Market Outlook #49

Market Outlook #49

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Market Outlook #49 (11th August 2019)

Hello, and welcome to the 49th Market Outlook.

In this week’s post, I’ll be covering the past week’s price-action in Bitcoin, Ethereum and Monero, as usual. That’ll be all, however, for this post.

Nonetheless, there’s plenty to get stuck into:

Bitcoin:

Daily:

4H:

BTCUSD4H

Price: $11,391

Market Cap: $203.575bn

Thoughts: In last week’s Market Outlook, I mentioned that a failure to close above trendline resistance would likely bring a retest of $11,000, and that, more significantly, this would form a lower-high on the Daily timeframe, opening up the possibility of a move back towards $9,000 to take out stops beneath the double bottom.

The earliest stages of this move have begun, with price forming a rounded top and failing to hold above trendline resistance, as can be seen on the Daily chart. Volume was flat whilst price climbed towards this resistance, though Daily market structure turned bullish when price closed above $11,200. Following this, we saw price attempt a move above $12,100 for several days, each time failing to hold that level. Volume peaked out on the first attempt at resistance and has been declining the entire week since, indicating that buyers are exhausted here and we may indeed be looking at another test of $9,000.

That said, let’s take a look at the 4H chart: here, there are numerous mixed signals, as tends to be the case when Bitcoin is range-bound. On one hand, we have a Daily market structure break to the upside when price closed above $11,200, as mentioned earlier, but this was followed by consecutive lower-highs as price struggled to stay above trendline resistance, culminating in a trendline breakout failure; following this, price broke down on the 4H, turning market structure bearish when it closed below $11,650. We then saw price retest the level at which Daily market structure turned bullish ($11,200), dipping briefly below this but ultimately forming a swing-failure pattern today, indicating that some upside may follow.

However, looking at where price is currently, it seems impossible to take a position with any confidence; it all depends on how price reacts here. If we test $11,650 and begin to break down, I believe a move back towards $9,100 is certainly on the cards, with price likely taking out that double bottom over the next few weeks. If price reclaims $11,650, I believe we see a breakout above trendline resistance ad new short-term highs above $12,400. It all depends upon this current period of price-action. I am leaning bearish, based on the clean double bottom at $9,100 and the lack of volume on Bitcoin’s continual test of trendline resistance.


Ethereum:

ETH/USD

ETHUSDDaily

ETH/BTC

ETHBTCDaily

Price: $209.89 (0.01846 BTC)

Market Cap: $22.585bn (1,982,931 BTC)

Thoughts: Ethereum continues to look terrible against both the Dollar and Bitcoin, with ETH/USD largely following the movements of the latter. If Bitcoin begins to break down here, I expect ETH/USD to take out the lows at $189 and lose the 200-day and 360-day moving averages, ultimately moving into the next area of support at ~$160. That said, these sentiments are also based on the historical under-performance of ETH/BTC, which, until I see a change in momentum, I will continue to assume will under-perform.

Looking at the ETH/USD Daily chart, we can see that price did attempt to reclaim support at $232, but ultimately formed a swing-failure pattern and rejected. Price is forming higher-lows, but I don’t expect these to hold if Bitcoin drops further. Also, price remains capped by trendline resistance and lingers precariously above the 200MA and 360MA, both of which have provided support several times already. Something has got to give; either we move down towards $160 if Bitcoin breaks down, or ETH/BTC reverses its trend and finds a bottom.

Now, let’s take a look at ETH/BTC: here, we can see how clean price-action has been over the past couple of months, with support being flipped as resistance all the way down on the Daily timeframe. However, peaks in volume have been declining with each new low that has formed, indicating sellers being exhausted. As such, I am expecting ETH/BTC to find a cyclical bottom within the next few weeks, with the next move down (if it comes) likely to be it. Before this, however, a move eup to retest 0.02 BTC and trendline resistance is possible, especially considering where Bitcoin may be headed short-term.


Monero:

XMR/USD

XMRUSDDaily

XMR/BTC

XMRBTC4H

Price: $91.62 (0.008 BTC)

Market Cap: $1.571bn (137,958 BTC)

Thoughts: Monero, unlike Ethereum, actually managed to reverse its short-term trend this past week, at least against the Dollar, with XMR/USD breaking out above trendline resistance and turning market structure bullish, as it reclaimed $86. If this level can hold as support, I expect we’ll see $107 next; however, given that Bitcoin looks short-term bearish, this would mean XMR/BTC must outperform, if Bitcoin does fall. Either that, or we see XMR/USD consolidate above $86 whilst Bitcoin finds its next bottom…

Looking at XMR/BTC, we can see that nothing at all has changed, with price range-bound for almost 46 days. Given how BTC/USD looks right now and how XMR/USD looks, I do expect we’ll see some movement soon, however, and I expect it to be bullish, with a retest of range resistance at 0.0094 BTC (+18% from here).

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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