Market Outlook #73 (8th March 2020)
Hello, and welcome to the 73rd Market Outlook.
In this week’s post, I’ll be covering Bitcoin, Ethereum and Monero, as usual, plus take a look at Zilliqa, Constellation and COTI.
Market Cap: $159.783bn
Thoughts: In the previous Market Outlook, I mentioned that I was looking for a raid of $8200 before I looked to get leveraged long for a swing position. This has not changed and, despite the intraweek movements over the past few days, there has been very little change in Bitcoin’s price from last week’s close.
Looking at the Weekly chart, we can see that price is approaching trendline support from the previous cycle, which has held twice since (in late 2018 and late 2019). I think it is likely that this trendline will be retested in the next week or two, but, beyond this, there is little to say except that price remains range-bound between the Q4 2019 low at $6400 and the preceding high from June 2019 at $14000; it is also highly likely that this range remains in play at least until the halving event.
Turning to the Daily chart, here we can see that price left a clean double-top just shy of $10,600, as I have highlighted in prior posts, and that since then we have been breaking down in a classical manner, with a series of lower-highs and lower-lows, the most recent low of which came at ~$8400 last week. We did sweep the low at $8433, which led to this week’s counter-trend rally into prior support turned resistance at ~$9250, catching a bounce above the 360-day moving average. From the high at $9250, we rejected, now trading back down to the 200-day moving average and we are likely to now move below that swing-low at $8200, where, if we fail to break cleanly below, I would look to get long. I particularly like the $8000 level as a dip-buying spot, given the 61.8% fib confluence. Should we – if bulls step in early – fail to sweep the low at $8200 and print a higher-low above it, I would stay on the sidelines until we make a higher-high above $9250, reclaiming it as support.
Price: $230.75 (0.02637 BTC)
Market Cap: $25.384bn (2,900,912 BTC)
Thoughts: Ethereum, despite a brief intraweek rally, does appear to have found a top for now and I am expecting retests of significant support at lower prices over the next couple of weeks.
Looking at the Weekly chart for ETH/USD, we can see the clear breakout above trendline resistance, followed by resistance being found at $290 and price subsequently dropping off; right now, we look as though we’ll be getting a retest of the breakout area, possibly down at $200. I am expecting the trendline resistance to hold as new support and that a third higher-low will form above those at $80 and $117. Short-term bearish, mid-term bullish.
Turning to ETH/USD on the Daily timeframe, this looks like complacency forming at $250 and I have marked out the trajectory I am expecting. I would be looking for a move down into the prior resistance at $200, which has confluence with the 360MA and 50% fib; this is also likely to be supported by the trendline. A deeper, more accelerate dump could send us to $180 (confluence with prior resistance, the 61.8% fib and the 200-day moving average) but I think such a dip would be short-lived. I would get bearish on Ethereum if $180 was lost.
Turning to ETH/BTC, we can see a similar pattern of price-action, with a double-bottom at 0.0245 (the prior support that has been reclaimed, for now). Looking at the chart, I am unsure whether we hold above that level or wick below it into the demand zone at 0.0228. At the moment, this just looks like a flag, consolidating under resistance on declining volume, which is bullish. The fact that we have rejected a move below the 360MA twice is also very bullish. That said, we have printed a bearish hammer at resistance this week and I would expect 0.025 to be retested at the very least.
Price: $64.40 (0.007358 BTC)
Market Cap: $1.125bn (128,592 BTC)
Thoughts: Monero looks pretty awful against the Dollar, largely due to BTC/USD, but is in a nice spot on its Bitcoin pair.
Beginning with XMR/USD, we can see that it lost its 360MA last week but found support at the 200MA, bouncing to retest the 360MA at $70 as resistance. The resistance held and we look ready to move back to the prior support and 71% fib of the entire upswing at $59. This would present a high reward/risk long opportunity moving forward, in my opinion, as I believe the Dollar pair has bottomed and I am expecting the double top at $98 to be taken out in the coming months.
Turning to XMR/BTC, this is precisely the area I was looking for Monero to move back to for a retest. The 200-day moving average is sitting here at 0.0073, as is the original breakout zone and the 61.8% fib of the range between 0.006 and 0.0094. I expect this area to hold if Monero is to remain long-term bullish; closing back below 0.007 would be very much bearish and I would expect the low of the range to be taken out. I am a buyer here of spot, with a stop on a Daily close below 0.007.
Price: $0.0066 (76 satoshis)
Market Cap: $65.97mn (7,537 BTC)
Thoughts: Zilliqa has now been range-bound between 50 and 90 satoshis for over 7 months, with lots of volume appearing inside this range and the largest holders primarily adding to their positions. Price has reclaimed the 200-day moving average as support with the 360MA overhead as resistance just above 130 satoshis. I am expecting a breakout above range resistance at 90 satoshis to be followed by a test of the 360MA, where price will likely take a breather. Once we close above the 360MA, I will be confident that a new cycle has begun for Zilliqa. Buying in this range provides the greatest R, but those that are risk-averse should await a close above the 360MA before entering a position.
Price: $0.037 (420 satoshis)
Market Cap: $11.47mn (1,311 BTC)
Thoughts: COTI has been flying since it broke out of its multi-month range in February, fueled by a Binance listing that has recently sent it to new local highs. Looking at the chart, we can see that 160 satoshis provided range resistance for several months before price broke out, with a close above the 200MA for the first time in its history providing further fuel for the rally. We rallied up just shy of prior support turned resistance at 480 satoshis, with price rejecting at 400 satoshis and retesting old support at 215 sats. From this point, the second leg of the rally began, with recent movements sending us back above 400 satoshis, with 480 satoshis in sight. I expect the overhead resistance to stall the rally for a while, but ultimately I am expecting all-time highs this year.
Price: $0.0156 (180 satoshis)
Market Cap: $15.777mn (1,803 BTC)
Thoughts: Constellation has a chart that is very similar to COTI, with fundamentals that are equally strong. We can see a similar multi-month accumulation range that preceded the first rally of the coin’s first every bull cycle, with the initial breakout occurring in September 2019 above the 360MA and range resistance at 70 satoshis. This led to weeks of rallying, culminating in a high at 290 satoshis in late Nov/early Dec 2019. From that point, price took a breather, dropping off to retest the 360MA at 82 satoshis back in January. Since, we have rallied hard, with price now battling the prior support turning resistance and 38.2% fib of the downswing at 180 satoshis. If we close the Daily above 190 satoshis, I think we will move swiftly towards the high at 290 satoshis and the next target would be 350 satoshis. Ultimately, just like COTI, I am expecting all-time highs this year.
And that concludes this week’s Market Outlook.
I hope you’ve found some value in the read!