Market Outlook #20

Market Outlook #20 (27th January 2019)

Welcome to the 20th Market Outlook. That’s somewhat of a milestone, is it not? And what does the past week of price-action present us by way of celebration? In short, f all.

Whilst not technically true, we have just witnessed another week of consolidation amongst Bitcoin, Ethereum and Monero, and price-action at present is extremely choppy on the lower timeframes. We are mostly still range-bound, but the consolidation in Bitcoin is proving to be of service to the rest of the market, with many alts either beginning to pop or looking as though they are on the precipice.

In today’s Market Outlook, I will take a granular look at the market structure in Bitcoin, in an attempt to show just how choppy and uncertain it is currently, and how traders are being destroyed left, right and centre. I’ll then examine Ethereum and Monero, before presenting a couple of opportunities in Komodo and, most interestingly, Golem.

Bitcoin:

Price: $3596

Market Cap: $62.946bn

Thoughts: Bitcoin continues to bounce between lower timeframe levels of support and resistance, effectively range-bound between $3560 and $3750 for the past two weeks (excluding the anomalies; the high at $3886 and the low at $3460).

As such, I figured it would be useful to do a move-by-move study of price-action across this period, observing, in particular, how often (and how mercilessly) price shifts market structure on the 4H:

Towards the end of 2018, we can see a series of higher-lows forming (and with them trendline support). These are met with lower-highs, with the range contracting until the breakout in the first week of January 2019. This high-volume breakout shifted the market structure to bullish from neutral by forming the first higher-high since before the New Year. This then led to another period of consolidation and a contracting range, with price failing to make any new highs above ~$4210.

A lower-high is followed by a lower-low and another lower-high, leading to another break in market structure on the 10th January; this time turning it bearish. This was also the moment price broke the trendline support that had been in play since around Christmas.

This led to a dramatic dump, and a series of lower-highs and lower-lows, typical of bearish market structure. We then see price surge up on the 14th January and form a higher-high, once again shifting market structure to bullish. This is followed by a few days of chop and consolidation, before a higher-high is made at $3886 on the 19th. One could be forgiven for expecting this new high to be met with a higher-low, as is typical of bullish market structure, but once again expectations were demolished and price broke below the previous low at ~$3650; market structure was once again bearish.

This shift brought with it the low at ~$3450 this past week, which has been followed by another period of consolidation. This was the case until yesterday, when price broke above $3650 once again, reclaiming the lost level and turning market structure bullish with a higher-high at $3750. Price has since formed a higher-low (which I have mistakenly marked a lower-low on the chart) at $3600. Will this be met with a new high or another change in market structure, back to bearish?

In truth, I cannot possibly say. The declining volume on the recent retrace back into the range suggests we may get another leg up, but given all that I have outlined above, this is no certainty. The most risk-averse way to play this would be to wait until the market shows you the direction it wants; this will come either in the form of a higher-high, after which it would be logical to expect the highs at $4200 to be targeted; or in the form of a clean break below $3550, ideally with a higher timeframe close below this level, indicating further downside to be found and a good area for shorts to enter.


Ethereum:

ETH/USD

ETH/BTC

Price: $116.07 (0.03227 BTC)

Market Cap: $12.126bn (3,375,084 BTC)

Thoughts: Much like Bitcoin, Ethereum is yet undecided on a clear direction. Against the Dollar, it is clearly range-bound between $116-$120, failing to close above or below these levels on the 4H or 1H over the past week.

Sometimes it is useful, even in tight periods of consolidation, to remind ourselves of the higher timeframe view. As such, ETH/BTC on the Daily shows us that we have bled below the Daily Breaker, just about, but that we are still well within the Daily Bullish Orderblock, with key support resting at 0.0313 BTC. The 4H shows us the gradual downtrend of the past two weeks that has led us to this point.

