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Market Outlook #98

Market Outlook #98 (26th October 2020)

Hello, and welcome to the 98th instalment of my Market Outlook.

In this week’s post, I will be covering Bitcoin, Ethereum, Chainlink, Waves, Zilliqa, Band Protocol, Ardor, Fetch.ai, Akropolis and COTI.

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

Price: $13,075

Market Cap: $242.253bn

Thoughts: Well, what a week we’ve had. I take four days off the grid and return to a mammoth weekly close for Bitcoin.

Looking firstly at the weekly, the most important thing to note here is that the close above $12,500 on the highest volume in a couple of months is very significant. We now have a higher-high after a breakout > retest of the $10,500 triple-top, confirming that area as new support and all but ensuring a retest of the most important level for BTC: $13,860 – the all-time high monthly close. Given that we are now only a few days away from October’s close, this could be precisely the breakout needed in order to have the momentum to push through that level, though I don’t doubt we will see some supply come in as the level is approached. What I am focused on here is the series of higher-highs and higher-lows we have put in since March, all of which has been within the November 2018 to July 2019 range. That is why that $13.9k area is so important; not only do we have the highest monthly close of all-time there, but that is the range high that has capped BTC throughout its bear market. Break above there and I think we accelerate towards the all-time high over the coming weeks, which itself is a crazy statement but is very much possible given the lack of macro resistance between the two levels. As a dip buyer, any move into $12,500 or even as low as $12,100 would be ideal for a long, in my opinion, with a target of ~$13,800. Now, as I’ve stated recently, we can’t get too ahead of ourselves whilst the most significant resistance lies directly overhead, but last week’s close was an overt signal that this is headed higher.

Turning to the daily, we can see the strength of the breakout here more clearly, with price ramping up towards that $12,100 resistance before blasting straight through it the following day. Given that breakout and push towards the new yearly high at $13,368, I would love to get long on a dip back into that level (or a little higher, given Bitcoin’s propensity to be front-run). Now, the more likely scenario is that we see some selling into October close and that’s when I’d look to get leveraged long for a retest of $13,860, but if we don’t get that dip and push straight into the level I’ll be sitting on my hands and waiting for a reaction. A monthly close above $12,500 and I’ll be looking for any reason to get long in November. If we look at the breakout post-$10,600, price retested that level a few days later before consolidating higher; I wouldn’t be surprised to see a similar pattern of price-action here.


Ethereum:

ETH/USD

Weekly:

ETHUSDWeekly

Daily:

ETH/BTC

Weekly:

ETHBTCWeekly

Daily:

ETHBTCDaily

Price: $406.50 (0.031 BTC)

Market Cap: $46.001bn (3,511,546 BTC)

Thoughts: Ethereum is certainly not the leader anymore, with ETH/USD lagging hard because ETH/BTC is being sold off on Bitcoin rallies rather than rallying alongside it as we have seen for much of 2020. This indicates to me that we have transitioned into a period of altcoin underperformance and Bitcoin dominance – and this may well last until new all-time highs are found if BTC can get above $13.9k.

Looking at ETH/USD, we can see from the weekly that following several weeks of consolidation around $365, last week’s rally in BTC/USD has dragged the pair up above the level, closing firmly above $400. Resistance overhead is at $448, but ETH will continue to underperform whilst ETH/BTC fails to make any higher-highs and keeps bleeding out. As such, I wouldn’t expect to see new 2020 highs for ETH/USD until ETH/BTC ceases bleeding. What is interesting, however, is that we do appear to have formed a rounded bottom and higher-low above the 200wMA at $309; I fully expect this low to now hold and for price to eventually follow BTC higher. If we quickly turn to the daily, one positive from last week’s movements is that price broke out above the double top at $395, turning market structure bullish.

