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Market Outlook #236

Market Outlook #236 (3rd September 2023)

Hello, and welcome to the 236th instalment of my Market Outlook.

In this week’s post, I will be covering Bitcoin, Ethereum, BNB, Uniswap, WOO Network and Ethereum Name Service. I will also be looking at Altcoin Market Cap.

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

Bitcoin:

Monthly:

btcusdmonthly

Weekly:

btcusdweekly

Daily:

btcusddaily

Price: $25,928

Market Cap: $504.957bn

Thoughts: If we begin by looking at the monthly chart for BTC/USD, we can see that August was not a strong month, to say the least. We opened up near $29.5k and closed the month out at $25.9k, firmly back below historical range support at $28.7k on marginally higher volume than July. Whilst this retracement of the entire bullish engulfing back in June is not promising for short-term price-action, we are still just chopping around inside the same range that has been traded for months now. If September brings acceptance below $25.4k, it is highly likely we move towards the next major support level at $21.5k. If, however, we wick below that June low this month and then close September back above $25.4k, I think this range persists and we retest the top of it up near $30k again in October.

Turning to the weekly, we can see how price wicked above last week’s high at $27k all the way through the 200wMA and into $28.2k before rejecting, now set to close the week marginally below the open, but still above the support cluster between $25.4k-25.7k. That said, you don’t need me to tell you that wicking above a weekly high into major resistance and rejecting is not bullish. We are sat in a precarious position here and is seems unlikely following this week’s movements that the bottom is in here; rather, it makes much more sense that following the liquidity sweep into $28k we now take out the June low into $24.3k to test demand in that area, before any longer-term trajectory is found. If we do see that, the reaction will be key: wick through the June low, catch and strong bid and reclaim $25.7k and this multi-month support remains valid, and likely leads to another test of that 200wMA from below; close through the June low and start testing $24.3k as reclaimed resistance and I would be looking for short exposure for the following weeks towards $21.5k.

Turning to the daily, we can see that price was a mess this past week, showing strength on the move above $27k to close marginally back above that 200wMA, then retracing the entire rally in two days. We are now consolidating above a cluster of swing-lows that have not been properly swept after a major rejection. If we get a pop early next week back into $27k without having taken out this week’s low, I am shorting that with a stop above $28.1k and looking for $25.3k, followed by the June low. Not much else to add beyond what has been mentioned about the higher timeframes.


Ethereum:

ETH/USD

Weekly:

ethusdweekly

Daily:

ethusddaily

ETH/BTC

Weekly:

ethbtcweekly

Daily:

ethbtcdaily

Price: $1,635 (0.06308 BTC)

Market Cap: $196.566bn

Thoughts: Looking at ETH/USD, we have similar price action with that wick above the prior weekly high into $1745, where price rejected and is set to close firmly below the weekly open and marginally below the 200wMA. Not a lot that now looks bullish here – we previously had a strong sweep of a key swing-low and reclaim of 200wMA as support; now, we have support becoming resistance and the 200wMA giving way. I would imagine that the previous two weekly lows will get taken out here into $1508 over the next week or two, and if that level fails to hold then it is likely we trade back into historical cycle highs around $1410. If we drop into the daily, we can see how we are still consolidating above the 360dMA, but if BTC/USD starts breaking fresh lows there’s not a chance this is holding the line here. The only short-term bullish scenario I can now see is another strong wick like that of two weeks ago, taking out all the recent support into $1508 and immediately catching a bid that takes it back above this $1630-1660 region.

Turning to ETH/BTC, this tight range continues to hold for the pair as price rejected once again last week at 0.0645 and this week consolidated between 0.062 and 0.0635. If we drop into the daily for some clarity, we can see how the 200dMA and long-term trendline resistance are closing in on the current range, and within a couple of weeks we will either have to reject a breakout, or actually break out. Third scenario is a fake-out then retrace, but you get the idea. For now, 0.0622 continues to act as support and until we have a strong directional push I don’t really have much of an opinion on the pair.


