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Market Outlook #87

Market Outlook #87 (3rd August 2020)

Hello, and welcome to the 87th instalment of my Market Outlook.

In this week’s post, I will be covering Bitcoin, Ethereum, Tezos, Cosmos, Komodo, COTI, ARPA Chain, VITE and Pirate Chain.

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

Bitcoin:

Weekly:

BTCUSDWeekly

Daily:

BTCUSDDaily

Daily (2):

BTCUSDDaily2

Price: $11,161

Market Cap: $205.888bn

Thoughts: What a week it was for Bitcoin, with a significant weekly close confirming a breakout.

Beginning with the weekly, if you recall from last week’s post I was discussing the significance of a close above $10,900, as this would not only be a break beyond the triple-top but also the trendline resistance from the all-time high back in late 2017. We actually rallied as far as $12,200 but ultimately closed the weekly around $11,100 on the highest volume since May, confirming the breakout. Now, what should we be looking for from here? Well, the first thing would be for price to hold above $10,600, with the level acting as support (we saw instances of this already on the lower time-frames). As long as we remain above $10,600 on the weekly, I think we can expect continuation from here. That said, even a move back below the level wouldn’t be disastrous now that we have a confirmed weekly close above $11k; all we are looking for is for the trends of higher-highs and higher-lows to continue following the March reversal. Thus, unless we see a weekly close below the prior range support and pre-capitulation high around $8100, I remain bullish moving forward. The next obvious area of resistance is the $14k swing-high from last year, beyond which BTC would have a clear path to the all-time high. One step at a time, however.

Turning to the first daily chart, we can clearly see the strength of the breakout, with significant volume traded and price closing well above the triple-top and the trendline resistance. The following day saw a brief retest of the level as support and price climbed higher, ultimately peaking at $12,188. That, as we can see, was a particularly volatile day, with price spiking lower to retest $10,600 again as support. These sorts of moves are expected if we truly are moving towards all-time highs, as there were numerous shakeouts in the previous cycle too. Moreover, we have moved ~$3k dollars in a couple of weeks; a breather is perhaps needed, but not necessary. If we turn to the second daily chart, we can see that yesterday’s candle actually cleared out the low of the first retest post-breakout; given the sweep, I wouldn’t be surprised to see BTC just continue higher from here, having taken out any post-breakout longs that were foolish enough to expect $10,600 not to be retested. I would much prefer to see some sort of consolidation here between $10,600 and $12,200, at least for a short while, but given the momentum I am not too sure we’ll get that. Lastly, if we start to break and close back below $10,600, I’d expect $10,100 to be retested. Below that, the next support is the confluence of the 360dMA, 200dMA and range support at ~$8800.


Ethereum:

ETH/USD

Weekly:

ETHUSDWeekly

Daily:

ETHUSDDaily

ETH/BTC

Weekly:

ETHBTCWeekly

Daily:

ETHBTCDaily

Price: $383.41 (0.0343 BTC)

Market Cap: $43.11bn (3,779,083 BTC)

Thoughts: Ethereum is an absolute monster at the moment and continues to lead the entire crypto market forward.

Looking at ETH/USD, from the weekly we can see the strong weekly close on higher volume than the previous week, with the close actually peeking above the support turned resistance at $364 too. This is a critical level for the pair, as a sustained move above all but confirms a cyclical reversal with a higher-low and higher-high following the November 2018 bottom into the 2019 high at $364. We are now well-clear of the 200wMA and I would expect ETH to continue leading the rest of the market upwards, with the next major resistance all the way up at $550. Turning to the daily, we can see that price does appear somewhat stretched following the breakout above trendline resistance and range resistance at $254 but I am very much expecting price to remain above the prior 2020 high at $290. Given how bullish ETH/BTC looks, I wouldn’t be surprised to see $290 left untested as support, giving no opportunity for a cheap long. We also have trendline support from the March capitulation that I am expecting ETH to hold above, though there is plenty of room for consolidation here before it is tested.

