Market Outlook #48

Market Outlook #48

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Market Outlook #48 (5th August 2019)

Hello, and welcome to the 48th Market Outlook.

What a week it has been, or rather what a weekend; after several days of chop and consolidation, we finally got some trending movement, but more on that a little later…

In today’s post, I will be covering the past week’s price-action in Bitcoin, Ethereum and Monero, as usual, plus taking a look at XRP:

Bitcoin:

Daily:

BTCUSDDaily

4H:

BTCUSD4H

Price: $11,745

Market Cap: $209.767bn

Thoughts: So, the double bottom trap that I highlighted last week – and that I was expecting to be raided this past week – ended up holding firm and providing strong support for a reversal rally. Now, under usual circumstances, I would maintain that the likelihood of this double bottom remaining untouched is slim (there’s rarely a free lunch in speculation); however, having monitored the past week’s movements, this may be one of those rare cases. That said, I am not yet convinced of this.

Looking at the Daily chart provided, I have depicted the two vital shifts in market structure over the past few weeks; the first turned market structure bearish at the beginning of July, following a breakdown and candle close below ~$10,900; the second has not yet been confirmed, but, if today’s candle closes above $11,200, market structure will once again be bullish.

There are a couple of things that make me less convinced, however. Notice the volume on the first market structure break – it exceeded the previous days by some margin; this is not the case with recent volume. Volume doesn’t always have to be strong in order for market structure to shift, but it is what provides us with a degree of confidence in the move. No volume = no confidence.

The second thing that prevents me from being fully convinced the bearish tide has turned is the double bottom that formed above $9,030 and has gone untouched. If I was looking to provide fresh liquidity for longs to ultimately drive prices higher, this is where I would look. All of that said, the price-action is undoubtedly strong, and depending on how the next couple of days plays out, we may get a high-probability long setup if price returns to $11,200 to retest the market structure break.

Looking at the 4H chart, we can see that price is approaching trendline resistance and reclaimed resistance from mid-July at $12,100. RSI is not giving any signs of underlying weakness as of yet and volume is beginning to pick up, indicating that there’s likely some room left to move up. If I was looking to get long, I’d first want to see price close convincingly above these resistances and then pull back towards the reclaimed support around $11,000 on low volume; this would be an ideal setup, for me.

However, if price fails to close above $12,100, it is likely that we will retest $11,000 anyway but I would be less convinced that the support would hold, especially with that double bottom teasing price. Further, trendline support from the end of July is also untouched; rarely, if ever, are short-term longs or shorts allowed to survive in this market, and there is likely plenty of long liquidity resting beneath that trendline.


Ethereum:

ETH/USD

Daily:

ETHUSDDaily

4H:

ETHUSD4H

ETH/BTC

ETHBTCDaily

Price: $232.45 (0.0197 BTC)

Market Cap: $24.917bn (2,112,564 BTC)

Thoughts: Unlike Bitcoin, Ethereum’s underperformance this past week has led to ETH/USD failing to move up above critical support turned resistance at $232, as can be seen on the Daily chart. It is this key level that I continue to monitor; once price is able to reclaim it on solid volume and conquer the looming trending resistance, I will be looking for long setups with a target of $260. Interestingly, the 200-day moving average has just crossed above the 360-day moving average, signalling a long-term shift in market trend. Nonetheless, price remains poised beneath multiple levels of resistance with recent volume continuing to decline; as such, I am not taking any positions at the moment.

Looking at the 4H ETH/USD chart, two things of note appear: firstly, after two failed attempts at closing the 4H above $232, the 3rd and most recent attempt has succeeded; secondly, prior to this most recent move up towards $232 resistance, stops were taken beneath the $200 low, providing liquidity for new longs. As such, a sustained move above $232 would confirm that the mid-July low was the bottom for this current range and that we are likely to make a move up to $260 resistance.

Looking now at ETH/BTC, bearish continuation from the prior week has led to fresh lows as of today, with ETH struggling to remain above 0.02 BTC. That said, until today’s candle closes, we cannot know whether price will regain this level or close below it. A close below it would signal further downside for the remainder of the week, as old support continues to be flipped as resistance; however, if price is able to close above it, it is likely that a bullish divergence will be printed and we may retest the resistance at 0.022 BTC.


Monero:

XMR/USD

XMR/BTC

XMRBTC4H

Price: $91.62 (0.00778 BTC)

Market Cap: $1.57bn (133,456 BTC)

Thoughts: Monero has outperformed other large-caps altcoins this past week, having remained largely flat against BTC and thus benefited from Bitcoin’s ascent against the Dollar.

Looking at XMR/USD, we can see that price, as of today, is pending a breakout above support turned resistance at $86 and trendline resistance from the June highs. If this candle closes where it is, market structure will turn bullish on the Daily time-frame, and I will be looking to get long upon at retest of $86.

Now, looking at XMR/BTC, price remains range-bound between 0.00735 and 0.0094 BTC, with an even tighter range having formed between 0.0074 and 0.0088 BTC since. Further, the 4H has failed to close below 0.0077 BTC since early July, indicating that this is a short-term area of support. Nothing has changed since last week, however. I remain neutral on XMR/BTC until it closes above or below the range.


XRP:

XRP/USD

XRPUSDDaily

XRP/BTC

XRPBTCDaily

Price: $0.327 (2781 satoshis)

Market Cap: $14.047bn (1,192,082 BTC)

Thoughts: XRP is rarely analysed in these reports, so I figured I’d take a look at it today.

Firstly, let’s take a look at XRP/USD: like the majority of majors, volume has been declining over the past couple of weeks of consolidation, with price having found a short-term bottom at historical support of $0.28. Much like ETH/USD, stops were taken below $0.0295 before price moved up above $0.32, with the next resistance at $0.342. If price is able to close the Daily above this level, market structure will turn bullish, opening up a move to support likely turned resistance at $0.37.

Looking at XRP/BTC, there appears to be a series of bullish divergences forming with price battling to remain above 2780-satoshi support. Overhead resistance has capped price at 3375 satoshis, and, if it is able to hold above 2800 satoshis, I expect this level to be retested. If not, well… look out below.

And that concludes this week’s Market Outlook.

I hope you’ve found some value in the read. Feel free to leave any comments or questions below!


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