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Market Outlook #44 (13th July 2019)
Hello and welcome to Market Outlook #44; and this one is an altcoin special.
Altcoins have been through the wringer of late, with the entire altcoin market currently falling at a rate that would see it worth effectively nothing by year-end, as I illustrated in a recent Twitter thread. Despite this, several altcoins have been disregarding Bitcoin entirely and are in the middle of their first real bull cycles; for example, Quant Network, which you can learn more about here.
In today’s post, I’ll be covering 7 altcoins at various stages of their respective market cycles, in an attempt to find a number of short-term and long-term opportunities. The coins featured in this Market Outlook are Cardano, ChainLink, Komodo, Siacoin, Ardor, NKN and Dero.
There’s a lot to work through here, so let’s crack on:
Price: $0.067 (596 satoshis)
Market Cap: $1.76bn (154,586 BTC)
Thoughts: Cardano has had a tough time of it as Bitcoin has shown strength in recent weeks, having fallen to multi-year lows against it. That said, for those who see Cardano surviving and thriving in the next market cycle, this may be the opportunity you were waiting for.
Looking at the ADA/USD chart, we can see that Cardano has rallied against the Dollar since December 2018, pulled up by Bitcoin’s out-performance, with trendline support holding firm for several months. Further, price climbed above both the 200-day and 360-day moving averages, but resistance was finally found at $0.107 towards the end of June, from which price has fallen back below the latter MA. More significantly, the trendline support from December has given way, and price is currently retesting the 200MA and historical horizontal support at $0.06. Interestingly, RSI has printed a bullish divergence on this most recent retracement; thus, if price can rally from here and reclaim the trendline support and 360-day moving average, I would consider this a shakeout before higher prices are found and resistance is retested at $0.11.
Now, looking at ADA/BTC, we can see that price found resistance at 1934 satoshis in April, having rallied steadily for several months. This was followed by a sharp rejection, from which price has continued to fall, being suppressed since then by trendline resistance. Further, we can clearly see that price, having fallen below the 200-day moving average in May, retested a move above this MA twice, being rejected both times and then falling further to new yearly lows. Now, however, price has entered the historical accumulation range; the price zone that preceded the December 2017 – January 2018 bull cycle. This is effectively the cheapest price range Cardano has traded within in its history, and those looking for cyclical positions may want to begin scaling in here. More risk-averse speculators can wait to see the reaction from this range, potentially waiting for a break above trendline resistance before entering a longer-term position. Either way, reward is high and risk is relatively low on Cardano, currently.
Price: $3.12 (27448 satoshis)
Market Cap: $1.093bn (96,069 BTC)
Thoughts: ChainLink is one of the rare altcoins that is outperforming Bitcoin currently, having begun its own market cycle towards the end of 2019. It is a perfect example of the demand for newer altcoins that have yet to experience their own full-blown bull markets; and why? Because price discovery is far easier to engineer on an altcoin with little to no price-history. Couple that with fundamental strength and you have a recipe for an outperformer. I’ll be writing an entire blog post on which altcoins I expect to outperform Bitcoin moving forward very soon. Let’s stick with ChainLink, for now.
Looking at LINK/USD, we can see that price made its initial all-time high at $1.47 in January 2018, which remained the high for over a year. Price began to make higher-lows beginning in July 2018, culminating in a breakout from an ascending triangle in late April 2019, turning resistance into support at $0.62. This kicked off the new bull cycle for ChainLink, with the rally growing steeper and breaking new all-time highs last month, with trendline support holding firm and the 200-day moving average crossing above the 360-day moving average. Price remains very much detached from both MAs, with the parabolic rise continuing to push LINK higher. Two weeks ago, ChainLink hit $4.50, which remains the all-time high to this day, with price having retraced a little on low volume. Further, RSI printed a bullish divergence, which means there is likely still upside in this market and that dips should continue to be bought.
