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Market Outlook #92

Market Outlook #92 (14th September 2020)

Hello, and welcome to the 92nd instalment of my Market Outlook.

I am back from my break and it feels like (as per usual) significant movements have taken place whilst I was away. Where many setups were looking extremely promising just two weeks ago, some of these no longer look so attractive. That said, the market is still awash with opportunities. Most important, however, are Bitcoin and Ethereum, so I will be paying particular attention to these in this post, as where these two go, the rest of the market tends to follow (though, of course, there are plenty of exceptions to be found).

One of the primary observations I made this past week was that despite many believing that legacy market correlations to crypto are a 2020 phenomenon, crypto has – on the whole – been inextricably tied to legacy since the January 2018 top. I wrote this tweet explaining my thoughts, but the crux is that EUR/USD and ETH/USD have shared almost precisely the same fate over the past two and a half years, with cyclical turning points occurring within a week of each other. As I mentioned in the tweet, this is very likely due to legacy markets in recent history being driven by dollar liquidity, with everything from equities to metals to crypto (and other foreign currencies) having benefited from a depreciating dollar. As such, I am currently of the mind that whilst EUR/USD is bullish on higher timeframes, it is likely that ETH/USD will remain bullish, which itself is a proxy for the rest of the crypto market, given that Ethereum has undoubtedly been the market leader this year, not Bitcoin.

Anyway, I’ll refrain from any further preamble.

In this week’s post, I will be covering Bitcoin, Ethereum, Chainlink, Tezos, Tron, NEO, Cosmos, Algorand. Ren, AirSwap, Chromia and Haven Protocol.

Yep, it’s going to be a long read.

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

Bitcoin:

Monthly:

BTCUSDMonthly

Weekly:

BTCUSDWeekly

Daily:

BTCUSDDaily

Price: $10,440

Market Cap: $193.175bn

Thoughts: In the previous Market Outlook – before I went on holiday – I wrote that everything was generally looking bullish for Bitcoin, as price was still above the all-important $10,600 level. I also wrote that we might expect a flush of $11,000, as price had formed a double bottom at the level. In the subsequent days, not only did we flush $11,000, but price continued falling, with $10,600 not acting as support in the slightest.

However, let’s begin by looking at the monthly: here, we can see that price closed August still just about in the green, although shy of the highest monthly close at $13,937, which remains the most important level above, other than the all-time high. Currently, the monthly simply appears to be retesting the pre-July resistances as support, but it remains to be seen if the final two weeks of September (and Q3) lead to a push higher. Nonetheless, there is nothing particularly bearish about this monthly chart.

If we look at the weekly, this is where it looks a little more bearish short-term. As I had been mentioning for weeks, $10,600 was my line in the sand for sustained short-term bullishness or for a period of consolidation or even decline prior to further upside. The week before last closed below $10,600 on higher volume than the preceding four weeks, with last week also failing to close back above the level despite testing it. For bulls to regain control, this level is vital, and I’d absolutely be looking for longs to $14k if we see price close this week back above. That said, it doesn’t look great at the moment, simply because the level provided no support despite being a triple-top breakout and it is once again acting as resistance on lower timeframes. If we see price unable to move above $10,600, the next area of interest would be lower to $8,820 to clear out the lows that preceded the breakout rally.

Turning to the daily, price printed a sweep of the high at $12,170, pushing into $12,511 before rejecting, printing a double bottom at $11,00, rallying into $12,170 again as resistance and selling off hard. This is a classic bearish setup, but what was particularly alarming was the lack of support as price pushed back into the previous range below $10,600. We did eventually find support at $,9790, but until we close the daily above $10,600, I don’t see much upside before another leg lower. If we do see $10,600 broken, however, the next target for me is $11,030, retesting that double bottom as resistance. Again, this is all intraweek movement; I am not expecting another leg higher to $12.5k or above until the weekly closes above $10,600. We could quite easily rally into $11k early this week and capitulate into the weekly close. Now, looking below, the next area of significant support is $8,800, as there is confluence of the 200dMA, 360dMA and the lows that preceded the breakout rally. I would love to get long a sweep of these levels and a close back above; that would be bullish.


