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Market Outlook #257

Market Outlook #257 (25th February 2024)

Hello and welcome to the 257th instalment of my Market Outlook.

In this week’s post, I will be covering Bitcoin, Ethereum, Optimism, dYdX, Jupiter, Arkham, XALPHA.AI and LayerAI. Most of these are newer coins, which are likely to outperform in the coming weeks and months…

As ever, feel free to comment with any requests for next week, or shoot me an email.

Bitcoin:

Weekly:

btcusdweekly

Daily:

btcusddaily

Price: $51,501

Market Cap: $1.011trn

Thoughts: If we begin by looking at the weekly timeframe for BTC/USD, we can see that this past week has been a consolidation week, with declining volume against last week and price consolidating within a tight range, capped by last week’s highs at $52.6k but finding support right around $51.5k, where it is set to close the week. Looking at this, it is very possible next week sees the bottom of this week’s range taken out at $50.5k into the prior resistance and $49.1k to find support there before pushing on higher through $52.6k and beyond – and that would be the slightly more bearish scenario. The bullish scenario here is that this week of consolidation was ample for another leg higher to ensue. This tweet gives us some data on weekend price-action vs weekday, indicating that 17 of the past green weekends have led to green weekdays; if the pattern holds true, there is a high probability next week sees price rally through $52.6k towards $59k as we head into March. Conversely, as February closes out, we can see data indicative of historically weak periods at the end of this month. I think the early trading next week will set the tone – if we see price reject around $52.1k and move below this week’s low at $50.5k, we’re heading for that $49k level; and if we accept above $52.1k early next week, turning it into support, onwards and upwards to $59k.

Looking at the daily, we can see this consolidation more clearly, with fairly equal highs around $52.9k that may act as a magnet, either for a deviation and then rejection and move lower or as a support flip for further upside. If we do see $49k traded next week, I am a buyer. If we flip $53k, I am buying the first dip back towards that level intra-day and holding for $59k. Simple structure = simple actions.


Ethereum:

ETH/USD

Weekly:

ethusdweekly

Daily:

ethusddaily

ETH/BTC

Weekly:

ethbtcweekly

Daily:

ethbtcdaily

Price: $3057 (0.05935 BTC)

Market Cap: $367.261bn

Thoughts: Beginning with ETH/USD, we can see from the weekly that the pair has deviated from BTC/USD, leading the market now as opposed to lagging, having rallied off the weekly open into the weekly close here near $3060, with momentum on this timeframe looking great for continuation higher. As mentioned last week, there is no real resistance now until at least $3300, if not $3600 on the weekly timeframe. As long as this week’s low holds now as support I think we just continue to teleport higher going into early March, with $3580 as the major target. Dropping into the daily, we can again see that there is no signs yet of exhaustion on the daily and this looks ready to rip higher into reclaimed resistance at $3284 before taking a breather. I think until that level is tagged, any dips are likely to be shallow, but following the test of that level I wouldn’t be surprised to see some of these untapped lows since the $2650 breakout to be taken out and price to form a higher-low above that level…

Turning to ETH/BTC, Houston we *may* have lift-off. This week has seen the pair do precisely what it needed to do after last week’s strong showing, with price rallying off the weekly open at reclaimed range support ~0.0551 back above the 200wMA and through long-term trendline resistance and prior support at 0.0577. This trendline has capped every major high for 532 days, so a clean breakout after the formation of a higher-high is not to be faded, in my view, especially since we have already faked out above that level. From here, I want to see support hold above 0.0577 and price to continue through 0.0606, turning weekly structure bullish on a close above that level. That would be the signal for a long-term reversal, likely lasting many weeks from here towards the ETH spot ETF deadlines in May. Weekly momentum is also indicative of strength here. Up only?


Optimism:

OP/USD

Daily:

opusddaily

OP/BTC

Daily:

opbtcdaily

Price: $3.79 (7359 satoshis)

Market Cap: $3.631bn

Thoughts: As Optimism has only been trading for around 18 months, let’s focus here on the Dollar pair.

Looking at OP/USD, we can see that price made fresh all-time highs at $4.24 in December, and has since been consolidating, trading lower into prior resistance turned support at $2.56 before rallying back above the prior ATH at $3.31 a couple of weeks ago. Since then, price has been consolidating above that prior high and below the all-time high at $4.24. I believe this entire range since December is re-accumulation around that prior all-time high turned mid-range at $3.30-3.40, from which we are to emerge into price discovery. Closing above that $4.24 level and turning it into support will open up a move into the confluence of fib extensions at just shy of $6, which is my major target for the next leg higher for Optimism. I am long and strong here, only looking to exit on a close below $3.30…


dYdX:

DYDX/USD

Weekly:

dydxusdweekly

Daily:

dydxusddaily

DYDX/BTC

Weekly:

dydxbtcweekly

Daily:

dydxbtcdaily

Price: $3.44 (6690 satoshis)

Market Cap: $1.468bn

Thoughts: Beginning with DYDX/USD, we can see from the weekly that price has rallied off trendline support and off trendline resistance turned support, having formed that higher low, consolidated and then turned higher. This is exactly what we want to see from an early uptrend, and this past week has seen price push off support at $2.96 into resistance above $3.71 and ultimately consolidate around $3.45. From here, I expect we break beyond the year-long resistance at $3.71, close the weekly through it and that begins the move from disbelief into hope for dYdX this cycle, with $5.12 the next resistance overhead. Ultimately, I don’t think there is much stopping this from hitting that $7.15 level before any serious pull-back once we turn $3.71 into support, with that also aligning with the 23.6% fib retracement of the bear market. Plenty of upside to come with this one – and I am looking to hold my spot position deep into the cycle.