Now, looking at LINK/BTC, price broke above the previous all-time high of 11200 satoshis in January 2019, but failed to turn this resistance into support and fell back towards the 360-day moving average, finding new support at 8070 satoshis. From here, price began a steep rally, breaking above the 200-day moving average and back above the prior all-time high, turning old resistance into new support on the way up. The rally continues to grow steeper but with resistance continuing to be claimed as support, with the all-time high set at 38500 satoshis. I bought this recent dip with a stop-loss on a Daily close below the recent low (and trendline support) at 23750 satoshis; a close below both of these levels would break the parabolic advance and likely indicate an imminent end to the bull cycle. For now, the trend is strong and bullish.
Price: $1.56 (13761 satoshis)
Market Cap: $176.057mn (15,477 BTC)
Thoughts: Komodo is one of my largest positions at the moment, with an average price of ~12,500 satoshis. The reasons for this are largely fundamental, but also because the project has shown some resilience during this most recent Bitcoin volatility.
From the KMD/USD chart, we can see that trendline resistance from the all-time high of $$14.30 set in January 2018 was broken in February 2019, after a likely cyclical bottom formed in December 2018 at around $0.50. Since then, price has rallied steadily, pulled up, as with all altcoins, by Bitcoin. That said, Komodo has shown strength of its own, having rallied above the 200-day and 360-day moving averages and successfully retested both, and remained above both during this most recent volatility in the altcoin market. Komodo did find resistance against the Dollar at $1.75, but is consolidating just below it. With a rebrand imminent and the trend strong, I expect this resistance will be broken soon.
Looking at KMD/BTC, we can see that price formed its all-time high at 103k satoshis in the summer of 2017, failing to rally above it on subsequent market cycles, with resistance being found at 86k satoshis. Since hitting this high in January 2018, price has bled out continuously, with initial support being found at 13.7k satoshis in December 2018, from which price rallied to support turned resistance at 28k satoshis in March 2019. This rally led to a reclamation of the 200 and 360-day moving averages, but these were shortlived, with price dropping off hard and losing levels of support, culminating in the most recent low of 9100 satoshis, from which price has rallied somewhat sharply back to prior support now turned resistance at 13.7k satoshis. A move above trendline resistance, which has confluence with the two significant moving average, on volume would confirm 9100 satoshis as the cyclical bottom for me. Risk-averse speculators could buy on a break of these levels with a stop-loss at the most recent low and hold for the next cycle.
Price: $0.003 (27 satoshis)
Market Cap: $127.33mn (11,196 BTC)
Thoughts: Siacoin is another of those fundamentally-sound altcoins that has suffered greatly in the recent Bitcoin volatility, but looks perfectly poised for a cyclical speculative entry.
Looking at SC/USD, I have depicted the historical accumulation zone, which, unlike for most altcoins, comes in the form of a channel trending upwards, much like Bitcoin on the logarithmic scale throughout its price-history. We can see from this chart that the all-time high formed in January 2018 at $0.12, with price suffering a deep bear market following this, eventually finding support at historical trendline support in January 2019. Since then, price has been trending upwards, breaking above trendline resistance from January 2018 and, more recently, above the 200-day moving average, now consolidating below the 360-day moving average and support turned resistance at $0.005. It is from within this channel that two of the past three cycles have begun for SC/USD, and a break above the accumulation zone will likely trigger the beginning of a new one.
Now, SC/BTC is a dismal picture for those that bought any time after the summer of 2017, but exceptionally rewarding for those of us that see Siacoin surviving and reaching new highs when the next cryptocurrency bubble is in full flight. Price made all-time highs at 887 satoshis in the summer of 2017 and has made successive lower cyclical highs since then, recently falling into the historical accumulation zone that preceded the 2017-18 mega-bull cycle. This is the cheapest Siacoin has been since Q1 2017, but price remains suppressed by trendline resistance and the 200-day moving average. I expect we shall see some consolidation within this historical zone, followed by a breakout above trendline resistance before the end of this quarter. In fact, if you look at the steepness of the trendline resistance, it would have Siacoin priced at all-time lows below 2 satoshis by November; an extremely unlikely scenario given that it is another 90% decline from here…
Price: $0.082 (724 satoshis)
Market Cap: $82.192mn (7,228 BTC)
Thoughts: Ardor, though resilient for a long while, finally showed some weakness during the past week of Bitcoin volatility, but continues to look good on the higher-timeframes against the Dollar.
