Market Outlook #95 (5th October 2020)
Hello, and welcome to the 95th instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, Tron, Monero, Algorand, Decentraland, Quant, Stratis, Ankr and Metronome.
As per usual, this post will probably run on for a few thousand words, so get comfortable.
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: $10,680
Market Cap: $197.912bn
Thoughts: It has been another week of tight consolidation for Bitcoin, the likes of which we last saw around the end of June.
If we begin by looking at the weekly chart, you can see here that price, for the third straight week, has closed above the prior triple-top at $10,570, which is a good sign for bulls, particularly with volume continuing to decline as weekly ranges contract. In fact, this past week has closed as an inside week; given that, short-term traders might want to look at buying a break below last week’s low if it occurs, in anticipation of inside week failure and thus a push higher into the prior weekly high at $11,000. However, I am primarily concerned with where we can expect price to move over the coming weeks, and with the ever-tightening ranges and declining volumes, I am now looking back at the multi-week contraction of volume that occurred in June. This period saw price spend several weeks declining in both volume and price range week-on-week, with BTC then pushing up and out of the range and ultimately breaking higher. Now, whether we see similar movements is yet to be determined and I definitely don’t want to jump the gun, particularly given the macroeconomic and political climate, which is undoubtedly going to get more volatile over the coming weeks. That said, if we see price continue to range here as opposed to begin to break lower, as I was initially expecting, then I believe we are more likely to see a similar base-and-bounce period to June, as opposed to flushing the lows at $8,800. This is all dependent upon whether we hold that $9,790 low, as a move below that level would invalidate the range.
Turning to the daily, there is actually not a lot to add here, given that we have seen price print an inside week and thus a lower-high and higher-low over recent days. What I am looking at here is how tightly we seem to be hugging that $10,570 level, which was such an important resistance level to overcome. It now appears that, short-term, bulls and bears are fighting for control of this level, hence the tightening range. One possibility I am considering from here is whether we simply see $10,570 act as a magnet for the next few weeks heading into the US election, and following that we see a breakout one way or another. For now, I am simply watching that $9,790 low as my line in the sand for any further downside; remain above it and I think the above scenario is quite likely.
Ethereum:
ETH/USD
Weekly:
Daily:
ETH/BTC
Weekly:
Daily:
Price: $352.11 (0.0329 BTC)
Market Cap: $39.743bn (3,715,944 BTC)
Thoughts: Much like Bitcoin, Ethereum is currently hugging an important level, but I do think the possibility of short-term downside is stronger here given how ETH/BTC looks at present.
If we begin with ETH/USD, as we can see from the weekly, price is wrestling with $365, which was an equally important level to break out above as $10,600 was for Bitcoin. We have since come back under that level, but the important thing to note here is that all of the past few weeks-worth of price-action has occurred within the range of that bearish engulfing that set the 2020 high at $491. Price has failed to move below the low of that week at $309 and is now contracting its weekly ranges around $365. If we drop into the daily, we can see that there is somewhat of a double-bottom at $309, which should concern anyone long here (as noted last week). That said, given that price printed an inside week (just like BTC/USD), it would actually be a beautiful textbook setup for longs if we see price flush $309 into that demand area around $290 and then close the week back above $309; I would be very keen to get long if we saw such movements, looking for $365 to be retested or even swept as the inside week high. However, if we start to close below $309 – particularly if we close the weekly below that level – I would be looking for continued downside, given bearish market structure and the pull of the 200dMA below.
Turning to ETH/BTC, a similar story can be seen to the Dollar pair on the weekly, with price having printed an inside week on declining volume. Unlike for the Dollar pair, however, the week before last saw its low sweep that of the bearish engulfing at 0.0312. This level held firm as support as price closed well above it after the sweep, but, if we turn to the daily, we can see that despite the swing-failure price has failed to give any sign of a sustained reversal. If anything, it has simply led to another lower-high at present, with price struggling to stay above 0.0328. If you look at the lower-high that preceded the swing-failure ~0.036, that is the level I am most interested in for a reversion to bullishness. Until that level gets broken above, I am expecting further downside for ETH/BTC, with the next area of interest a retest of 0.0286.
