Market Outlook #13

Market Outlook #13 (25th November 2018)

What a crazy week we’ve had across-the board. In this 13th instalment of the Market Outlook series, I’ll be dissecting the bloodbath that has ensued over the past few days in Bitcoin, Monero and Ethereum. I’ll also be taking a look at the super interesting price-action currently occuring in XRP, as well as highlighting one altcoin that seems to be looking bullish despite macro market conditions: Stakenet.

N.B: I’ve used log charts for a lot of this post primarily to improve the visibility of the moves.

Bitcoin:

Price: $3871.90

Market Cap: $67.344bn

Thoughts: Firstly, let’s take a second to appreciate that Bitcoin has dropped by more than 40% in two weeks… okay, second over. I hope that you guys are all still alive, and, more importantly, in a position to capitalise on prices that we haven’t seen since Q3 2017.

Now, the first chart I’ve posted is a simple fractal from 2014/15. The only reason I’ve posted this is so that we can visualise the price drop in percentage-terms and map it out to this year, to at least give an estimate as to what could be considered a ‘cheap’ price going forward. Those that bought BTC in 2015 at an 85% or greater discount from the all-time high were maximally rewarded when the subsequent bull cycle began. If we use a similar discount from the January highs of ~$20k, we’d need to see sub-$3k prices to capture maximal returns when the next bull cycle begins. This is a simplistic perspective using the fractal, but it is useful when used in conjunction with the subsequently printed price-action charts.

So, this past week has seen price drop into a Weekly bullish orderblock that has remained untouched for over a year. This is significant. Zooming into the Daily chart, we can see that price has also traded within the Daily bullish orderblock. There is some probability that any calls for new lows could be answered with a reversal from current prices, given this higher time-frame confluence. When we look at the 15-minute chart, we can also see the beginnings of a short-term reversal, with price breaking market structure to the upside and respecting the breaker. This is indicative of a potential relief rally to the $4.2-4.3k area. However, this is only valid whilst the breaker remains intact. If the breaker gives way, new lows are highly probable.

However, given the fractal we mentioned earlier that would price ‘cheap’ Bitcoin below $3k, what would draw price to such levels? Well, the level of prior resistance turned support at around $3k is what led to a continuation of the momentum that pushed prices to just shy of $20k in January. Hence, there is a great deal of liquidity resting below that swing-low. Price has already swept the stops below $5400 without there being sufficient momentum for a reversal, so the next obvious place for price to seek out would be those lows below $3k. There is also an untested Weekly bullish orderblock resting just below that level at ~$2.5k. *If* we do not see a sustained reversal from within the current orderblock, this is where I expect price to move towards. There has, however, been significant trading volume this week – the highest since in 8 months on Bitfinex – and, as such, I wouldn’t rule out a longer-term reversal forming from these levels.

Either way, if you have capital set aside for future investment, scaling into spot Bitcoin from here seems a no-brainer with a sufficient time-horizon.


Monero:

XMR/USD

XMR/BTC

Price: $57.06 (0.01485 BTC)

Market Cap: $947.042mn (246,547 BTC)

Thoughts: Monero has swept the Weekly swing-low against the Dollar at just shy of $65. This low had been untouched for 13 months. Price has traded into a level of prior resistance at $58, though I would be surprised to see anything more than a short-term bounce at these prices. This is primarily because of the meaty Weekly bullish orderblock sitting sitting at $45. Against BTC, Monero is still riding the two-year uptrend, and is currently experiencing a slow bleed towards the Daily bullish orderblock at 0.014 BTC. This level has confluence with the two-year trendline support, and I do not anticipate the ~0.013 BTC lows to give way easily. Short-term support has become resistance at 0.0155 BTC and price continues to trade below its short-term trendline resistance.


Ethereum:

ETH/USD

ETH/BTC

Price: $110.03 (0.02856 BTC)

Market Cap: $11.379bn (2,954,347 BTC)

Thoughts: Well, where Ethereum seemed to be positioned so strongly just a couple of weeks ago, it now looks the weakest against the Dollar. There are very few higher time-frame levels of support on ETH/USD. The most significant ones are at $95, $59 and ~$49. These latter two levels are around a 50% drop away still, and are situated around the next Weekly bullish orderblock. That would be a huge drop given where BTC/USD and ETH/BTC are sitting. It would either imply another 50% drop in Bitcoin’s price (if ETH/BTC is stable), which, whilst not improbable, I find highly unlikely; or it would mean ETH/BTC breaks a number of critical support levels, which is more probable.

