Market Outlook #260 (21st March 2024)
Greetings and welcome to the 260th edition of my Market Outlook.
In this week’s discussion, I’ll be focusing on Bitcoin, Ethereum, Solana, Fantom, Illuvium, and LooksRare, with a few of these being requests from readers. This is a slightly more concise post that highlights the movements of the major assets; regular programming will resume on Monday.
As always, if you have suggestions for next week, feel free to reach out via email or leave a comment below.
Bitcoin:
Weekly:
Daily:
Price: $65,405
Market Cap: $1.285 trillion
Thoughts: It’s been quite the few days…
Starting with the weekly chart for BTC/USD, we notice that last week’s price closed just below the previous all-time high at $68.4k, having spiked up to $73.7k before a rejection. Since then, the price has also pulled back from the weekly open, dropping toward $59.2k, but has managed to bounce above that level this week, currently consolidating around the previous resistance that has turned to support at $64.9k. This is a critical level: it was the high in April 2021, and sustaining above it here would resemble breakout, rejection, and retests similar to the previous cycle’s all-time high breakout. Furthermore, holding around this level indicates that the current parabola remains active, suggesting price discovery in April and May until the parabola eventually breaks. On this timeframe, there isn’t much to worry about just yet. It’s simply a natural pullback after a significant run that added substantial leverage in the market, which has been largely depleted in recent weeks. Now it’s about maintaining support at these higher timeframes and pushing upward in my opinion. However, if we close weekly below $59k, that could raise concerns — it could mean the beginning of a parabolic break followed by a prolonged period of consolidation and volatility before rallying again. Importantly, there are no signs of exhaustion currently: spot volumes are increasing and momentum indicators are making higher highs.
Examining the daily perspective, I’ve outlined three scenarios I’m contemplating here. The most bullish one proposes that a higher low was established this week at $60.7k, which is above the swing low of $59.2k. This bullish engulfing could lead to a higher low forming over the next few days above $61k, followed by a breakout reclaiming $69k to turn that into support before moving into price discovery. The second scenario considers that, despite the bullish engulfing, today’s price has rejected at the previous all-time highs without using that momentum to break above $68.9k, which could result in a lower high forming and lead to a flush of this week’s low, triggering a minor liquidation cascade through $59.2k down to $58k before a sharp reversal takes place, returning toward the all-time highs in April while maintaining the parabola. The third scenario suggests continued decline past $61k, forming a lower high beneath $65k and breaking the parabola, resulting in a close below $58k. This bearish outlook could result in more extended consolidation and volatility, pushing prices down to $48k before establishing a bottom in summer and potentially initiating a new parabola towards price discovery and beyond. To be honest, I have no strong conviction on any of these scenarios right now, but if we start to close daily below $64.9k and establish that as resistance mid-week, I’d consider the second scenario the most likely, which would liquidate numerous eager longs that jumped in after the bullish engulfing. I find longer consolidation plausible but am currently leaning towards it being the least likely scenario. Clarity will emerge if we drop below $61k and see no significant bullish reaction…
Ethereum:
ETH/USD
Weekly:
Daily:
ETH/BTC
Weekly:
Daily:
Price: $3442 (0.05266 BTC)
Market Cap: $413.035 million
Thoughts: Analyzing ETH/USD, we notice price rejected at previously reclaimed resistance around $3950 and then closed last week just above $3600, continuing its descent this week below previous support at $3580 into $3034, then bouncing back and currently consolidating around $3440. There’s nothing bearish to note on the weekly chart, with increasing volume and momentum showing no signs of exhaustion. This looks like a typical pull-back following six consecutive weeks of gains. In fact, a pull-back into $2721 forming a higher low from there would still appear strong on this timeframe. While I doubt the market will grant a pull back to $2700, it still underscores ETH’s structural strength. Shifting to the daily chart, I’ve identified two possible scenarios here, contingent on BTC’s movements. The bearish scenario involving the dip to $2700 and a phase of consolidation and re-accumulation is likely if BTC/USD breaks the parabola and loses $58k. On the other hand, a sharper recovery seems more likely; we’ve already tackled that long wick to $3284 and trapped breakdown shorts, as well as liquidating many longs. Thus, I would anticipate the formation of a higher low this week above $3284, followed by a push through $3580 next week towards fresh yearly highs in early April, especially considering how Ethereum shrugged off the SEC headlines yesterday. A daily close below $3284 would make the rapid recovery unlikely.
