Market Outlook #238 (24th September 2023)
Hello, and welcome to the 238th instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, Cardano, Cosmos, Algorand, Casper Network, Fetch.ai, Convex Finance and Cellframe.
As ever, if you have any requests for next week’s Outlook, do let me know.
Bitcoin:
Weekly:
Daily:
Price: $26,587
Market Cap: $518.245bn
Thoughts: If we begin by looking at the weekly chart for BTC/USD, we can see that price wicked up this past week through prior support at $27k towards the 200wMA at $27.5k but rejected, now set to close out the week back near the weekly open at $26.5k. Not the most promising week of price-action, given the false breakout above a key level followed by rejection and retrace back below that level. Looking at this, as long as $27k now caps the highs next week, I would expect the bottom end of this range to be retested at $24.5k. Now, if we start to break and accept back above $27k despite this rejection, then we have a case for another attempt at that 200wMA, but honestly this looks quite weak at the moment and with that clean double bottom into the June low I would be surprised if we don’t see $24.3k tested as prior resistance turned support before a bottom is found. Beyond that, picture is the same as last week – until we get a clean weekly close below the June low, weekly structure is still bullish but we are just chopping around doing very little of significance at the moment.
Turning to the daily, we can see that daily structure turned bullish following that deviation below $25.3k, which was promising, as price v-reversed back above the support cluster and made a new swing-high at $27.6k. However, the immediate rejection and close back inside $27k is not looking particularly promising in light of the weekly timeframe too. That said, bulls do have some potential structure to fall back on here: if we can now hold above $25.7k and form a higher-low in that area we do still have bullish daily structure – in that scenario, we would expect to see that 200dMA at $27.9k tested as resistance. However, as mentioned above, the bearish scenario here is due to the combination of that swift retrace back below a key level + the fact that the June low and September low are now virtually identical and have not been swept. For actual trade setups this coming week, I am looking at either a long at $25.7k if we get nice structure on the lower timeframes that indicates a higher-low formation, a long at $24.3k if that fails (sweep -> reclaim), or a short at $27k if we pop above it early next week and then break back below it into $25.7k.
Ethereum:
ETH/USD
Weekly:
Daily:
ETH/BTC
Weekly:
Daily:
Price: $1593.83 (0.0599 BTC)
Market Cap: $191.612bn
Thoughts: Beginning with ETH/USD, we can see from the weekly that price is set to lose another week below the 200wMA and now below support at $1616. We are still sat firmly above $1508 but if BTC breaks $25.7k I would expect ETH/USD to tumble through that support towards prior cycle highs at $1410. No indication as of yet on the higher timeframes that we’ve bottomed out here unfortunately, particularly with momentum indicators still pointing to lower prices. Now, if we drop into the daily, there is much more clarity here. We can see how price made bullish divergence on that last push into $1508 and rallied off it into reclaimed resistance at $1616, where the pair rejected and moved back below the 360dMA. We are now consolidating below that reclaimed resistance, and daily structure is now bearish once again – I would look to short any pop up early next week with invalidation above $1664. If we accept above $1664, I will likely flip long because that would look super bullish following this bearish structure – targeting $1750. To the downside, as long as this structure holds and $1616 acts as resistance, first target is $1508 followed by $1410-1430 if that falls.
Turning to ETH/BTC, we can see how this weakness has manifested, with the pair losing the multi-week range and closing below 0.061, now set to close around 0.06 after hitting 0.0594 this week – the level marked out for a long time now. Now that we are in this area and the pair has breached support, it’s clear this downtrend has not yet ended, and weekly RSI does not point to exhaustion either. If we drop into the daily, we can see how there is similarly no sign of divergence or trend exhaustion here yet either, and if we rally off this support level into 0.061 and mark that out as support turned resistance I would be looking at 0.0577 for the next area of interest. Now, given that we are now coming towards the bottom end of a multi-year range, after a year-long downtrend, I am expecting this next 5-10% zone below current prices to mark out a long-term bottom; somewhere between 0.055-0.0577. Let’s see how the weeks unfold from here…
Cardano:
ADA/USD
Weekly:
Daily:
ADA/BTC
Weekly:
Daily:
Price: $0.245 (925 satoshis)
Market Cap: $8.618bn
Thoughts: If we begin by looking at ADA/USD, we can see how the pair has been slowly bleeding lower for a few months and has now found support once again right around $0.237, which has held the pair up since November 2022. This is exactly where bulls want to see demand step in, given the strong sweep of the lows in May followed by the reclaim and rally in summer. Now that we have returned to this support cluster, it should hold firm if the cyclical bottom for Cardano has indeed already formed, and whether we simply chop around here or start to push higher will likely be determined by the broader market. However, the concerning thing for ADA bulls is that it does not look like BTC and ETH are quite ready to turn higher just yet, and if they lose key supports, can ADA hold this level?