If we now look at ETH/BTC, we can see that the weekly closed bearish for the pair, though holding above 0.031 for its close and sweeping the double bottom at that level. That said there is nothing bullish about the recent structure that would indicate a push higher following the sweep; instead, I am looking at that 0.0286 area that I’ve had marked out for some time as a place for the pair to reverse, printing a macro higher-low in the process before continuing its trend higher. If we look at the daily, we did see a daily close below 0.031, confirming the series of lower-lows on this timeframe. As such, I do expect new lows to be found this week as price reaches for that 200dMA sitting just above prior resistance at 0.0286. I will absolutely be a buyer if we see the pair come into this area and print signs of reversal. Now, should my expectations be wrong and we see ETH/BTC hold around here, I would not be interested in being long ETH instead of BTC until we see market structure turn bullish again; that is, a higher-high followed by a higher-low.


Chainlink:

LINK/USD

Weekly:

LINKUSDWeekly

Daily:

LINKUSDDaily

LINK/BTC

Weekly:

LINKBTCWeekly

Daily:

LINKBTCDaily

Price: $12.13 (92,668 satoshis)

Market Cap: $4.723bn (360,680 BTC)

Thoughts: Chainlink is looking much more attractive than it was just a few weeks ago, as it appears to have found a new base at prior resistance on both its pairs; but, I’d be wary of expecting too much from it whilst the narrative is ‘BTC up = ALT/BTC value down’.

If we begin by looking at LINK/USD, we can see that rounded bottom having formed that I mentioned a couple of weeks ago, with prior resistance at $9 turning support, as price failed for consecutive weeks to close below the level. We did see a spike lower into $7.25, but price recovered fast and a higher-low seems to be in place here. Looking at the weekly, there really isn’t a great deal of resistance between here and the all-time high at $20, but I think it will be a while before price returns to those levels if LINK/BTC falls as BTC/USD rallies. Looking at the daily, signs are promising here as price has closed above trendline resistance and printed a series of higher-highs and higher-lows following the $7.25 low, with $13.87 the next key area of resistance. Get above that level and I’d definitely be interested in LINK longs towards the ATH.

If we look at LINK/BTC, price is still well above the long-term trendline support from June 2019, with a similar higher-low having formed at 72,377 satoshis after falling off from the all time high. That said, resistance at 96.8k satoshis appears to be capping price, with the pair failing to follow LINK/USD higher. In fact, if we look at the daily, we actually have a series of lower-highs into that reclaimed resistance, with trendline resistance also remaining unbroken. I’d imagine that we see another test of the 200dMA below follow if BTC/USD pushes on towards $13,900 this week and I’d be looking at buying the pair anywhere between that MA and the trendline support below it. However, if we do breakout above both trendline resistance and 97k satoshis, it is absolutely game on for a reversal back to the ATH – and we know how quickly LINK can move when it gets going.


Waves:

WAVES/USD

Weekly:

WAVESUSDWeekly

Daily:

WAVESUSDDaily

WAVES/BTC

Weekly:

Daily:

WAVESBTCDaily

Price: $3.26 (24,820 satoshis)

Market Cap: $336.797mn (25,642 BTC)

Thoughts: Waves has had a quiet few weeks following its huge breakout in August, but recent movements are showing signs of renewed promise.

Beginning with WAVES/USD, here we can see that price rallied hard into August, closing above $1.75 and pushing as high as $5.10, where it printed a double top. Since, price has retraced towards that $1.75 area but remaining above it, with price now pushing higher once more, as the pair closes above its 200wMA. If we look at the daily chart, the most obvious thing to note here is the strong support that formed above $2, with three successive attempts failing to breach that level, which led to price pushing higher along with BTC/USD over the past two weeks. Higher-highs have started to form for the first time since August and the pull-back into old resistance turned support appears to be over. I’d expect to see WAVES push for $5.10 once more before the end of the year, above which the next major resistance is at $7.32.

