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Market Outlook #39 (9th June 2019)
Hello, hello, and welcome to the 39th Market Outlook.
It’s been an interesting week for many altcoins, with numerous spikes occurring across-the-board, whilst high-caps remain largely in consolidation.
As such, in this post, I’ll be covering Bitcoin and Ethereum, as usual, but will be substituting the subdued Monero for Komodo, as well as taking a look at opportunities in Einsteinium and Reddcoin.
Market Cap: $140.822bn
Thoughts: The bearish scenario played out rather than the bullish one, and thus no new highs were given to us this past week.
Instead, as can be seen from the Daily chart, we were given a clean market structure break to the downside on solid volume, but prices failed to move below the low of that initial daily candle at ~$7450. Instead, new support has been found at $7620, with three consecutive daily candles failing to close below it despite all wicking below. Price then moved back up towards the area where market structure turned bearish (~$8000) and is now failing to close above that area, with historical resistance holding firm at $8200. For now, the Daily chart remains range-bound between $7500-$8200 and volume remains flat. This consolidation indicates an expansive move incoming, beyond the body of the original candle that broke market structure. The likelihood is that this expansion will come in the form of a bearish continuation, with a move towards $7240 being likely whilst Daily market structure remains bearish.
Now, looking at the 4H, we can see that the 200MA is currently supporting price but that even the 4H candles are struggling to close above $8000, with short-term trendline resistance incoming next week. Unless price can break above $8230 and trendline resistance on solid volume, the outlook remains bearish short-term, with further consolidation expected early next week followed by another test of $7450.
Price: $244.63 (0.03081 BTC)
Market Cap: $25.988bn (3,264,756 BTC)
Thoughts: Now, as is the case with the majority of the largest altcoins, Ethereum remains in consolidation against BTC after its initial rally from the lows in May. Price continues to hold above 0.03 BTC, with support also being reclaimed at 0.0305 BTC this past week. However, trendline resistance from May 15th continues to cap any upwards momentum, with price retracing back towards 0.0305 BTC support a couple of days ago. That said, this leg down occurred on declining volume, with each successive test of 0.0305 BTC support experiencing declining volume also; are sellers running out of steam? More often than not, descending triangles like the one currently playing out break out to the downside, but higher timeframe perspectives and volume patterns indicate otherwise. Cautiously bullish.
Price: $1.70 (21495 satoshis)
Market Cap: $194.892mn (24,593 BTC)
Thoughts: Komodo is one of the altcoins I expect to outperform in the next bull cycle, and it looks as though this next cycle is whirring its engines. Having dumped with the rest of the market throughout April and early May, Komodo found what looks to be a cyclical bottom at a little under 14k satoshis, having rallied strongly since, breaking above trendline resistance and reclaiming the 200-day and 360-day moving average. Price is now in the historical pivot zone between 20-24k satoshis; an area of support and resistance across numerous instances over the past year. If price can continue this current momentum and close above 24k satoshis, I expect the rally to grow steeper as we enter the Disbelief phase of the new market cycle…
Price: $0.11 (1396 satoshis)
Market Cap: $25.262mn (3,187 BTC)
Thoughts: Given that altcoin action has begun to grow interesting again, I figured I’d include a couple of smaller alts in this post. The first of these is Einsteinium, which has a monster bull cycle in 2017/18. Whilst there is a high probability that we are witnessing the beginnings of new bull cycles as we transition out of altcoin bear cycles, and thus these positions are best held cyclically for those that are not traders, I have depicted a ~5:1 reward-to-risk opportunity here for EMC2/BTC.
We can clearly see that EMC2 has been forming long-term higher-lows by the near-8-month trendline support. Further, there is a bullish divergence on recent swing-lows, with price also failing to break below trendline support. Entries here with a stop-loss on a Daily close below trendline resistance offer us 5:1 reward-to-risk with a target of the local high at 2900 satoshis, set in March this year.
Beyond this, Einsteinium hit ~19k satoshis whilst Bitcoin was trading above $15k… food for thought.
Price: $0.0017 (21 satoshis)
Market Cap: $48.747mn (6,167 BTC)
Thoughts: Lastly, a low-satoshi coin is always a good play for an altseason. Reddcoin is about as legacy as they get, besides perhaps Dogecoin. We can see from the chart that there have been numerous accumulation spikes over the past few months, and that, following the loss of support at 30 satoshis in April, price fell to a low of 19 satoshis. Trendline resistance from this fall has been broken and there is another 5:1 play here without even targetting the local high of 83 satoshis. Instead, an entry here with a stop-loss on a close below 16 satoshis and a target of the support turned resistance at 46 satoshis offers us 5:1 reward-to-risk. I myself will also be holding a cyclical position in RDD, as it tends to go a bit nutty when new cycles begin.
And that concludes 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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