Market Outlook #63 (1st December 2019)
Well, what a couple of weeks we’ve had. Last week’s Market Outlook was altcoin-specific, so there is quite a lot to catch up on.
In today’s post, I’ll be covering Bitcoin, Ethereum and Monero, as usual, plus taking a look at a possible long-term opportunity in Zilliqa.
Market Cap: $132.978bn
Thoughts: So, my original idea for Bitcoin throughout November was that we would bottom above $8,000, finding support at the area at which price turned Daily market structure bullish in October. I mentioned that, if price closed the Daily below $8,000, this idea was negated and we would likely take out the range low at ~$7,400. Price indeed was unable to hold above $8,000 and the past couple of weeks saw a collapse to below $7,000, with price printing a short-term bottom at $6,500, as can be seen in the chart above.
Now, we are in a particularly interesting area, as price failed to remain below the 360-day moving average as the rounded bottom formed. Further, the bounce over the past few days has taken price back into support turned resistance at $7,700 and trendline resistance from October. It appears that price is rejecting here, which would open up another move back below the 360MA, perhaps to retest the $6,500 bottom. I expect this would be rather catastrophic for Bitcoin; losing the 360-day moving average after originally breaking out above it back in May would be very bearish, which, coupled with consistent lower-highs and lower-lows would likely open up a move back to $5,850. I tend to use the 360MA as a measure for the market cycles of Bitcoin, as the second chart displays; we can clearly see that, once price closes above the 360MA, it respects it until the cycle ends.
Whilst this current bearish structure remains firm, however, this is what we must expect. Until price can close above trendline resistance and the horizontal resistance at $7,700, I remain bearish in my outlook.
Price: $147.93 (0.0201 BTC)
Market Cap: $16.088bn (2,186,987 BTC)
Thoughts: Similarly to Bitcoin, ETH/USD followed the collapse over the past couple of weeks, falling back below its 360-day moving average and closing below support at $152. Price fell to $131, where it bottomed and bounced back up to support turned resistance at $161. There does not appear to be much support left below $125, so it is vital that price is able to remain above here. Given how Bitcoin looks at the moment, however, it appears that ETH/USD is poised for more downside. The following support would be at $100, which is a long way away…
Looking at ETH/BTC, price is currently range-bound between 0.019 and 0.023, with no clear indication present as to its future direction. Until we start to break towards that range resistance and close above it, I fear the possible downside in Bitcoin will be exaggerated in ETH/USD (as occurred over the past week thanks to ETH/BTC bleeding with it). As mentioned in prior reports, remaining above 0.0188 is vital, as a break below this level would likely take price to the bottom of the larger range at 0.016.
Price: $53.01 (0.0072 BTC)
Market Cap: $918.886mn (124,934 BTC)
Thoughts: Monero, on the other hand, acted exactly as expected, having rejected numerous resistances on several occasions across both its pairs. Having struggled at trendline resistance, XMR/USD dropped off hard, falling below $52 support all the way to $45.50, where it bottomed. Price has since reclaimed $52 but is once again struggling below trendline resistance.
XMR/BTC remains in conflict with the 0.0074 level that I have mentioned is the most critical at present. This is acting as significant resistance at the moment, with price failing on several occasions to remain above it. Moreover, trendline resistance from all the way back in April is creeping up on price, and I expect December will be make or break for the pair. I remain bearish until 0.0074 can be reclaimed and turned into support once again.
Price: $0.005 (70 satoshis)
Market Cap: $44.434mn (6,041 BTC)
Thoughts: Zilliqa, like many midcaps, is looking very attractive for a cyclical position. Across both its pairs, its beginning to show signs of being in the transition phase between cycles, although it is the BTC pair that we are most concerned with. For context, I have provided the USD pair, but I expect that the movements in Bitcoin will have more influence over its price until ZIL/BTC breaks out of its current range.
Looking at ZIL/BTC, we can see that price broke below long-term support at 345 satoshis back in spring, bleeding out through summer into autumn and ultimately setting an all-time low at 50 satoshis. Price has been range-bound between 50 and 90 satoshis for the past 114 days (almost 4 months). This has occurred with periods of high buying volume. As such, I am buying ZIL in this range with a view to hold until at least the 360-day moving average is tested above 200 satoshis.
And that concludes this week’s Market Outlook.
I hope you’ve enjoyed the read. As ever, feel free to leave any comments below!