Market Outlook #85 (20th July 2020)
Hello, and welcome to the free edition of the 85th Market Outlook!
In this week’s post, I will be covering Bitcoin, Ethereum and Tezos.
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Market Cap: $169.111bn
Thoughts: I needn’t remind you of the eternal range and this point and I won’t waste your time in an attempt to dissect this useless chop.
As you can see from the weekly, price remains tightly wound in an ever-contracting range, with volume continuing to decline each week on BitMex. I mentioned in recent outlooks that I am not really interested in BTC/USD at the moment, as I am waiting for price to provide the trigger for a new trend. Instead, our focus should be on the fruitful conditions for alts. Turning briefly to the daily, we can see how minor supports, resistance and trendlines mean very little in this environment and anyone foolish enough to trade this is likely getting chewed up. We remain firmly above the 200dMA and 360dMA but weekly ranges are currently being capped by $9550. Break above that and we’ll probably go and retest $10k, but I’m not overly concerned whilst price remains inside the larger range between $8100 and $10,600. The meat of the move will likely come when either side of that gives way.
Price: $237.81 (0.02593 BTC)
Market Cap: $26.596bn (2,899,790 BTC)
Thoughts: Ethereum has had a muted week, much like Bitcoin, with not much to add to last week’s commentary for either pair.
Nonetheless, let’s take a look at ETH/USD: here, we can see on the weekly that price remains capped by the 200wMA, trendline resistance and horizontal resistance at $253. It also appears to be holding up above the prior weekly resistance around $228. Just as with BTC/USD, volume continues to decline. Turning to the daily, one thing of particular interest here is that we have a pretty clean quadruple top in the $250-254 region and whilst ETH/USD remains above $217 and ETH/BTC continues to look bullish, I am expecting those highs to be taken out. *Note: please ignore the three Trendline Resistance tags; clearly I must have copy-pasted them without realising.*
Now, looking at ETH/BTC, here we find more consolidation but above the key trendline resistance and right at the level of previous weekly high ~0.0261. Volume has also broken out of its downtrend since the breakout above the trendline and I am expecting a push up towards 0.0286 to follow soon, as long as BTC/USD remains range-bound and doesn’t spoil the party. The daily makes the consolidation more apparent, as we did get a clean breakout above the previous weekly high and have since come back off a little to test prior range resistance at 0.0256 as support. As I mentioned last week, as long as we remain above that level, I would expect bullish continuation; falter here and retest 0.0256 as resistance and we’ll likely retest the range support at 0.024.
Price: $2.86 (31,221 satoshis)
Market Cap: $2.11bn (230,093 BTC)
Thoughts: Tezos appears to be lagging behind Chainlink, the latter of which recently rocketed to new all-time highs.
Looking at XTZ/USD, we can see the range that has formed between $2.25 and $3.05, with price failing on two attempts to close the weekly above range resistance despite poking above. That said, last week was one of the first high-volume weeks for the pair since March/April and if Tezos can catch a little momentum this week I would very much expect the range resistance to give way. From the daily, we can see that price came and swept $2.25 into the 200dMA and bounced all the way to the top end of the range, where it did close above and has now come back inside. I think if it stays above the midpoint of the range and minor reclaimed support at $2.64, we’ll see bullish continuation out of the range towards the all-time high, but I do think this will be driven by the XTZ/BTC pair.
Looking at XTZ/BTC, we can see on the weekly that price broke out below the pennant that had formed, but, having taken out the low at 25,600 satoshis, price reversed hard, closed the week back inside the pennant and has since spiked up into the trendline resistance. I have marked out a trajectory that I wouldn’t be surprised to see play out; some sort of consolidation inside the pennant for a couple of weeks followed by a breakout above and continuation to 40k satoshis over the coming weeks.
And that concludes this week’s free Market Outlook.
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