Market Outlook #99 (2nd November 2020)
Hello, and welcome to the 99th instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, Monero, Tezos, THETA, Uniswap, Siacoin, Orchid, Tellor and KardiaChain.
As ever, if you have any suggestions for next week’s post, feel free to leave them in the comments below.
Market Cap: $248.253bn
Thoughts: Ah, what a sight to behold as we enter the penultimate month of 2020.
Beginning with the monthly, there is very little to say except that price managed to close October basically at the highest close price of all-time (most exchanges were either at or slightly under this price). This is huge. The monthly closed at highs with no real wick, thus no sweep and rejection. As such, as mentioned last week, I am now looking for opportunities for longer-term leveraged longs targeting the all-time high. I do think the US Election and other such extraneous factors could have a short-term effect on price, but the monthly chart speaks for itself here.
Turning to the weekly, I have marked out a rough trajectory for price, similar to recent pushes higher and subsequent consolidations. In fact, the weekly did sweep $13,900 and close below the level, thus I would not discount the possibility of some consolidation here followed by a move lower into $12,500 to find a higher-low and new support base, much like the push above $10,600. More bullish than that even would be for price to continue higher this week, close above $14,000 and then retrace towards the prior range high at $12,500, where I would look for mid-term longs. The most ideal entry would be as close to the trendline support that has formed since price reclaimed the capitulation candle high at $8000. The next area of resistance above $14,000 is $17,150, followed by the all-time high.
Turning finally to the daily, here we can more clearly see the sweep of the high (along with bearish divergence) that may well lead to a period of consolidation here, particularly if US Election results have a downside shock for price. Regardless, the dip is clearly for buying in this market, with a strong trend of higher-highs and higher-lows throughout 2020. 2021 looks bright for Bitcoin.
Price: $383.41 (0.02868 BTC)
Market Cap: $43.424bn (3,248,562 BTC)
Thoughts: As anticipated, Ethereum continues to lag Bitcoin because ETH/BTC continues to put in lower-lows. As I said last week, I am uninterested in ETH as a play instead of BTC until this pattern shows signs of reversal.
If we begin with ETH/USD, from the weekly we can see that price is currently consolidating above $365, having printed an inside week. That said, it remains firmly within the bearish engulfing candle range, with $309 as support and the 2020 high at $491 as resistance; all price-action within this range is irrelevant long-term – it is a break and close above or below either side that would dictate the mid-term trajectory for the pair. Turning quickly to the daily, we can see that price posted higher-highs for the first time since September began but is now struggling to hold above the breakout level at $392. If we see price falter further and fall below $365 again, turning market structure on this timeframe bearish again, I’d expect to see $309 retested as support. If we see price hold here, $448 is the next key area of resistance.
Turning to ETH/BTC, price behaved exactly as expected following Bitcoin’s push higher last week, breaking below support at 0.031 and closing firmly below it. Price pushed into the prior resistance turned support at 0.0286 that I have had my eye on for weeks now, and now I am looking for signs of reversal. That said, we could easily squeeze another 5-10% lower if BTC/USD breaks cleanly above $14,000, and the next major support is at 0.0262. Either way, it is between these two levels that I expect another higher low to form in the series of such higher lows since September 2019. ETH/BTC is trending higher long-term, no doubt about that. If we drop into the daily, we can see price is contesting with the 200dMA, but we may well see a spike lower towards trendline support or even the 360dMA if BTC continues higher; as such, I am now looking for bullish divergences or shifts in daily market structure (higher-high followed by higher-low) to indicate when I should re-enter longs.
Price: $118 (0.00889 BTC)
Market Cap: $2.093bn (157,913 BTC)
Thoughts: Monero has pushed on into major resistance and since pulled back, now trading towards an attractive area for entry.
If we look at XMR/USD, here we can see the large range of the previous weekly candle, pushing to new highs at $140, just shy of major resistance at $145, with the low of the week clearing out the prior two weekly lows. Despite that, I do think we’ll see a bit more of a pullback on the pair into prior resistance at $106, where I would be keen on getting long. The clean breakout above the 2019 high was all I needed to know that Monero is very likely headed much higher in 2021. Dropping into the daily, we can see that local trendline support is being tested a second time in the past few days, hence why I would be cautious about attempting an entry here, but I do think that $97-$106 area will be ideal for a longer-term swing.