I have illustrated the two moves I am waiting for before taking any trade on ETH. The bullish scenario would be a clean and strong breakout above this 4H downtrend, ideally on significant volume, at which point I would go long on a retrace with my sight set on 0.042 BTC being taken out. The bearish scenario would be for price to break below this current channel, forming a higher timeframe close below the key support at 0.0313 BTC. This would turn the Daily to bearish, and shorts could be found on a retest of this prior support, which would be expected to hold as resistance.


Monero:

XMR/BTC

Price: $45.84 (0.01274 BTC)

Market Cap: $767.835mn (213,410 BTC)

Thoughts: Monero remains less decisive than even Bitcoin or Ethereum, slowly trending upwards but doing little to comba tthe trendline support turned resistance that has been in play since mid-December 2018.

A clean breakout above trendline resistance and above 0.0137 BTC would turn market structure bullish, and I’d be buying; a strong rejection from trendline resistance and a subsequent clean break below 0.0122 BTC and I would be selling what I currently hold.


Komodo:

KMD/BTC

Price: $0.685 (19074 satoshis)

Market Cap: $76.45mn (21,281 BTC)

Thoughts: Komodo looks very much ready for a move above range resistance at ~22k satoshis. It has been denied a higher timeframe close above this level for the past 5 months almost, trading between it and range support at 15.5k satoshis. During that period, Komodo has experienced high volume on buyups, followed by low volume retracements back to range support. More recently, however, price broke above its 200-day moving average on significant volume, being restrained only by range resistance. Price subsequently retraced on declining volume back to the 200 MA, holding firm around this level; now looking to make another attempt at a breakout from the range.


Golem:

GNT/BTC

Price: $0.065 (1820 satoshis)

Market Cap: $63.020mn (17,541 BTC)

Thoughts: I have no idea how it has taken until the last week of January for me to take a look at Golem, but the past 8 weeks have seen it experience insane volume. Price set a high just shy of 3000 satoshis at the beginning of December 2018, during which period 74% of Golem’s circulating supply was traded across all exchanges. This was followed by a move lower and the formation of a range between 1700-1900 satoshis for over a month. This range remains in play, and, during this period, Golem has experienced cumulative volume of over 317% of its circulating supply. If that isn’t a sign of serious interest at current prices, I have no idea what is. I will certainly be buying in this range.

That concludes the 20th Market Outlook. I hope you’ve found it somewhat useful! Feel free to leave any comments or questions below and I’ll get back to you.


If you’ve enjoyed this post and want to receive new posts straight to your inbox, I’ve set up a RSS-to-Email feed that will be sent out weekly; every Monday, 12pm. You’ll also get infographic Coin Reports and other material not published to the blog. Just submit your email and I’ll make sure you’re included in the list. Cheers.

Market Outlook #19

Market Outlook #19 (20th January 2019)

Hello, and welcome to the 19th Market Outlook. Unlike in last week’s post, where we had a lot to talk about, this past week has seen the market as a whole in consolidation. That being said, there is some interesting action taking place on the 4-hour timeframe, so much of this Market Outlook is focused on that.

As usual, I’ll be covering Bitcoin, Ethereum and Monero, and concluding the post with a look at a couple of altcoins: namely, Ark and HyperSpace. Let’s crack on:

Bitcoin:

Bullish Scenario:

Bearish Scenario:

Price: $3732

Market Cap: $65.269bn

Thoughts: Bitcoin, despite moving within a limited range for the past week, is in a very interesting position. I have depicted a bullish and bearish scenario for price-action moving forward, though I am leaning more towards the bullish scenario for reasons that will become obvious.

In the bullish scenario, the first chart I’ve printed is a rarity; as regular readers will know, I don’t often use indicators, but the 200 MA is one of significance, and the Weekly 200 MA has been respected by Bitcoin since before 2014. We can only see the moving average up until the summer of 2015, as there is not enough data to see further back, but BTC/USD has pretty much always trailed above this average. We can also see that the dump to new lows from back at $6k found its bottom exactly where the Weekly 200 MA resides. In 2015, when price reached this moving average, it began its slow but clear reversal.

