Market Outlook #67 (20th January 2020)
Hello, and welcome to the 67th Market Outlook.
In today’s post, I will be covering Bitcoin, Ethereum and Monero, as usual, plus taking a look at recent price-action in Zcash, Stratis, Constellation and Piratechain.
Market Cap: $158.403bn
Thoughts: As expected in last week’s Market Outlook, Bitcoin spent the past week rallying to new highs, eventually finding resistance around $9000.
Looking at BTC/USD, we can see the clear break to new highs early in the week, with a strong close above $8472 on solid volume. Price then spent some time pressing up against resistance at $9090 before poking above it and printing a bearish engulfing of the prior day. As we have seen from today’s price-action, price has refused to follow through on the engulfing and is instead consolidating above $8500; whether price falls off for the remainder of the week, as one might well expect given the bearish candle at significant resistance, is uncertain for now, as we have not yet closed below the resistance turned support at $8472 – this level giving way would be my primary indicator that the rally is likely over, at least short-term.
If, however, we see price begin to retest that $9090 level this week, I expect we may see some further continuation into the heavy resistance zone between it and $9470, which is where I would expect supply to come in strong and price to reject. Looking at possible areas to get long, I think any pullback towards the 360-day moving average would be prime for picking out a long setup on a lower timeframe.
Price: $168.79 (0.0193 BTC)
Market Cap: $18.485bn (2,113,716 BTC)
Thoughts: Ethereum turned its fortunes around over the past week, compounding its returns against the Dollar by outperforming against Bitcoin, leading to a significant push above important resistance on both pairs.
Firstly, from ETH/USD, we can see the strong continuation candle after the albeit weak close above trendline resistance from July. This single daily candle also pushed price above support turned resistance at $161, with price then retesting it as support and continuing up to test the 360-day moving average at $177, where it took a breather. Price remains in consolidation between these two levels and I would be looking to get long at $152 if price does begin to take a fall here. If, however, we get a close above the 360MA, I would look to rebuy a retest of the $180 area.
Looking at ETH/BTC, my concerns about its lack of clarity were answered with a huge daily candle, closing above trendline resistance from November; a day that also experienced solid volume. Since then, price has climbed more gradually, currently pressing up against support turned resistance at 0.0195. I think the reclamation of 0.0188 was more significant, however, and I am now very much bullish on the pair moving forward.
Price: $65.87 (0.0076 BTC)
Market Cap: $1.154bn (132,234 BTC)
Thoughts: At long last, Monero has conquered its most important levels.
Looking at XMR/USD, we can see the sharpness with which price has ascended since the bottom in December, rallying over 50% since then. Over the past week, price continued its ascent, reclaiming support turned resistance at $66 and briefly climbing above the 360-day moving average, where it now consolidates. Volume has been huge of late and I expect that this rally will continue towards $75 before month-end.
Looking at XMR/BTC, the pair has finally broken above 0.0074, after being suppressed by the level for months. Price is now pressed right up against trendline resistance, above which there are now clear skies. I am eagerly anticipating a move above 0.0081, where I will look to get long. Again, volume is very promising here.
Price: $54.87 (0.0063 BTC)
Market Cap: $472.815mn (54,217 BTC)
Thoughts: Zcash has experienced somewhat of a winter resurgence, rallying harder than most largecaps over recent weeks.
Looking at ZEC/USD, we can see how trendline breakouts have failed in the recent past, but the price-action since January speaks for itself, with the pair having rallied over 100%. In fact, it has reclaimed three important levels of prior support in the process. Moreover, it is now consolidating at the 360-day moving average, having briefly traded above it. Due to the force of the rally, I would not be surprised to see a dip at this area of resistance if ZEC cannot continue to outperform BTC, but this is perhaps the strongest it has ever looked when one accounts for volume.
Looking at ZEC/BTC, similar price-action is present, with price having rallied into trendline resistance from December 2018 and struggling at support turned resistance around 0.0067. I would be looking to get long a move back to 0.0053. Further, if the pair is able to close above the 360-day MA at 0.0079, I would become very bullish short-term, given the pair’s reluctance to trade above it throughout its history.
Price: $0.34 (3901 satoshis)
Market Cap: $33.902mn (3,888 BTC)
Thoughts: Stratis remains a textbook picture of a classical market cycle, having spent over five months inside a range between 3000 and 5800 satoshis, with price now trading at the support end of the range, having fallen off from its test of resistance back in December. I am expecting a breakout to the upside in this pair when midcaps begin to move, with buys within the range seeming very attractive from a reward-to-risk perspective. For those more risk-averse, await a breakout and close on strong volume above 6000 satoshis.
Price: $0.01 (121 satoshis)
Market Cap: $10.442mn (1,198 BTC)
Thoughts: Constellation has suffered of late, having had an immense run from its lows last year, with price now back to retesting its original breakout are above 70 satoshis. In fact, as can be observed on the DAG/BTC chart, its fall has recent culminated in a retest of the 360-day moving average, which led to a bullish hammer being printed. More importantly, we can also see that the entire move down from 280 satoshis has occurred on falling volume, indicating that this is a low-volume pullback within a larger bull cycle. We can see bullish divergence forming on RSI at current prices and I would expect that buys here will be rewarded in the coming months, particularly following the coin swap at the end of this month.
Price: $0.036 (415 satoshis)
Market Cap: $5.165mn (591 BTC)
Thoughts: PirateChain is a lowcap that I am very much a fan of, given its privacy-first approach and its undervaluation. Price is currently sitting inside a consolidation range between 300 satoshis and 500 satoshis, with the latter having been range support prior to the major bull cycle. The pair is also trading below the 360MA but is trading on rising volume; I am looking at a break above 800 satoshis as the catalyst for a new bull cycle for PirateChain.
And that concludes this week’s Market Outlook.
I hope you’ve enjoyed the read.
As ever, feel free to leave comments or questions below!