However, this past week’s dump has meant that the Weekly swing-low that formed in July 2017 has now been swept, and there are a number of reasons to think that we’ll find some support at the levels highlighted on the Daily chart. The ~$100 level is an area of prior resistance that seems to be holding for now, whilst $92 is the next Daily bullish orderblock. I would expect this area to provide at least some short-term relief. That being said, there is an untouched pool of stops resting below $77 with highly illiquid price-action below it that price may seek to fill in. The following level of support would be the prior resistance at $59…

Looking at the 4H ETH/BTC chart, we can see that price has traded into a 4H bullish orderblock, with prior support at 0.0308 BTC now resistance. The short-term trendline resistance has, however, been broken. If price can sustain this breakout and remain above the orderblock, I’d expect a recovery to that former support level.


XRP:

XRP/USD

XRP/BTC

Price: $0.35 (9112 satoshis)

Market Cap: $14.15bn (3,674,547 BTC)

Thoughts: Ah, XRP – the coin that everyone loves to hate. Despite this communal loathing, no one can deny how fascinating the price-action of XRP has been over this past week. Where most altcoins have fallen against BTC due to the recent volatility, XRP has rallied. This hasn’t, of course, stopped it falling against the Dollar.

There is no doubt that XRP/BTC is exhibiting bullish market structure, with higher-highs and higher-lows in continual formation since early October. A bounce at current levels of prior resistance potentially turned support would imply an imminent new high above ~11k satoshis. When you look at this in conjunction with XRP/USD, there seems to be a highly profitable opportunity in play. The Weekly chart for XRP against the Dollar shows that price is trading inside a Weekly bullish orderblock and between two levels of prior resistance. Dropping down into the Daily chart shows that price has swept the liqudity below $0.372 (also a level of prior resistance turned support) and caught a bounce from the equilibrium (50%) of the orderblock (which is also a level of prior support). This is a low-risk, high-reward play.


Stakenet:

XSN/BTC

Price: $0.10 (2621 satoshis)

Market Cap: $7.449mn (1,938 BTC)

Thoughts: After publishing my Coin Report on Stakenet last week, I hadn’t actually paid any attention to its recent price-action. It seems that Stakenet gives zero fucks about what Bitcoin is doing…

The Daily chart is printing what looks to be a series of extended higher-lows and higher-highs, but price has run into resistance at ~3200 satoshis. However, volume has been rising for three months straight and levels of prior resistance are becoming short-term support. *If* this momentum can be sustained and the Daily can close above 3200 satoshis, there’s a likelihood that Stakenet is beginning a new bull cycle.

I hope you’ve enjoyed this 13th instalment of Market Outlook. Stay safe out there.


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Market Outlook #11

Market Outlook #11 (17th November 2018)

Welcome to the eleventh Market Outlook.

Well… that was certainly an interesting few days. I did ask politely not to be proven wrong in my claim that we had found a bottom; alas, Bitcoin gives zero fucks. However, despite the bloodbath in BTC/USD this past week, there is a silver lining: this Market Outlook is probably the most exciting in a while for BTC, ETH and XMR, all of which had been range-bound for an age. Further, whilst there was a lot of subsequent blood in alts, the vast majority of the lows that formed in August/September seem to have held firm.

This post will deal exclusively with Bitcoin, Monero and Ethereum, as there is a great deal to get through concerning those three. Where things get real messy is in the somewhat conflicting pictures being painted in ETH and XMR against BTC versus both against the Dollar, as we’ll see…

On with le spectacle:

Bitcoin:

Price: $5618

Market Cap: $97.644bn

Thoughts: *insert well, that escalated quickly gif*

What a week. In last week’s Market Outlook, price looked as though it had successfully retested the breakout from trendline resistance, forming a higher swing-low on the 4H chart. Fast-forward to today, and 11 months of holding above ~$5800 have been undone in a couple of 4H candles. Looking at the Weekly chart, we can see that price has now swept that previous swing-low at $5750, currently hanging above the last bullish orderblock of 2017 by a thread. There is long-term liquidity below $5400, and I would be very surprised if we don’t see that level taken on Bitfinex before catching a bounce. Just below that liquidity is a level of prior resistance at $4970. If this current Weekly candle closes at or below $5750, that’s where I think we’re headed next.

However, looking at the Daily and 4H charts, decreasing volume is apparent; perhaps this particular period of selling is running out of steam, and we may be headed for a short-term bounce back up to prior support now turned resistance between $6100-6200. That area is also the OTE retracement region (61.8%-78.6%) of this current downswing. A less extended bounce could see price move to $5850 before being slapped straight back down to new lows.

However, there is a third and more hopeful case here, and it is predicated on the next couple of weeks of price-action. What we *might* be witnessing is the creation of a Wyckoff Spring, from which we form a longer-term reversal. The liquidity below $5750 and $5400 has been the primary doubt circling my mind when considering a Bitcoin bottom above that former swing-low. It would seem that my convictions were incorrect and I should have known that, no matter what, that liquidity would be swept. The Wyckoff Spring scenario could see further capitulation towards that $5k level before a return to the range above $6k. If that isn’t what is unfolding, and we get a Weekly close here, be prepared for a hell of a fight to reclaim $6000, given the time its taken to break through it to the downside. Fingers crossed for the former, right?