Turning to DYDX/BTC, this is where we can see just how compressed price has been, with highs being capped by trendline resistance from the November 2022 high. We retested that trendline this week after forming a higher low above 5770 satoshis, and, as long as that level holds, I am expecting price to take out this week’s high at 7800 satoshis and close through the trendline in March, leading to the beginning of the bull cycle for the pair. Momentum on the weekly also appears to have bottomed out. Looking briefly at the daily, we can see that price is also capped by the 200dMA and 360dMA, both sat below that trendline, so clearing all three and turning that range into support would be huge confluence for a period of sustained outperformance.


Jupiter:

JUP/USD

4H:

jupusd

Price: $0.49 (950 satoshis)

Market Cap: $666.339mn

Thoughts: As Jupiter has only been trading for a few weeks, I am going to look at the 4H chart for the Dollar pair here.

Looking at JUP/USD, we can see that the pair has shown the classical airdrop pattern of a sharp rally on day one followed by a slow bleed. Price formed its all-time high at $0.87, then retraced around 50% into its current all-time low at $0.43 in mid-February. Since, the pair has ceased bleeding and is now consolidating between reclaimed support at $0.47 and support turned resistance at $0.55. Given the lack of price-history here, I am not keen to jump the gun, but I very much want to be a spot buyer of JUP, given that I expect it to do a UNI-esque run later this year or next. As such, I am looking for acceptance above $0.55 to enter my position, with $0.45 as invalidation and looking to hold potentially for the duration of the cycle, expecting price discovery through $0.87. If we don’t see that acceptance any time soon but rather run lower through the all-time low, only if we get to a 70-80% drawdown ($0.17-$0.26) would I be a blind buyer here. Let’s see what March gives us…


Arkham:

ARKM/USD

Daily:

arkmusddaily

ARKM/BTC

Daily:

arkmbtcdaily

Price: $1.69 (3278 satoshis)

Market Cap: $332.714mn

Thoughts: Again, as ARKM has only been trading for a few months, let’s look solely at the Dollar pair as both are looking fairly similar.

Looking at ARKM/USD, we can see that price showed a similar pattern to that so far of JUP, having airdropped, formed an all-time high and then bled lower for months, until it formed an all-time low at $0.28, around 84% off the all-time highs. Since then, the pair has been in an uptrend, rallying into $0.78 in December before consolidating above $0.49 for a few weeks. This support held into early February, after which price began a huge rally for the past four weeks, pushing through $0.78, into the all-time high at $1.71, around which it is sat today. We are set to close the week right around this ATH and I am expecting to see price discovery follow after a brief consolidation around this high, with $2.60 the primary target, as the 1.618 extension of the bear market. This also gives us a pretty clear roadmap (and one that appears again and again) for recently airdropped tokens, with the only variance likely to be depth of retracement off the all-time high…


XALPHA.AI:

XALPHA/USD

Daily:

xalphadaily

4H:

xalpha4h

Price: $0.131 (253 satoshis)

Market Cap: $9.51mn

Thoughts: As XALPHA.AI has only been trading for a couple of months, we’ll focus here on the Dollar pair, and I have provided the Daily and 4H here for clarity.

Beginning with the daily for XALPHA/USD, we can see that price is set to close the day (and week) at fresh all-time highs, having recently experienced its first pull-back of this cycle into support at $0.025. From there, price has run higher with plenty of volume through multiple support levels into that all-time high at $0.106, consolidated and now continued through into $0.135. From here, I am expecting the first bull cycle to really kick in, particularly with market conditions how they are, and I expect we’ll be trading between $0.17-0.20. I have also added to my position this week around $0.12 and this is one I want to hold for several months from here, with expectations of a $100m+ FDV during peak euphoria. I am looking to sell partials once we get above $0.48 – the 500% fib extension of the trend so far. Nothing else to add here.


LayerAI:

LAI/USD

Daily:

laiusddaily

LAI/BTC

Daily:

laibtcdaily

Price: $0.029 (57 satoshis)

Market Cap: $9.225mn

Thoughts: Finally, one of my key AI microcap plays for this cycle: LayerAI.

Let’s look at the Dollar pair here, as this has only been trading for under a year and so both pairs look identical.

Looking at LAI/USD, price form an all-time high during early trading at $0.16 and then entered its first bear market immediately, bleeding lower for months until it had retraced 97% into an all-time low in October at $0.005. From here, price began its first bull cycle, bottoming out and reclaiming support at $0.008 in November, before rallying through the 200dMA into $0.021 in mid-December. This marked the peak of the first leg higher, with price then retracing and consolidating in January and early February above reclaimed support at $0.009. Since then, price has broken back above that 200dMA, outperforming as the AI narrative has taken over, pushing through $0.021 this week into the 1.618 extension of the trend and prior support at $0.035. We are now consolidating between prior resistance at $0.027 turned support and $0.035. The AI bubble in crypto is still relatively small and likely to be one of the major outperforms as ‘mass retail’ return to crypto, whenever that occurs. As such, this is definitely one I am looking to hold deep into the cycle, but short-term I am expect price to extend in another leg higher into that $0.064 area in March. Ultimately, as the pair has never experienced a bull cycle and is in a great sector, I am absolutely holding for price discovery through $0.16 before scaling out. Let’s see what the rest of this quarter brings us…

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. Djeuna Edhuige

    Hallo Nik
    Could you please study FILUSDT ?
    Thank you

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