Tron:
TRX/USD
Weekly:
Daily:
TRX/BTC
Weekly:
Daily:
Price: $0.026 (243 satoshis)
Market Cap: $1.86bn (174,044 BTC)
Thoughts: Tron is one of the more interesting majors at the moment and one that I remain invested in.
If we look at the weekly for TRX/USD, we can see that, following the spike above prior resistance at $0.045, price has returned to the swing-high at $0.027 where it appears to be forming a base, having broken above trendline resistance and horizontal resistance on significant volume earlier this year. I would like to see price hold this level before eventually seeing the rally continue, with $0.054 now the obvious resistance. Above that, major resistance is at $0.10, but I am not expecting that level to be tested before 2021. If we drop into the daily, we can see more clearly the solid bullish market structure here, with a series of higher-highs and higher-lows since mid-March capitulation. I would want to see $0.022 remain firm as a higher-low, with any close below that level a signal for me to exit and re-assess at a later date.
Turning to TRX/BTC, this is naturally the more attractive pair for speculators, given the recent breakout above a year-long range and now the retracement into range resistance. I mentioned in a recent Market Outlook that, for anyone on the sidelines, waiting for price to return to range resistance would be the optimal area to start buying spot. If we look at the daily, we can see that price is now in a tight range between 234 satoshis and 275 satoshis, sandwiched around the range resistance. This is where I think entries make sense, with invalidation on a close back below the 200dMA and 360dMA, which has confluence with the pre-breakout swing-low at 200 satoshis. Hold above 200 and we’re all good.
Monero:
XMR/USD
Weekly:
Daily:
XMR/BTC
Weekly:
Daily:
Price: $106.23 (0.00993 BTC)
Market Cap: $1.882bn (175,980 BTC)
Thoughts: It has been quite some time since I have featured Monero in these posts, as it was pulling a Litecoin and doing absolutely nothing for weeks on end. It has finally started to move and now looks like one of the most attractive majors.
If we look at XMR/USD, we can see that price has broken above trendline resistance and retested it as support a few weeks ago. Price has since bounced hard off the trendline and appears to be pushing for $123, which is the 2019 high. If we see the weekly close above that level, I’d expect $145 to be the next area of significant resistance; above that, there is very little resistance for a long way. Turning to the daily, the only thing to add here is that I will be looking for any opportunity to long XMR/USD if we break above $123 and then retrace into $106 to retest it as support. The trend is very strong here…
Turning to XMR/BTC, volume on Binance has been incredibly high for the pair throughout 2020 and for several of the latter months of 2019, with volume now beginning to kick even higher as price accelerates out of the range and above the prior yearly high at 0.00947. In fact, last week’s close saw a clean breakout above the level, with price stalling at prior support ~0.01. I am not expecting this resistance to last, but I also would not want to be a buyer right here given that it is right at resistance; if anything, awaiting a breakout above the level and a pull-back into a higher-low makes far more sense.
Algorand:
ALGO/USD
Daily:
ALGO/BTC
Daily:
Price: $0.31 (2,897 satoshis)
Market Cap: $327.942mn (30,661 BTC)
Thoughts: Algorand hasn’t really changed in its outlook over recent weeks, but it remains in an attractive area for spot accumulation.
If we look at ALGO/USD, we can see that price is now consolidating above the 200dMA and 360dMA, with trendline resistance from the 2020 high at $0.77 capping it. Bears would want to push below that most recent low at $0.25 and close below the level, thus closing below those two significant MAs also, as this is the last major support level before $0.16 (the prior-all-time low turned range support). Bulls would want $0.25 to hold as the low, with any move above trendline resistance and a higher-high above $0.39 turning market structure bullish and opening up the path to another leg higher, with resistance above that at ~$0.50 and then the yearly high.
