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Market Outlook #28 (24th March 2019)
Welcome to the 28th Market Outlook.
Today’s post will be a little briefer than usual, as much of the market remains in consolidation – I’ll just be covering the past week’s price-action in Bitcoin, Ethereum and Monero, plus a quick update on Stratis.
Bitcoin:
Price: $4040
Market Cap: $70.887bn
Thoughts: In last week’s post, I mentioned that though short-term price-action was bullish, it is critical to remember the longer-term range price is currently trading within, and that we were coming towards the top of that range.
I was over-expectant in this short-term bullishness, anticipating a retest of $4300 this past week; instead, price found resistance a little early and dropped off towards $4000, with the ~$4025 prior resistance remaining support. In truth, there was very little movement at all over the past week, with price remaining inside a ~$130 range.
Looking at the Daily chart, we can see that volume remains flat whilst price trails the 20-day moving average, forming a short-term ascending triangle; a triangle that, if price continues to trail the 20MA, will conclude around the first week of April. In general, price tends to break upwards from ascending triangles, but range resistance lies waiting if this is the case.
Over the coming week, I expect more of the same, with little volatility and price continuing to trail the 20MA towards the conclusion of the ascending triangle. Perhaps towards the end of the week (and the month), we will see a breakout.
If price breaks and closes below the current uptrend on the Daily time-frame, I’d expect a move back towards $3800 to follow. If price breaks out above the local high below $4300, I’d expect the range resistance at $4500 to provide the next area for consolidation. Short-term outlook remains bullish, however, unless we get a clean break of that 3-week uptrend on signficant volume.
Ethereum:
ETH/USD
ETH/BTC
Price: $137.84 (0.03427 BTC)
Market Cap: $14.523bn (3,611,743 BTC)
Thoughts: I completely underestimated the slowness of ETH over the past week, expecting price to make a weekly low around last Tuesday/Wednesday and see out the rest of the week with a move towards 0.036 BTC. Instead, we saw prices move towards the short-term range support above 0.034 BTC.
A similar pattern of price-action can be observed on the 4H ETH/BTC chart, with price running towards this support, breaking out above short-term trendline resistance and then returning to 0.0355 BTC. I expect we’ll see something similar play out over the coming week. This is all within a larger period of consolidation between 0.033 BTC and 0.036 BTC that I believe is setting Ethereum up for another move up towards 0.043 BTC in April. The only worry here is that ETH longs are at an all-time high on Bitfinex, and perhaps we need these shaken out before upwards momentum can continue. If this is to be the case, I’d expect the 3-week uptrend to give way on ETH/USD and prices to move back towards the longer-term uptrend at ~$125 – a fall of around 10%. This would imply an equivalent fall in BTC/USD if ETH/BTC is to remain within its current range.
Regardless, I remain leaning bullish on ETH going into April, and I believe what we will actually see is an upwards breakout from the ascending triangle that can be observed on the ETH/USD Daily chart.
Monero:
XMR/BTC
Price: $53.82 (0.01339 BTC)
Market Cap: $908.174mn (226,032 BTC)
Thoughts: We now approach 100 days range-bound for Monero; a vast period of consolidation that I believe indicates that Monero will be one of the outperformers of the next bull cycle amongst the ultra large-caps.
Stratis:
STRAT/BTC
Price: $0.94 (23415 satoshis)
Market Cap: $93.357mn (23,242 BTC)
Thoughts: The Stratis Weekly chart is a thing of beauty. Back in December, we saw a high-volume, explosive breakout above the long-term trendline resistance. Price has since experienced a low-volume pullback towards an earlier accumulation range, where it is being re-accumulated prior to a second leg up. I believe this second leg will take us towards prior support turned resistance at ~50k satoshis before the end of April. Beyond this, I expect to see prices reach for ~75k satoshis…
And that concludes this week’s Market Outlook. I hope you’ve enjoyed the read.
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