In regards to ETH/BTC, examining the weekly chart reveals that price sold off last week from the open to a close just above the 360-week MA at 0.053, finding resistance this week at the weekly open before dropping into support at 0.051 and bouncing back, currently consolidating between these levels. While this may not appear visually appealing, it doesn’t look disastrous either – it simply reflects an extremely tight range. We have a potential sweep of the recent swing low into demand, with price appearing eager to hold at 0.051. If that level cannot hold and we see a weekly close below 0.051, it could become concerning, indicating we might need another deep flush down to 0.049 or even 0.046 before a genuine bottom emerges. Conversely, if support is maintained, we await a break above the trendline to hold as support in the following week. Observing the daily chart, we see price dipped below the local trendline resistance this week during the drop to 0.051 and is now retesting 0.0533 as resistance. This will be a crucial test in the next couple of days: if we reject here and decline, it’s unlikely 0.051 will hold; conversely, if we manage to break and close back above that level, another attempt at the trendline may unfold.
Solana:
SOL/USD
Weekly:
Daily:
SOL/BTC
Weekly:
Daily:
Price: $178.18 (0.002726 BTC)
Market Cap: $79.248 million
Thoughts: Starting with SOL/USD, the weekly chart indicates price closed last week at new yearly highs, approaching the September 2021 high at $213 and the 78.6% Fibonacci retracement from the bear market. This week has seen minor pullbacks off this region into the 61.8% Fibonacci level at $170, with price dipping below to $162 before finding support. I could envision the price pulling back as low as $140 before establishing a bottom if the market continues lower, and the pair would still appear strong. Transitioning to the daily chart, we observe the parabolic advance since the lows in December 2022 and the steepening of the rally over the past few weeks. Despite this rise, momentum indicators show no signs of exhaustion from the latest push up to $212, and it currently appears to be a textbook reset before another upward movement. If we break below $162, significant demand should emerge above $144 to create a bottom from which the pair gears up toward all-time highs. It’s conceivable that consolidation might take a few weeks without disrupting the parabolic advance; as long as that advance remains intact, new all-time highs before May seem likely.
Shifting focus to SOL/BTC, the price is tightly aligned with its parabolic trajectory, bouncing off support at 0.00207 last week and achieving new yearly highs, closing around the 61.8% Fibonacci level of the bear market at 0.003. This week has seen minor retracement from that peak, but nothing suggests an impending break of the parabola yet. While there are indications of possible exhaustion, nothing concrete has materialized thus far: it could easily bounce next week above 0.0026 and continue to progress towards 0.00377 while maintaining the parabola. If support holds, we might witness the formation of newer highs in the summer. Observing the daily, the price has swept the 0.0029 high, found resistance there, and that level now caps the price. Should we continue lower from here, I’ll watch for the prior resistance at 0.00244 to act as support, facilitating another breakout attempt beyond 0.003. There is nothing overtly bearish present on this timeframe; simply watch for a higher low and consider positioning until the parabola breaks.
Fantom:
FTM/USD
Weekly:
Daily:
FTM/BTC
Weekly:
Daily:
Price: $1.07 (1632 satoshis)
Market Cap: $3.004 billion
Thoughts: Observing FTM/USD, the weekly chart indicates a recent upward trend with the pair rallying past the 200-week moving average and turning it into support at $0.55 as it broke several years’ resistance at $0.64, which has also become support during upward movement. Last week, we witnessed a rally through a cluster of resistance below $1 and hitting $1.14, where it subsequently rejected. If weekly closes above $1 persist, I would anticipate continued upward movement in the coming weeks targeting the 38.2% Fibonacci level of the bear market, alongside previous resistance around $1.51-1.66. Additionally, momentum indicators are still not showing signs of fatigue. Transitioning to the daily chart, we notice some divergence on the recent pushes into resistance, but typical of bull markets, these were invalidated when the price closed above $0.98, marking a higher high in RSI. From this juncture, I expect further consolidation between $0.91-1.14 in the upcoming week before a notable advance towards $1.50 in early April.
