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Market Outlook #34 (7th May 2019)
Hello, and welcome to part two of this week’s Market Outlook. For those who missed the first part, which dealt exclusively with Bitcoin, Ethereum, Monero and Dash in extensive detail, you can find it here.
In this post, however, I will be covering Stratis, Komodo, Ark and Ardor. These are four of the larger mid-to-largecap altcoins I’m invested in, and I think they largely reflect the nature of most of the altcoin market at present.
Strangely, whilst most of the market is at ALT/BTC lows, I do not think the bloodshed is quite over yet, as my expectations for an imminent short-term top in Bitcoin give me reason to believe we’ll see more blood when BTC retraces. Altcoins will have their time to shine, but it’ll take either a period of consolidation or a slow and steady rise in Bitcoin (above the $6k resistance) before that occurs. Volatility and uncertainty in Bitcoin is generally not so good for alts…
Stratis:
STRAT/USD
STRAT/BTC
Price: $0.82 (13787 satoshis)
Market Cap: $81.175mn (13,693 BTC)
Thoughts: Stratis has a lot going for it fundamentally (as do the rest of the four coins featured in this post) but its chart now looks horrific. Just two weeks ago, it was one of the stronger looking charts…
Now, let us take a look at the Weekly chart for STRAT/USD for some context:
Trendline resistance that was in play for a year was broken going into 2019 and price successfully retested it in January. As such, there is a strong possibility that the cyclical low was formed at $0.53 last year. Since then price has found resistance at an historical level of support, $1.34.
Looking now at the Daily chart, we can see the breakout from trendline resistance occurred on high volume and that mid-term support has formed around $0.73. However, STRAT’s climb above the 200-day moving average was shortlived and price now sits in a precarious position with at least 30% of room to fall before it reaches the low from December 2018. If Bitcoin does retrace towards the low $4k area, STRAT/USD would undoubtedly be dragged down towards this potential support level.
STRAT/BTC looked rather comfortable above 21k satoshis in April, but, looking at its Weekly chart, we can see that it now looks a little grim:
18-month trendline resistance was broken in December, and price found resistance at support turned resistance around 40k satoshis. Following this, it retraced towards 21k satoshis where it sat, presumably in re-accumulation, for a couple of months. However, late April brought with it a breakdown from this support level and price has continued to fall, breaking and closing the Weekly below the November low of 15k satoshis. It seems to me to be painting something of a spring as it seeks to test the trendline resistance as support once more, though this time around 12k satoshis.
Looking at the Daily chart, we can see where price lost the 200-day moving average followed by a fall through the significant 0.0002 BTC level. The subsequent sell-off has been steep but very low in volume, indicating that a move into historical resistance at 12k satoshis from 2017 will likely be a good place to buy. However, low-risk buyers would wait for a rejection and break of the bearish market structure before an entry. I have depicted the path I expect Stratis to take on its Weekly chart, though I expect movements to be more explosive than shown if late Q2/early Q3 is when alts get some relief.
Komodo:
KMD/USD
KMD/BTC
Price: $1.10 (18567 satoshis)
Market Cap: $124.511mn (21,000 BTC)
Thoughts: Komodo looks relatively strong compared to other alts, though it suffered from a great deal of downside of late too. Looking at KMD/USD on the Weekly timeframe, it is evident that price is lingering around serious resistance but remains above its 20-week moving average. Again, given the significant relationship between Bitcoin’s price at ALT/USD prices, I expect KMD/USD to be dragged back towards trendline support (and perhaps briefly under it) as Bitcoin finds a short-term top.
Now, let’s take a look at the Weekly chart for KMD/BTC:
10-month trendline resistance was broken and retested prior to 2019, after which price rose steadily, respecting its trendline support. It found resistance at prior support around 28k satoshis, retracing hard towards the trendline, which then gave way. What has followed is a move back into what is clearly an area of historical accumulation for all of Komodo’s bull cycles.