Turning to WAVES/BTC, from the weekly we can see the series of higher-highs and higher-lows since 2020 began, with the most recent pull-back taking price back into the all-important pivot at 19k satoshis; an area from which began its 2017 cycle. Dropping into the daily, this level acted as resistance for over a year before it was broken through in August, following the pair’s successful close above both the 200dMA and 360dMA. As one would expect following such a breakout, price has since printed a bull flag of sorts into this prior resistance turned support, now bouncing and breaking to a higher-high. If the pair can hold above 23,220 satoshis, I’d expect to see it move back towards 40.5k satoshis later this year; fall back below that level and I’d expect a retest of the 200dMA to follow.


Zilliqa:

ZIL/USD

Weekly:

ZILUSDWeekly

Daily:

ZIL/BTC

Weekly:

ZILBTCWeekly

Daily:

ZILBTCDaily

Price: $0.019 (144 satoshis)

Market Cap: $199.87mn (15,211 BTC)

Thoughts: As regular readers will know, I am a big fan of Zilliqa and expect we’ll see a huge cycle from it in the future. As is the case with a few other alts I have highlighted in these posts, it spent the bulk of its existence in a downtrend prior to 2020 and it has barely moved since.

Looking at ZIL/USD, we can see that price rallied off the March low into a significant pivot at $0.029 and has since been flagging below resistance, with three months spent range-bound between $0.015 and $0.029. Unless we see ZIL break below this range support and lose $0.012, I am fully expecting upside resolution of this range and a weekly close above the pivot. This would open up a move into $0.-053, above which there is little resistance to $0.175. Plenty of upside here and plenty of speculative interest judging by the volume.

Turning to ZIL/BTC, this is one of the best looking charts around (much like FET, below). If we begin with the weekly, we can see the accumulation range that preceded the pump into that historical support turned resistance ~340 satoshis. Since, price has bled back towards range resistance, above which it is currently consolidating. If we turn to the daily, trendline resistance is capping price at present, printing lower-highs as price bleeds towards that range resistance, but, for now, 136 satoshis is holding as support. To be honest, I’d expect a move lower into the 360dMA to follow if BTC/USD pushes higher, which is where I’d look to add to my position (as close to 100 satoshis as possible). This is a long-term hold for me and I fully expect a move above 340 satoshis and much more upside above that next year.


Band Protocol:

BAND/USD

Daily:

BANDUSDDaily

BAND/BTC

Daily:

BANDBTCDaily

Price: $5.73 (43,680 satoshis)

Market Cap: $117.47mn (8,952 BTC)

Thoughts: BAND has had a killer 2020, rallying from near $0.20 to $18 in less than a year.

If we look at BAND/USD, the first thing that screams out at me is the similarities between price-action between May-July this year and current price action since mid-August. Following the all-time high at $18, price has reversed and broke much lower, turning support into resistance on the way as new lows were found, but price is now basing around old resistance at $5.25. Currently, range resistance is $7.65. Now, there are two ways once could play this, given how close the 200dMA is to price at present: either, you could buy in here at range support with a stop on a daily close below the 200dMA; or, you can wait for $7.65 to be flipped as support once again for a higher probability reversal. Either way, the pair is in an interesting spot for longer-term bulls. Any move below the 200dMA would likely send price down towards $2.75 or as low at $2.35 – this would make an ideal long-term entry.

Turning to BAND/BTC, again we find price at the 200dMA but no similar base has formed, with price printing lower-highs and lower-lows at present. Until this market structure reverses, I would not be interested in the BTC pair (and – in truth – neither should you, as clearly BTC/USD is the out-performer at present vs BAND/USD). As soon as 57,250 satoshis is reclaimed, I think we will see price begin its reversal, but for now there is nothing bullish about BAND/BTC.


Ardor:

ARDR/USD

Weekly:

ARDRUSDWeekly

Daily:

ARDRUSDDaily

ARDR/BTC

Weekly:

ARDRBTCWeekly

Daily:

ARDRBTCDaily

Price: $0.05 (401 satoshis)

Market Cap: $52.37mn (4,005 BTC)

Thoughts: Ardor has been a laggard for some time now – 460 or so days to be precise – and it finds itself sitting right at all-time lows.