Ethereum:

ETH/USD

Weekly:

ETHUSDWeekly

Daily:

ETHUSDDaily

ETH/BTC

Weekly:

ETHBTCWeekly

Daily:

Price: $367.90 (0.0352 BTC)

Market Cap: $41.323bn (3,965,483 BTC)

Thoughts: Ethereum also printed a fairly bearish candle the week before last against the Dollar, but price is holding up above prior resistance, on the whole.

If we look at ETH/USD, from the weekly chart we can see that there was a period of consolidation above $365 that led to a Darth Maul weekly candle the first week of September, where price swept both sides of the range. Price rallied into $489.50 before rejecting hard and falling as low as $308. That said, price only just closed that week below $365, with the following week closing back above the level, held up by trendline support. If we turn to the daily, we can see the significant bearish divergences that ultimately led to the drop into trendline support, with price losing $365 but regaining it just a few days later. If price can break higher this week and close the daily above last week’s high, I’d expect $448 to be retested as resistance. Looking below, if price was to falter here and lose trendline support, $290 would be where I’d start scaling into low-leveraged longs for another leg higher, with the next buys at $255.

Turning to ETH/BTC, we remain consolidating within this weird banana-shaped pattern, with channel resistance capping price but the parabolic advance remaining intact. There is no reason for me to expect ETH/BTC to fall here, based on the weekly chart, as we are simply consolidating around prior resistance at 0.035. Above, we have significant resistance at 0.042 if price catches a bid here. Turning to the daily, we can see a similar pattern of bearish divergences that led to the sell-off earlier this month, with price poking above channel resistance before rejecting. The sell-off – unlike against the Dollar – failed to break bullish market structure, with price sweeping two swing-lows into 0.0317 before closing back above 0.0328. Now, if the pair was to fall here and lose 0.0317, that would be quite bearish for ETH/BTC and altcoins on the whole, and I’d be looking at 0.0286 to provide support. That said, for now structure is bullish and so is the trend, so I’d expect a test of 0.0407 to follow.


Chainlink

LINK/USD

Weekly:

LINKUSDWeekly

Daily:

LINKUSDDaily

LINK/BTC

Weekly:

LINKBTCWeekly

Daily:

LINKBTCDaily

Price: $11.71 (0.001126 BTC)

Market Cap: $4.118bn (394,199 BTC)

Thoughts: Chainlink hasn’t really done a lot over the past couple of weeks except consolidate into support.

If we look at LINK/USD, we can see that price hit $20,75 as a new all-time high before pulling back throughout latest August, with the first week of September pushing price into prior resistance turned support at $9. On the weekly, price is still above trendline support and structure remains bullish. If we turn to the daily, price has put in a series of lower-highs and lower-lows since the all-time high as it traded into the previous consolidation area at $9, where it bounced back into the previous swing-low at $12.70. This is where we are currently seeing consolidation, and there is a quite bearish scenario that could play out, if price was to fall here and lose $9. That would also necessitate and break below trendline support from March, and I’d be looking for price to trade all the way back into the prior all-time highs and range resistance at $4.85. However, just like ETH/BTC, for now it remains in a bullish trend and I wouldn’t want to bet against trend continuation until a clear signal is given. For bulls, a move back above $12.68 and short-term trendline resistance would be the trigger for another run at all-time highs.

Turning to LINK/BTC, the picture is pretty much identical, as can be seen on the weekly. There isn’t a lot to add here given the similarities except that I’d be looking for 97k satoshis to hold as support, in confluence with trendline support. A break below 90,600 satoshis would open up a move back into the 200dMA or lower, as far as 53k satoshis, where prior range resistance, long-term trendline support and the 360dMA all have confluence.


