Market Outlook #259 (13th March 2024)
Hello and welcome to the 259th instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, Polygon, Uniswap, Cosmos, Arweave, Vulcan Forged, enqAI, Banana Gun, League of Kingdoms and BuildAI. All of these were readers requests this week, which is great to see! For the newer, purely on-chain plays, I’ve focused solely on the USD pair, as there is very little price-history available.
As ever, if you have any requests for next week, please do let me know via email or in the comments.
Bitcoin:
Weekly:
Daily:
Price: $72,931
Market Cap: $1.435trn
Thoughts: If we begin by looking at BTC/USD, on the weekly timeframe we can see that price closed last week right on that prior all-time high at $69k, on growing volume. Since, trading this week has seen Bitcoin enter price discovery, pushing into $73.7k, below which it is currently sat. Momentum indicators are very much bullish at present, with no signs of exhaustion on this timeframe just yet. We now also have no resistance levels, given price discovery, and so the first major level overhead of any concern will be $100k, being arguably the most significant psychological number in its history alongside the 1.618 fib extension of the bear market. No doubt we will see plenty of volatility as we approach that level. We can also see from the weekly that price has been in a parabolic advance since the November 2022 bottom, and most recently broke and closed above channel resistance at $53k, after which it has not looked back, steepening the curve of the advance. If this parabola holds firm into the halving, we’re looking at $100k by May, as absurd as that would have sounded 6 months ago. Such is the strength of the bid. Now, if we happen to find resistance in the next few weeks and break that parabola, I would then expect a period of extended consolidation before the next leg higher begins, but let’s cross that bridge when we come to it. For now, as long as this week closes firmly through $69k, I think the next month is broadly up only (with shallow but sharp wicks to deleverage the market).
Turning to the daily, we can see that there is some momentum divergence forming here as we have emerged into price discovery, but nothing that has been confirmed yet – this could very well just keep grinding higher until momentum makes fresh highs and invalidates any exhaustion. That said, if we reject below $75k (the 1.618 extension of the current trend) and then break and close back inside $69k, we have confluence between price and momentum for a deeper pull-back, likely back towards $60k to retest that support level before another breakout attempt. Assuming the trend holds – which is my view here – we should see some minor rejection at $75k, a higher-low above $69k and then continuation towards $85k by the end of the month, invalidating the current perceived weakness in RSI. Not much else to add here at present.
Ethereum:
ETH/USD
Weekly:
Daily:
ETH/BTC
Weekly:
Daily:
Price: $3992.50 (0.0546 BTC)
Market Cap: $479.451bn
Thoughts: Beginning with ETH/USD, we can see from the weekly that the pair continues to rip higher on gradually growing volume week-on-week, having tested $3350 as support last week and bounced all the way into the weekly close just shy of $3900. Price is now consolidating early this week around that $3950 resistance level, and any acceptance through here opens up continuation into the last level before all-time highs, at $4385. Nothing to suggest exhaustion here on the higher timeframes either. If we drop into the daily, we can see a little bit of divergence on the most recent push higher, but the trend has been relentless and steep, offering only sharp but brief wicks to buy into. We got another one of those a couple of days ago, and unless we now close back below $3950 and turn it into resistance I am expecting this trend to persist into $4385 before the eventual breakout and price discovery in a few weeks time. Last cycle, it took 48 days for ETH to make a fresh all-time high after Bitcoin, but given that this cycle is progressing more rapidly than the last I would not be surprised to see ETH at $5k in early April.
