Market Outlook #80 (10th June 2020)

Hello, and welcome to the 80th Market Outlook.

In this week’s post, I will be covering Bitcoin, Ethereum and Tezos.

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Let’s crack on:

Bitcoin:

Price: $9712

Market Cap: $178.935bn

Thoughts: Bitcoin continues to chop at resistance and chew up anyone attempting to trade it intraday.

Looking at the daily chart, we can clearly see the triple-top at $10,600, which was formed by a spike early last week that cleared out the highs of the preceding weeks at $10,125. Following this, we got an immediate rejection and BitMex took this as an opportunity to find more liquidity than other exchanges. Another reminder to steer clear of Mex if you didn’t have enough reasons already… In effect, price bazooka’d down to $20 below the prior weekly low at $8620, ensuring any longs with resting stops beneath that low were taken out. On other exchanges, price barely broke below $9300. Nonetheless, BitMex is the dominant derivatives exchange and so it is important to know what price is doing there before looking elsewhere.

So, what do we have? Price cleared out top-side liquidity and then BitMex cleared out the prior low, before closing the day back above $9400. Since then, we have had several days of tight consolidation below $10,125. Volume is declining and many are split in their thoughts on short-term trajectory. For me, this remains a no-trade zone, as we are pressed against long-term resistance. We have also not broken down yet, so there is no need to jump the gun and enter shorts in my opinion. Patience.

Ethereum:

ETH/USD

ETH/BTC

Price: $243.52 (0.02504 BTC)

Market Cap: $27.08bn (2,787,084 BTC)

Thoughts: Ethereum is in a similarly coiled and precarious area to Bitcoin, with plenty of resistance above but no reason to short just yet.

Looking at the daily for the Dollar pair, we can see that price finally took out the pre=capitulation swing-high at $253. Price has since been consolidating below the trendline resistance, supported by short-term trendline support that formed on the bounce off of the 200 and 360DMAs. I am currently still expecting higher prices, as I am still expecting $10,600 to be breached on BTC/USD. As such, I have depicted a potential trajectory that would allow us to get long for a $36 move into the lower-high at $290; I’m just waiting for a daily close above the trendline on decent volume. If we start to break down before that and fail to conquer the trendline resistance, I’d look for a retest of $228 as resistance to get short.

Turning to ETH/BTC, we can see that there has been a clear breakout above trendline resistance at that price has been consolidating on declining volume since. As we have broken out, I am now eyeing that flat top of equal highs at 0.02612. Break above that and I think we go for new highs above 0.0286. However, I have also depicted a possible fakeout > breakdown that we could see play out if things turn sour, with a raid of the equal highs followed by a swing-failure and rejection. If this happens, I will be shorting and looking for significantly lower levels.

Tezos:

XTZ/USD

XTZ/BTC

Price: $2.89 (29,762 satoshis)

Market Cap: $2.118bn (217,959 BTC)

Thoughts: Tezos is currently flatter than the majority of majors, with no real sense of direction at all at the moment.

Looking at XTZ/USD, we can see that price remains within an ascending triangle that has been playing out for a few weeks at this point, although we are swiftly coming to decision time. I am anticipating a breakout to the upside, in line with my views for BTC, but we may well get a false breakout to the downside first, as classical patterns rarely play out to a tee.

Now, if we look at XTZ/BTC, on the daily we can see that a range has been formed between 28.3k satoshis and 31.5k satoshis. There was a false breakout of range resistance last week, but price has found its way back inside again. If we do get a clean breakout above 31.5k sats, I would expect price to find its way towards trendline resistance and that may be a nice intraweek long setup.

And that concludes this week’s free Market Outlook.

I hope you’ve found some value in the read!

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