Turning to ETH/BTC, the weekly confirms for me the cyclical reversal for the pair and thus for altcoins on the whole, with a series of higher-lows and higher-highs beginning in Q4 2019. More importantly, this past week saw the highest weekly volume on record for the pair on Binance, cementing its position as the market leader right now. I am now looking at that 0.042 area as the next resistance, which happens to be the high that preceded 2019’s capitulation; close above that and I think we get a swift retest of 0.054 as resistance. Turning to the daily, we are currently at minor resistance but the rising volume and retest of 0.0286 as support followed by a strong bounce indicates that we won’t be stopping here; however, I wouldn’t be surprised to see a break above 0.035 be followed by a brief dip and consolidation. Interestingly, we can clearly see the steepness of the rally increasing now, as is often the case with long-term reversals. Onwards and upwards. Unless we break back below 0.0286 I see no reason to be bearish on Ethereum.


Tezos:

XTZ/USD

Weekly:

XTZUSDWeekly

Daily:

XTZUSDDaily

XTZ/BTC

Weekly:

XTZBTCWeekly

Daily:

XTZBTCDaily

Price: $3.03 (27,230 satoshis)

Market Cap: $2.14bn (201,100 BTC)

Thoughts: Tezos looks a little bit confused on its dollar pair but looks primed for more upwards movement against BTC.

Beginning with XTZ/USD, we can see the multiple failures to close the weekly above $3.05 since April but volume is starting to come in here and price is consolidating at resistance. Once we see a close above $3.05 on the weekly (perhaps this week?), I’d expect to see a new run for the all-time high begin. Ultimately, the pair remains in a bullish trend with a clear series of higher-lows and higher-highs. Unless we break and close below $2.25, there’s not much bearish about the pair. If you look at the daily, you can even see a bull-flag playing out right at range resistance, with price also remaining above the 200dMA. I’m expecting an upside breakout, though primarily due to the position that the BTC pair finds itself in.

So, looking at XTZ/BTC, another lower-high was printed a couple of weeks ago and price has made its way back to range support around 26k satoshis, holding above critical support at 24k satoshis for now. If we look at the daily, I have provided a long setup that I am taking myself, as price is at range support and looking ready to break higher; whether it can break new highs I don’t know for sure, but I do think it’ll retest that trendline resistance. The invalidation here is very clear, with a break and close below 24k satoshis spelling disaster for the pair.


Cosmos:

ATOM/USD

Weekly:

ATOMUSDWeekly

Daily:

ATOM/BTC

Weekly:

ATOMBTCWeekly

Daily:

ATOMBTCDaily

Price: $3.98 (35,313 satoshis)

Market Cap: $756.33mn (68,144 BTC)

Thoughts: Cosmos appears to have played out precisely as expected in Market Outlook 83.

As I mentioned in that previous post, there were a couple of clear trades available to us in ATOM/USD, with the overall trajectory moving towards trendline resistance followed by a retest of the breakout area. We have now seen this play out perfectly, with the pair now consolidating around trendline resistance with a current swing-high at $4.58. If we look at the daily, we can see that price rallied hard into trendline resistance on rising volume and has since been flagging as it retested the 360dMA and 200dMA, as well as old support at $3.28. This is an important confluence of levels and one which appears to be holding for now, with the pullback occurring on declining volume, as is textbook. I’d now want to see a close above $4.56 before getting involved again, with the next area of interest the 2020 high at $5.56.

Turning to ATOM/BTC, the confluence of the pivot at 47.2k satoshis and trendline resistance has capped the pair, with it now pulling back into the original breakout area at 33.2k satoshis. Bulls should be looking for a higher low to form in this area, which will likely prompt another run at trendline resistance and I don’t think the next test will hold. Once we see a weekly close above 47.3k satoshis, I think it is game on for the 2019 high, which will provide plenty of long opportunities. If we see ATOM break lower from here, however, that 25.6k satoshi bottom should hold, or else the pair would very likely retest its all-time low.