Turning to ETH/BTC, we can see that the pair continues to chop around between the 200wMA and 360dMA, but price is forming higher-lows for now. As long as the 360wMA at 0.053 holds, this structure will remain intact and I would expect an upside breakout beyond 0.06 to follow shortly. If, however, we close below 0.053, it is likely we see the bottom of this cluster swept into 0.049 again to retest that low as support, with the possibility of a wick below that if BTC/USD goes on a tear towards $100k before a sharp reversal. Looking at the daily, we can see this structure clearly, with the pair now winding tighter with lower highs and higher-lows, likely culminating in some volatility either side of 0.053 and 0.058 in the next week or two. I do think the legitimate breakout and continuation higher is close – just unsure at present whether we see a front-run of BTC consolidating after a run-up before marking the bottom, or whether the pair wicks below all of this support and then reverses sharply like the January price-action (fake-out) showcased…
Polygon:
MATIC/USD
Weekly:
Daily:
MATIC/BTC
Weekly:
Daily:
Price: $1.28 (1752 satoshis)
Market Cap: $11.907bn
Thoughts: Beginning with MATIC/USD, we can see that the pair has bullish weekly structure following last week’s firm close through $1.10, establishing the uptrend and opening up continuation into the 2023 highs at $1.56. Weekly momentum is also looking decent here for further upside and this week has seen price find support at that prior resistance around $1.10 and bounce. If you’re holding MATIC longs here, I would look to hedge around $1.40 and reopen exposure on a clean breakout through $1.60 for the rest of the cycle, as there is a lot of resistance up here, so we could see some volatility. But if you’re in spot, honestly just sitting on your hands and letting the market drag this through $1.56 is your best bet, with $2 as the primary target after that level is cleared. I don’t think MATIC will be an outperformer this cycle relative to other large-caps given its performance last cycle, but I would not be surprised at all to see some minor price discovery through $3 before the cycle peaks. Turning to the daily, we can see some divergence in momentum here, much like BTC and ETH, but given the proximity to major resistance here I would be more concerned, as explained prior. If we do reject off this $1.31-1.43 range, I would not be surprised to see $1.10 retested to mark out a higher-low in the broader trend before continuation through $1.56.
Looking at MATIC/BTC, we can see how price swept the bottom of the multi-year range at 1717 satoshis into 1550 but closed back above the range last week, now holding it as support. This could act as a classical spring formation, from which we would see price rally through 2100 satoshis over the next couple of weeks, turning weekly structure bullish. If instead we see lacklustre price-action this week and support fails as BTC moves higher, I would not want to own Matic regardless of the Dollar pair, given there is zero support below and we would be seeing no signs of strength at a key historical level. All to play for here…
Uniswap:
UNI/USD
Weekly:
Daily:
UNI/BTC
Weekly:
Daily:
Price: $14.08 (19,270 satoshis)
Market Cap: $10.62bn
Thoughts: Beginning with the weekly timeframe for UNI/USD, we can see that price rallied through $13 into $17.50 as resistance last week but rejected, nonetheless closing firmly above that huge historical level that preceded capitulation in 2022. This should now act as support this week, and if so I would expect another crack at $17.50 to follow, which is only a minor resistance level – above that, however, we have the 38.2% fib and prior resistance around $20, followed by the 50% fib and major historical level at $25. I would expect to see some sort of local top between those levels for the next pullback and consolidation before continuation higher. Looking at the daily, we can see some minor divergence on momentum but structure is super clean here, with resistance becoming support as we push higher. As long as we don’t see the pair close back below $13 this week, up only continues. If we do close below that level, I would look to buy blood as close to $10 as the market will give me, but I would not expect much, to be honest.
Turning to UNI/BTC, we can see that price has turned weekly structure bullish and is now just consolidating around prior resistance at 17.5k satoshis. Weekly momentum is trending higher and we are very much looking ready for more upside in the coming weeks. If we drop into the daily for more clarity, we can see that the 360dMA is now acting as support, as is prior resistance at 18.9k satoshis. If this area between 17.5k and 19k satoshis can hold, I would expect 35k satoshis to be the next target as the 1.618 extension of the trend. Only below 17.5k would there be any reason to get bearish given the implications for market structure. Nothing else to add here – this is very clean.
Cosmos:
ATOM/USD
Weekly:
Daily:
ATOM/BTC
Weekly:
Daily:
Price: $13.65 (18,710 satoshis)
Market Cap: $5.318bn
Thoughts: Beginning with ATOM/USD, we can see similar structure to MATIC, with a higher-low in October 2023 above the May 2022 capitulation low leading to a shift to bullish weekly structure and the formation of an uptrend. This trend was solidified last week with a close through trendline resistance from the September 2022 highs. Weekly RSI is also making fresh highs but price is now pushing up into the 200wMA at $14, just shy of the multi-year resistance cluster between $14.60-16. This, much like MATIC, puts you in a bit of a pickle if you’re levered heavily and long: there could be a violent reaction off this overhead resistance, so probably best to hedge up here and reopen long exposure through $16 if that’s how you’re playing this, but if you’re holding spot then sit on your hands until eventually that level breaks and ‘easy mode’ begins towards $20 as the next resistance. Longer term, I expect this one to push back into all-time highs, but not sure about massive periods of price discovery through $47.