Regarding FTM/BTC, the weekly structure remains bullish, characterized by a series of higher highs and higher lows since the bottom formation in October 2023. The last couple of weeks saw resistance around 1309 satoshis, with prices wicking into the 200-week moving average at 1422 satoshis, followed by rejection and closing below that level multiple times. However, last week, the price managed to break through the cluster resistance, moving into the next significant resistance level at 1730 satoshis, with momentum also trending upwards. As long as we stay above 1400 satoshis in weekly closures, I foresee a brief consolidation followed by a move through 1900 satoshis toward the 23.6% Fibonacci retracement of the bear market and significant previous support turned resistance around 2420 satoshis. This level is likely where a local top will begin to form. Unless we revert back inside 1308, the trend remains robust. In the daily perspective, consolidation leading to a breakout seems plausible, but the major takeaway here is that the 360-day moving average is acting as support, with no signs of momentum exhaustion in play. I remain bullish on Fantom for the foreseeable future.
Illuvium:
ILV/USD
Weekly:
Daily:
ILV/BTC
Weekly:
Daily:
Price: $130.03 (0.001989 BTC)
Market Cap: $822.166 million
Thoughts: Looking at ILV/USD, the weekly chart clearly shows that the pair has been on an upward trend, forming a solid bullish structure, especially after breaking above $120 a few weeks ago into $162. The price has since consolidated and turned $121 into support, which is currently being maintained. I anticipate the next leg up to surpass $162 and achieve fresh yearly highs, with minimal resistance up to the 200% Fibonacci extension around prior support at $240-260. Invalidation would occur with a weekly close below the $108 level, which had previously held price down for over a year. Moving to the daily chart, we see a robust daily structure; despite some divergence in the last push higher, I believe this has already played out with the recent downturn earlier this week. We should now observe a higher low forming above $120, aiming for upward movement towards $260 in the upcoming weeks.
In terms of ILV/BTC, the pair has navigated primarily within a downtrend, but following the all-time low at 0.00124 in October 2023, it has seen a rally that reclaimed support at 0.0016, establishing a bullish weekly structure. The price reached a local high of 0.0033, then retraced to 0.0016, maintaining that reclaimed support throughout 2024. Currently, we are range-bound between this support and previously transitioned support turned resistance at 0.00224. I expect upside resolutions from this range, and if we achieve a weekly close above 0.00224, it will serve as a clear buy signal with invalidation set at 0.0015, with ambitions for cycling through to a major target of 0.01.
LooksRare:
LOOKS/USD
Daily:
LOOKS/BTC
Daily:
Price: $0.131 (200 satoshis)
Market Cap: $130.877 million
Thoughts: Given that both pairs for LooksRare display similar patterns due to limited price history, let’s concentrate on the Dollar pairing.
Examining LOOKS/USD, we find that the price has recently surged above the 200-day and 360-day moving averages which had previously constrained progress, with the latter rarely trading above until a false breakout in December 2023. Prices climbed higher and reclaimed support at $0.11 before finding resistance at a yearly high around $0.187. We have since pulled back to $0.11, which is now serving as support, and the broader trend now appears bullish, characterized by higher highs and higher lows, suggesting the onset of a parabolic advance. I expect the next phase of growth for LOOKS to start from here, targeting a breach past $0.19 towards significant resistance at $0.46, where the 2.618 extension of the current trend is situated. Interestingly, the distance to the highs is significant—the 23.6% Fibonacci retracement from the bear market only comes into focus at $1.65, while the 38.2% Fibonacci level sits at the critical prior support turned resistance around $2.60. That latter level is my target for holding, considering that LOOKS has yet to experience a bull cycle. I plan to exit a majority of my position around that level by late this year or early next, keeping a small stake for a potential moonshot at all-time highs. In the short-term, as long as we maintain above $0.09, this trend appears set for upward movement…
And that wraps up this week’s Market Outlook. Expect a return to full length next week!
Thank you for reading, and I hope you found this information valuable!
As always, feel free to leave comments or questions below, or reach out to me directly at nik@altcointradershandbook.com.
