Market Outlook #88 (10th August 2020)
Hello, and welcome to the 88th instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, BitTorrent, Zilliqa, Energy Web Token, DMM: Governance, Constellation, NKN and Adbank.
A few of the featured coins this week have been suggestions, which I am always happy to include in the post.
As ever, if you have any suggestions for next week’s post, feel free to leave them in the comments below.
Bitcoin:
Weekly:
Daily:
Price: $11,895
Market Cap: $219.558bn
Thoughts: Well, given the past few weeks that we’ve had, perhaps it comes as no surprise that the past week has been one of consolidation for Bitcoin, with price range-bound within the confines of the previous week.
If we look at the weekly, we can see this clearly, with price having remained inside the range of the week that initially broke out of trendline resistance and the much-discussed triple-top. Volume over the past week was a little lower but still higher than for much of June and July, which I would expect of a consolidation week, and price is now looking to retest and possibly break above the $12,188 high. As I mentioned in last week’s post, it would perhaps be healthy for the pair to consolidate for a little while longer between $12,200 and $10,600, but given current macro momentum this may not be the case. Whilst we remain above $10,600 the outlook remains very much bullish, with the next major area of resistance the $14k high that I’m sure everyone has their eyes on. If we break back below $10,600 and close the weekly below it, I would be looking for immediate rejection and a move back above the level the following week to hold a short-term bullish bias; anything else and I would assume price wants to retest $8,900 as support.
Turning to the daily, there isn’t really a great deal to add here except that we have just this past week seen the 200dMA cross above the 360dMA, which, though not as significant for BTC/USD as it is for altcoins, is still a bullish sign. If we do see a deeper dip, I’d be looking to long that 200dMA.
Ethereum:
ETH/USD
Weekly:
Daily:
ETH/BTC
Weekly:
Daily:
Price: $394.28 (0.0332 BTC)
Market Cap: $44.33bn (3,743,286 BTC)
Thoughts: Ethereum is currently in a very interesting position, with the potential for significant upside from here should it remain above some key levels.
Looking first at ETH/USD, from the weekly we can see that the week prior to last closed above the important $365 level, which was historical support turned resistance. Much like BTC/USD, the pair has consolidated above resistance and within the range of the breakout week on slightly lower volume. We remain well above the 200wMA and the previous high of $290 and trendline support is still a long way away. As such, if we do start to dip here, it is likely that price would seek out one of these key areas. However, if BTC keeps climbing, ETH will continue to outperform in my opinion, and that $550 area is of great interest as the next major resistance. Looking at the daily, again, there is not much to add here given where price is sat, but we can see clearly how long the pair could be sat just below $415 before it gets anywhere near a trendline support retest. Ultimately, I am looking for ETH to continue upwards as we get into Q4, but whether we get much more upside in August I’m not sure. Long and strong, nonetheless.
Turning to ETH/BTC, on the weekly I have highlighted two important areas of resistance as Ethereum continues higher, which I fully expect it to do given the steepening curve of the rally and the huge volume that came in a couple of weeks ago. The first of these is, in my opinion, the most important, and a close above 0.042 could prove the catalyst for the real ride to market-wide euphoria. Looking at the daily, we are currently at minor resistance but have retested the previous local high as support; above, it is clear skies to 0.042; below, I’d be looking for an opportunity to buy 0.0286. I’m not too worried about a potential break of the curve, as curves aren’t very reliable; this is merely to show the steepening rally without drawing several trendlines.
BitTorrent:
BTT/USD
Daily:
BTT/BTC
Daily:
Price: $0.00047 (4 satoshis)
Market Cap: $311.92mn (26,235 BTC)
Thoughts: BitTorrent isn’t a project I know much about since its move into crypto, but the chart does appear to be looking upwards, having lagged many other sizeable midcaps recently.
Looking at BTT/USD, we can see that price has slowly recovered from the mid-March capitulation into a new all-time low and has recently close above the 360dMA for the first time in its history. I would be looking at $0.0006 as the major resistance, with a move above opening up clear skies to $0.00115.
