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Market Outlook #56 (29th September 2019)
Hello, hello and welcome to the 56th Market Outlook; and what a week it has been.
After many weeks of consolidation and anticipation, we finally broke the range support in Bitcoin and with it sent shockwaves through the rest of the market. As such, there is plenty to cover in today’s post.
I will be looking at Bitcoin, Ethereum and Monero, as usual, as well as providing an update on EOS and outlining a lowcap opportunity in adToken:
Bitcoin:
Price: $8,149
Market Cap: $146.398bn
Thoughts: Alas, the much-anticipated day arrived this past week, as Bitcoin took a tumble, crashing through the double bottom at $9,080 that had held price up since July. We did not get the fakeout to the upside of the range that I was hoping to fade; instead, price opted to break down early in the week, not only moving below $9,080 but closing the day well beneath it, printing a legitimate downside breakout. As you will know if you regularly read these posts, I was expecting a swing-failure to print below this range, trapping breakout shorts, but the close of the Daily candle in the mid-$8ks negated this idea and I am now expecting price to move a little lower before we form a bottom.
As can be seen on the chart, price closed above the 200-day moving average on the first test, but has since closed below and is struggling to reclaim the level. Meanwhile, we have some more liquidity available beneath $7500, which is a Weekly swing-low with some near-enough equal lows printed on lower timeframes – many will be expecting this low to hold, and so I would not be surprised if price looks to form a spring for a reversal from below this level. This would align with a move towards the 360-day moving average, and I have spot bids placed in this range. As for a leveraged position, I would like to see a swing-failure of the $7500 lows to get long into. Beyond this scenario, I would also look to get long on a reclamation of $9100 if we fail to move any lower from here…
Ethereum:
ETH/USD
ETH/BTC
Price: $171.60 (0.02108 BTC)
Market Cap: $18.523bn (2,275,794 BTC)
Thoughts: As expected in last week’s Market Outlook, Ethereum found some resistance this past week and dropped off, although the move in ETH/USD was certainly exaggerated by the drop in Bitcoin.
Looking at ETH/USD, we can see that despite the violence of the drop that came in conjunction with BTC/USD’s tumble, price has failed on several occasions this past week to close below the $163 swing-low, printing a swing-failure here. However, price has lost both its 200-day and 360-day moving averages, although looking at recent price-action these do not seem to be respected of late on either side. Lending further weight to the bullish scenario is the bullish divergence printed on the wick down to $151. As such, I am expecting some consolidation here followed by another leg up to test $230.
Looking at ETH/BTC, we can see that price printed a swing-low around the 50% Fib retracement, as expected in last week’s post. Price has since rallied back towards the highs from the prior week, and I am expecting further bullish continuation from here to test 0.0245 BTC.
Monero:
XMR/USD
XMR/BTC
Price: $56.25 (0.00691 BTC)
Market Cap: $969.32mn (119,083 BTC)
Thoughts: Monero looks very bearish to me at the moment, unlike a lot of other altcoins, with XMR/BTC playing out the exact bearish scenario anticipated a couple of weeks ago, as it tested and rejected from 0.0077 BTC and has since dropped off back towards yearly lows. There appears to be no respite for holders at the moment and it does not look attractive to me to enter any positions; further, XMR/USD has lost the 200-day and 360-day moving averages and formed significant trendline resistance. Price has, however, come into prior resistance turned support at $55.72 – if we can form a bottom here and start pushing up, I’ll reassess, but given my expectations for BTC/USD and the weakness in XMR/BTC, I expect Monero will continue to underperform.
EOS:
EOS/USD
EOS/BTC
EOS/ETH
Price: $2.81 (34,545 satoshis)
Market Cap: $2.625bn (322,562 BTC)
Thoughts: EOS did not perform as expected this past week, with price trading more weakly than Ethereum and moving EOS/ETH back to the bottom of its recent range.
EOS/USD rejected at trendline resistance, making new lows beneath the swing-low at $3.03 and closing firmly beneath it. Until this level is reclaimed, I would not enter any longs. Looking at EOS/BTC, we can see that price did fail to make new lows on the dump, bouncing above 0.0003 BTC, with RSI continuing to rise with every new swing-low. And EOS/ETH, as mentioned earlier, returned to the bottom of the range as Ethereum outperformed; however, just as the pair printed a swing-failure above the range resistance at 0.0215 and fell off, it also printed a swing-failure below range support at 0.0163, along with a bullish divergence. As such, perhaps now is the time for EOS to return to outperforming Ethereum, at least against Bitcoin. That said, if the pair closes below 0.0163, I expect we will see significant weakness in EOS and in altcoins, overall.
adToken:
ADT/BTC
Price: $0.0026 (32 satoshis)
Market Cap: $2,088,029 (257 BTC)
Thoughts: After many weeks without any interesting, longer-term opportunities, I believe we are now starting to see some attractive prices across-the-board. One of these is adToken, which is a lowcap coin that made all-time lows this summer, but has since found what appears to be a bottom at 28 satoshis, forming a range between here and 37 satoshis that has been in play for 55 days. RSI has been rising since July, and I now expect that this is an accumulation range, from which we are likely to begin a reversal. As such, I am buying in this range, though liquidity is very low at present. I will be buying with a soft stop-loss below 27 satoshis; if price begins to close multiple days below range support, I will exit. My first target is 77 satoshis. Let’s see what happens…
And that concludes this week’s Market Outlook.
I hope you’ve enjoyed the read, and, as ever, feel free to leave any comments or questions below.
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