Market Outlook #80 (9th June 2020)

Hello, and welcome to the 6th instalment of my premium Market Outlook and the 80th overall.

In this week’s post, I will be covering Bitcoin, Ethereum, Tezos, Komodo, Matic Network, Tomochain, Fetch.ai, Celer Network and Chromia.

As ever, if you have any suggestions for next week’s post, feel free to leave them in the comments below.

There’s plenty to cover this week, so grab a coffee and settle in.

Bitcoin:

Weekly:

Daily:

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 weekly chart, we can see that last week actually had an outside range for the first time in several weeks, meaning that price wicked above the prior weekly high and below the prior weekly low – at least on BitMex, but more on that a little later. We are still firmly below trendline resistance from the all-time high, and we have now printed a third failed test of $10,600, though we fell a little short of it. The fact that this is now a triple-top makes me a lot more confident that we’ll see a raid of the level, at the very least. There will undoubtedly be many bears that have taken comfort in this triple top, particularly under long-term trendline resistance. Want maximum pain? Run them over before any potential downside. If we are to fall significantly from here, $10,600 would provide ample liquidity for short orders to be filled before a rug pull, trapping breakout buyers and taking out early sellers.

However, I maintain that whilst we are above the capitulation candle high at $8044, we are likely to continue moving higher rather than come to retest the yearly open (or move lower).

Turning to the daily chart, we can more clearly see the triple-top, 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.

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Ethereum:

ETH/USD

Weekly:

Daily:

ETH/BTC

Weekly:

Daily:

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 weekly for ETH/USD, we are still below trendline resistance from June 2019, as well as below the 200-week moving average. However, price closed last week firmly above the prior high of $228. Volume, much like for BTC/USD, has been declining for weeks, and it is quite evident that we are in for fireworks soon, in whichever direction they come.

Turning to 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 on the weekly, a similar volume pattern has been occurring, with gradually declining volume for two months whilst price has been below trendline resistance from early 2020. The latter part of that changed this past week as price closed above trendline resistance, as well as above the top-end of the pivot zone at 0.0245.

Looking at the daily for more clarity, 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.

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Tezos:

XTZ/USD

Weekly:

Daily:

XTZ/BTC

Weekly:

Daily:

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, the weekly chart hasn’t really changed all that much from Market Outlooks posted last month. We are still firmly above the low at $2.25 but price has failed to break cleanly above $3.05. However, we can see a small uptick in volume here of late and I will be looking for even more volume to come in if we break out above $3.05.

Turning to the daily for the pair, 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, there isn’t much to add here from the weekly chart, as price is still consolidating inside a tightening pennant, but 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.

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Komodo:

KMD/USD

Weekly:

Daily:

KMD/BTC

Weekly:

Daily:

Price: $0.775 (7,976 satoshis)

Market Cap: $93.143mn (9,586 BTC)

Thoughts: Komodo is starting to look rather bullish, but there is significant overhead resistance to overcome.

If we start with KMD/USD, from the weekly we can see that price has been rallying for several weeks since reclaiming $0.45 as support, on modest volume, but is now pushing up against trendline resistance from November 2019. Moreover, the pivot level at $0.88 is also capping price. However, if we do see a clean breakout, I would expect to see the top end of the long-term range be tested at $1.66.

More interestingly, KMD/BTC has broken out of trendline resistance from the all-time high back in January 2018, but is now coming into range resistance and the prior double-top at 9550 satoshis. From the daily chart, we can see that price has experienced a lot of volume inside this range and has recently closed above the 200 and 360DMAs, the latter of which has been capping prices for over a year. We have also been experiencing quite a lot of daily volume since mid-May relative to average daily volume earlier in the year, suggesting that there may be more validity to this rally than previous ones. I do think we’ll retest 9.5k as resistance, but there is every possibility that price stops there and returns to the mid-range. However, I am certainly going to be holding my KMD until we get a breakout above the range, with my first target being 13.6k sats.

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Matic Network:

MATIC/USD

Daily:

MATIC/BTC

Daily:

Price: $0.02 (208 satoshis)

Market Cap: $70.289mn (7,233 BTC)

Thoughts: Matic Network has had a couple of very violent pump-and-dumps in its short existence. The fact that it has only been around for 13 months but has experienced two bull cycles in that time (during a bear market) is quite interesting, as it indicates clear speculative interest in the project.

We don’t need a weekly chart here, given the limited price-history, but from MATIC/BTC we can see that the first bull cycle began upon listing in May 2019, with its all-time low forming during early trading at 48 satoshis. For several weeks, price rallied, hitting the all-time high of 575 satoshis. This led to violent rejection, complacency at 350 satoshis, and a prolonged bear cycle until support was found at 80 satoshis. Price then began being re-accumulated for several months, with another bull run beginning late in 2019. Price once again sprinted back to the all-time high but failed to break it, then retracing the entire move in a few days. Trendline support has continued to be respected however since inception, with recent support forming at 150 satoshis. Price has resistance overhead at 320 satoshis. From a risk/reward perspective, there arguably isn’t a better place to buy than the trendline support, but with the brutality of movements here I would be keen on a hard stop-loss below it.