Now, looking at the Daily, we can see that price remains above the prior resistance turned support. It has consolidated in a tight range over the past week, and the 4H depicts the stop run that led to market structure being broken to the upside at the beginning of the week. Further, we can see that there is a double top waiting at ~$4200, and price is continuing to make a series of higher-highs and higher-lows. If this bullish scenario is to play out, I’d anticipate a dump back below $3700 before a swift rejection and new highs above $3900, leading to that double top being taken out.

In the bearish scenario, the Daily shows price trading up into a bearish orderblock and forming lower-highs and lower-lows from this point. Price then dumped below ~$3900 last week, before consolidating this past week. The 4H shows the potential mechanics of this bearish scenario, with the uptrend being broken after the triple top was swept at $4100. This was a shift to bearish market structure, and price recently traded up towards the 4H breaker. From here, I would anticipate that wick to be swept before new lows below $3550 are made, eventually targeting $3200.


Ethereum:

ETH/BTC

Price: $124.35 (0.03328 BTC)

Market Cap: $12.991bn (3,477,392 BTC)

Thoughts: ETH/BTC broke above the short-term trendline resistance on significant volume at the beginning of the week, and has since consolidated in a range between 0.033 BTC and 0.034 BTC. There’s not all that much to say here given the lack of price-action of late, but last week’s scenario is one that I am still confident in, with this consoldation proving but a period of respite before new highs are attempted.


Monero:

XMR/BTC

Price: $46.15 (0.01235 BTC)

Market Cap: $772.324bn (206,811 BTC)

Thoughts: Monero is in a world of its own at the moment with how little it is giving away as to its direction moving forward. Higher-lows are being met by lower-highs, in an ever-contracting range. There is liquidity both to the upside and the downside, as the vast majority of these swing-low-and-highs remain intact. Trendline support has become resistance, but price is trailing very close to it and has not rejected in the manner that it usually would from a level of resistance. To return to bullish market structure, price must reclaim both the trendline resistance and the prior support turned resistance just below 0.013 BTC.


Ark:

ARK/BTC

Price: $0.43 (11512 satoshis)

Market Cap: $46.346mn (12,411 BTC)

Thoughts: Ark looks like its forming a beautiful cyclical low in this range between 9000 and 13000 satoshis. There are numerous high-volume buyups taking place, and higher swing-lows are forming on the Daily. I expect this range to last a little while longer before price breaks out above 13k and confirms a reversal. The next resistance level would be 19k satoshis – a level of prior support from July 2018.


HyperSpace:

AMP/BTC

Price: $0.019 (498 satoshis)

Market Cap: $1.87mn (502 BTC)

Thoughts: HyperSpace has some fundamental reasoning behind its unsually high-volume buyups, with its recent rebrand from Synereo and the beta launch of its content-sharing platform imminent; one which will reward content creators with AMP. Over the past month, AMP has seen over 20% of its circulating supply be traded, and market structure is beautifully clean for such a small coin. Prior range supports have become more recent range resistance, and there’s even a capitulation wick preceding the massive buyups. I can’t make an accurate guess as to when AMP will reverse and break out above 750 satoshis, but I expect this to have an explosive pump when it does.

That concludes this 19th Market Outlook. I hope you’ve found it somewhat useful. Please feel free to leave any comments or questions below and I’ll answer them as best I can!


If you’ve enjoyed this post and want to receive new posts straight to your inbox, I’ve set up a RSS-to-Email feed that will be sent out weekly; every Monday, 12pm. Just submit your email and I’ll make sure you’re included in the list. Cheers.

Market Outlook #18

Market Outlook #18 (13th January 2019)

Welcome to the 18th Market Outlook. After a few weeks of breakout rallies, short-term reversals and general upwards momentum, this past week has found the market, as a whole, losing steam and dropping off. With that said, local lows across-the-board remain intact, as we shall see.

In today’s Market Outlook, I’ll take a look at the past week’s price-action in Bitcoin, Ethereum and Monero, followed by a quick glance at an opportunity in Cloakcoin.