BNB:

BNB/USD

Weekly:

bnbusdweekly

Daily:

bnbusddaily

BNB/BTC

Weekly:

bnbbtcweekly

Daily:

bnbbtcdaily

Price: $214.35 (0.00827 BTC)

Market Cap: $32.967bn

Thoughts: Beginning with BNB/USD, we can see on the weekly that the pair – having consolidated above the 200wMA for a couple of months – lost it two weeks ago, dumping into multi-year support above $210, where it has now consolidated for two consecutive weeks. This support has held the pair up since April 2021, for context, so closing the weekly below it would be a huge show of weakness, particularly with the channel trendline from 2018 just below. If we do start to close below $210 on the weekly, obviously $183 becomes the last stand for this structure, and demand stepping in there and then reclaiming $210 would begin looking like a promising setup for long exposure. However, if $210 becomes resistance and we start trading below that confluence of the trendline and $183, I don’t think minor support at $151 is going to be much help, and it is the only level between there and $44. We would effectively see BNB in bearish price discovery, attempting to find levels within that huge range that will eventually mark out the bottom. Not a spot you’d want to be in if you’re bullish BNB.

Turning to BNB/BTC, we can see that the pair has been in a tight range, marginally trending upwards, since capitulation earlier this year into that 200wMA at 0.0077. Following a bottom formation above that MA, price has reclaimed 0.0081 as support and is now sandwiched between it and trendline resistance from the all-time high, as well as reclaimed resistance at 0.0091. Looking at the bearish scenario firstly, obviously losing the 200wMA here would be the biggest sign of significant further downside, with no support below it all the way into 0.0068. Whilst this support holds, however, it makes sense to assume a little bit more chop will follow, at least until the trendline compresses against this current range later in September. Then, much like ETH/BTC, we will likely see a directional shift – either a breakout and acceptance above, or rejection and subsequent loss of the 200wMA. Of course, there is the possibility that the trendline simply gets invalidated as resistance, with price just chopping through it and continuing to consolidate – in my view, that would be more bullish than bearish, as it is highly indicative of that period of time capitulation that precedes the beginning of a fresh cycle, rather than an omen of further downside. Not much else to add here…


Uniswap:

UNI/USD

Weekly:

uniusdweekly

Daily:

uniusddaily

UNI/BTC

Weekly:

unibtcweekly

Daily:

unibtcdaily

Price: $4.43 (17,066 satoshis)

Market Cap: $3.334bn

Thoughts: If we begin by looking at UNI/USD, we can see on the weekly timeframe that the pair rejected around prior support at $6.30 and has retraced back below $4.75 into $4.27, where it is currently set to close the week. We are now marginally back below the long-term trendline resistance, and I would expect to see price retrace further back towards that $3.50 area if we don’t reclaim $4.75 next week. If we do reclaim that level, I am looking to buy back my UNI with a view to add on acceptance above $6.30. If we reject $4.75 next week and continue to move lower, I would love to buy the bottom of this range if I get the opportunity – sweep $3.50 and I am all in. Briefly looking at the daily, we can see there is some bullish divergence down here, but structure is still bearish and unless this divergence leads to a break and close through $4.75, further downside is inevitable…

Turning to UNI/BTC, we can see from the weekly that the pair actually has bullish structure on this timeframe and it is possible now that price is looking form a higher-low above the June swing-low at 14.4k satoshis. At present, we are consolidating around reclaimed support at 16.9k, and, if we drop into the daily, we can see how price rejected at the 200dMA before returning to this support cluster. If the pair finds demand here, a return to bullish market structure on the daily is the first thing we are looking for as a sign of a macro higher-low formation. If we reject 17.5k early next week and break back below 16.9k, I think we get that next leg lower into 15.3k, which may be where buyers do step in. Looking at this pair long-term, the highest probability signal for the next cycle beginning and thus a long period of outperformance, in my view, is acceptance above 23k satoshis. For the risk-averse, that’s the level to wait for.


WOO Network:

WOO/USD

Weekly:

woousdweekly

Daily:

woousddaily

WOO/BTC

Weekly:

woobtcweekly

Daily:

woobtcdaily

Price: $0.165 (634 satoshis)

Market Cap: $285.333mn

Thoughts: If we begin by looking at WOO/USD, we can see from the weekly that the pair has been range-bound since May 2022, with much of that period having found support above $0.15 – and with all of 2023 having been supported by that level. Range resistance has been found around prior support at $0.30 and we have now been consolidating above support for three weeks, with this past week having tested $0.15 for the fourth time this year. If we see a weekly close below the level, no doubt we dip into minor support below at $0.131, but I would actually expect the May 2022 bottom to be retested at $0.103 if this level fails and is not immediately reclaimed, as $0.131 is not that strong a level. If instead we see a deep wick through $0.15 towards $0.13 and then reclaim this 2023 support level, that is as good a signal as any in my view that we are going to move back towards the top of the range and we can look to play that for up to 100% of upside back into $0.30.

