Market Outlook #186 (8th August 2022)
Hello, and welcome to the 186th instalment of my Market Outlook.
In this week’s post, I will be covering Bitcoin, Ethereum, Cardano, Tron, Algorand, THORChain, Enjin and Ispolink.
As ever, if you have any requests for next Monday’s Outlook, do let me know.
Bitcoin:
Weekly:
Daily:
Price: $24,086
Market Cap: $460.433bn
Thoughts: If we begin by looking at BTC/USD, on the weekly timeframe we can see that last week was an inside week, with a very tight weekly range that culminated in price marginally close above the 200wMA once again. Given the inside week, we have the possibility of inside week failure here, and this morning we have seen price take out last week’s high at $23,650 and now make a move towards the prior weekly high at $24,545. If we see rejection early this week from up within this range – particularly if we take out $24,545 – and price starts to move back below last week’s high, we may be setting up for that inside week failure, where we could then expect price to take out the bottom of the weekly range subsequently and thus move back below the 200wMA towards prior resistance turned support at $21.9k.
Dropping into the daily, if we do see that SFP of $24.5k lead to a breakdown and eventual close below $22.5k, we then have a break in market structure following rejection from a key level and a liquidity sweep, which is not promising for bulls short-term. In that scenario, it is likely momentum indicators will break down, and then it is all on that strong $21.9k support to remain support – break back below that and I think we return to the $19k area to retest the bottom of the range as support. If, however, we don’t reject up near $24.5k and instead start to close and consolidate above it, a weekly close above the level invalidates inside week failure and I am then looking for longs next week to continue to ride the rally higher and fill the gap back into $28.7k.
Ethereum:
ETH/USD
Weekly:
Daily:
ETH/BTC
Weekly:
Daily:
Price: $1770 (0.0735 BTC)
Market Cap: $215.773bn
Thoughts: Beginning with ETH/USD, we can see from the weekly that we continue to consolidate right around that all-important prior support turned resistance level at $1728, with last week closing just below the level at $1700 and painting an inside week, just like on BTC. Again, this sets us up for a possible top for the rally in a vital area or for a massive reclaim and potentially for another 25-30% rally into $2300. For the bears, what you would want to see is price to take out the high at $1802 and then reject and close the week back below $1728, opening up the likelihood of at least the $1560 swing-low getting taken out. Moving into the daily, we can see that if that low gets taken out following a sweep of $1800, we have a reversion to bearish market structure, and if that occurs with momentum indicators pointing towards exhaustion, I think we’re back in sell the rally mode, at least back into the $1290 area to retest the breakout level as support. If we can close above $1800 and consolidate and lower timeframe momentum continues to point higher, I will be looking for dips to long over the next couple of weeks with a primary target of the 200dMA at $2275.
Dropping into ETH/BTC, we can see that price has closed above the weekly trendline resistance for a second consecutive week having retested the mid-range as support. This is promising, and I would expect continuation higher from here towards the 2022 open and the top of the range around 0.08-0.082 to follow, as long as we now hold above 0.069. If we break back below that level – particularly if we can’t take out 0.076 and print a higher-high – I think we are going to unwind most of this rally back towards range support. If we look at the daily, there is some exhaustion appearing on momentum indicators as ETH/BTC pushes up here but nothing yet in price-action to suggest a top – it is only if price starts to break down from here and return to bearish market structure can we start looking for ETH weakness moving forward, so don’t get trapped into shorting ETH early.
Cardano:
ADA/USD
Weekly:
Daily:
ADA/BTC
Weekly:
Daily:
Price: $0.54 (2256 satoshis)
Market Cap: $18.319bn
Thoughts: Beginning with ADA/USD, we can see from the weekly that price continues to consolidate below the 200wMA, with the pair range-bound between support at $0.42 and resistance around $0.56 for several weeks now. Until that range breaks to either side, this is just chop and is not something I am interested in. If we break and close above the 200wMA, there is a potential long play into the $0.68-$0.75 range assuming the setup presents itself a risk/rewards is favourable, but to be honest it doesn’t look like that’s something I will want to play. Instead, if we do break higher, I’d rather look for exhaustion as price comes into $0.68 and then look for shorts following a reversion to daily bearish structure. If we drop into the daily, we can see that price would also be contesting the 200dMA up in that range, as well as the trendline resistance from the all-time high, so plenty of confluence for a top in that area if we do break higher from here. If, however, $0.56 continues to cap price and we break $0.42 and close below it, I am absolutely looking for more downside into $0.27 as the next level, with $0.20 the next major support below that.
