Market Outlook #241 (15th October 2023)
Hello, and welcome to the 241st instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, Polkadot, Cosmos, Arbitrum, Frax Share, Tellor Tributes and AllianceBlock Nexera.
As ever, if you have any requests for next week’s Outlook, do let me know.
Market Cap: $524.846bn
Thoughts: If we begin by looking at BTC/USD, on the weekly we can see that price rejected at the 200wMA this week and sold off from the weekly open at $27.9k, retracing back below last week’s low at $27.6k into $26.5k, now set to close the week at $26.9k. This is not particularly promising given the rejection from a key resistance cluster but for now we remain consolidating around $27k reclaimed support and above the prior trendline resistance now turned support. If we see price accept $27k as resistance next week, then it is likely we move lower once again, with the yearly lows into $24.3k the target as ever for shorts, followed by $21.5k should that give way. If, however, we hold above $27k next week and begin to push higher from there, we may well be forming a higher-low from which price will take another crack at a 200wMA breakout.
If we drop into the daily, we can see how price is now consolidating between $26.5k and $27k, which has been acting as resistance for a few days now. If we pop above that level next week and then break below $26.5k subsequently, that would be a short trigger for a move back into $25.4k. If we sweep $26.5k early next week and then begin to climb back above $27k, however, we could look for longs into the $28k area with invalidation at $26.5k. Acceptance above $28k opens up the probability of a move into $29.4k, with no major resistance beyond that into new yearly highs above $32k…
Price: $1556 (0.05786 BTC)
Market Cap: $187.168bn
Thoughts: Beginning with ETH/USD, we can see from the weekly that things are looking quite bleak at the moment for Ethereum, with rejection from prior support the previous week leading to a continuation lower through $1616 this week into support at $1510, above which the pair bounced and is now set to close at $1556. The fact we now have a cluster of lows in this $1510 area with this heavy market structure is indicative of a flush to come, and whether it is a deep flush and reclaim or a slow bleed and leg lower is yet to be determined. If we drop into the daily, I have marked out the former scenario, where we move firmly below $1508 but then reclaim it as support – and we would look for longs on that reclaim for a move higher. If that is not the path the pair treads, and $1508 acts as resistance, then I am looking at the area around $1360-$1410…
If we now look at ETH/BTC, we can see that the pair found support again around 0.0577 this week but wicked below the level, and price is continuing to push towards that 0.055 area where there is a confluence of support. Weekly RSI is also still pointing towards further downside, with no signs of trend exhaustion. Dropping into the daily for clarity, I have marked out what may be the move we see over the coming weeks, where I would look for signs of bullish divergence as we approach 0.055 for an early signal of a reversal. Obviously, if we see a weekly close below that 0.055 area, that spells huge trouble as we have held this range support for years. Let’s see how the rest of October develops…
Price: $3.74 (13,902 satoshis)
Market Cap: $4.807bn
Thoughts: If we begin by looking at DOT/USD, we can see from the weekly that the pair continues to bleed out, losing the December 2022 lows at $4.21 recently and turning that level into resistance, with price now dropping lower into the final level of support since its inception at $3.52. This was the level that marked out the bottom of the original accumulation range in 2020 before its bull cycle, and we are sat marginally above it this week. If we close below the level next week on the higher timeframes, there is no support all the way into the all-time low at $1.42 – just an illiquid gap. Now, I would find it highly unlikely we see another 60% drop into $1.42 after a 94% drawdown from all-time highs, but this is just what the market structure shows us. Rather, I think we see this key historical level swept and price begin to consolidate around it and volatility diminish. If we drop into the daily, we do have some bullish divergence on this fresh push lower, which is a start, but really I am looking for a deep wick through $3.50 followed by a reclaim of the December lows at $4.17 to get involved. That would be a really strong bottom signal, in my view.
Turning to DOT/BTC, the pair has spent 875 days in a downtrend and is now in no man’s land between prior support at 15.6k satoshis and the all-time low at 11.8k satoshis. We are approaching the business end of the pair’s bear cycle, and what would be really promising here is a 15-20% capitulation wick through the all-time low followed by a multi-week consolidation back above it – if we see that, I think the pair is *finally* ready for a strong spot allocation. Dropping into the daily, unlike for the dollar pair there are no signs yet of exhaustion – just perpetual bleeding. Look for signs of exhaustion on momentum as we approach that all-time low. Nothing more to be said here…
Price: $6.56 (24,374 satoshis)
Market Cap: $1.918bn
Thoughts: Looking firstly at ATOM/USD, we can see that price rejected at $7.33 and below trendline resistance that has capped the pair all year, breaking lower into resistance turned support at $6.38. This level held firm a few weeks back but now we are testing it once again, having rejected a major resistance cluster. Whilst this level was very strong support in 2022, it is looking likely that it will fail here – at least at present. If we close below it next week, I would expect the wick into $5.50 to be filled in quickly – and if we can sweep that historically significant swing-low and then reverse off that, we have the makings of a bottoming formation. If we drop into the daily, that trendline resistance has so perfectly capped the rallies all year that whilst we are below it there is no reason to get too excited. In fact, only when we get a breakout beyond it will things begin to look more attractive to be honest. The ideal scenario here would be continuation lower into $5.50, take out that low and then reclaim $6.38 and break out beyond the trendline. Anything resembling that is a buy. If $5.50 turns into resistance, it’s another 20% drop into the next support level…
Turning to ATOM/BTC, we are poised to close marginally through that 2022 low with no major support below it back into 17.8k satoshis, which should be troubling for ATOM holders. Either we wick deeply below this support next week and then start to push back above 25k satoshis, or this low becomes resistance and we get at least at 25% drop. Looking at the daily now, we have been showing signs of trend exhaustion for months but each divergence has done little but form another lower-high. Given this lack of momentum on the rallies despite some trend exhaustion, I would wait until market structure on the daily turns bullish before looking to allocate spot, if that’s what you’re considering. Bullish divergence followed by a higher-high and higher-low is the signal.
