by Jamie Holmes
BTCManager’s Weekly Cryptocurrency Outlook highlights the price action and technical indicators on a long-term basis to identify the best opportunities in the largest cryptocurrencies, such as bitcoin, ether, and others.
September has sure been volatile for bitcoin, one month later perhaps than many were expecting with the UASF movement and Bitcoin Cash hard fork. The monthly chart below shows that bitcoin reached its highest ever price in dollars at $4979.90 and dropped to a low at $2972.01. Since then, the price has recovered to near $4000 at the time of writing.
Examining the highs of the candlesticks from August 2016, we see there have been 11 near consecutive higher highs, suggesting on the long-term timeframe, bulls are beginning to exhaust themselves. The market has already retraced to the 61.8 percent Fibonacci level at $3255.32 so there could be upward trend continuation, but it is more likely we will see the market remain below $4979.90 until the end of December 2017. Then, to start 2018, a new bullish count may begin.
Unless BTC-USD moves above $4979.90 by the end of November, the bullish run as measured by the near high consecutive count is over. Of course, November is also a contentious month with regards to the development of bitcoin.
Even so, the market will be refreshed and the next count will begin. On the other hand, the bullish count may continue, but can only sustain for another two months or so until bulls become exhausted and we ‘refresh’ the count.
The monthly chart also shows resistance at $4734.26, with the peak of the lagging line (purple) indicating a critical level to watch out for near the end of a month-long trading session. Since we see the lagging line heading downwards, we need to see some sort of trough to emerge to grip a long-term support and bearish exhaustion.
On the weekly timeframe below, there is some uncertainty as indicated by the near consecutive high/low count. For instance, since July 10, 2017, there was a bullish run where the count reached five and has since been negated, since we have three weeks without a fresh high above $4979.90. Since the all-time high was reached, we have had two near consecutive lower lows, extending to $2972.01 and this count is still in play. If by October 9, the market does not move below $2972.01, then the bearish count will be invalidated.
At present, there is no bullish count yet on the weekly timeframe. The market needs to get above $4377.65 by October 9 to establish a fresh high and begin the count, after which the fractal resistance at $4979.90 will be targeted. The chart below shows that the bullish scenario is more likely to pan out for bitcoin. For example, notice the conversion line (blue) has moved higher this week to $3797.45, as well as the base line.
Moreover, the Fibonacci resistance at $3914.45 is another key level to keep an eye on. A weekly close above this level will open up an attempt at the high at $4377.65. Also, the next Fibonacci resistance lies at $4979.90, so if the market maintains above $3914.45, we should see a drift toward the all-time high.
A bearish outlook is validated with a weekly close below $3914.45 (Fibonacci support) or $3797.45 (conversion line).
The daily chart below shows that the market is in equilibrium, trading within the green Ichimoku cloud. The upper span lies at $2936.97 for Sep. 25, with a daily close above this level considered bullish. The next resistances are then the base line (Red) at $3975, $4122.70 and then at $4377.65.
A bearish saucer signal is given with a move below $3552.00, as shown be the Awesome Oscillator. The cloud provides support at $3404.95 and the Awesome Oscillator indicates that if anything bearish momentum is starting to wane.
The thin Ichimoku cloud, which appears to be like a sliver of green and red patchwork, projected to mid-October indicates the uncertainty in the market. An important indication of the next big trend will be given once the cloud starts to fan out and paint a red or green cloud.
We await a daily breakout of the Ichimoku cloud to enter long/short positions or daily close above the base line, at $3975.95.
August was the best month ever for ether, with a gain of almost $200, equivalent to a 100 percent increase. But one bullish indication we get is that August’s candlestick was a bullish Marubozu, almost flawless. Buy orders were suggested at $201.78 and $294.89 for Ethereum‘s cryptocurrency. ETH-USD went as low as $201.28 and now looks to test the support-turned-resistance at $294.89. We look for a daily close above $294.89 to enter into a long position on ETH-USD.
The weekly price action is displayed below. A weekly close above $292.59 will give a stronger bullish signal and open up a test of $395.00, the fractal sell level from the end of August. However, a failure to close above $292.59 will be considered neutral/slightly bearish, with another test of $201.78 a potential outcome.
As with BTC-USD, the conversion line moves higher this week, suggesting the two cryptoassets will move in tandem higher. Furthermore, to begin a near consecutive high count, ETH-USD needs to breach $317.98, so this is another key level for bullish confirmation.
The daily price chart below shows a potential setup for a short trade on BCC-USDT. Notice that the Awesome Oscillator displays a bearish saucer for bitcoin cash. Therefore, we look for a move below the September 24 low to confirm the signal, that is at $416.132. Given the bearish saucer signal is triggered, we should see the market tend toward fractal supports at $395 and $301.