Turning to BTT/BTC, much like a number of alts I’ve featured in these posts, the pair has never experienced a bull cycle since inception, with early trading culminating in a measly 3x rally before the long bleed began, with the all-time low coming in May 2020 at 3 satoshis. Price has held above this level for some time since, now looking to break above the 360dMA after rejecting it last month. Invalidation for new positions would be a close below the all-time low and I’d expect price to really start moving once its above 6 satoshis. Following this, there is resistance at the prior support ~12 satoshis.
Zilliqa:
ZIL/USD
Weekly:
Daily:
ZIL/BTC
Weekly:
Daily:
Price: $0.0256 (216 satoshis)
Market Cap: $265.53mn (22,333 BTC)
Thoughts: Zilliqa, having been one of the earlier movers, spent a few weeks pulling back and consolidating.
Looking at ZIL/USD, we can see from the weekly that price found resistance at the historical pivot at $0.029, above which I would expect the rally to enter the latter stages of a market cycle and start pushing much higher much faster. But, for now, that level is acting as resistance and price has found support above $0.015, with last week pushing higher off the base. I am expecting another test of $0.029 to follow and, with some luck, a close above the level. Fail at the level and I will be taking significant position size off the table until we get a close above on the weekly. Turning to the daily, we can see that ZIL is well above the 200dMA and I have marked out the next area of resistance pending a breakout at $0.054.
Turning to ZIL/BTC, we can see the accumulation > test pump > low-volume pullback pattern distinctly, matched by the volume profile one would expect of a cyclical shift. Historically significant volume was traded as price broke out of the 280-day range and then found resistance at the historical support turned resistance at 340 satoshis; flip this level as support and I would expect a swift move into 690 satoshis. On the daily, we can see that this would be just beyond a 2.0 fib extension of the recent swing, so I’d be looking to take some profits once we get above 600 satoshis.
Energy Web Token:
EWT/USD
Daily:
EWT/BTC
Daily:
Price: $12.42 (0.00104 BTC)
Market Cap: $83.4mn (7,017 BTC)
Thoughts: There isn’t a great deal I can analyse for Energy Web Token given that the project has only been traded since April, but everyone can see the strength of the trend here, with a straight-4-month rally since inception.
If we look at EWT/USD, we can see that the all-time low was traded into only a couple of days after inception, with price having rallied 25x since then and currently consolidating at all-time highs below $13. I would not be looking to buy as a new buyer given the extent of the rally and the lack of price-history, but if I was a holder I would not be exiting given that price is in discovery mode backed by a strong uptrend and plenty of volume. I would, however, deem it wise to take some profits if you have been a holder since April.
If we look at EWT/BTC, the story is almost identical except to a lesser degree, with price having run 1400% since the all-time low in April at 7,900 satoshis. Volume is still strong and there is an even more well-defined trendline support here. I think it is likely the pair continues higher but given the market cap and the run so far, again, I would not look to be a new buyer.
DMM: Governance:
DMG/USD
4H:
DMG/BTC
4H:
Price: $1.35 (11,364 satoshis)
Market Cap: $47.265mn (3,975 BTC)
Thoughts: DMM: Governance is another token that I have seen making waves on crypto-Twitter but haven’t looked into myself much, but that has also only been trading for a little over a month.
That said, given that this pair already has a derivative available on FTX, there is more to be analysed here as I do think there is some upside opportunity. If we look at DMG/USD, we can see that price has spent its entire existence between $1 and $1.64, which is a pretty tight range for a relatively small altcoin. Following initial trading, price made its all-time high and then fell immediately off to form an all-time low at $0.99 in late July. Price has since found a base above $1 and is now appearing to print somewhat of a bottom. In fact, given the 4H close above $1.33, we can make the case that 4H market structure is now bullish and – if the daily closes above the level too – it would make for a good long with a stop at $1.01 and the expectation that this, like other tokens of its kind on FTX at the moment, will enter price discovery above $1.65.
Turning to DMG/BTC, the pattern of price action is similar except that we have a clear trendline breakout earlier this month that was followed by a retest of the all-time low. Price has since reversed and rallied back above prior support turned resistance at 10,770 satoshis and I would expect the reversal to continue on towards the all-time highs at 18k satoshis. Volume is continuing to rise after the double-bottom sweep-and-run, which is also positive. Risk is clearly defined here and the pair is arguably more attractive than the Dollar pair, as there is about 20% of downside risk into new all-time lows with almost 70% of upside to new all-time highs.
