Market Outlook #31

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Market Outlook #31 (14th April 2019)

Welcome to the 31st Market Outlook. It has been a relatively subdued week for Bitcoin but a bloodier week for alts across-the-board…

In today’s post, I’ll be covering the past week’s price-action in Bitcoin, Ethereum and Monero, as usual, plus – though it pains me to say it – presenting an opportunity in Verge.

Bitcoin:

Price: $5092

Market Cap: $89.796bn

Thoughts: After the fireworks of the prior week, this past week has been, as expected, somewhat subdued. That said, price did sweep above last week’s highs to form a new local high below $5500 before being slapped back down into the short-term range between $4800-$5300.

Looking at the Daily chart, we can see the strength in this recent rally, with higher timeframe closes above range resistance, trendline resistance and the 200-day moving average all in the space of a few days. RSI topped out at the highest levels seen since December 2017 when price came into significant resistancea at ~$5400. Even heavier resistance lies ahead in the $5800-6000 area, and it seems as though price is consolidating above the 200MA for the time being.

Looking now at the 4H chart, I have crudely depicted the path I expect Bitcoin to take over the coming weeks. Of course, this may not play out exactly as illustrated, but my general thesis is that we still have some room for another leg up towards the real resistance around $5800, from which we will see a strong rejection and a move back towards the original breakout level (range resistance) around $4500. We may even dip below this level (though it would now be expected to be a level of support) to trap breakout+retest buyers, but ultimately I believe the trajectory moving towards Q3 will be upwards.


Ethereum:

ETH/USD

ETH/BTC

Price: $164.03 (0.03231 BTC)

Market Cap: $17.319bn (3,413,062 BTC)

Thoughts: ETH/USD, after breaking above the supposed ‘double-top’ resistance at $170, found new resistance at an old level of support around $190. Price also broke out above the 200-day moving average and has remained above for the past week. Looking at the 4H chart, I expect ETH/USD to follow a similar path to Bitcoin, but to outperform it due to movements in ETH/BTC, as I shall explain shortly. However, in ETH/USD, we can clearly see a short-term range has been formed, and the bearish scenario would be for this to play out as a bear flag; as such, I’ll be watching for a 4H close below range support at ~$161 to indicate further downside towards the 200MA at ~$150. The declining volume on the retracement on both pairs suggests to me that more upside is the more likely path, however.

Now, looking at ETH/BTC specifically, there are many mixed signals being given here. We have a bearish breakout below trendline support and a retest of range resistance at 0.0353 BTC that failed to give way; we have price consolidating at the 200-day moving average; and we have declining volume on the recent dump. In my opinion, as long as 0.0318 BTC level remains firm as it has done thus far, we will see a bullish reversal and a reclamation of that 0.0353 BTC area.


Monero:

XMR/BTC

Price: $64.95 (0.01279 BTC)

Market Cap: $1.098bn (216,484 BTC)

Thoughts: After months of consolidation, we have seen two polar opposite weeks of price-action in Monero, with one week indicating a high-volume breakout above the range and the past week confirming it as a false breakout. Price is, in short, back where it has been since December; trading between 0.012 BTC and 0.0136 BTC. The 200-day moving average continues to cap price, but short-term support at 0.0125 BTC is holding firm.


Verge:

XVG/USD

XVG/BTC

Price: $0.0086 (169 satoshis)

Market Cap: $136.003mn (26,801 BTC)

Thoughts: Now, Verge is often met with equal revulsion as XRP in this space, but, as a speculator, I care not for ideology and only for opportunity. This is a solid, low-risk, high-reward opportunity. Verge has been range-bound between 140-240 satoshis for over 35 weeks, with patches of high volume during that time. As such, it is likely that this is the accumulation range preceding the next bull cycle. Further, XVG/USD has broken above 16-month trendline resistance and range resistance, with the 200MA currently supporting price.

The current price of 169 satoshis offers us a maximum of ~30% downside risk with a soft stop-loss on a Daily close below 120 satoshis (to account for any illiquid movements). In return for that risk, we have an initial target of the prior support turned resistance at 340 satoshis; a 100% return. As such, this trade is a minimum 3:1 reward-to-risk setup. Tighter stops can increase this drastically. Either way, it seems too good to pass up…

And that concludes this week’s Market Outlook. I hope you’ve found some value in the read.

As ever, feel free to leave any comments and questions below.


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