Turning to ALGO/BTC, this pair has actually broken above trendline resistance already but remains printing lower-highs for now. I have been buying some spot at the 200dMA ~2,900 satoshis, but I would not look for leveraged positions until we see a higher-low and higher-high follow, thus turning market structure bullish once more. It may well be that ALGO is being re-accumulated here before another leg higher, which may take some time; in that case, I’d like to see a range form here between 2600 satoshis and 3400 satoshis, with any move below 2600 opening up further downside towards the all-time low. For spot buyers, this would be a fantastic opportunity, but any leveraged longs would be in a lot of pain if price started falling towards that level. Ultimately, I do think ALGO will make its way towards 8,300 satoshis in 2021.
Decentraland:
MANA/USD
Weekly:
Daily:
MANA/BTC
Weekly:
Daily:
Price: $0.075 (708 satoshis)
Market Cap: $110.75mn (10,355 BTC)
Thoughts: Decentraland isn’t a project I have ever featured in these posts before but, after recent movements, it looks more attractive than ever for upside.
If we look at MANA/USD, we can see that the weekly has broken out above the significant support turned resistance at $0.06 that held price down for over a year. This occurred on the highest weekly volume Binance has seen since initial trading began in late 2017. Price has since pulled back on low volume towards the $0.063 area, and I am expecting one last flush into the level to test it as support before further upside above the 2020 high.
Turning to MANA/BTC, the picture is quite similar, although price is a very long way from the all-time high at 4,230 satoshis from June 2018. What we can see is that a year-long range formed between 270 satoshis and 575 satoshis; a range that gave way upon that huge breakout several weeks ago, with price closing the weekly above prior support turned resistance at 800 satoshis, let alone the range resistance around 575 satoshis. That 800-900 satoshi area did prove to be too much on the first test, however, and we now see price pulling back towards prior resistance at 686 satoshis. If MANA can form a new base here, the next resistance is up at 1900 satoshis.
Quant:
QNT/USD
Daily:
QNT/BTC
Daily:
Price: $8.60 (80,411 satoshis)
Market Cap: $103.83mn (9,708 BTC)
Thoughts: Quant has had some of the strangest price-action, with plenty of chop but a generally rising trend on both its pairs for the best part of the year.
If we look at QNT/USD, we can see that price has been trading inside a rising channel since May, supported primarily by the 200dMA, below which it has not closed since April. It is currently hugging channel support, making this a great area for a trend play, with channel resistance the next logical target, although the all-time high at $17 is alluring. For bulls, as long as the pair can hold channel support, or, at the very least, above the 200dMA, I think QNT will keep pushing higher, slowly but surely. If that MA does give way, we can bet price will return to retest the pivot at $5.15.
Turning to QNT/BTC, we see a similar trend in its price-action, although trendline support from March is much firmer and cleaner, along with price hugging to the 200dMA as support. Following the breakout above trendline resistance in July, price has chopped up and down, with the 2020 high of 0.0011 having formed shortly after the breakout and all subsequent price-action being a series of higher-lows and lower-highs. I do think that buying this trendline makes perfect sense given how price has generally reacted since it formed in March, and I’d expect to see that 2020 high retested over coming months. Break out cleanly above 0.011 and the next resistance is 30% higher.
Stratis:
STRAT/USD
Weekly:
Daily:
STRAT/BTC
Weekly:
Daily:
Price: $0.41 (3,843 satoshis)
Market Cap: $41.116mn (3,842 BTC)
Thoughts: Stratis is one of my favourite projects for speculative prospects at current prices, given its long-term fundamental quality and progress. Moreover, its recent news on a proposed new token dubbed Strax – stated to be built for DeFi – makes me even more excited, although there remains much research to be done on that proposal.
