Market Outlook #79 (1st June 2020)
Hello, hello and welcome to the 79th Market Outlook.
In this week’s post, I’ll be covering Bitcoin, Ethereum and NEO.
If any of my regular readers would like to take a look at the premium version of this post, in which I provide my thoughts on half a dozen of such alts and some analysis on Altcoin Market Cap, you can find it here.
Anyway, let’s crack on:
Market Cap: $176.244bn
Thoughts: Well, despite another week passing by, Bitcoin remains coiled inside a tightening range.
Looking at the daily chart, there is clear short-term trendline resistance that has formed over recent weeks, with each high lower than the previous. We also printed a higher-low last week at $8585, above the $8100 range low from a couple of weeks prior. This contracting range has been occurring on decreasing volume, as such patterns often do, with the current tussle being with the old weekly high at $9470, which I have repeatedly mentioned as an important line in the sand. The fact that we are now forming a mini-consolidation below short-term trendline resistance – a fractal of the weekly pattern unfolding – makes me think that we will see an upside breakout soon, but I doubt it will be as easy as that. We may get another dump into the 360-day moving average before the pattern resolves, but I am expecting $10100 to be retested soon. If price is able to close above $10100, a move into the double-top at $10600 should swiftly follow. Close and hold above that and it is clear skies and I believe the macro bull run is underway.
However, this is by no means guaranteed. Despite the consolidation pattern unfolding, we may well still be making a lower-high on the weekly. My invalidation for the bullish scenario would be a daily close below $8100, with a more aggressive flip to short possible on a close below $8585.
Price: $237.94 (0.02483 BTC)
Market Cap: $26.456bn (2,759,455 BTC)
Thoughts: Ethereum is leading the charge somewhat as it has broken out of consolidation before BTC/USD, driven by rallies in ETH/BTC.
Now, looking at the daily for the dollar pair, we can see that price closed firmly above that high at $228 that I was so keenly watching, with consolidation occurring above the high. Price didn’t quite reach the pre-capitulation swing-high at $254 before rejecting but I am now looking for a move into that high over the coming days. It is at that point that I will be paying most attention, as there are two possible scenarios that make for high R plays; either we see a breakdown at the trendline resistance after taking out $254, which I would look to get short on, or we close above the confluence of levels and rally into $290.
Turning to the daily for the BTC pair, there is a clear breakout above trendline resistance on this timeframe and the 200DMA looks to be crossing over the 360DMA from below for the first time in over a year. I have marked out the area I was discussing last week at 0.023, which, as we can see, preceded a swift move up as soon as it was reclaimed. If we start to see a similar consolidation here, I’d expect to see another leg up above 0.0261. If we fall here and close back under 0.0245, I’d be looking for a retest of the consolidation at 0.023 before price decides on a direction. I am, however, leaning bullish here, as trendline resistance is failing to be respected.
Price: $12.40 (0.00129 BTC)
Market Cap: $874.942mn (91,271 BTC)
Thoughts: NEO has been very similar in its movements to many majors, as one might expect.
Looking at the daily, we can see a reclamation of the 200DMA and 360DMA and pre-capitulation support at $10.25. I’d expect to see a move up from here into that resistance at $13.86. Above that and I think we move for that higher-high at $17. Beyond that, I am looking at $24.56 as major resistance. However, if price loses the confluence of levels at $10.25, I’d expect a retest of $6.50 as support.
The NEO/BTC chart is quite a bit more attractive: on the daily, you can see the trajectory I am expecting over the coming days, with short-term trendline support now in place and price having reclaimed the 200DMA and 360DMA. There is also a clear break in market structure to the upside, with price having broken and closed above 0.0012. I am looking at 0.00153 as a short-term upside target.
And that concludes this week’s Market Outlook.
I hope you’ve found some value in the read!
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