There isn’t too much to add for MATIC/USD, as the pair is very similar to MATIC/BTC, but there is more recent trendline support from the capitulation in March and price is now back above the 200 and 360 DMAs. Whilst we are above $0.018, I would expect a retest of $0.028. Above that, we will likely see a very swift retest of the highs above $0.043.

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Tomochain:

TOMO/USD

Weekly:

TOMO/BTC

Weekly:

Daily:

Price: $0.47 (4,839 satoshis)

Market Cap: $33.361mn (3,433 BTC)

Thoughts: Tomochain is one of the project I am quite bullish on for the rest of the year into 2021, with a solid base being built at historical support at present.

Looking at TOMO/BTC, the weekly shows us the two prior cycles that have played out, as discussed in earlier Market Outlooks but the most important thing to note here is that the all-time low, formed in August 2018 at 2800 satoshis, has not been breached on successive retests. In fact, support appears to be rising, with the range low that preceded the December 2019 rally found at 3050 satoshis and the current range low being 3380 satoshis. Looking at the daily, we can see that the 200 and 360DMAs are currently capping price, along with prior support turned resistance, but once price breaks this level I would expect to see 6.4k satoshis retested and likely broken. The case for a new bull cycle would be invalidated on a break below the all-time low.

Looking at TOMO/USD, the only thing I’d like to highlight here is that it appears that price has been in a 400% range between $0.16 and $0.83 for almost two years. This is one of the longest ranges I have ever seen and the kind of alt/usd range that we can see preceded 2017/18’s rallies in coins like Monetary Unit – effectively, years of consolidation against the dollar followed by rapid, excessive expansion well beyond the prior all-time highs. Now, this is of course just hypothetical at present but I would expect to see any rally gain steam above $0.83.

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Fetch.ai:

FET/USD

Daily:

FET/BTC

Weekly:

Daily:

Price: $0.0275 (283 satoshis)

Market Cap: $20.25mn (2,084 BTC)

Thoughts: Much like Celer Network (below), Fetch.AI has been in a downtrend its entire existence and is beginning to look as though a reversal may be underway but there is significant resistance immediately overhead.

In fact, looking at the daily for FET/USD, we can see that trendline resistance has capped price since inception, along with the 200DMA, both of which now appear to be being tested. Moreover, the pre-capitulation support at $0.03 is also capping price as resistance. Any movement above this confluence of key levels would open up a more sustained rally towards $0.08.

Turning to FET/BTC, we can see that price formed a range for 169 days with 360 satoshis acting as support through later 2019 and early 2020. This level gave way in March and price has now formed a 3-month range with the all-time low at 169 satoshis acting as new range support, with 360 satoshis now range resistance. Above, we can see the 200DMA, above which price has never traded since inception. I am a buyer in this new range with a stop-loss at the all-time low. Onwards and upwards…

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Celer Network:

CELR/USD

Daily:

CELR/BTC

Daily:

Price: $0.0033 (34 satoshis)

Market Cap: $12.361mn (1,272 BTC)

Thoughts: As Celer Network only has a year of price-history, there is no need to look at the weekly chart here.

What we can see is that, similarly to FET, price has been in a downtrend for its entire existence. Looking at CELR/USD, price printed its all-time high at $0,.027 in May 2019, before falling for almost an entire year. A support base was found in January 2020 at $0.0033, but with March came capitulation and price fell to a new all-time low at $.00084. Since, price has recovered the entirety of the capitulation candle, forming trendline support and now pressing up against the pre-capitulation support (now resistance). Moreover, price is being capped by the 200DMA, as it has been its entire existence, but it does appear to be giving way. A clean break above the level would open up a move to test the 360DMA and, above that, the triple-top resistance at $0.0058.

Looking at CELR/BTC, naturally a similar pattern of price-action is seen here, though even more dramatic, with price falling from all-time highs of 625 sats to the all-time low of 18 satoshis in a year. What we are primarily concerned with, however, is the range that has formed down here for the past 3 months, with 35 satoshis acting as resistance, along with the 200DMA. I am a buyer here, with a soft-stop loss on a daily close below 18 satoshis. Risk-averse speculators may wish to wait for a breakout and retest of the 200DMA. I am looking for 110 satoshis as a minimum target…

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Chromia:

CHR/USD

Daily:

CHR/BTC

Daily:

Price: $0.025 (257 satoshis)

Market Cap: $7.942mn (817 BTC)

Thoughts: Chromia is a lowcap I have been accumulating since February this year, as it is another of those that are sound fundamentally but have never experienced a bull cycle since inception.

In fact, we can quite clearly see that the all-time high was formed shortly after initial listing on both pairs, with price bleeding subsequently for months, until the all-time low on CHR/BTC was formed in January 2020 at 117 satoshis. Overall, price has been range-bound between support at 177 satoshis and resistance at 320 satoshis for the best part of the past six months. There was a false breakout in March but price returned to the accumulation range shortly after. I am still buying here and will likely be looking to hold for many months to come.

And that concludes this week’s Market Outlook.

I hope you’ve found some value in the read and thank you for supporting my work!

As ever, feel free to leave any comments or questions below, or email me directly at nik@altcointradershandbook.com.

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