Market Outlook #97 (19th October 2020)
Hello, and welcome to the free edition of the 97th Market Outlook.
In these free versions of the Outlook, I provide my analysis on Bitcoin and Ethereum.
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Bitcoin:
Monthly:
Weekly:
Daily:
Price: $11,630
Market Cap: $214.291bn
Thoughts: As mentioned last week, Bitcoin is beginning to look better and better following its violent dip in early September, but heavy resistance inches closer.
Given the mass exodus from BitMEX, I have decided to switch my default BTC/USD chart to Coinbase, as a more relevant indicator of volume. If we look at the monthly chart, the key thing I wanted to highlight here is that $13,863 is the highest monthly close of all time, whilst the second-highest monthly close of all time was a few months ago at $11,650; with 12 days to go, October is now approaching that key level once more. As such, I am waiting with eager anticipation for the monthly close; above $11,650 and I think we’ll see bullish continuation into 2021 towards that $14,000 area.
Turning to the weekly, given the consecutive bullish closes since the breakout above $10,600 and subsequent retest in late August to early September, I am now purely focused on the reaction as we approach $12,500 because this will reveal a lot about the strength of the breakout and the bounce. If price ascends towards that current yearly high and rejects (or sweeps the high and fails to close above it), I would be looking to sell BTC back down towards $10,600 at the very least. If, however, price closes above that level, things get very interesting; a higher-high following a higher-low and clear trend continuation. I would expect a test of $13,900 to follow.
Finally, looking at the daily, here I have highlighted these two possible trajectories, with arrows indicating areas to look for continuation longs or reversal shorts.
Ethereum:
ETH/USD
Weekly:
Daily:
ETH/BTC
Weekly:
Daily:
Price: $379.37 (0.03263 BTC)
Market Cap: $42.894bn (3,690,471 BTC)
Thoughts: Now, Ethereum is lagging behind Bitcoin at the moment, primarily due to a lack of movement in ETH/BTC.
If we look at ETH/USD, here we can see another weekly close above the all-important $365 level, suggesting that bulls are in control at the pivot. That said, volume continues to decline on the pair, but, if we turn to the daily, we can see that price is continuing to test minor resistance at $388. This level looks ready to be broken, in my opinion, and a daily close above that level would open up a retest of $448, above which we find the 2020 high. Ideally, I’d like to see volume break out along with price to confirm the validity of a move above $388. The higher lows into this resistance are certainly promising.
Turning to ETH/BTC, beyond last week’s comments, there isn’t a great deal to add as price remains in consolidation in a very tight weekly range. That said, we are seeing higher lows on the daily, but as of yet we still have no higher high to confirm a bullish reversal. If we do see price push above that 0.034 level, that would make the entire rounded bottom above 0.031 a higher-low in the series of higher-lows from September 2019, which, no doubt, would lead to a retest of the 2020 high at 0.041. Above that, 0.053 is the next major resistance.
And that concludes this week’s free Market Outlook.
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