Tezos:

XTZ/USD

Weekly:

XTZUSDWeekly

Daily:

XTZUSDDaily

XTZ/BTC

Weekly:

XTZBTCWeekly

Daily:

XTZBTCDaily

Price: $2.61 (24,943 satoshis)

Market Cap: $1.936bn (185,378 BTC)

Thoughts: Tezos, though not particularly attractive against the Dollar, is in a make or break (and thus high R) area against BTC.

If we begin with XTZ/USD, we can see that price simply looks to be printing a series of higher-highs and higher-lows having broken to new all-time highs a few weeks ago. What is a little concerning is the move back into the previous consolidation range that preceded the breakout to new highs, with range resistance at $3.05 not having acting as support. That said, we are effectively sitting above range support at $2.25, with prior all-time highs just below at $1.95 (which, should price get down there, would be ideal for longs). If we look at the daily, price has lost the 200dMA but remains above the 360dMA, with price action relatively similar to that between Feb-April earlier this year, albeit less dramatic in the fall. We are consolidating above range support, which provides clear invalidation for anyone looking to get long early in the expectation of a rally above short-term trendline resistance into $3.05, to retest that range resistance.

Turning to XTZ/BTC, we have now swept the range low at 24k satoshis, which has been supporting price for the entirety of 2020 and was the previous area of resistance before the run to new all-time highs. Given this sweep on the weekly timeframe, I am opening a low leveraged long here, with clear invalidation on a weekly close below 23k satoshis. If we turn to the daily, we see that there is also confluence with the 360dMA, which has supported price for over a year. Losing this area would be disastrous for Tezos, with very little support below for some way, so the risk/reward here for a long is great.


Tron:

TRX/USD

Weekly:

TRXUSDWeekly

Daily:

TRX/BTC

Weekly:

TRXBTCWeekly

Daily:

TRXBTCDaily

Price: $0.0308 (295 satoshis)

Market Cap: $2.208bn (211,310 BTC)

Thoughts: Tron finally started running, right when everything else began to falter…

If we look at TRX/USD, from the weekly we can see a large wick on the week before last, where price, having broken above $0.027, ran all the way into and above resistance at $0.045, hitting $0.054 before rejecting. That said, despite the wick, price did close that week at yearly highs on very high volume. If we look at the daily, this is the sort of trend you’d want to be getting involved in on dips (although I am already in from lower, as regular readers will know). IF we look at the move above trendline resistance, price consolidated and then rallied hard above $0.027, then dipping back into 0.0215 as support before rallying into $0.0536. This occurred on the highest volume in over a year, and I’d expect the trend to continue higher moving into October.

If we turn to TRX/BTC, I was unlucky enough to have been on holiday as price came into my first target at 475 satoshis, so I missed the sell, which is a shame as I would have rebought that partial as price fell off back into 275 satoshis, as can be seen on the daily. There isn’t much to add here except that a retest of the range resistance at 260 satoshis would be ideal for those on the sidelines to get involved. I’d be looking for 475 satoshis to be retested, followed by 865 satoshis as the next major target.


NEO:

NEO/USD

Weekly:

NEOUSDWeekly

Daily:

NEOUSDDaily

NEO/BTC

Weekly:

NEOBTCWeekly

Daily:

NEOBTCDaily

Price: $20.97 (0.002 BTC)

Market Cap: $1.479bn (141,518 BTC)

Thoughts: NEO looks fantastic here, with a strong trend in play on both pairs on the higher timeframes.

If we look at NEO/USD, on the weekly, we can see that price broke cleanly above the 2020 high at $17 last month on good volume, finding resistance just shy of the historic $24.50 level. Price then fell off slightly, retesting $17 as support, with last week closing very bullish (having swept the low of the previous week before rallying into the close). If we look at the daily, naturally the primary area of interest here is that $24.50 support turned resistance, above which there are clear skies for much more upside. I would imagine that this week will bring new yearly highs given the strength of the reaction off of $17, with $24.50 just above that.

Turning to NEO/BTC, the weekly has just closed a bullish engulfing above a confluence of prior supports turned resistance between 0.00165 and 0.00184. This is super bullish, and I’d be looking for price to continue into significant resistance at 0.00232 next. Turning to the daily, if price is able to get above the overhead resistance, that 0.00275 area would be the next target. Buying this on any dips.