Bitcoin:

Price: $3672

Market Cap: $64.188bn

Thoughts: So, in last week’s Market Outlook, I suggested we price may seek out the equal highs that were resting around $4100 on resolution of the ascending triangle that was forming; and we certainly cleared those out this past week. However, price then swiftly broke down, confirming the upside breakout as false, and has since dropped off towards a significant historical level at ~$3700. This level has been support, resistance and support again all within the past couple of months…

Convention would suggest that this level would be one where we would catch a bounce, but price has lingered and consolidated here. With the swing-low from December 28th still pretty much intact – and price hovering above a Daily and 4H Breaker – I’d be surprised if we didn’t drop further over the next few days, towards $3550, before finding a real direction. Given the sheer number of equal highs on the 4H and Daily charts, I’m inclined to believe that any dump from here will be swift and temporary, serving as the catalyst for further upside above and beyond $4400 over the coming weeks.

I’ve depicted two possible scenarios from here on the Daily chart (one bullish, one bearish); both see price trade under $3600 soon, but how price reacts around that Daily Breaker is what I believe will indicate the path going forward. A sustained loss of the $3500 level would likely see new lows; a bounce in the Breaker would likely see price trade above the double top at $4400 shortly after.


Ethereum:

ETH/BTC

Price: $125.97 (0.03433 BTC)

Market Cap: $13.144bn (3,582,297 BTC)

Thoughts: As anticipated last week, Ethereum’s recent rally lost its momentum and price has dropped off ~20% against BTC. However, the market structure clearly remains bullish on the higher time-frame charts. The Weekly depicts a strong break of bearish market structure, followed by a retracement (this past week) towards the breakout level. The Weekly Breaker is being respected, though I wouldn’t be surprised to see a small further drop towards 0.033 BTC; the close price of the Breaker.

The Daily chart shows a sweep of the swing-low at 0.0354 BTC into the Daily Breaker and Daily Bullish Orderblock. Key support lies at 0.0313 BTC, and this is a long opportunity if ever I saw one. Only a higher time-frame close below this support level would invalidate the current bullish market structure. I expect further upside before the end of the month.


Monero:

XMR/USD

XMR/BTC

Price: $45.30 (0.01234 BTC)

Market Cap: $756.413bn (206,066 BTC)

Thoughts: Monero continues to move slowly relative to Ethereum, and remains range-bound. The Adam & Eve bottom I expected to form has not, and the rally I expected to come for XMR this past week also has not. Major resistance against Bitcoin remains at 0.0136 BTC, and a Daily close below 0.012 BTC would indicate new lows incoming.

XMR/USD depicts a cleaner breakdown from the uptrend on high volume, and I would expect price to at least retest the trendline support as a level of resistance. This would see price trade around $52 before either dropping off to form new lows below $40 or reclaiming the ascending triangle and breaking above ~$57 resistance.


Cloakcoin:

CLOAK/BTC

Price: $1.11 (30251 satoshis)

Market Cap: $5.82mn (1,586 BTC)

Thoughts: Cloakcoin is a low-supply privacy coin that has been around almost as long as I have. I have traded it numerous times in the past, but it hasn’t looked buy-worthy since late 2017… until now. Price has dropped off from highs formed in April/May 2018 towards a significant historical area of resistance, now turned support. Further, the actual opening price of the Cloakcoin market on Bittrex (from June 2014) has formed the range resistance; a range which has been in play for 5 months. Short-term resistance is around 38000 satoshis, with range support at ~25000 satoshis. Upside potential from current prices is over 1000%. A Weekly close below 24000 satoshis would negate this range and thus the trade, but that gives ~20% of downside risk versus a great deal more upside…

That concludes this week’s Market Outlook. I hope you’ve enjoyed the read. Please feel free to leave to any comments and questions below!


If you’ve enjoyed this post and want to receive new posts straight to your inbox, I’ve set up a RSS-to-Email feed that will be sent out weekly; every Monday, 12pm. Just submit your email and I’ll make sure you’re included in the list. Cheers.