Turning to ADA/BTC, we can see from the weekly that price has been consolidating above support at 1975 satoshis for a few weeks now but continues to be capped by reclaimed resistance at 2530 and below the lower high at 2750 satoshis. Much like the dollar pair, we are range-bound here with no indication as to direction: if we see price close the weekly back below 1975, I would expect to see the 200wMA at 1700 satoshis retested as support at the very least; conversely, break and close above 2530 and I think we take out the lower high, following which the reaction becomes key, because a weekly close at a higher high turns structure bullish off a key level, whereas an SFP of that high and subsequent breakdown opens up more short opportunities for a return to that 200wMA. Nothing clear for now.
Tron:
TRX/USD
Weekly:
Daily:
TRX/BTC
Weekly:
Daily:
Price: $0.071 (293 satoshis)
Market Cap: $6.539bn
Thoughts: If we look firstly at TRX/USD, we can see from the weekly that price has been chopping around above the 2020 highs as support at $0.054, with the past few weeks of price-action seeing the pair chop higher in tight weekly ranges into reclaimed resistance at $0.071. We are now sitting right up against that resistance with trendline resistance also looming overhead. If the pair breaks higher following this period of tight consolidation and can close the weekly above the trendline, I will be looking for longs back towards the next resistance level at $0.089. If we drop into the daily, we can see that this is really very choppy around current levels and looking ahead it appear to be forming a descending triangle into that 2020 high, which is bearish. If that $0.054 level were to break again and price held below it, I think we could comfortably look for shorts all the way back towards $0.027 as the next major support level.
Turning to TRX/BTC, we can see that price is consolidating above the 200wMA and above prior resistance turned support around 260 satoshis, which is promising for bulls. If we dip from here into that 260 level, there is a case to be made for a long play from there back towards 350 satoshis, as invalidation is extremely tight on a close back below the 200wMA at 245, so risk reward for me would be too favourable not to take that. If, however, we close back below the 200wMA, of course that position is exited but the pair also looks like it has deviation key resistance and a key MA and then broken down, and I would expect most of this rally to be wiped out back towards the base of the consolidation around 150-175 satoshis.
Algorand:
ALGO/USD
Weekly:
Daily:
ALGO/BTC
Weekly:
Daily:
Price: $0.36 (1526 satoshis)
Market Cap: $2.553bn
Thoughts: Looking firstly at ALGO/USD, we can see that price is just breaking above prior support turned resistance at $0.34 and is looking to attempt a trendline breakout from the 2021 high. If we can close this week above $0.38, it looks to me like the pair is ready for some relief back into major reclaimed resistance at $0.48, and I will be looking for any opportunity to get long early next week in that event. If however we price wick above $0.38 and then close this week back below $0.34, it looks like the pair is still in consolidation mode and we could look to buy range support at $0.29 with a very tight stop on a close below that level, or just wait for a clean breakout to target that $0.50 region.
Turning to ALGO/BTC, we have reclaimed support at 1350 satoshis but the pair is struggling around prior support at 1560 and remains capped by trendline resistance from the all-time high. Ideally, bulls now want to see 1350 continue to hold as a higher low, and price curl higher to take out trendline resistances and close above it. In that instance, we can expect the prior lower high and reclaimed resistance at 2200 satoshis to be retested. If, however, the trendline holds firm and price loses 1350, I think we take out the swing-low at 1175 into support at 1080 satoshis, which is the last real support above the all-time high.