Looking at ARDR/USD, the most significant thing to highlight is the trendline support that has remained intact since Ardor was first traded on exchanges in late 2016. After forming an all-time high at $2.55 in January 2018, price has suffered a protracted bear market like the rest of the cryptosphere, finally finding support at that trendline and at its historical opening price of $0.042 in December 2018. Since then, price has rallied steadily, reclaiming prior resistance as support and moving back above the 200 and 360-day moving averages. However, Ardor did find resistance at the $0.127 level in June, falling from here back below the 360MA and now retesting the 200MA and hovering above trendline support. This is a critical support area for Ardor, and one that I expect will hold moving forward, with a larger ascending triangle now unfolding with a likely breakout before year-end.
Looking at ARDR/BTC, there is one particular pattern that has recurred throughout Ardor’s price-history; a small test-pump and shakeout preceding a larger bull cycle. This preceded the previous two cycles, and has again formed recently, though this time taking out the all-time low of 980 satoshis and forming a new low at 680 satoshis, despite RSI indicating a bullish divergence here. If this pattern is to play out again and this is the beginning of a new bull cycle for Ardor, we should see a move back above 980 satoshis sooner rather than later, followed by a test of the 360-day moving average. Risk-averse speculators can wait for this to unfold before entering, placing a stop-loss at the 680 satoshi level if it holds as the all-time low.
Price: $0.064 (579 satoshis)
Market Cap: $23.04mn (2,026 BTC)
Thoughts: NKN, much like ChainLink, had never experienced its own full bull cycle before, and, though it experienced some upwards momentum on the release of its Mainnet this month and listing on Huobi Global, price remains capped by trendline resistance, as can be seen on the NKN/BTC chart. More significantly, price has been range-bound between 1400 satoshis and range support at 320 satoshis for almost an entire year. Price actually formed its all-time high shortly after first being listed on exchanges at 7200 satoshis, but swiftly decline and found the range I just mentioned in August 2018. Most interestingly, NKN experienced its all-time high 24H volume this past week, indicating significant interest at these prices, and I am certainly buying a cyclical position here.
Looking at NKN/USD, we can see that price is in an uptrend since December 2018, having rallied over 8x against the Dollar and outperformed Bitcoin by June 2019, but it found resistance at $0.085, which was historical resistance. This is where price is currently consolidating below, though it continues to trade above the 200 and 360-day moving averages. Again, like LINK, the trend is overall bullish, as are the fundamentals, thus dips are for buying.
For those that would like to learn more about NKN, read my Coin Report.
Price: $1.41 (12295 satoshis)
Market Cap: $11.2mn (985 BTC)
Thoughts: Dero has recently shown great resilience and outright disregard for Bitcoin, with it looking as though it is beginning a new bull cycle.
From the DERO/USD chart, we can see that price formed its all-time high in May 2018, shortly after it was first listed on exchanges, at $5.33, but price then swiftly fell, making an all-time low at $0.20 in September 2018. From then, a new bull cycle played out, culminating in a high of $2.76, before price fell towards $0.50, where it found its cyclical bottom. Since then, DERO has rallied against the Dollar a little, but largely remained in consolidation below $1.40 resistance, which is where it currently trades.
Now, looking at DERO/BTC, we can see that the project is currently trading significant volume and has found support at 5500 satoshis, above the all-time low of 3300 satoshis from September 2018. Price recently rallied and reclaimed old support at 10k satoshis, now consolidating below 14600 satoshis. We are still very much in a bear cycle whilst price remains below this resistance and the overhead resistance of the 200 and 360-day moving averages, but should Dero move above these, a new bull cycle will be confirmed and I will be buying dips along the way.
If you’d like to learn more about Dero, check out my Coin Report.
And that concludes this one-off altcoin-focused Marked Outlook. I hope you’ve found some value in the read.
As ever, please feel free to leave any comments or questions below.