Komodo:

KMD/USD

Weekly:

KMDUSDWeekly

Daily:

KMDUSDDaily

KMD/BTC

Weekly:

KMDBTCWeekly

Daily:

KMDBTCDaily

Price: $0.653 (5857 satoshis)

Market Cap: $79.125mn (7,091 BTC)

Thoughts: Komodo is in a prime area for new buyers to step in or for existing positions to be topped up, in my opinion.

Looking at KMD/USD, on the weekly we can see a sort of inverse H&S unfolding above the support at $0.45, with the capitulation low at $0.19 being the head. Volume remains higher than the levels seen late last year but price is capped by the pivot at $0.88 and trendline resistance (or the neckline, for pattern traders). If we see a weekly close above $0.90, I think we see price continue on to the significant resistance between $1.66 and $2.06, which will be the real test. Close above that area and it is party time for Komodo.

Turning to KMD/BTC, we are back at the range support that has been holding price up for almost a year, with a triple-top having formed at 9,550 satoshis. Entries here provide high R, with a clear invalidation on a close below the range support on the weekly, with initial targets of the 9,550-satoshi resistance. If we start to see prices move beyond the triple-top, the next resistance is 12.8k satoshis, followed by 16.8k satoshis, which is the low that preceded the January 2018 rally. On the daily, we can see that the 360dMA continues to cap price and risk-averse speculators should probably wait until we see a breakout above that area before getting in. For those, like myself, who see Komodo as a long-term hold, any price below 8k satoshis is a deal.


COTI:

COTI/USD

Daily:

COTIUSDDaily

COTI/BTC

Daily:

COTIBTCDaily

Price: $0.042 (378 satoshis)

Market Cap: $21.72mn (1,946 BTC)

Thoughts: COTI remains one of my favourite projects in the space, delivering on its promises and more in recent weeks, with plenty of fundamental growth evident.

Looking at COTI/USD, we can see the bullish trend remains very much in play, with price having reversed the entire March capitulation and closed above the March high at $0.038 just a couple of weeks ago. Volume was significant on the breakout and price now appears to be retesting it as support. Trendline support is clear and I’d expect a test of $0.55 to follow in the coming weeks. Close above that level and it’s clear skies for a run at the all-time high at $0.128.

Turning to COTI/BTC, we are starting to see a longer-term cyclical reversal form with a gradually steepening rally out of the bottom. Price has recently found resistance at prior support around 535 satoshis, but has come back into the prior consolidation area, where it appears to be holding. I’d expect COTI to hold above the trendline resistance and the 200dMA below it, with another test of 535 satoshis expected relatively soon. Break above that level and the rally will, I imagine, begin to steepen, as disbelief turns into hope. This remains a project I buy on dips with a view to hold for many more months.


ARPA Chain:

ARPA/USD

Daily:

ARPAUSDDaily

ARPA/BTC

Daily:

ARPABTCDaily

Price: $0.0228 (204 satoshis)

Market Cap: $16.788mn (1,504 BTC)

Thoughts: ARPA isn’t a project I know anything about so I cannot speak to its fundamentals, but the chart is quite attractive in many respects.

Looking at ARPA/USD, we can see the V-shaped reversal from the March all-time low at $0.004, with price, as of last month, having closed on the highest recorded daily volume above its February 2020 high at $0.022. Price then rallied into resistance at $0.037 and formed a triple-top and has since come off, returning to the $0.022 breakout area. There appears to be a new range forming here, and I think as long as ARPA remains above $0.02 it is likely to continue higher to retest the triple-top. Ideal buys would be at $0.141, which is the original breakout area and the 360dMA and 200dMA confluence, but I don’t know if we’ll see it return there.