I sold my position in Ardor several weeks ago to re-allocate capital into more promising prospects, but, looking at ARDR/BTC in particular, I may well re-enter a position here with a very tight stop. If we start with this pair, from the weekly we can see just how ridiculous this range has been, with it starting some time in August last year and with the all-time low above 360 satoshis acting as range support, with major resistance at prior support of 900 satoshis. Dropping into the daily, this 460-day range has seen bursts of volume traded but price has failed to perform like many other alts, even failing to break above range resistance at 740 satoshis throughout 2020. The most recent sell off has been heavy, from range resistance all the way down to the Binance range support at 385 satoshis (a little higher than the Bittrex pair). Given the ridiculous risk/reward, I will be punting a buy here with a stop on a weekly close below 385 satoshis on Binance. At worst, price breaks the range low and I exit at a loss but know that there is no possible area of support below this that I can refer to for a reversal to occur; at best, I capture a move back to the range resistance or higher.


Fetch.ai:

FET/USD

Weekly:

FETUSDWeekly

Daily:

FETUSDDaily

FET/BTC

Weekly:

FETBTCWeekly

Daily:

FETBTCDaily

Price: $0.053 (403 satoshis)

Market Cap: $39.43mn (3,004 BTC)

Thoughts: I’ve been talking about re-buying FET for a few weeks now and I think the time is here to really start getting some entries.

If we look at FET/USD, the weekly shows support being found above $0.048 with a rounded bottom forming at prior resistance. Turn to the daily and we find that price is at both the 360dMA and 200dMA, printing bullish divergence here. Break above $0.058 and the reversal is on, in my opinion.

More importantly, FET/BTC has finally returned to range resistance (and reclaimed support) above 360 satoshis, capitulating back below the 360dMA. I am expecting a range to form here as FET gets re-accumulated before the next leg of its cycle to retest 1400 satoshis. I will start buying here incrementally with my stop at the all-time low, looking to enter a full position over the next two weeks or so. Let’s see what November brings…


Akropolis:

AKRO/USD

Daily:

AKROUSDDaily

AKRO/BTC

Daily:

AKROBTCDaily

Price: $0.011 (86 satoshis)

Market Cap: $22.43mn (1,709 BTC)

Thoughts: Again, like FET, I have been waiting to buy AKRO for some time, although I do not think it is quite ready yet.

If we look at AKRO/USD, its is riding the 200dMA but putting in lower highs and lower lows, with the support at $0.0091 holding the pair up for now. We may well see the pair hold above the monthly low at $0.0073 if BTC/USD pushes higher, but it is AKRO/BTC that I am most interested in.

If we turn to AKRO/BTC, I mentioned previously that I was waiting for capitulation below the 200dMA, followed by a period of depression back around the range resistance at 33 satoshis. I don’t think we’ll get quite that low, what with the 360dMA just below at 60 satoshis, but I do think we’ll see price range below 81 satoshis for a while before another cycle can begin, particularly when one considers the extent of its bull cycle (unlike FET). As such, I will be giving this one a couple of weeks yet to play out before I even consider an entry, with stink bids below 60 satoshis.


COTI:

COTI/USD

Daily:

COTIUSDDaily

COTI/BTC

Daily:

COTIBTCDaily

Price: $0.035 (274 satoshis)

Market Cap: $20.448mn (1,558 BTC)

Thoughts: COTI has been holding up a little better than expected during the past week of BTC/USD mania, but I do think we’ll see a little more downside before a reversal.

If you look at COTI/BTC, I have left in my rough trajectory from a previous post, and I do think that last flush into range resistance around 185 satoshis is possible if BTC/USD squeezes towards $14k. That said, I am not expecting such an ideal entry for adding to my bag, and I’ll be looking to buy in here, now that we’re below the 360dMA. I do think we’ll see a period of consolidation here or lower before price reverses, but the first indicator for that reversal will be a higher-high (something we haven’t seen since the beginning of September when the 2020 high formed). I am expecting a huge cycle from COTI going into 2021, so any entries around this historical range make sense to me.

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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