Well, if we turn to ADA/BTC, it does not look like that is the case. There are no signs here that the pair has formed a strong bottom with promising structure to emerge from; rather, we have some support here at 870-950 satoshis which looks ready to fall. If we begin to accept below 870, there is no support lower for another 20% decline into 710 satoshis. Honestly, I would not be looking for long exposure until we see this trendline resistance broken and weekly structure turned bullish, which at present would mean reclaiming 1125 satoshis… Dropping into the daily, we again have no signs of momentum exhaustion here, which is not promising for bulls. We have one last line of defence here in the form of that 871 satoshi swing-low, and beyond that the pair is simply in a downtrend with strong momentum pointing lower. Ouch.
Cosmos:
ATOM/USD
Weekly:
Daily:
ATOM/BTC
Weekly:
Daily:
Price: $7.05 (26,524 satoshis)
Market Cap: $2.063bn
Thoughts: If we look firstly at ATOM/USD, we can see that price has returned to prior resistance turned support at $6.38, where it has found support and bounced this past week, but right into reclaimed resistance at $7.32, with price rejecting a move above that level and now set to close the week back below it. That being said, this is an area to pay attention to for sure, as it marked out the June 2022 bottom, from which point the pair rallied 3x, with momentum looking similar back then. Nonetheless, weekly structure is bearish still with no signs of trend exhaustion – for now. If we close below $6.38, I would expect that June low to get swept at $5.50, with $4.58 the next key support below. Dropping into the daily, we can see how price rejected the move through $7.33 and has since turned lower, marking out a swing-high in that area – whilst the downtrend persists, it is wise not to bet against it.
Turning now to ATOM/BTC, again we have returned to a key historical area of support and one which would in other contexts be primed for blind buying. Last week we tested the June low at 24.5k satoshis and bounced, with this past week rallying towards prior support at 29k but rejecting below it, now set to close the week inside the key historical support range between 24-27k satoshis – and this range has held price up since 2020 save only for one deviation below at the beginning of 2021. Given that there is no support below this range all the way into 17.8k satoshis, bulls want to see it hold, obviously; what may happen is a deep sweep of the level followed by a reclaim, after which I would be a keen buyer of spot. If we turn to the daily, there are now signs yet that a bottom has formed except the shift to daily bullish structure, but we saw a similar push in August that led to fresh lows, so not the most useful sign here. I would be looking for a sweep of 24.5k or a deviation below it with bullish divergence. Let’s see how it plays out.
Algorand:
ALGO/USD
Weekly:
Daily:
ALGO/BTC
Weekly:
Daily:
Price: $0.101 (380 satoshis)
Market Cap: $791.938mn
Thoughts: Beginning with ALGO/USD, we can see that price has swept the prior all-time low at $0.089 and made a fresh low at $0.082, then reclaiming $0.089 as support and now pushing up off that level into prior support turned resistance at $0.10. This, unlike many other large-caps, is beginning to look promising after two years of downtrend. However, weekly structure is still bearish and we remain below local trendline resistance. The shining hope for bulls here is that weekly RSI does appear to be showing trend exhaustion following that sweep of all-time lows; if you’re gonna print divergence, printing it after sweeping an all-time low is as good a spot as any. Turning to the daily, we can see that we recently turned daily structure bullish and price has since been consolidating below prior support; this looks ripe for a pop above that level, to be honest, and if we can reclaim $0.10 as support I think we have the makings of a bottom. before we get too excited though I think it’s important to note that trendline resistance from November 2022 has capped major rallies, so until we close the weekly through that I am not super confident…
Turning to ALGO/BTC, we are seeing even more promising signs here, with the pair having broken the sharp trendline resistance that has suppressed price most of 2023 and since been consolidating above prior all-time lows now acting as support at 350 satoshis. If we can rally off this area and reclaim 410 as support, turning weekly structure bullish in the process, then I think we start to see ALGO begin to outperform for a period, as we have major real resistance back into 722 satoshis from there. Whilst 350 acts as support, it makes sense to lean bullish here I think. Not much else to add on this one – fingers crossed we see support hold and can get a decent trend to jump on board.
Casper Network:
CSPR/USD
Daily:
CSPR/BTC
Daily:
Price: $0.0323 (122 satoshis)
Market Cap: $366.196mn
Thoughts: As both charts for CSPR look pretty much the same, I will focus here on the Dollar pair.