To the upside, significant resistance is found around $511, as indicated by the base line (red). Previously, the market managed to close above the base line, but failed to sustain the bullish momentum, with the market moving lower subsequently.
Litecoin looks to trade between $50 and $63 this week. The lagging line (purple) suggests LTC-USD carved out a bottom at $47.30 and we should see the market test the resistance at $63.08 in the weeks ahead. We also see that last week’s candlestick pattern closely resembles a bearish inverted hammer, which suggests that the downward trend has ended and we should look to buy LTC-USD.
The weekly chart below for DASH-USD shows that the altcoin held up pretty well and recovered pretty quickly compared to other cryptocurrencies. The price is trading near $350 and we look for a weekly close above $364.998 to point to a stronger long-term bullish case for DASH. We expect the altcoin to tend back toward the Fibonacci extension level at $387.27, with a further resistance at $491.27. Support is provided at $283.27 and by the conversion line (blue), which stands at $292.75.
The daily timeframe, shown below, paints a green Ichimoku cloud with important support zone between $320 and $265. Important breakout levels are also indicated. Fractal resistance lies at $369.88 and a break of this level opens up the all-time high. On the other hand, a break below $308.00 is likely to see the bullish mood tempered.
The daily price action for monero indicates that a close above $95.63 is required for further bullish confirmation. As shown below, the conversion line has provided resistance around this area, with bulls failing to bring the market above this level for long enough. Monero still remains in our buy zone, which lies around the Fibonacci support at $93.71, a key support to keep in mind.
Resistance is seen at $109.33 and $112.50, as indicated by the Fibonacci levels and the base line (red). Moreover, the market is moving back into the Ichimoku cloud, back into equilibrium. We are likely to see monero trade within the cloud, up to $118 for the week ahead, as shown by the upper span.
The weekly price action indicates an important support at $90.00. Moreover, even though XMR-USD has displayed some gains during the week so far, a weekly close above the conversion line would give more certainty of a longer-term upward move. For instance, the chart below shows that the conversion line is at $99.48 for the week ahead. Therefore, we are looking for a close above $99.48 on Sunday, October 1 to motivate a long-term buy position.
Conversely, a close below the base line (red) at $89.17 (or $90.00) at the end of the week will point to a bearish outlook for XMR-USD over the long-term. We await the weekly close to enter any positions or a daily close above $95.63 to buy.
Zcash has reached fresh highs against the US Dollar breaching above $200 on a string of news, perceived positively. First, there was the release of the upgrade, Sapling, which pushed forward new boundaries for zk-SNARKs and is the main reason for the appreciation in ZEC-USD. Secondly, an audit found no security breaches of the trusted setup ceremony in any way to the best of their knowledge.
The chart below shows the daily chart for ZEC-USD. The price action for September 25 looks to close above the Alligator, signaling the end of the downward trend that saw zcash fall from its peak around $320 earlier in the month. The fractal resistance at $318.00 is now exposed with a daily close above the Alligator’s teeth (blue). All three resistance provided by this indicator have broken, and we expect the upward direction to continue.
However, note that the first buy signal given on the daily timeframe when considering both the Alligator and the fractal levels is a break of the resistance at $265.00. Therefore, we look for the market to attempt and close above this important resistance to give further bullish confirmation.
For ZEC-BTC on the BIttrex exchange, the Alligator suggests a buy position however, we have not obtained a stronger bullish signal, that is a break of a fractal above the Alligator. Further confirmation will be given once ZEC-BTC tests 0.065 and will give more certainty of an upward trend forming over the long run. The initial targets are the fractal resistance at 0.06999 and 0.07735.
Zencash (ZEN) has also benefitted from the rise in value of ZEC. Also, the technical setup for ZEN-BTC is more favorable for a buy position. Looking at the daily chart below, we see that already, two buy signals have been displayed. Firstly, the market price looks to close above the Alligator today, indicating a shifting trend. Secondly, the resistance at 0.00199520 has also been tested, and being the lowest fractal resistance above the Alligator, we should look to enter a long position for ZEN-BTC as close as possible to this level.
The Alligator is ‘asleep’ for ZEN-BTC, that is the three lines are intertwined and not trending in any direction. This suggests that a strong bullish breakout is expected for ZEN-BTC. The chart above shows there will be strong resistance around the 0.00283-0.00284 zone.
Omise announced a partnership with MacDonalds Thailand on September 25, and OMG-BTC has coincidentally been a strong performer over Monday’s trading session, up more than eight percent on the open. However, the announcement does not seem to be linked to the Ethereum-based cryptocurrency OmiseGo.
The chart below shows a bullish signal may be given on September 25’s close. We see that the market price is moving above the Alligator and a close higher than 0.00255 will indicate the start of an upward trend. OMG-BTC will then look to target the 261.8 percent extension level at 0.00308076.
A snapshot of the top cryptoassets by market capitalization and 24-hour volume are shown below.