Turning to XMR/BTC, we can see quite a heavy pull-back from the high of the year at 0.012, with price dropping off towards the initial ascending triangle breakout level at 0.0085. I think we could see price fall towards the 200dMA and trendline support – if we turn to the daily – as there is a great deal of confluence here for a bottom to form. Any bullish divergence coming into that area would be the first sign of a reversal for me; risk-averse traders can opt to wait for market structure to shift back to bullish, however. Nonetheless, it is almost time to buy.
Price: $1.89 (14,258 satoshis)
Market Cap: $1.415bn (106,751 BTC)
Thoughts: Tezos doesn’t look quite ready yet despite the recent sell-off, but it is approaching key areas.
Starting with XTZ/USD, from the weekly we can see a swing failure below the prior all-time highs turned potential support at $1.95, with trendline support from October 2019 just below should price falter here. Ideally, I’d like to see the pair form a new base above $1.95 in order to become interested in entering a long, as – other than trendline support – there is very little major support below this until $1.25 or so. Turning to the daily, we have lost the 360dMA again after a false breakout took price higher, with the major battle now occurring at this $1.95 area. To be honest, despite BTC/USD being bullish, Tezos still looks weak against the Dollar, which just shows how weak its BTC pair is at present.
Turning to that BTC pair, price has fallen hard since it lost the 24k-satoshi level, dumping into prior resistance turned support at 14.6k satoshis last week. The next major support is down at 12k satoshis, hence the potential for another 10-15% decline in XTZ/USD even if BTC/USD pushes a little higher this week. That is assuming that the current support level gives way, which, if we turn to the daily, does appear to be happening, with today’s candle appearing to reject it as resistance rather than cling to it as support. It is very possible that – much like July to November 2019 – we see the pair form a large range between 12k satoshis and 14.6k satoshis for several weeks before a reversal begins. Not interested in this one just yet.
Price: $0.598 (4,516 satoshis)
Market Cap: $598.713mn (45,163 BTC)
Thoughts: THETA has had a monster run and it simply does not look attractive to me here as a potential new buyer. If you are a holder, however, there are positives.
Looking at THETA/USD, we can see that price printed its all-time high at $0.82 a few weeks ago and has since fallen off towards prior resistance potentially turned support at $0.60. That said, it has also lost trendline support from the March capitulation low. If we drop into the daily, this trendline break becomes clear, but, interestingly, no sell-off has occurred since. Instead, we have a range forming between the all-time high and $0.60 as support. Should the pair break below $0.60, the next area of support is 30% lower at $0.41, just above the 200dMA, which might make a more attractive entry for new buyers. Personally, I would not be interested until $0.30 or lower.
Turning to THETA/BTC, here we can see the bull cycle clearly, with a higher-high on the weekly in September culminating in an all-time high at 7,550 satoshis. Price has since dropped off towards prior resistance at 4,047 satoshis, closing firmly below a potential level of support above at 5,241 satoshis last week. Again, it has lost local trendline support, but, much like the consolidation in July, could very well find a base at a higher-low and then rally to new all-time highs from here. If it loses 4,047 satoshis, however, I’d expect it to return towards 2,200 satoshis; over 50% lower from here. If we look at the daily, the 200dMA is 20% lower from here and the 360dMA is closer to that 2,150 satoshi support base from this past summer. Again, this doesn’t look attractive to me as a potential new buyer. The most ideal scenario for me as a buyer would be to simply wait for price to return to the original range at 1600 satoshis.
Price: $2.26 (17,400 satoshis)
Market Cap: $482.94mn (36,286 BTC)
Thoughts: UNI was a request from a subscriber and due to its minimal price-history, I have provided an hourly chart for both pairs.
If we look at UNI/USD, we can see that price rallied from its listing into an all-time high at $8.70 and has since been playing out a sped-up bear cycle, with the classic stages visible at each new level of support that has turned resistance. I would say that the early October dump through the support at $3.17 was very likely capitulation, given the accelerating decline through the floor and the relatively high volume that was traded as price hit $2.48 as a then-all-time-low. Price then bounced into $3.17, reclaimed it briefly but struggled to move beyond the 360hMA, falling back below and bleeding slowly subsequently. Recently, $2.48 gave way also, with price falling to a new all-time low at $2.22 (potentially the anger phase of the bear cycle). $2.48 is now acting as resistance but my eyes are firmly fixed on the 200hMA, which has capped price since late September. I would not be interested in UNI until this MA is reclaimed; it may well be a couple more weeks of depression before UNI gets there.