Constellation:
DAG/USD
Daily:
DAG/BTC
Daily:
Price: $0.019 (160 satoshis)
Market Cap: $24.54mn (2,070 BTC)
Thoughts: Constellation has been lagging behind some of the other fundamentally-outstanding projects that have been running recently, but it looks ready to play catch up now.
If we look at DAG/USD, we can see that price rallied from March 2019 into November 2019, finding resistance at $0.024, before falling off and finding support at $0.0056. Price has been struggling to break new highs with trendline resistance now having formed since that $0.024 high. However, this past week, price has broken back above the 360dMA and 200dMA, as well as the trendline resistance from both the all-time high and the November 2019 high. I would expect this to now continue on towards the all-time high at $0.037.
Turning to DAG/BTC, as I have mentioned in the past, there was a clear accumulation range that played out through 2019, with price then hitting resistance at 290 satoshis before falling for the past 7 or so months back towards the range resistance turned support at 70 satoshis. On every bounce, price has been finding resistance at 185 satoshis, so I am looking for this level to be flipped before I am convinced the consolidation is over. If we do see this occur, I’d be looking for all-time highs above 600 satoshis, or for the largest holders to begin selling off their balances before I exit any of my position.
NKN:
NKN/USD
Weekly:
Daily:
NKN/BTC
Weekly:
Daily:
Price: $0.03 (255 satoshis)
Market Cap: $17.7mn (1,488 BTC)
Thoughts: NKN, much like Constellation, has been a laggard recently, but its Dollar pair looks very similar to Zilliqa and I am expecting the second leg of its rally to begin soon.
Looking at NKN/USD, we can see from the weekly that trendline resistance from the all-time high was broken last week, but price remains below the horizontal double-top at $0.033. Once this level gets flipped, there isn’t deal of resistance above until $0.05, above which it is clear skies to $0.12. Looking at the daily, we can see that price is now using the 360dMA as support and I’d be looking to add to my position once we close above $0.033.
Turning to NKN/BTC, the bear market looks even more bleak, with price having never spent any prolonged period rallying since its inception, as I have mentioned before. As such, I think there is price discovery to be had here once the cycle starts accelerating. If we look at the weekly, we can see that price remains below the prior support turned resistance at 340 satoshis, with plenty of volume being traded inside the long-term range above the all-time low. I would be looking for 1,300 satoshis to be retested as resistance once we see a breakout above 340 satoshis. However, my first target would be the minor support turned resistance and 2.0 fib extension of the current swing at 590 satoshis, as seen on the daily.
Adbank:
ADB/USD
Weekly:
Daily:
ADB/BTC
Weekly:
Daily:
Price: $0.004 (34 satoshis)
Market Cap: $3.22mn (270.3 BTC)
Thoughts: Adbank was my first microcap play of 2020, with my buys coming in at 8 satoshis when the market cap was closer to $650k. Despite the 4x run since then, it looks to me like ADB is only just kicking into gear after an entire existence of perpetual downtrend.
Looking at ADB/USD, we can see on the weekly that price formed a double-bottom at the all-time low of $0.00026 before reclaiming $0.0007 as support in May 2020. Price then broke out above trendline resistance from the all-time high back in Feb 2018 at $0.0417 before retesting $0.0007 as support again and rallying hard for weeks. Price has now come into prior resistance at $0.004 and appears to be stalling but traded the highest single-week volume of all-time coming into the level originally. I wouldn’t be surprised to see some consolidation here followed by a move into $0.0096.
If we turn to ADB/BTC, we can see just how much volume has been coming in within the accumulation range and following the breakout from the range, with the next major resistance at 96 satoshis, followed by 120 satoshis. I am expecting that 96-satoshi area to be retested as resistance at the very least given the amount of volume that has followed this breakout.
And that concludes this week’s Market Outlook.
I hope you’ve found some value in the read and thank you for supporting my work!
As ever, feel free to leave any comments or questions below, or email me directly at nik@altcointradershandbook.com.
Thanks for the updates Nik! Excited for next week!
Always providing amazing setups, keep up the good work!
Cheers!
Nice work Nik as always. Any chance of a Celer Network ($CELR) chart next week? I think it came pretty close for the next coin report but missed out.
Yep, will do!