Looking at CSPR/USD, we can see that price spent the first year of its existence in a downtrend, retracing 98% from its all-time high into an all-time low of $0.022 in June 2022. Since then, the pair has been more choppy, spending a year broadly moving higher but extremely slowly, with the most recent peak at $0.064 in May 2023. Since that peak, the pair has returned to prior resistance turned support at $0.03, with some momentum exhaustion now beginning to form in this area. Nonetheless, I would not look at this as particularly attractive just yet. We are back below key MAs and daily structure is bearish. This is also not a particularly strong support level we are sat at. Rather, if you were looking to get involved in a longer-term spot position for CSPR, I think that $0.0286 level looks much more interesting, layering bids between there and $0.0252 with invalidation on fresh all-time lows. Given the pair has stopped making fresh lows since June 2022, and has instead been in a period of rising chop, one would expect that $0.0286 level to start forming a new higher base from which the next wave higher can emerge…
Fetch.ai:
FET/USD
Weekly:
Daily:
FET/BTC
Weekly:
Daily:
Price: $0.217 (819 satoshis)
Market Cap: $227.205mn
Thoughts: Beginning with FET/USD, we can see that price has formed a bottom above $0.16 after retracing from the yearly highs around $0.54, having swept the June low in August and since rallied higher, turning weekly structure bullish. The pair marginally closed above both trendline resistance and the 200wMA but has since retraced back below both, and I am now looking to buy $0.19-0.20 if we get it, with invalidation at $0.16. Dropping into the daily, we can see how daily structure has turned bearish and price rejected just shy of the 200wMA, but from the higher timeframes we know weekly structure is bullish and that $0.19 is strong support, so any dip into that area from here is opportune for spot buying in my opinion. I am looking for another run at $0.54 to follow if we can get back above $0.30.
Turning to FET/BTC, we can see the pair had been consolidating above the 200wMA after forming the summer bottom, then rallying through it into prior support turned resistance at 1079 satoshis, where the pair rejected. We are now retracing back towards a huge level of support: prior resistance and the 200wMA around 750 satoshis. That would line up nicely with the Dollar pair dipping into where my entries will be layered, so let’s see if we can squeeze a little lower next week. Above 1080 satoshis, I think the next wave of FET outperformance begins – and unless this closes the weekly back below 635 there is no reason to be bearish, in my view.
Convex Finance:
CVX/USD
Weekly:
Daily:
CVX/BTC
Weekly:
Daily:
Price: $2.86 (10,774 satoshis)
Market Cap: $230.881mn
Thoughts: If we begin by looking at CVX/USD, we can see that the pair continues to be capped by trendline resistance since the all-time high back in December 2021, having recently broken below year-long support at $3.12 and bled lower into no man’s land, finding support at $2.30, well above the all-time low at $1.90. We have a possible set up here for a long-term spot position, but we are about to run into the primary resistance that I’d like to be patient for. If we see this rally continue into and through $3.10, I am a buyer on a weekly close back above that level without a doubt. That would be a strong signal to me that this downtrend is over. If, however, we reject at $3.10 and turn lower, I would expect to see price push closer towards that all-time low. I am very keen to be involved when this gives me the signal.
Turning to CVX/BTC, we can see a very classical altcoin cycle on the weekly chart, with the pair undoubtedly in the depression phase of that market cycle – time capitulation, where volatility diminishes and all market participants have lost hope. This is exactly where we want to be buyers and if we reclaim 11k satoshis as support I do think we are beginning to form that bottom. Back above 15k satoshis, I think the disbelief rally begins. Very little else to add here as the chart speaks for itself when viewed in conjunction with CVX/USD.
Cellframe:
CELL/USD
Weekly:
Daily:
CELL/BTC
Weekly:
Daily:
Price: $0.175 (658 satoshis)
Market Cap: $5.034mn
Thoughts: Now, before we discuss CELL, I would like to preface this by mentioning it is a microcap and so there is very little liquidity – and this has been requested by a reader. Nonetheless, it is also one of my key microcap (moon or die) picks for the next cycle.
Looking at CELL/USD, we can see that the pair has been in a downtrend for over 900 days since inception, albeit not making fresh lows now since the beginning of 2023 when it formed its all-time low at $0.13. That being said, we still have bearish weekly structure and lower highs on every rally capped by a long-term trendline. We recently rejected at prior support ~$0.37 and have since returned to reclaimed support at $0.15, which is around my original buy-in level and around where the pair has spent much time consolidating since June 2022. If you are on the side-lines and looking to get involved this is not a bad spot at all – we have clear invalidation with that all-time low below. If the weekly closes below that level, I will look to DCA in below it as this is very much a moon-or-die type of play for me and I still have a small % to allocate to it if we do get those cheaper prices. If you want to use that as invalidation, however, that makes perfect sense and you could look to buy back on a reclaim or a new range formation lower. In the end, this has never experienced a bull cycle, has lost 98% of its value since inception and been trading for almost three years whilst still being a very active project, so I think it’s a decent bet for outperformance when the tide turns.
Turning finally to CELL/BTC, we can see that the pair has been range-bound between all-time lows and prior support at 780 satoshis since June, poking above that prior support a couple of times but more recently accepting below it as range resistance. Volatility has effectively diminished in its entirety down here and it does appear we are in that time capitulation phase that precedes a bull cycle. If we close the weekly below the all-time low, bearish price discovery beckons, but given how price reacted last time we broke a fresh low (June), the response has been muted and I would expect much of the same. If instead we respect 465 and price now reclaims 780 as support, I would look for a weekly close above 1100 satoshis as confirmation the bottom is in, from which point 1800 is the major level I am looking at for resistance.
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.