Monero:

XMR/USD

XMR/BTC

Price: $85.82 (0.0155 BTC)

Market Cap: $1.422bn (257,607 BTC)

Thoughts: Monero is in a super interesting spot against Bitcoin and against the Dollar, for different reasons. XMR/USD shows that price has returned to the long-term accumulation range; the range that preceded the Winter bull cycle. Now, whilst this range remains in play, there really isn’t much to worry about aside from intra-day volatility, which is almost entirely predicated on Bitcoin. But the range is large enough to accomodate some volatility: we are currently 12-13% above the range support at $75, and, assuming that XMR/BTC remains stationary, even a BTC/USD move to $5k wouldn’t quite penetrate the bottom of the range. However, a Daily or (god forbid) Weekly close below this range would signify some serious capitulation, as support levels are sparse below that range low.

Now, XMR/BTC is a beauty on all time-frames, offering hope where it may be foolish to anticipate any bullish movement. XMR/BTC has been in an uptrend on the Weekly for almost two years now; it is currently trading inside two Weekly bullish orderblocks; and it is trading within a Daily bullish orderblock, also. This orderblock sits neatly below the initial breakout level – a level that continues to hold firm. I think it would take something entirely unexpected in Bitcoin’s price-action (or in Monero’s fundamentals) in order for XMR/BTC to trade below that 0.013 BTC level anytime soon.


Ethereum:

ETH/USD

ETH/BTC

Price: $173.49 (0.0313 BTC)

Market Cap: $17.913bn (3,235,069 BTC)

Thoughts: If possible, Ethereum looks even more conflicted across its pairs. ETH/USD is trading a little above a Daily bullish orderblock, with the swing-low that formed in September just about holding. Given this positioning, I highly doubt that the low holds much longer, if only to allow price to trade inside the orderblock. If/when price closes below that $167 low, the next major support is at $136… that’s ~20% lower. It gets really messy if price breaks through that support level; the following support is ~$100 – a level of prior resistance. (On the lower time-frame chart, ETH looks like it might be gearing up for a short-term bounce, similar to BTC.) But fear not…

ETH/BTC is granite-like. The Weekly chart shows that price is currently consolidating within a bullish orderblock that sits at a level of prior resistance turned support. Price and volume are flat, as though ETH/BTC has no idea  what’s going on in the rest of the market. The Daily chart shows that price has held its short-term range despite all the recent market volatility; but the volume candle looks a little concerning – until you switch to 4H. The 4H confirms that ETH formed a strong bullish close on significant volume, with a move back into the range.

As a side note, this 4H chart is almost forex-like in its fuckery; we’ve got a tight consolidation range, followed by a false breakout to the upside and a subsequent breakout to the downside, followed by a return to the range.

Regardless, ETH/BTC remains more bullish than bearish, despite the short-term trendline resistance that has formed. That being said, I must highlight that any present bullishness or neutrality will swiftly be demolished if that swing-low at 0.0297 BTC gets taken out. Eyes on the following week.

That concludes the eleventh Market Outlook and what has been a fascinating few days. I hope you’ve enjoyed the read! See you next Sunday.


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Market Outlook #10

Market Outlook #10 (11th November 2018)

Hello, hello. Today marks the 10th consecutive week of publishing these Market Outlook posts, and, given that milestone, I’ve decided to write up a stonker. In the following post, I will take a look at the past week’s movement in Bitcoin, Monero and Ethereum, as usual, but will follow those up with analysis of five altcoins that have never been discussed within this series of posts. Now, it’s important to stress that the analysis is exclusively technical. That being said, the alts I’ve selected are primarily largecaps, and thus they trade with ample volume and liquidity to assure the validity of the analysis (unlike lowcaps or microcaps with equivalent charts that are more prone to deviating from what makes sense). Long story short, there’s a lot of opportunity floating around at present, and the alts I’ll be looking at in this report are Qtum, Gifto, Waves, Komodo and Wings. As you’ll see, they share many technical parallels, though I can’t vouch for such equivalence in fundamental strength.

Anyways, on with the show.

Bitcoin:

Price: $6389.16

Market Cap: $110.982bn

Thoughts: In last week’s Market Outlook, I spoke about the low-volume pullback and trendline retest being textbook, anticipating a a bounce this past week. We got the bounce but price is still struggling to reclaim the ~$6550 level, which is critical in shifting short-term market structure from its present chop to a bullish state. The key support remains around $6300, and that level has held despite the more recent pullback from the short-term resistance. We have also formed a higher swing-low, which should serve to drive price above that significant pivot level. The Daily chart looks as though a reversal is imminent – perhaps in December we’ll see that resistance at $8500 tested with the launch of Bakkt acting as a catalyst. The overall picture remains positive with key support intact.


