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Market Outlook #40 (16th June 2019)
Welcome to the 40th Market Outlook, and what a week it has been. I took a short holiday mid-week and returned to dynamic movements across-the-board. As such, in today’s post, I’ll be covering Bitcoin, Ethereum and Monero in depth, plus taking a look at Dash.
Market Cap: $164.911bn
Thoughts: In last week’s Market Outlook, I outlined the short-term bearish outlook for Bitcoin, with bullish market structure having been broken. However, I also mentioned that a break above trendline resistance and horizontal resistance at ~$8250 would revert market structure back to bullish, and it didn’t take long for this to happen, cementing the bullish momentum for Bitcoin.
As can be seen on the Daily chart, the large period of consolidation between $7-9k was occurring on declining volume, as this recent ascent to new highs has also been doing. We are yet to see daily volume break its downtrend and yet the uptrend for price remains very strong. I have depicted where I expect the next area of short-term resistance to be found, which is the psychological and historically significant area around $10,000. However, looking at the equal highs marked out around $11,700, these seem ripe for picking, and I expect any move above $10k will be swiftly followed by a move up towards this area; there is also confluence here with the 1.618 extension of the current swing.
Now, looking at the 4H, we can actually see volume more accurately on this recent advance, with volume steadily rising as price broke above $9100. This advance also mirrors the advance occurring on the Daily timeframe, with the rally growing steeper with each move up. The next area of interest on this timeframe is that psychologically-relevant $10k spot… this is also where I expect news and media outlets to begin discussing Bitcoin again more frequently.
Price: $276.12 (0.0297 BTC)
Market Cap: $29.409bn (3,167,871 BTC)
Thoughts: There is rather a lot going on with Ethereum at the moment on its various charts, but let’s begin by looking at ETH/USD on the Daily timeframe:
Here, we can see the strong rejection and continuation off the 360-day moving average; a sign that the bullish trend is very much still in play. Further, we can see that each successive peak in ETH/USD has occurred on rising volume, which is something I shall be looking for on the next leg up. RSI has also reset heavily on the retrace to $225, with plenty of room for price to move upwards towards the next area of resistance, which looks to be between $330-350.
Looking at the 4H ETH/USD chart, we can see that market structure turned bullish after a period of decline when $250 was reclaimed, following a break above and successful retest of trendline resistance. The 200MA is currently supporting price, alongside the strong uptrend that began last week. Volume is largely flat for now, but I expect this will change upon a break above $290. $333 is the 1.618 extension of this recent range, and thus likely where price will move towards over the coming weeks.
Now, ETH/BTC is a different beast entirely, with it currently unsure on its relationship to BTC/USD. Sometimes, when Bitcoin rises, ETH/BTC is stagnant; sometimes it falls; sometimes when Bitcoin falls, ETH/BTC rises; and so on…
Thus, with such chop and change, it is important to retain a higher timeframe perspective, and the Daily chart shows a retrace from the highs of mid-May into the Daily Breaker on declining volume (accounting for one anomalous day). These are all signs of an impending bullish continuation. The one thing that looks rather bearish is the fact that ETH/BTC closed above its 200-day moving average on significant volume in May, but has lost it recently and is now being capped by it. However, as long as price remains inside or above the Daily Breaker, I am bullish on Ethereum, overall.
Price: $96.32 (0.01049 BTC)
Market Cap: $1.641bn (176,861 BTC)
Thoughts: Monero has formed a new range since finding its potential cyclical low in May at 0.01 BTC, with range resistance at 0.0117 BTC, local support at 0.0104 BTC (where it currently lingers) and the range pivot at 0.0108 BTC. This pivot was lost this past week when alts all dumped in harmony, with it now acting as short-term resistance. It is vital for Monero to hold this range (in particular, above 0.01 BTC), as this is critical historical support, with very few significant levels beneath it for a long way down. Until we break above 0.0117 BTC, however, there is no confirmation of a new bull cycle beginning.
Price: $160.03 (0.01724 BTC)
Market Cap: $1.419bn (152,892 BTC)
Thoughts: DASH/USD is in a very good position at the moment, similar to ETH/USD in its recent retest and continuation off the 360-day moving average. It also has a strong uptrend on the Daily timeframe, with the trendline support holding on several occasions. Volume is particularly high of late, with declining volume on retracements and increasing volume on rallies, indicating that the trend remains healthy. The 1.618 extension of the most recent swing would see prices at historical support turned resistance of $250.
This thesis is backed up when taking a look at DASH/BTC, which, though having declined towards its potential cyclical low of 0.0165 BTC this past week, seems to be rejecting a move below this level. Further, the decline since the highs of mid-May has occurred on decreasing volume, with the 200MA having capped price back then. Short-term support turned resistance is ahead at 0.0183 BTC and a move back above this level on significant volume would indicate that the cyclical low is indeed in for DASH/BTC.
And that concludes this week’s Market Outlook. I hope you’ve enjoyed the read!
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