Turning to WOO/BTC, we can see how the pair had been consolidating above 676 satoshis since August 2022, but broke below that level in July, finding support at 600 satoshis and now testing 676 as resistance. We have been inside this 10-15% range for five weeks now and given the breakdown from a long-term support level, the lack of follow-through is quite telling. If we pop back above 676, I am buying spot with invalidation at 590 and looking for 970 as a first target, followed by 1150. Very clean structure here – keep it simple.


Ethereum Name Service:

ENS/USD

Daily:

ensusd

ENS/BTC

Daily:

ensbtc

Price: $7.36 (28,371 satoshis)

Market Cap: $189.756mn

Thoughts: As ENS has only been trading for around 18 months, both pairs look virtually identical and I will focus here on the Dollar pair.

Looking at ENS/USD, we can see on the daily chart that trendline resistance that has capped the pair all year provided resistance in July that has led to price returning to the all-time low, retesting $7.10 in mid-August and then again this past week, now consolidating marginally above it but still firmly below both the trendline and prior support at $8.04. Given how many times this all-time low has now been tested, I would be very surprised to see it hold firm here – rather, I am expecting a deep wick or fake-out below to be followed by a reclaim. If we do see price break $7.10 in the next week or two, I will be watching for demand to step in and bring it back above the level, looking to buy spot in that scenario. I am also looking to add to that spot exposure on acceptance above that trendline and price turning daily market structure bullish. So, if we do sweep the all-time low, I am a buyer as close to $7.10 on a reclaim and then likely looking to add above $8.05. Let’s see how this one plays out in September…


Altcoin Market Cap:

ALT/USD

Weekly:

total2usd

Daily:

total2usddaily

ALT/BTC

Weekly:

total2btc

Daily:

total2btcdaily

Market Cap: $519.245bn (20.05mn BTC)

Thoughts: If we begin by looking at ALT/USD (or TOTAL2 USD), we can see on the weekly that the altcoin market continues to chop around inside this range that has been in play for 441 days, with the market finding resistance at ~$598bn for most of that period, with a fake-out above it back in April. We have retraced following the more recent rejection of that resistance level back into support for the broader market around $500bn – a valuation that has held firm for most of 2023. Nonetheless, we rejected the 200wMA as resistance this past week and if the altcoin market begins to move below $500bn in the next week or two, I would expect to see previous cycle highs at $480bn retested as support, with current cycle and range lows of $425bn the next target if that fails. Regardless, as long as this range continues to hold, it is likely that ‘the worst’ is over for price capitulation, and we are now seeing time capitulation play out, with the possibility for many more months of chopping inside this range before acceptance above $600bn. If and when we do see that – and the 200wMA becomes support again – I do believe that will be the trigger for a market-wide disbelief rally for altcoins. with the 38.2% retracement of the bear market at $940bn becoming the next magnet (i.e. 50% of upside following that breakout). If you are still side-lined and waiting for the opportune moment to begin entering altcoins, I would be very surprised if you get much of a better opportunity than the next couple of months…

If we look at ALT/BTC,  we can see how following the multi-year range breakdown earlier this year, altcoins generally found support against BTC and marked out a bottom around that 200wMA, v-reversing since that point back into range support turned resistance around a 20mn BTC valuation. We have recently seen the altcoin market break above trendline resistance, indicating some strength following what currently looks like a classic shakeout, and I am now keen to see whether altcoins can continue this period of outperformance against BTC. If we see the market accept back above 20.2mn BTC as reclaimed range support, I think it is very likely the cycle lows are in for altcoins broadly against Bitcoin and we see outperformance from there back towards the mid-range at 24.3mnn – or 20% of upside vs BTC. If we see alts reject on their BTC pairs in this area and begin dumping lower, it is very probably the June low at 17.7mn gets retested, indicating 10-15% of downside for alts. Watch for the weekly range reclaim.

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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This Post Has 2 Comments

  1. martin vojkuvka

    Hello Nik,
    I know it’s too early, but do you like some of the small, low-cap projects on your radar?
    thank you for answer.

    1. Nik

      Hey Martin, sorry for the delayed response I must have missed this comment. I am going to be publishing an update to the top microcap and lowcap picks for the next cycle in the next week or two. Cheers!

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