If we look at STRAT/USD, we can see that price rejected at prior support turned resistance at $0.71, after breaking out above resistance at $0.53. Price has since fallen off and now trades back below that latter resistance, but from the weekly it looks more like a bull-flag than anything too concerning. On the daily, we can see that this pullback has taken price back into the 200dMA and 360dMA and I’d like to see this area hold. If we fall below the 360dMA, the next area of major support is at $0.26. Looking ahead, I am awaiting a breakout above $0.7 to open up a move to $1.16, beyond which there is little resistance to $2.42. Patience is certainly the key with this project.
Turning to STRAT/BTC, the pair remains trapped inside a year-long range with 3,110 satoshis as support and prior support turned range resistance at 5,900 satoshis. Price did briefly break above range resistance but has since fallen back inside. Below range support, the final level of support is the all-time low at 1,535 satoshis. Turning to the daily, I don’t like that we broke above the 360dMA and have since fallen back below it and rejected, but whilst price remains above range support I remain invested, with plenty of accumulation occurring within this range. It is very much possible that the range support gets swept before any meaningful reversal occurs, so I’d be looking at the weekly to swing-fail this level if we do drop further. Above, I expect any reclaim of the 360dMA to lead to a retest of the 2020 high; get above that and 10k satoshis is the next target, followed by prior support at 15.4k satoshis.
Ankr:
ANKR/USD
Daily:
ANKR/BTC
Daily:
Price: $0.007 (65 satoshis)
Market Cap: $40.52mn (3,786 BTC)
Thoughts: Ankr has had quite the run since March, but it doesn’t look so attractive now, having swept the all-time high against the Dollar and rejected.
If we begin with ANKR/USD, we can see precisely how this occurred, with price shooting up above $0.016 in August into a new ATH at $0.018, before falling back below the level, consolidating and then breaking support and turning market structure bearish, leading to a swift move back towards the 200dMA, where it found support. That said, the bounce from the 200dMA has only pushed price back into prior resistance at $0.008, where it is struggling and putting in a lower high. Failure here would see price come back to retest the 200dMA at $0.0045 and I’d be looking for $0.0037 to be retested as support.
Turning to ANKR/BTC, we appear very much to be in the latter stages of the first bear cycle of this new wave, with capitulation expected to follow if price fails to break back above 83 satoshis. I’d expect to see that 200dMA lost and price to retest the 360dMA that has confluence with prior resistance at 38 satoshis, form a base here (i.e. depression) and then re-accumulate for disbelief and the next wave of the bull cycle as we come into 2021. I will be rebuying my ANKR position at 40 satoshis if we come into that level.
Metronome
MET/USD
Daily:
MET/BTC
Daily:
Price: $0.74 (6,896 satoshis)
Market Cap: $8.095mn (756 BTC)
Thoughts: Metronome is one of those projects that has spent its entire existence in a downtrend but appears to be changing its fortunes of late.
Looking at MET/USD, the all-time high formed shortly after initial trading in July 2018 at $4.50, with price then falling for nearly two years before the all-time low formed in March 2020 at $0.20. Since, price has rallied consistently, breaking above long-term trendline resistance in August and finding resistance at prior support around $1.20, with the yearly high coming in at $1.36. Price has since pulled back into the 200dMA, but I am not yet looking to buy MET. I am expecting price to fall further towards the 360dMA around $0.56 before a bottom is found and the next leg begins, which is where I would look to be a buyer. However, if price flips that most recent support turned resistance at $0.86, I’d look to enter there, as market structure will have turned bullish.
Looking at MET/BTC, price has already come back into the 200dMA and 360dMA after the rally of August, which may speed up the reversal on the Dollar pair and leave my stink bids at $0.55-0.58 unfilled. That said, I would expect re-accumulation to occur before the next leg begins here, so a retest of that 5,300 satoshi level as support would not be out of the question as a new base. Either way, I expect MET will push for 15k satoshis over the coming months.
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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I like SNX. You can take a look and advise where to buy. Thank you
Included in this week’s post.