THORChain:
RUNE/USD
Weekly:
Daily:
RUNE/BTC
Weekly:
Daily:
Price: $2.96 (12,300 satoshis)
Market Cap: $980.345mn
Thoughts: Beginning with RUNE/USD, we can see that price bounced above prior resistance turned support at $1.22 after at 93% drawdown from the all-time high and has been chopping higher for a couple of months on declining volume, with the last few weeks of price-action seeing rejection from major support turned resistance at $2.98. This is a pivotal level and one where we would expect the rally to be capped if the downtrend persists, where if we now start to see lower timeframe breakdowns from this level we can begin to scale into shorts targeting $1.22. If, however, there is enough juice to reclaim this level, the next resistance level is at $4.40 and so we could look to buy $3 as reclaimed support and exit on a breakdown back below the level. Looking at the daily, we can see that trendline support is also holding firm for now and that there are no signs of exhaustion just yet, so if we do break and hold above $3, we could use the most recent swing-low as invalidation for longs. Further, if we see price fake-out above the level and then breakdown below trendline support, I would look to short $2.98 or as close to it as possible and look for the whole rally to be erased.
Turning to RUNE/BTC, we can see that price is consolidating above support at 8800 satoshis but below resistance a 12800 satoshis, where if that latter level gives way here there is very little resistance all the way up into 19k satoshis, and thus would be the sort of range we want to play to the upside. If 12.8k satoshis continues to cap price, and the dollar pair starts to break trendline support and revert market structure, I think the BTC pair begins another leg lower into the next level of support at 6200 satoshis.
Enjin:
ENJ/USD
Weekly:
Daily:
ENJ/BTC
Weekly:
Daily:
Price: $0.717 (2974 satoshis)
Market Cap: $643.15mn
Thoughts: Beginning with ENJ/USD, we can see from the weekly that price is pushing up against the 200wMA from below as resistance, as well as trendline resistance and prior support at $0.72, providing a great deal of confluence in this area for the relief rally to subside and for price to turn lower. If we drop into the daily for more clarity, the momentum indicators aren’t yet pointing to exhaustion, but for fresh shorts what I would like to see is a spike above $0.72 to be followed by a break back below $0.70, trapping breakout longs. This would open up downside back into at least $0.55 to retest that area as support, where if that level fails the $0.45 support become critical for the pair not to begin another leg lower all the way into $0.26. If we start to consolidate between $0.45-0.55 again for a prolonged period of time, that’s the sort of PA I want to be getting involved in. Alternatively, if we break and close above trendline resistance here, I would look to buy $0.72 as support with a target of $0.93 followed by the 200dMA at $1.11.
Turning to ENJ/BTC, unlike the dollar pair we have deviated below the 200wMA and almost immediately reclaimed it, as well as prior resistance turned support at 2400 satoshis. Since, we have retested that area as support and now broken higher once again, closing above trendline resistance and rallying towards reclaimed resistance at 3370. This is where I would expect the rally to start to diminish, which aligns with our expectations on the dollar pair, but given the structure here, I would be very keen to start buying ENJ if we then return back to the 200wMA and 2400 satoshi support base as a re-accumulation zone, with invalidation on a close back below the 200wMA, or if you’re looking for a wider stop then on a break below 1700, looking to hold that spot position for the next cycle. If this area does fail as a cyclical base, the next area of interest below is all the way down near 950 satoshis.
Ispolink:
ISP/USD
Daily:
ISP/BTC
Daily:
Price: $0.00098 (4 satoshis)
Market Cap: $2.718mn
Thoughts: I would like to preface this by mentioning that Ispolink is a subscriber request and so I am unsure on its fundamentals, but it is very much a microcap and so if you are interested in it, be aware of low liquidity, particularly in current conditions.
Given it has only been trading for a little over a year, both pairs look identical and so I will opt for its Dollar pair for analysis.
Looking at ISP/USD, we can see that it has played out what looks like a conventional altcoin market cycle, retracing almost its entire bull cycle off the all-time low, finding support at $0.0007 in June and continuing to now hold above that level as the last level of support above that all-time low at $0.00055. If that level continues to hold, I would want to see the pair continue this choppy consolidation above it for several more weeks whilst large holders are seen to be accumulating, and then look to buy as close to $0.0007 as possible, with the all-time low as my invalidation. This looks like it is entering the depression stage of the market cycle, which can last many months for microcaps, so I wouldn’t be rushing in. Structure is very nice here though, so if the fundamentals do stand up, this is one to keep on your watchlist.
And that concludes this week’s Market Outlook.
I hope you’ve found 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.