Cosmos:

ATOM/USD

Weekly:

ATOMUSDWeekly

Daily:

ATOMUSDDaily

ATOM/BTC

Weekly:

ATOMBTCWeekly

Daily:

ATOMBTCDaily

Price: $5.34 (51,104 satoshis)

Market Cap: $1.08bn (103,746 BTC)

Thoughts: Cosmos recently broke new all-time highs and has since come off, but it is in a pretty attractive place for spot buys.

If we begin with ATOM/USD, we can see that price broke to $9 in August before falling back below the prior all time high at $7.77 the following week. It then sold off with the rest of the market a week later, coming right back into the previous 2020 high at $5.55, below which it currently sits. It has also come into trendline support and another previous consolidation area above $4.58. If we turn to the daily, we can see that price has broken bullish market structure having fallen below the prior 2020 highs, so I wouldn’t be interested in any short-term leveraged longs until we see some higher-highs and higher-lows follow from here, but spot buys in this confluence of supports make sense to me.

Turning to ATOM/BTC, price is at a much more attractive spot here, having traded right back into the confluence of the historical pivot at 47.2k satoshis and the trendline resistance turned support. I am absolutely a buyer here, with my invalidation being a weekly close back below the pivot.


Algorand:

ALGO/USD

Daily:

ALGOUSDDaily

ALGO/BTC

Daily:

ALGOBTCDaily

Price: $0.37 (3623 satoshis)

Market Cap: $400.48mn (38,346 BTC)

Thoughts: Algorand looks less attractive than Cosmos, in my opinion, although the two do tend to move in tandem like Tezos follows Chainlink.

If we look at ALGO/USD, price has broken the parabolic advance, but certainly appears to be putting in a higher low above prior range resistance at $0.30. Moreover, price is still above the 200dMA and 360dMA confluence; falling below that would be quite concerning for bulls and I’d be looking at a retest of the prior all-time low at $0.16. However, that is quite some way away and for now the outlook is relatively bullish, as the trend remains bullish. The move above $0.50 into $0.77 in August was a strong one and the pull-back since has occurred on declining volume. That said, if I had to be long one or the other, I’d pick ATOM over ALGO here.

Turning to ALGO/BTC, we do have a series of higher lows and higher highs here, with the move into 6,510 satoshis printing new yearly highs and being the first time price has traded above 5,350 satoshis since August 2019. If we see a second test of the 200dMA (ideally with a sweep of the current low), that would be a trigger for a long entry for me here, with price-action appearing quite similar to the pull-back after the July rally into 4,060 satoshis. If price does begin a third leg up, the upside target above 6,500 satoshis is 8,330 satoshis.


Ren:

REN/USD

Weekly:

RENUSDWeekly

Daily:

RENUSDDaily

REN/BTC

Weekly:

RENBTCWeekly

Daily:

RENBTCDaily

Price: $0.314 (3007 satoshis)

Market Cap: $278.054mn (26,625 BTC)

Thoughts: Ren has been on an absolute tear since it broke out earlier this year, having run around 50x against the Dollar from its all-time low of ~$0.013.

If we look at REN/USD, we can see that price broke out above the August 2019 high of $0.135 in June this year, consolidating for a short period above the highs before beginning its ascent into price discovery. Within a few weeks, price had hit its current all-time high at $0.60, the week of which it also rejected and fell to retest $0.21, finding support just above that prior consolidation from July. If we look at the daily, this is quite bearish short-term, as price swept the high on printing its all-time high, formed a swing-failure, rejected and broke market structure as it closed below $0.37. There is every chance that was the euphoria into complacency for this current cycle and REN may need some time to consolidate before it runs for another high.

Turning to REN/BTC, the outlook is effectively identical with the same pattern of price-action marking the current top. If we look at the daily, I’d be looking for a move back into 1,411 satoshis before going anywhere near this.