Monero:

XMR/BTC

Price: $103.35 (0.0162 BTC)

Market Cap: $1.711bn (268,508 BTC)

Thoughts: The Daily XMR/BTC chart is very interesting, as we managed to close above the recent swing-high at 0.017 BTC on rising volume, but swiftly lost all ground and returned to the short-term range. Volume on the pullback, however, has been decreasing with each day, with price now trading inside a bullish orderblock above resistance turned support at the breakout level of 0.0155 BTC. This is a critical turning point. The volume action implies that we should form a higher-low around here and make another attempt at breaking out of the range, and, ideally, maintaining the breakout level.


Ethereum:

ETH/USD

ETH/BTC

Price: $211.75 (0.033 BTC)

Market Cap: $21.838bn (3,426,123 BTC)

Thoughts: Last week, I mentioned that the unusually low volatility would likely be followed by dynamic movement. Ethereum has led the charge regarding price-action this past week, with an explosive breakout from the range on significant volume. This has occured against the Dollar and against Bitcoin, and both breakout levels have held firm. The recent pullback on ETH/USD has been on near-zero volume, and a series of higher-highs and higher-lows have been formed, confirming bullish market structure. Given that the breakout level continues to hold, I’d expect another 10-15% move up over the next couple of weeks.


Qtum:

QTUM/USD

QTUM/BTC

Price: $3.89 (60978 satoshis)

Market Cap: $345.987mn (54,288 BTC)

Thoughts: I want to preface this section by stating that I have absolutely no idea what Qtum is. Now that that’s out of the way, behold the beautiful chart and the immense upside potential on a serious largecap. Rarely do you see the possibility of a 2000% return on a $345mn altcoin, but that is exactly what is presented to us here. A clearly defined accumulation range is apparent on the QTUM/USD chart, with one 24-hour period trading almost $10mn-worth of Qtum. Further, QTUM/BTC has been range-bound for 10 weeks, and is currently trading inside the bullish orderblock that preceded its insane bull cycle in December 2017. Volume has been rising for each of the past three months, and range resistance and support continue to be respected. Bullish.


Gifto:

GTO/USD

GTO/BTC

Price: $0.06 (992 satoshis)

Market Cap: $33.617mn (5,274 BTC)

Thoughts: Similarly to Qtum, but on a smaller scale, Gifto is also experiencing a large amount of volume within a tight price range. Where QTUM traded 2.69% of its circulating supply in one day, Gifto traded almost 9%, and is currently priced only ~20% above its all-time low. There are clear levels of resistance to potentially set sells at should a reversal come, and there is over 1500% of growth to occur before the USD all-time high gets broken. Again, not a clue what Gifto is, but if it even has remotely decent fundamentals, this looks like a solid buy.


Waves:

WAVES/USD

WAVES/BTC

Price: $1.75 (27328 satoshis)

Market Cap: $175.377mn (27,328 BTC)

Thoughts: Now, a more familiar altcoin: Waves. Waves is currently trading at clear long-term support against the Dollar, with very little support beneath. Should price fall and close below $1.60, it would make sense to exit any position. But, for now, that level continues to hold strong. WAVES/BTC is currently experiencing a near-zero volume pullback towards short-term support around 24000 satoshis. That’s only ~10% below current prices, which is minor downside risk.


Komodo:

KMD/BTC

Price: $1.17 (18423 satoshis)

Market Cap: $129.882mn (20,376 BTC)

Thoughts: Komodo is in a really promising area, current trading at the lowest price that preceded the January highs. KMD/BTC has formed a range between 14k-22k satoshis, and experienced ~$10.4mn worth of supply exchanging hands within a few days, with price respecting range resistance. Price has since returned to the equilibrium of the range on low volume.


Wings:

WINGS/BTC

Price: $0.19 (3000 satoshis)

Market Cap: $17.148mn (2,691 BTC)

Thoughts: Wings is another familiar altcoin, and one that is exhibiting perfect price-action. Firstly, price formed a 10-week range, during which volume was constant. Then price broke out of the range on very high volume, with 13.75% of the circulating supply being trading during the breakout. Price then remained above the breakout level, formed a lower swing-high, and then retested the the former resistance now turned support. This recent retest saw price bounce hard on even higher volume, with 24.3% of circulating supply traded, and a clear series of higher-lows and higher-highs have formed. Most bullish.

That concludes the milestone 10th Market Outlook. I think this has been an eye-opening one for myself regarding current opportunities amongst largecaps, as I tend to stick to midcaps and lowcaps. I hope you’ve found some value in it, too! Let me know what you think.


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