Turning to ARPA/BTC, this is the more attractive chart for me, with price not far off the breakout area and 360dMA/200dMA confluence at ~150 satoshis. We are currently trading about 25% above this area, but I’d expect that area to be front-run if ARPA gets another leg higher into 420 satoshis. That said, we are in no-mans land at present and I wouldn’t want to risk a buy right here.


VITE:

VITE/USD

Daily:

VITEUSDDaily

VITE/BTC

Daily:

VITEBTCDaily

Price: $0.024 (212 satoshis)

Market Cap: $11.02mn (993 BTC)

Thoughts: VITE is one of the low-caps that looks particularly interesting at current levels, being one of those projects that has spent the majority of its existence in a downtrend.

If we look at VITE/USD, we can see the all-time high formed on the first day of trading at $0.11 in August 2018 and price fell for months following it, before finding a bottom at $0.01. Price then rallied for several months, ultimately printing a lower-high at $0.046, before continuing its descent to $0.007 in November 2019. Another rally followed this but was short-lived, with resistance being found at $0.023; a historical pivot. March 2020 brought the final plunge into an all-time low at $0.005 and price has since reversed all the way back to $0.023, where it is currently consolidating, having broken and closed well above the 360dMA and trendline resistance. I think the pair very likely continues from here towards $0.046 as long as it holds above the multiple levels of significance between $0.014 and $0.018.

Turning to VITE/BTC, this chart reminds me a little bit of NKN/BTC, with a strong downtrend from early trading leading into a double-top and consolidation range, which then led to capitulation into a new range at all-time lows. Until a couple of weeks ago, price had never traded above the 360dMA and the breakout above this MA has brought with it rising volume as price trades into resistance at 240 satoshis. I am a buyer at this level, with a stop on a daily close below the 360dMA, looking for 314 satoshis as the first target but likely much higher at the 620-satoshi double top.


Pirate Chain:

ARRR/USD

Daily:

ARRRUSD

ARRR/BTC

Daily:

ARRRBTCDaily

Price: $0.035 (313 satoshis)

Market Cap: $5.73mn (513 BTC)

Thoughts: Pirate Chain is a fantastic micro-cap project, focusing on privacy and with a very attractive chart.

Looking at ARRR/USD, we can see that price played out a classic cycle that led to an all-time high at $0.29 in June 2019, but has since returned to the pre-cycle range support and all-time low around $0.015-$0.017. Price now appears to be breaking above the range-resistance at $0.036 that has capped it for most of this year, as well as the 360dMA, with a lot of volume coming in here. I think this is a low-risk, high-reward entry, with an initial target of $0.07.

I actually trade this pair solely against BTC, however, so let’s take a look at ARRR/BTC. If we look here, we can see a very similar cycle having played out with price trading near all-time low and range support that has been in play since November 2019 at 213 satoshis. I have been buying below the 200dMA and will be looking to hold this one for a cycle, but more risk-averse traders could wait for a breakout above trendline resistance and a reclaim of 530 satoshis as support before entering.

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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This Post Has 10 Comments

  1. Kayden Nguyen

    Hi Nik, I just read this report for the first time. The price of ARRR is not moving much yet since the report and it’s def still in the accumulation zone. I wonder you still accumulate this one?

  2. mikdek

    did we just get a breakout on NKN? Can you update us next week? Cheers, and thank you for all your hard work! Really appreciate the Premium Reports every week!

  3. massimo cortesi

    …and let’s not forget BTT , many thanks Nick!

    1. Nik

      Will make sure it’s in today’s post 🙂

  4. Christopher Garcia

    Would love to see an analysis on $EWT

  5. kenzar

    Please review $DMG. Great DeFi project and incredible partners and investors (Tim Draper, Chainlink, Coinbase)

    1. Nik

      Hey, I’d be happy to do a full Coin Report on it if the team get in touch. I’ll include some TA for you in today’s post though.

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