Market Outlook #53

Market Outlook #53

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Market Outlook #53 (8th September 2019)

Hello, and welcome to the 53rd Market Outlook; back to regularly scheduled programming in today’s post, as I will be covering the past week’s price-action in Bitcoin, Ethereum and Monero.

As a side note, later this week, I will be publishing my top 5 altcoins to hold for 2020, which is why I haven’t featured any midcaps as I would usually in this post.

Anyway, let’s crack on:

Bitcoin:

Daily:

BTCUSDDaily

4H:

BTCUSD4H

1H:

BTCUSD1H

Price: $10,547

Market Cap: $189.039bn

Thoughts: Though we were looking for shorts this past in week in Bitcoin, no setup came as price did not respect the levels marked out in last week’s post, instead running up towards the top of the range, where we have currently formed a very bearish pattern indeed; despite this, I am not currently looking for shorts, as I would like to see the Weekly close.

Looking a little deeper, from the Daily chart, we can see that price ran the stops below $9,475 before forming a local bottom and spending this past week running back to the top of the range. When it hit $10,800, price formed a swing-failure, though lingering a little below the top of the range at $10,960; the following day we had an inside day, with price consolidating within the range of prior day, and then we cleared out the liquidity at the top of the range and formed a bearish engulfing. As such, I was looking for shorts yesterday, but no setup formed and now I await the Weekly close. If we close tonight below $10,800, I will be looking for shorts next week. However, one point of worry is that BitMex was one of the only platforms on which a swing-failure was printed at the top of the range. As such, I wouldn’t be surprised to see price rally up above $10,960 once again early next week before collapsing; either way, a Weekly close below $10,800 would indicate to me that price wants to run back towards the bottom of the range at $9,080.

Looking now at the 4H, we can see that market structure has broken to the downside and I have depicted the two possible scenarios from here should we close the Weekly below $10,800. The first of these sees us break down here and continue the move back down the range; I would be looking to short a break and retest of $10,200 if this occurs; the second scenario has price run up above $11,000 before breaking down, trapping breakout longs and taking liquidity from early shorts. This would be the ideal scenario for a short, offering us maximum R.

Finally, looking at the hourly, we can see that price has already retraced to the 50% level of the move down from $10,968 to $10,200, and is lingering beneath trendline support turned resistance. Seeing this, I wouldn’t be surprised if price simply broke down here and offered no entry for a short above $10,600. Nonetheless, I won’t be jumping the gun and will be looking to Monday and Tuesday for short setups.


Ethereum:

ETH/USD

Daily:

ETHUSDDaily

4H:

ETHUSD4H

ETH/BTC

ETHBTCDaily

Price: $181.09 (0.01721 BTC)

Market Cap: $19.495bn (1,853,442 BTC)

Thoughts: Ethereum appears to have broken its trendline resistance against the Dollar this past week, which has been in play since the local top at $360 in June. Looking at the ETH/USD Daily chart, we can see that price formed a double bottom at $163 (always a worrisome sign for a bottom, as this often entices longs that place their stops directly beneath the double bottom). Following this, price broke out above trendline resistance and is currently sat beneath support turned resistance at $187. Price also remains well below the 200-day moving average.

Looking at the 4H, we can see that price is rather messy at the moment, with no real sense of structure; it is primarily chop, taking out longs and shorts on either side of the range. The only untouched low is the very bottom at $163.33, whilst this past week has seen price sweep the stops above $182.81. Despite this, no clear bullish market structure has been formed, with price appearing to be running out of steam as it approaches resistance; bearish divergence in RSI confirms this. I would not be getting bullish on ETH/USD until it has started reclaiming old support levels that have continued to be flipped into resistance. The most significant of these, for me, is around $203.

Looking at ETH/BTC, we can see that price made fresh new lows last week, though I had expected a move back to the top of the range at  0.02 BTC before any further downside. We got no such movement; instead, price collapsed as Bitcoin rallied. Over the past couple of days, price has rallied straight into support turned resistance at 0.0175 BTC and trendline resistance, which remains firm from June. If price is able to reclaim 0.0175 BTC as support and break above trendline resistance, I think we may have our bottom; however, price remains firmly in a downtrend and there is no reason to expect this level of support turned resistance to act any differently to the several other levels that have been flipped on the way down.


Monero:

XMR/USD

XMRUSDDaily

XMR/BTC

XMRBTCDaily

Price: $77.86 (0.00738 BTC)

Market Cap: $1.338bn (127,074 BTC)

Thoughts: Monero, despite looking bullish a couple of weeks ago, has been hit hard by Bitcoin’s rally, with XMR/BTC breaking below range lows to fresh new yearly lows and XMR/USD turning market structure bearish and losing its 200-day moving average.

Looking at XMR/USD, we can, however, see that price is attempting to reclaim the 200MA, as well as the level at which market structure initially turned bearish: $77. Nonetheless, given my expectations for BTC/USD to fall back to the bottom of its range, it would take supreme outperformance in XMR/BTC for this level to be reclaimed as support, signs of which we have yet to see.

Looking at XMR/BTC, I have provided a fuller price-history for context, so that we can see how textbook price-action has been in this downtrend, turning every support into new resistance. We have also recently rallied into support turned resistance at the prior range low of 0.0074 BTC. I expect price to fall here, making fresh new lows; however, I have depicted the path price should take if the range is reclaimed.

And that concludes this week’s Market Outlook. I hope you’ve enjoyed the read.

Feel free to leave any comments or questions below!


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