Turning to the BTC pair, the picture is very much the same, except that a cleaner trendline resistance is capping price along with the 200hMA, into which price has rallied today. If we start to see closes above this confluence of resistances, I’d become interested, with 21.5k satoshis the major resistance overhead.
Price: $0.0023 (18 satoshis)
Market Cap: $106.147mn (7,953 BTC)
Thoughts: Siacoin has suffered like many other alts over the past couple of weeks, given the rally in BTC/USD.
If we look at SC/USD, from the weekly we can see that there was a false breakout above significant resistance at $0.004, which has led to a sell-off back towards a major support area between $0.002 and $0.0026. Price is currently slowing down its sell-off as it trades in this area, and I’d expect to see a rounded bottom form here above $0.002. If we lost $0.002 on the weekly, I would be exiting my position until it was reclaimed, as the next support is at $0.0012. I do think we see Siacoin push back above $0.0026 later this year however, and those on the sidelines could wait for that level to be flipped as support before entering, with the obvious target after that the 2020 high.
Turning to SC/BTC, we can see that 15 satoshis has held as range support for 434 days, with price now pushing back towards this range support. There are two scenarios I am considering here: the first is that price sweeps the low and closes back above it before reversing towards the 2020 high at 46 satoshis; the second is that the range support holds for the pair and we see re-accumulation occur here. The bearish scenario would be for the weekly to close below 15 satoshis and not reclaim it immediately the subsequent week; this would put Siacoin back in bear territory and I would not want to be holding. I do think we see the bottom form roughly around the same time ETH/BTC bottoms, so pay attention to that.
Price: $0.207 (1,562 satoshis)
Market Cap: $76.287mn (5,741 BTC)
Thoughts: Orchid had a mental August, rallying from the all-time low at 1,425 satoshis to 8,005 satoshis in a few days. Since, price has pulled back slowly, bleeding throughout September and October and now approaching that all-time low once more. Much like Siacoin, I think there is a possibility this low gets swept before we see a reversal and another pump towards the all-time high, so I will be watching for a break below 1425 satoshis followed by a reclaim of the level before I enter. If, however, the low holds, I’d be looking for a range to form here once again, just like earlier this year.
Price: $19.67 (0.00147 BTC)
Market Cap: $29.89mn (2,250 BTC)
Thoughts: Tellor is a project I am definitely interested in re-entering, but I am unsure if it is quite the time yet.
Looking at TRB/USD, we can see that price has been bearish following the all-time high at $91, breaking support levels and turning them into resistance since. However, price has broken cleanly back above prior support turned resistance at $25.93 and since traded back below towards the 200dMA. If we see another higher-high follow, I would definitely consider that a reversal has begun. However, if price falls here and breaks below support at $12.62, I’d look at $8.50 for an entry.
Turning to TRB/USD, the most important level here is the prior range resistance turned support at 99.6k satoshis. If we see Tellor trade back into that level – note that it hasn’t broken back above any important levels on this pair – then I’d be a buyer with a stop-loss at ~46.6k satoshis, looking for a cyclical reversal. I do think we will need to see a range form, much like many other alts, before this reversal occurs, as price has run very hard over recent months and re-accumulation will need to take place. Don’t rush your entries on charts that look like this.
Price: $0.0126 (94 satoshis)
Market Cap: $22.145mn (1,654 BTC)
Thoughts: KardiaChain was a massive winner for me over recent months and – despite my belief in the long-term viability of the project – I am very glad I exited above 280 satoshis.
That said, I want to be a holder once more, but first I need to see a range form like that of June to July earlier this year, if we look at KAI/BTC. Ideally, I’d like to see price continue lower towards that range resistance at 56 satoshis and turn this into a new range support. However, if price fails to get that low, I will be looking for a new range to form at whatever price it does (perhaps above the 81-satoshis support level), monitoring the rich-list for signs of re-accumulation. If we quickly turn to KAI/USD, a range forming at the current level would also be a clear sign of a bottom, as prior resistance at $0.012 would now be support. Watching this one very closely.
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 firstname.lastname@example.org.