Market Outlook #69 (2nd February 2020)
Hello, and welcome to the 69th Market Outlook.
In today’s post, I will be covering the past week’s price-action in Bitcoin, Ethereum and Monero, as well as providing an update on NEO and Ardor.
On the whole, the market closed exceptionally strongly in January, and there appears to be plenty to look forward to from this quarter.
In case you missed it, earlier this week I also published the inaugural Three-Coin Thursday post, which is a new series in which I will be taking your requests to do an extensive top-down analysis of the three coins that you’d like covered, against both BTC and the Dollar. Just tweet me their cash-tags with #ThreeCoinThursday so that I can make a note.
Anyway, that’s quite enough preamble; let’s crack on.
Market Cap: $170.365bn
Thoughts: In last week’s Market Outlook, I mentioned that the declining volume on the pull-back of the prior week was rather bullish, and that we appeared to be putting in a new base of support above $8200.
Looking at the Daily chart, we can see that price originally formed its swing-high just shy of the 200-day moving average, from which point it dropped off on declining volume towards prior resistance turned support at $8200. From here, volume picked up as price rallied early this past week, with Bitcoin closing above its 200MA for the first time since October 2019, though that previous occasion culminated in a fakeout that led to new lows.
Now, we do appear to be consolidating above the 200MA and retesting $9110 at support, having put in a high of $9600 this week. further, volume is declining, just like the previous consolidation before new highs. That said, we must also be aware that price is now at major resistance and that, until we close above $10,600, market structure is still bearish and this could well be a lower-high. Nonetheless, there are no bearish signs as of yet, other than the slight bearish divergence in RSI; although I do not use this as an entry signal unless it occurs with bearish price-action. The strong close above the 200MA and successful retest of last week’s high as new support is certainly not bearish. I am expecting another upwards breakout to take out the $9600 high next week. Following this, if we print a swing-failure at this high, I will look to get short, expecting downside for the rest of the week; however, if we break cleanly through the level and close above it, I would expect continuation to test $10k and eventually the high at $10,580. I am currently long from $9290.
Price: $187.40 (0.02 BTC)
Market Cap: $20.526bn (2,190,698 BTC)
Thoughts: Ethereum has finally begun to move out of its consolidation, although it did put in an impressive fakeout on its BTC pair earlier this week.
Looking at ETH/USD firstly, we can see that price pushed up into support turned resistance at $177 the prior a couple of weeks ago, then falling off to reclaimed support at $152 before rallying this entire week. ETH, much like BTC, closed above the 200MA, but it has also just reclaimed its 360-day moving average. There is very little to bearish about right now, with the next resistance at $200. The uptrend remains strong, although volume has declined a little. The most bullish aspect of this all, in my opinion, was the bullish engulfing candle from three days ago that close above both the 200MA and the 360MA; if anything was a sign of imminent continuation, it was that. I am now looking to see the reaction at $200, although, if we get any dips next week before hitting resistance, I will be a buyer.
Now, turning to ETH/BTC, I have marked out the consolidation range between reclaimed support at 0.0188 and resistance at 0.0195, which remained in play for a couple of weeks. Earlier this week, however, we actually closed below the range, but this proved to be a fakeout as the following day printed a huge bullish engulfing. Price remained pressed up against resistance and below the 200MA but, as of today, we appear to have move clear of the range, breaking above 0.02. If price can close above the 200MA today, it will be the first successful close above since May 2019. The next area of resistance would be the high at 0.0219. Whilst price remains above 0.0188, I am bullish.
Price: $72.64 (0.00775 BTC)
Market Cap: $1.265bn (135,139 BTC)
Thoughts: Monero continues to look bullish, having broken out of multi-month consolidation and conquered its pivot.
Looking at XMR/USD, we can see a similar pattern to that of ETH/USD, with price putting in a swing-high at $72 above the 200MA and 360MA earlier in the month before dropping off on low volume to retest prior resistance as new support at $58. This has led to a strong rally this past week, with price closing firmly above the previous high and reclaiming both MAs after the brief pullback. The next area of resistance is $82, where we put in a swing-high back in September that preceded capitulation. Above $58, I am a buyer on dips.
Turning to XMR/BTC, I have highlighted the pivot area that I’ve been banging on about for months, as price successfully closed above it earlier this month for the first time since September, also closing above the 200MA in the process. Despite that, Monero had failed to crack the trendline resistance from 2018, instead consolidating tightly above the 200MA and below the trendline. This past week, however, price broke out to the upside, closing above and retesting resistance as new support and now looking poised for a move above 0.0081. I expect we will see higher prices moving forward and I am bullish whilst we remain above the pivot.
Price: $12.35 (0.00131 BTC)
Market Cap: $871.411mn (92,990 BTC)
Thoughts: NEO is in a world of its own, with its recent price-action appearing quite different to most altcoins.
Looking at NEO/USD, we can see the violent move up from the low at $6.50 in October that occurred on the highest volume in over a year. Following this, NEO peaked at $13.80, before collapsing back below both its 200MA and its 360MA. By December, it was trading back at $7.90, but incidentally this is where it bottomed; at prior resistance turned support. From here, NEO has been on a tear, rallying back above its MAs and printing a swing-high at $12. We saw a brief pullback from there to retest $10 as support and now price appears ready to break new highs above those from November at $13.80.
Looking at NEO/BTC, price has been in consolidation above 0.00115 since December, remaining firmly above its 200MA, having closed above it in December. Price has been capped by the 360MA, however, since 2018, and the pair is currently stuck between the two moving averages, the former providing the support and the latter resistance. I am expecting a breakout above the 360MA in February, leading to a test of significant support turned resistance around 0.0017. If NEO can break above that, I think we will see a new cycle begin.
Price: $0.056 (603 satoshis)
Market Cap: $56.423mn (6,021 BTC)
Thoughts: Ardor is one of those altcoins that has remained pretty firm throughout recent months, neither looking too bullish nor bearish. That said, it appears to me like a classical altcoin bottom.
Looking at ARDR/USD, we can see that price put in a low at $0.04 back in November 2018, before rallying to $0.16 in May 2019. This led to further bleeding throughout 2019 and price returned to the November 2018 low exactly 12 months later. Ardor briefly broke below the low, printing a bottom at $0.035, before reclaiming $0.04 as support and rallying over the past week towards the 200MA and 360MA. Significantly, price appears to be breaking out above trendline resistance also. The next area of resistance is $0.086, but, if price can close firmly above its 360MA, I think this will begin a larger move to retest May 2019 highs at $0.16.
Finally, turning to ARDR/BTC, we can (quite inconceivably) observe that Ardor has been trading inside a range for ~200 days. That is over 6 months of consolidation between 460 satoshis and 800 satoshis; a classical cyclical bottom. Price has been capped by the 200MA for almost a year and is now appearing to break out. I am most concerned with range resistance and the 360MA at 900 satoshis; if we clear both of these, I would be fairly certain that a new cycle has begun. A Daily close below 450 satoshis would invalidate this and likely lead to further bleeding.
And that concludes this week’s Market Outlook.
I hope you’ve enjoyed the read.
As ever, feel free to leave any comments or questions below!