Turning to ATOM/BTC, we can see that the pair has been in a downtrend since September 2022, most recently breaking below support at 20k satoshis to find support at that historical 17.8k level, which marked the bottom in 2019. We do have some signs of trend exhaustion here as we have approached this level and therefore the possibility of reversal, but no actual structure yet to confirm this. If we break and close below 17.8k, I would expect the all-time lows at 14.2k satoshis to be swept before any meaningful reversal begins. Looking at the daily for clarity, I have marked out what we may see if this 17.8k level is to hold, which is a sharp sweep through the level followed by a reclaim and rally through 20.4k satoshis into 22.7k satoshis, then forming a higher-low back above that 20.4k satoshi area – if we see this, I’m on board for ATOM outperformance going forward. Until then, not one I’m keen to hold with so many better opportunities present.
Arweave:
AR/USD
Weekly:
Daily:
AR/BTC
Weekly:
Daily:
Price: $37.97 (52,140 satoshis)
Market Cap: $2.491bn
Thoughts: If we look firstly at AR/USD, we can see that price has been on a tear the past few weeks, with last week bouncing off resistance turned support at $23 and pushing up as far as the 50% fib retracement of the bear market at $48 before closing the week out at $41. We have no signs of exhaustion on the weekly and plenty of volume on this most recent push higher, but I would not be surprised to see some consolidation here above $34 and below $44 the rest of this week. As soon as we close above $44 on the weekly, I think we’re gonna see acceleration towards $72 as the next major resistance level before fresh all-time highs later this year. Dropping into the daily, much like others coins we can see some exhaustion on the last push higher but nothing structurally to indicate much lower prices are inbound . Rather, I expect a higher-low to form above prior resistance at $34. If that level does fail, I think we trade back towards $27.50, where there is plenty of demand. To the upside, just getting a clean break through last week’s highs will open up significant upside, as other than the 61.8% fib at $59, there really isn’t much overhead resistance before $72.
Turning to AR/BTC, we can see that weekly structure is firmly bullish and price has recently tested the 38.2% fib of the bar market at 68k satoshis, before rejecting and now consolidating between reclaimed support at 50k and resistance around 65k satoshis. Again, as long as that 50k level now holds as support, I think we just continue to push higher in the next week or two towards trendline resistance from the all-time highs and the 50% fib at 85.6k satoshis. Looking at the daily, the picture is largely the same as it was for the Dollar pair, with some momentum divergence here but structure still looking solid for a higher-low above that 44-50k satoshi range. Unless we see 37.8k fail, daily structure is still bullish and the trend is intact, so no reason to overcomplicate this to be honest…
Vulcan Forged:
PYR/USD
Daily:
PYR/BTC
Daily:
Price: $9,47 (13,001 satoshis)
Market Cap: $226.443mn
Thoughts: I will focus solely here on the Dollar pair for Vulcan Forged.
Looking at PYR/USD, we can see that the pair emerged from a multi-year range in November 2023, turning range resistance into support at $5.50. Price then rallied into $9.10, found resistance and retraced, retesting that range resistance and forming a low above the 200dMA. Since, price has continued the trend higher, rallying through $9.10 last week into the 23.6% fib of the bear market around prior support at $10.78, where we have found some resistance. I would expect to see some consolidation here but for a higher-low to form above $8, leading to a breakout through $10.78, with $16 as the next target beyond that. I am still holding my spot bag from that range and I am looking for the 38.2% fib to be tagged at $18.60 before I begin considering selling partials and scaling out, with a view to hold some for price discovery beyond $51 in a full-blown gaming mania at some point in this cycle. If you are on the sidelines looking to get in, I would be considering anything close to $8 as a good entry with invalidation at $5.50 and that $18 area as a first target.
enqAI:
ENQAI/USD
Daily:
Price: $0.099 (136 satoshis)
Market Cap: $95.036mn
Thoughts: As enqAI has only been trading for a few months, we will look solely at the Dollar pair here.
Looking at ENQAI/USD, we can see that price initially formed resistance at $0.041 before retracing into an all-time low at $0.0068 shortly after trading began. This marked out the bottom, from which the pair then consolidated for a month between a higher-low at $0.0097 and resistance at $0.023. This range gave way in February, beginning ENQAI’s first bull cycle, with price then making fresh highs through $0.041 and now grinding higher within a channel, forming an all-time high a week ago around $0.15. We have since retraced to the bottom of the channel and prior resistance at $0.084, acting as support. This is the level bulls want to see hold, as a breakdown below this level and through the bottom of the channel would open up the likelihood of a deeper retracement back towards that $0.041 level to retest it as support before continuation higher can begin. If this area does hold, however, we’re looking at $0.22 as the next major target as the 1.618 extension of the trend, sometime late in March. If this is vertical accumulation before a parabola/blow-off top begins, we should see the top of the channel give way and turn into support, leading to sharper rallies higher from there. At the end of the day, we are still fairly early in the AI crypto cycle and it is likely these valuations become much more ridiculous before the cycle peaks, so holding this whilst its in price discovery and just sitting on your hands makes sense to me.