From the Daily chart, we can see that price is lingering within this range, above support at 17500 satoshis, but if Bitcoin sneezes I expect this level to give way and KMD to move towards 15700 satoshis. I do, however, expect the November low at 13400 satoshis to remain intact as a cyclical low. A move above 21500 satoshis would confirm the reversal.
Ark:
ARK/USD
ARK/BTC
Price: $0.49 (8191 satoshis)
Market Cap: $54.54mn (9,178 BTC)
Thoughts: Ark is another coin that looked very strong against Bitcoin in Q1 but has suffered a deep retracement towards November lows.
The Weekly chart for ARK/USD depicts the breakout above support turned resistance at $0.50 and the 20-week moving average in Q1, following which price found resistance at $0.90. It has since fallen towards trendline support and the 20-week moving average has been lost. Further, it is sitting at the reclaimed level of support at $0.50.
Looking now at the Daily chart, we can see price flirting with trendline support, but also that the 200-day moving average has also been lost. Multiple Daily closes below support indicate that there is further downside to be had, and a close below $0.45 would open up a move towards $0.36.
But what about ARK/BTC? Well, as can be seen in the Weekly chart, price is sitting just above the first ever Weekly orderblock, which preceded the 2017 bull cycle. This is likely a great area for low-risk, high-reward accumulation, and the successive bearish Weekly candles suggest to me that we will see the local low at 7300 satoshis taken out before price rejects, acting as a spring for a new cycle to begin.
I have depicted this on the Daily chart, where we can also see the series of significant levels of support that have been lost recently. A move back above 9500 satoshis would indicate that a bottom has been found, but I expect we shall see price wick below 7k before that happens.
Ardor:
ARDR/USD
ARDR/BTC
Price: $0.07 (1176 satoshis)
Market Cap: $69.6mn (11,753 BTC)
Thoughts: Finally, we have Ardor. One particularly interesting feature of Ardor’s price-history can be found on the Weekly chart for ARDR/USD, where I have depicted a very similar fractal that seems to be playing out from late 2016/early 2017. Further, the 5-month trendline support is being respected by the Weekly candles, but its fortunes are largely tied to the movement of Bitcoin. We can clearly see numerous levels of support becoming resistance, with the most recent resistance found at $0.09.
Looking now at the Daily chart, we can see that there is actually a little room to fall before Ardor tests its trendline support against the Dollar. Further, it also just about holding onto its 200-day moving average and holding above resistance turned support at $0.067. However, again, unless Ardor massively outperforms Bitcoin, a retracement in BTC/USD will certainly bring ARDR/USD below these areas of support, perhaps towards $0.50.
The ARDR/BTC chart, however, is a work of art, as price has moved back into the original accumulation zone from 2016. I have painted a price trajectory on the Weekly chart. It is, however, paramount that Ardor holds above 900 satoshis, which is its all-time low. A move below that would open up bearish price discovery. Whilst Ardor holds within this range, it is likely a rewarding opportunity to accumulate.
Finally, looking at the Daily chart, I have shown where Ardor broke its uptrend against Bitcoin and lost its 200-day moving average. The subsequent dump has been extensive, bringing price all the way back to the November low above 1100 satoshis. The recent rejection of a move below this does suggest that a double bottom may be forming, but I expect this low will be swept in a similar spring-like fashion to that which we are seeing across-the-board in alts.
And that concludes this lengthy second part to this week’s Market Outlook. I hope you’ve enjoyed the read.
As ever, feel free to leave any comments or questions below.
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Hey Nik,
Thank you for your wonderful post. I must admit that my patient strategy of very slow trading, buying low-caps in the bear market and waiting is being seriously tested right now… Have you experienced a similar situation in 2015 ?
If you look at the ALT/BTC chart (Total2/BTCUSD on tradingview), you’ll see that the same pattern has played out 5 times in the past 5 years. It’s basically just fear and greed that are constantly in flux.
Thank you Nik.