious, a weekly close above 645 here would be a very promising sign indeed of a strong uptrend for Stellar, with no resistance from there all the way into 1000 satoshis, and that is certainly a range I want long exposure within. Until we see that, I don’t feel the need to jump the gun, but we are certainly coiling up beneath that resistance cluster now…


ImmutableX:

IMX/USD

Daily:

imxusddaily

IMX/BTC

Daily:

imxbtcdaily

Price: $0.561 (2161 satoshis)

Market Cap: $630.061mn

Thoughts: As both pairs are virtually identical for IMX, I will focus here on the Dollar pair.

Looking at IMX/USD, we can see that price has been range-bound between prior range resistance turned support at $0.52 and support turned resistance and the 360dMA at $0.80 since June. The pair recently retraced back towards that former level, now sat right above it. Given how important this area has been, I am willing to buy some spot here with a tight invalidation on a close below $0.50 (giving me some breathing room), looking to play just the range back into the 360dMA now at $0.75. Beyond that, I am looking for cyclical exposure above $0.80, as acceptance above that level will suggest to me that the accumulation -> test pump -> re-accumulation phase is over and we are beginning IMX’s first major cycle, which I want to be a part of. First target for that cyclical position is $1.84, followed by $3.35. Obviously, if this loses $0.50 here and accepts below that level, we are very likely to return towards those all-time lows, where I would look to be a buyer on a sweep of $0.38 followed by a reclaim of the range.


dYdX:

DYDX/USD

Weekly:

dydxusdweekly

Daily:

dydxusddaily

DYDX/BTC

Weekly:

dydxbtcweekly

Daily:

dydxbtcdaily

Price: $2.15 (8287 satoshis)

Market Cap: $374.030mn

Thoughts: Beginning with DYDX/USD, we can see that price has been chopping above $1.91 but below $2.40 for months now, continuing to be capped by trendline resistance from earlier this year also. That said, we are now very much just coiling within a key range below this resistance cluster, and I am expecting a breakout pretty soon, particularly given how that trendline is beginning to close in on price. If we see a weekly close through $2.40, the next key area for price to be drawn is the level beyond which the pair has not closed since April 2022 – $2.97. That level capped every weekly push earlier this year, so flipping that as support is as strong a signal as I can think of for the next phase of the market cycle for DYDX, with the 23.6% retracement of the bear market (and the April 2022 highs) coming into view at $7.15 as a major resistance level.

Turning to DYDX/BTC, we are beginning to trend upwards again following the breakout beyond trendline resistance and weekly structure turning bullish, with last week closing marginally above 8240 satoshis. There is now zero resistance between here and the next major level at 11k satoshis, but, if we drop into the daily, we can see how price is still being pressed up against the confluence of the 200dMA and 360dMA here with some momentum exhaustion beginning to form. This will be invalidated if we start to close above 8600 satoshis, where I would then expect a strong push into 11k to follow over the coming weeks. If instead we see 7925 satoshis give  way as support,  I would look to 7067 to hold for this structure to continue to look promising mid-term. Either way, there is nothing inherently bearish about what I am seeing here for DYDX.


LooksRare:

LOOKS/USD

Daily:

looksusd

LOOKS/BTC

Daily:

looksbtc

Price: $0.0615 (237 satoshis)

Market Cap: $33.526mn

Thoughts: Much like IMX, both pairs are looking very similar here for LOOKS, so I will focus on the Dollar pair.

Looking at LOOKS/USD, we can see that the pair recent breached the multi-month range support at $0.05, deviating into a fresh all-time low at $0.041 and then immediately reclaiming that range and now pressing up again range resistance at $0.068. Unlike previous range breakdowns, this one has not rejected at the prior range support and made fresh lows – rather, we are now on the verge of a breakout beyond range resistance after a deviation into an all-time low. This is exactly how I would expect a bottom to form, but of course we remain in what has been a perpetual downtrend for the pair since inception for now. If this $0.068 level continues to act as resistance, it is likely $0.05 gets retested as reclaimed support: hold above it and protect that all-time low and the cyclical bottom is likely in here, after almost 18 months of downtrend. If we can get a breakout through $0.068, there is no resistance back into the major support turned resistance at $0.11, which aligns with the 200dMA, and that will likely mark out a local top on the first test. Lose $0.05 and no doubt this downtrend continues to fresh lows…


Raini:

RAINI/USD

Weekly:

rainiusddaily

Daily:

rainiusdweekly

 

RAINI/BTC

Weekly:

rainibtcweekly

Daily:

rainibtcdaily

Price: $0.0131 (51 satoshis)

Market Cap: $6.397mn

Thoughts: If we begin by looking at RAINI/USD, we can see that the pair has recently retraced back into the historical support level at $0.01 above which it has consolidated for four weeks now, with that level having acted as resistance during Q4 2022 and acted as the base for the first bull cycle back in 2021. As such, it is a key level. Last week saw a strong push off that level to close at weekly highs back above $0.012, but weekly structure is obviously still bearish here. Nonetheless, this is beginning to look promising following the rallies of early this year, with a cyclical bottom very much looking like its in, in my view. I am looking to add to my long term spot bag when we can get a weekly close back above $0.0175, turning weekly structure bullish. If we drop into the daily, we can also see how that area has confluence with the two key MAs, so that’s what I am watching for. With daily structure now bullish, as long as $0.01-$0.011 is protected as support we should see the pair rally towards that cluster of resistance sooner rather than later.

Turning finally to RAINI/BTC, we can clearly see how price deviated below long-term support at 43 satoshis, failing to gain momentum to the downside and now reclaiming that level as support. Momentum indicators are beginning to point towards a turn in favour of the bulls here off this key level, but weekly structure is still bearish. When we reclaim 62 satoshis as support, I think the odds increase dramatically that the next cycle for RAINI is beginning, in my opinion. Dropping now into the daily timeframe, we can see how price has turned daily structure bullish after the multi-week consolidation and we are sat right near the final level of resistance between here and 63. Push through this area and I think that retest comes swiftly, with acceptance above the cluster of resistance between 63-74 satoshis being the greenlight for further outperformance of RAINI. I am looking at long-term targets here of 230 satoshis, followed by 280 satoshis and finally the all-time high and beyond.

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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