Market Outlook #82 (24th June 2020)

Hello, and welcome to the free edition of the 82nd Market Outlook.

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

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Let’s crack on:

Bitcoin:

Weekly:

Daily:

Price: $9650

Market Cap: $177.88bn

Thoughts: Bitcoin remains in the eternal range between $8,000 and $10,500, despite recent whispers of PayPal integration.

Beginning with the weekly chart, we can see that price is now beginning to print somewhat of an ascending triangle into resistance above $10,000, on continually declining volume. Nothing much has changed for me in my outlook, given that price remains nestled in this range. Looking at this, I still think we pop $10,600 first, before anything else major occurs. If we reject up there and start to close back below $10k, I’d see it as a liquidity sweep to fill short orders for significant downside (perhaps to retest the yearly open at ~$7160). If we close above it and thereby close above that all-important trendline resistance also (on good volume, might I add), I think we will begin the bull run that everyone is waiting for, with that $14k high as the first target. Moreover, inside week failure printed on Sunday night, giving further validation to the idea that the liquidity at the top end of the range will be swept. The invalidation for a sweep of $10,600 is more visible on the daily, so let’s move on to that timeframe.

Turning to the daily, here we can see the range between $8100 and $10.6k more clearly, with price clearly being supported by the 360-day moving average as the swing-lows from each week are brought higher. We can also see that last week’s inside week failure has been followed by a reclamation of $9580 as of yesterday, with price now pressing up against short-term trendline resistance. Given the inside week failure and the subsequent reaction, I think we see a breakout above this trendline today or tomorrow followed by a move back towards $10,100 later in the week. Looking at this timeframe, the invalidation for me is if we see a daily close below the 360dMA, which has been supporting price throughout this consolidation. If we break and close below the MA on solid volume, I’d expect to see a retest of $8k at the least.

Ethereum:

ETH/USD

Weekly:

Daily:

ETH/BTC

Weekly:

Daily:

Price: $244.25 (0.0253 BTC)

Market Cap: $27.226bn (2,821,548 BTC)

Thoughts: Ethereum is once again looking ready to lead Bitcoin higher, as ETH/BTC pushes up from local support.

Looking at ETH/USD on the weekly to begin with, we remain firmly below the 200-week moving average and trendline resistance, but we can see that price has flipped the prior high at $228 as support, albeit on declining volume. I am still waiting for a close above $253 to start looking at intraday longs all the way up to $290 and probably higher.

Turning to the daily for the Dollar pair, there is a clear short-term range that formed between $228 and $253, with a sweep of the range low last week into $217 providing the impetus for the recent bounce back above short-term trendline support towards the top-end of the range. Although it would be stupid to enter any longs here, given how close we are to a confluence of resistance levels, I do not think $253 will hold firm given another test and I have marked out a trajectory showing where I would like to get long (a breakout > retest of $253).

Now, looking at ETH/BTC, we remain firmly above weekly trendline resistance, having seemingly reclaimed the top end of the pivot zone at 0.0245 as support. This should form a base for a move above 0.0261, with a weekly close and breakout of the declining period of volume likely to lead to 0.0286. Turning to the daily chart, we can we a very traditional bull flag formation at resistance. Now, as you probably know, I tend to be a little bit suspect of traditional patterns, as we often see a false breakout or sweep before the real move occurs; as such, I would not be surprised to see 0.024 swept before a breakout to the upside. That said, given the current macro sentiment that is growing into fervour around DeFi, perhaps any notion of short-term price-action should be thrown out of the window. If we do see a weekly close above 0.0261, I think the growth of the DeFi narrative will likely drive Ethereum above 0.042 over the coming months.

ZCash:

ZEC/USD

Weekly:

Daily:

ZEC/BTC

Weekly:

Daily:

Price: $59.14 (0.00613 BTC)

Market Cap: $558.61mn (57,865 BTC)

Thoughts: ZCash has had a history of disappointment for holders, many of whom have held through one of the worst bear markets for any major altcoin. Why? Because they don’t consider emission, which, for ZCash, has historically been very high. That said, there is a chance the tide is turning.

Looking at ZEC/USD, we can see that price is pressing up against trendline resistance, like many other majors, having swept the 2019 low at $24.40 during the mid-March capitulation of this year, hitting a new all-time low below $21. Price has recently reclaimed support at $45.20, as well as the 360dMA, which is now acting as support. Moreover, trendline support from March 2020 is now converging with trendline resistance from June 2019, with a breakout to the upside looking likely. If we see a close above $57, I’d expect to see $77 retested.

Turning to ZEC/BTC, price has been capped by trendline resistance since February 2018, with price now pressing up against both that resistance and more recent trendline resistance from earlier this year. Volume is declining but price has held firmly above prior resistance at 0.0047. The 200dMA and 360dMA have also converged, with price above the latter for the first time in years. As we have seen with other altcoins recently, this has often been the catalyst for a decent rally. If we see price pop above both trendlines and close on good volume, I’d expect to see a retest of 0.0079; above that, I think ZCash would likely go parabolic.

And that concludes this week’s free Market Outlook.

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