Price: $0.80 (2971 satoshis)
Market Cap: $1.019bn
Thoughts: As both pairs for ARB look virtually identical here, let’s focus on the Dollar pair.
Looking at ARB/USD. we can see that the pair lost the prior ATL at $0.91 in September and capitulated into a fresh low at $0.74, before rallying off that level back above $0.91. The rally found resistance just shy of prior support at $1 and trendline resistance from the all-time high and we have since retraced much of the rally into support at $0.78, above which we are now consolidating. Market structure is bearish and we have no support below this level back into that all-time low, so I wouldn’t be too hasty to jump in. Rather, given the broader market view, I would await the next week or two of price-action on the sidelines: if we see $0.73 swept and reclaimed and price begin to consolidate back above that level, that’s promising; alternatively, if we break below that all-time low and it becomes resistance, await the formation of a low-volatility range further down. If somehow ARB bucks the rest of the market here and begins to push off this support, reclaim $0.93 and break above the trendline and we have something to shout about.
Price: $5.76 (21,403 satoshis)
Market Cap: $429.482mn
Thoughts: If we begin by looking at FXS/USD, on the weekly we can see the pair continues to consolidate largely between $3.88 as support and $7.60 as resistance. For the past few months, however, this range has tightened, with price sat between prior support at $6.75 acting as resistance and support at $4.58. This tightening of the range within a larger range is promising from a time capitulation point of view. We want to see that volatility disappear. If we now turn higher, a weekly close through $7.60 is the clearest signal for the beginning of the next bull cycle for Frax Share that I can see here, and it would turn market structure bullish too. Accept above that level and we can look to buy any pullback towards it as support, with a view to hold longer-term for that entire gap to get filled back in towards $30. Turning to the daily, we are starting to find acceptance above trendline resistance that has capped the rallies all year and prior support at $5.78 is also giving way here. Daily structure looks ready to turn bullish off this breakout and if we close through $6.75, best believe we see a sharp attack on $7.60. As long as $5.10 now holds as support, I think the bottom is in here for FXS, but let’s see if it holds true if the rest of the market takes a dive…
Turning to FXS/BTC, we can see that the pair has been capped by trendline resistance for 637 days but has spent the past four months in a really tight range above 18k satoshis and below 24.2k. This range has held above the May 2022 capitulation low, which is promising, and price is currently chopping around that 20.3k satoshi area. What bulls want to see here is a strong push higher off this support through 24.2k, breaking out above the trendline in conjunction with reclaiming that level as support. That would be a really strong sign of a sustained reversal ahead with only minor resistance at 27.7k before a move towards 40k satoshis. Not much else to add here – super clean structure.
Price: $57.52 (0.00214 BTC)
Market Cap: $143.462mn
Thoughts: Beginning with TRB/USD, we can see on the weekly that the pair has been rallying for months off the year-long bottom at $8.27. Price found support at that level on multiple occasions after the May 2022 capitulation candle and in August 2023 began rallying sharply higher, taking out trendline resistance that had capped price since May 2021. Subsequently, the pair push on into resistance at $30 and flipped that and the 200wMA as support, then continuing to squeeze into the 38.2% retracement of the bear market at $69, where it is currently finding resistance. Dropping into the daily, we can see there is momentum exhaustion up here on the recent pushes higher and if you have spot TRB it would make sense to offload a little here following this multi-month rally. No doubt this still looks like it could rip higher, but we may first see some of this untested support cleared up – if this divergence plays out, I would expect $30 to be retested as support before another leg higher begins, which is almost 50% lower from here. Undoubtedly, however, TRB is showing us the path ahead in 2024 for many other charts. That is plain as day. Weekly breakouts beyond those multi-year trendlines is what we are looking for.
Turning to TRB/BTC, we see a similar pattern of rallying through that trendline resistance from the ATH into another trendline, with price closing above that in September and now consolidating above prior resistance at 18k for a couple of weeks. The pair found resistance this week at the 2021 highs at 29k satoshis and is set to close right around the 2022 highs. That said, when we look at the daily, we see that bearish divergence once again and a strong rejection today off multiple resistance levels. I would be looking at that 13k satoshis area for a pull-back later this year to get on board for another crack at the 2021 highs and beyond.
Price: $0.06 (224 satoshis)
Market Cap: $45.644mn
Thoughts: Finally, focusing here on NXRA/USD given the pair has only been trading this year, we can see on the daily that price rallied off multi-week support at $0.048 and reclaimed support at $0.056, extending beyond that today into the 200dMA at $0.064, below which it is currently sat. We have a confluence of major resistance levels right here: the support level that held the pair up through March and April at $0.062 (above which we are sat at present) + the 200dMA + trendline resistance from the all-time high + prior support at $0.066. Momentum is in favour of the bulls (and the BTC pair has broken out of its trendline). That said, this is obviously not a high R area to jump in if you are waiting to: rather, wait for a clean close through $0.066 and buy that level as support, with no resistance all the way into $0.081 from there; or wait for a pull-back towards $0.058 next week and buy that. It does look promising here for the coming months…
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 email@example.com.