Banana Gun:
BANANA/USD
Daily:
Price: $35.99 (49,410 satoshis)
Market Cap: $86.186mnn
Thoughts: Again, as Banana Gun has only been trading for a few months, let’s focus on the Dollar pair.
Looking at BANANA/USD, we can see that early price-action in September saw price rally off support at $5.38 into resistance at $14, before retracing to form a fresh all-time low at $5 and then reclaiming $5.38 as support. Subsequently, the pair began its first bull cycle and rallied through $14 into $18.77 in December, before retracing into a higher-low at $8.18 in January. We have since been on a consistent trend higher, with a parabolic advance currently in play. Price rallied into all-time highs a couple of days ago at $39 and has been grinding higher within a channel (similar to ENQAI) since mid-February. I would expect to see this trend persist here and the rallies get steeper, as long as we don’t break and close below $30. If that level holds, I think we see continuation into $48 later this month, followed by some sort of blow-off top / parabola break sometime in April, before a period of consolidation and correction before what will likely be the ‘real’ blow-off top whenever BTC/USD has marked a top for this cycle. The alternative scenario is that it just continues to cling to this parabola and grind higher through April above $80 and beyond, but I am leaning less towards this view at present.
League of Kingdoms:
LOKA/USD
Daily:
LOKA/BTC
Daily:
Price: $0.424 (583 satoshis)
Market Cap: $48.627mn
Thoughts: As both pairs for LOKA look very similar, let’s focus here on the Dollar pair.
Looking at LOKA/USD, we can see that the project launched within the bear market and suffered a 97% drawdown from the $5.50 all-time high in April 2022, falling all the way into $0.17 in September 2023, which marked out the bottom. Price then reclaimed support at $0.19 and began turning daily structure bullish, rallying for months until it hit the 360dMA at $0.34 and rejected twice, retracing off that level into the 200dMA to form a higher-low above $0.19 in February. From there, the pair has continued to rally, breaking through the 360dMA and turning it into support for the first time in its history. We have pushed from that level into prior support at $0.45, below which we are now consolidating. I would expect to see the formation of a higher-low above $0.34 now, likely closer to $0.38, and price to break through $0.45 in the next week or two, leading a huge range of upside to be captured before the next major resistance. I will be looking to buy acceptance above $0.45 with a view to hold into the $1.46 level – the 23.6% fib of the bear market and prior support turned resistance.
BuildAI:
BUILD/USD
4H:
Price: $0.51 (686 satoshis)
Market Cap: $4.298mn
Thoughts: As BuildAI has only been trading for a few weeks, I have opted for the 4H chart here of the Dollar pair for analysis, given how little price-history is available.
Looking at BUILD/USD, we can see similar price-action to early ENQAI, with a rally into resistance at $0.45, followed by the first correction and consolidation above support at $0.15 (a 66% drawdown) and then the beginning of a bull cycle earlier this month off that support level. Price rallied through resistance at $0.31, turning it into support, then cleared $0.45 making fresh all-time highs. Since, we have continued to push higher into $0.85 as the all-time high, but there are some signs of exhaustion here at present. It is important to be mindful of the fact that this is a 4H chart, however, so exhaustion is expected after a couple of weeks of rallying higher. We have reclaimed resistance at $0.71 forming that lower-high, but currently price is holding above prior highs turned support at $0.45. This could very well mark the bottom here as this cluster of support has been swept into a key level and price has found demand, and if so we should see a higher-low form above $0.50 this week leading to continuation through $0.85 into price discovery, with $1.25 as a target beyond that. If, however, we need a larger correction here, $0.62 should now act as reclaimed resistance, forming another lower high, and price should break below $0.45 from there, opening up a move into the previous mid-range at $0.31 (which is also the 78.6% fib retracement of this entire rally *and* around the same drawdown as the previous correction). If we get close to $0.31, that would be a good entry for anyone looking to hold this for a cycle.
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.