AirSwap:

AST/USD

Weekly:

ASTUSDWeekly1

Daily:

ASTUSDDaily

AST/BTC

Weekly:

ASTBTCWeekly

Daily:

ASTBTCDaily

Price: $0.12 (1167 satoshis)

Market Cap: $18.286mn (1,751 BTC)

Thoughts: AirSwap has had a crazy year if one considers how far it has moved from its all-time low, but against historical prices it is still well below its peaks.

Beginning with AST/USD, the weekly shows the long-term bear trend than preceded the reversal in March, where mid-March capitulation took AST to an all-time low of $0.005. Since, price has rallied above trendline resistance on strong volume, continued and consolidated below range resistance at $0.077 and then broke out once again and rallied into $0.34 (almost 70x higher than where it bottomed in March). Price has since fallen off from this high and is now retesting prior range resistance as support. If we look at the daily, we see a similar (though less bearish) pattern to that of Ren, with price having peaked and since broken bullish market structure on this timeframe, now coming back into prior range resistance to retest it as support. I’d be looking to buy this if it came back below $0.08.

Turning to AST/BTC, price has broken out of multi-month consolidation and is now printing a series of higher-highs and higher-lows on the weekly chart, which is certainly bullish. Price has found some resistance at prior support ~2,370 satoshis, but if it is able to close above that level then there is no major resistance until 7k satoshis on the weekly timeframe. If we turn to the daily, the series of lower-highs and lower-lows from the peak of 2,750 satoshis does appear to be like a cyclical top, although, in the context of the historical chart, it is more likely that AirSwap has had its first-wave euphoria and that another larger cycle will follow once it has been re-accumulated. Again, I’d be looking to buy a retest of the 200dMA.


Chromia:

CHR/USD

Daily:

CHRUSDDaily

CHR/BTC

Daily:

CHRBTCDaiily

Price: $0.044 (428 satoshis)

Market Cap: $19.428mn (1,860 BTC)

Thoughts: Chromia has gone from looking fantastic to looking terrible in a couple of weeks, and if it makes one more leg lower I will likely be exiting my position from April and looking to re-accumulate lower.

If we look at CHR/USD, price has recently broken below trendline support from March, retesting it as resistance, as well as falling back below reclaimed support at $0.05. It has found support above the 200dMA and prior resistance at $0.038, but if price closes the daily below the 200dMA I will be exiting my position from ~$0.014.

Turning to CHR/BTC, the picture is less unattractive here, with the 200dMA currently supporting price and significant support below that with the confluence of the 360dMA and prior range resistance at 318 satoshis. Again, if those levels gave way, I’d be looking to re-accumulate at 180 satoshis, or as close to its as possible. I still expect Chromia to have a very good future, with that 1,430-satoshi level my primary upside target long-term, but I would be a fool to not notice how poor it looks in comparison to many other opportunities now.


Haven Protocol:

XHV/BTC

Weekly:

XHVBTCWeekly

Daily:

XHVBTCDaily

Price: $1.74 (16,634 satoshis)

Market Cap: $23.394mn (2,240 BTC)

Thoughts: Haven Protocol was one of the standout performers earlier this year and it now looks ready for a second leg higher.

If we look at the weekly chart for XHV/BTC, we can see that price hit an all-time low of 619 satoshis in Q4 2019, before consolidating for over half a year below 5,450 satoshis on a slow grind up. Price then broke above this resistance in June, rallying to 30.3k satoshis, before pulling back over recent weeks. It looked to be gunning for a retest of 5,500 as support, but the area has been front-run, with a huge bullish weekly candle forming last week, taking price firmly back above the pivot at 13,665 satoshis. If we turn to the daily, I would be looking to be a buyer on any dip from here into 13.6k or lower, perhaps retesting that 200dMA ~10k satoshis. Overall, I think we see this hit that 56.3k-satoshi area that it peaked at in November 2018 before the cycle ends.

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 2 Comments

  1. pieter de nys

    Hi Nik,
    Could you do Origin Protocol next week?
    Thanks!

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