Weekly Cryptocurrency Market Outlook Oct 25

October 26, 2017

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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.

BTC-USD (Bitstamp)

Bitcoin soared to a fresh high at $6188.66 last week but the price has since dipped back below $6000, currently trading near the $5700 handle. Bulls have been in control for the entire month of October, as shown below. As we approach a new month, we can use the October candlestick to determine the future price action.

We have seen the market move above the resistance at $4734.26, which now turns into an important support level.

Secondly, we have divied the range of the market price for the month of October into thirds. If the monthly close is within the top third, then we can be certain bulls are in control as November rings in, and therefore, a higher probability that the upward trend will continue. The upper third lies above $5499.32, so a monthly close above this level will be considered bullish. On the other hand, there will be more uncertainty if the monthly close is below $5499.32 and could precipitate the start of a longer-term downtrend.

The weekly price action shown below shows that a weekly close below $5683.92 will be considered bearish. However, if the market manages to regain this level and bring the weekly close higher, than we should see a continuation of the upward trend.

After breaking above the Fibonacci resistance at $4979.90, we expect a long-term drift toward $6926.54. However, the conversion line (blue) is flat suggesting that BTC-USD may test this support at $4576.00 before moving higher. Therefore, we look to set limit buy orders near $4576.00, which also aligns with the support provided by the peak of the lagging line (purple).

However, there is a higher probability that the uptrend will continue, with the bullish saucer signal just triggered last week. We could also initiate a buy position on the open of the next weekly candlestick, given the open is higher than $5683.92.

The daily price action below shows that BTC-USD has battled resistance at $5640.68, with a close higher than this level on October 25 giving a bullish signal. The Oct. 25 low at $5366.00 could form a fractal support, providing the price action for October 26 and 27 remains above this level.

A failure to remain above the conversion line, and then it looks likely that we will see a long-term drift toward $4400, the lower span of the Ichimoku cloud, as BTC-USD returns to equilibrium. This portion of the cloud corresponds with early November, when the SegWit2x hard fork is expected to occur, which is bound to cause some confusion in the markets and disruption to Bitcoin itself. Therefore, we look for a sell position with a break below the fractal support at $5101.63, with a target of $4409.22.

The most recent fractal resistance lies at $6188.66, and buy positions just above this fractal could be used to get in on the uptrend, with a take profit level set near $6926.54.

ETH-USD (Bitfinex)

The weekly chart below shows that ETH-USD is within equilibrium, trading near the conversion line, just below $300. The conversion line is at $296.51 for the current week, giving an important balance point once we obtain the weekly close. If by the end of October 29, the price of ether is higher than $296.51, then this will give a slight bullish slant to our outlook for the weeks ahead.

On the other hand, a weekly close below $296.51, then a drift toward the important support at $257.00 is expected. The Awesome Oscillator is moving lower this week and turns red again.

Ethereum’s devcon three is due to take place over November 1-4, and could come with some surprise news or moves in the market, as we have witnessed with the Ethereum Enterprise Ethereum Alliance and the effect it had on ETH-USD. The daily chart for ether is shown below. Here we see the market is bouncing from a support zone provide by the Ichimoku cloud. The flat upper span of the red could at $296.51 shows the importance of this particular level for ether. With a daily close out of the cloud and above $296.51, we should see ether attempt recent highs near $355.00.

However, the Awesome Oscillator has turned negative, suggesting that the market will be attracted to the flat upper span, suggesting sell positions when the market is quite far above the cloud, say near $315 or $350.

For November 1-4 there is no change in the thickness of the cloud or the color, giving little clues as to the anticipated movement.

XRP-BTC (Poloniex)

Ripple looks to continue its downward trend, as last week XRP-BTC closed below the Ichimoku cloud. The next support lies at 0.00000427, as shown below. Unless an attempt is made to clear above the conversion line, which provides resistance 0.00004300, the market will likely continue the downward trend.

BCH-BTC (Bitfinex)

The daily price action below illustrates a weak bullish signal for BCH-BTC. Notice that the conversion line has moved above the base line, indicating a switch in momentum. Also, the Ichimoku cloud provides a resistance zone for the days ahead, signaling plenty of room to the upside. The Awesome Oscillator, while it is negative, is trending higher and is green in color.

However, when looking at the weekly timeframe, we see there is more risk of further downside, as indicated by the declining conversion line.

LTC-USD (Bitfinex)

The weekly chart for litecoin below shows that $53.93 is an important balance point for the altcoin, which is the base line (red), providing support. A break of this support could open up the fractal buy level just above $32; $47.30 also provides support.

Resistance is seen at $63.08, the conversion line, while the most recent fractal lies at the high of $93.71, suggesting large leverage for an upside move. Notice also, the market is attempting to break the resistance at $55.47, the high from early July, so this balance point is another important level to keep an eye on over the remainder of this week.

XMR-BTC (Poloniex)

After eight consecutive weeks of losses, XMR-BTC is in the green this week, bouncing from an important support zone. A fractal support looks to form at 0.0142990, as long as XMR-BTC remains above this level until November 6. Once the fractal support is confirmed, we should see the market attempt to find a new ceiling, possibly testing the most recent fractal resistance at 0.03557503. Given that the distance between most recently formed fractal sell level and the current fractal forming suggests there is leverage for a large move to the upside.

The yellow ray at 0.01350116 represents the open of the large bullish candle formed in late August 2017 and is an important support level that seems to have held for now. As long as the price action remains above this level, the trend will continue to be upward.

Notice that last week’s price action was contained within the green Ichimoku cloud, while the current price action is looking to move back out of the cloud, which will give bullish confirmation if the weekly close is above 0.0162. The base line (red) provides resistance at 0.0231.

The 4-hour chart of XMR-BTC is shown below, with a green Ichimoku cloud (or Kumo) emerging, with the red cloud dominating over the past 150 or so trading sessions. The price action has moved above the red cloud as well, which also gives a bullish signal. Furthermore, once the lagging line (purple) pierces upward through the Kumo then the upward trend will be confirmed. A bullish saucer signal is also emerging but this requires a move above the recent high of 0.0175 to be triggered.

Here we also see that the market is now trapped within the conversion line (blue) and base(red) line.

The price of monero spiked on the Bittrex exchange on October 25, as the Helium Hydra version point 1 was released. XMR-USD reached a brief high of $118.22 before falling back below $100 to the current level around $90. What is interesting though is that across exchanges, for XMR-USD, the conversion line has moved sharply higher this week as compared to the previous. Notice on the chart below, the conversion line moved from $109 to $119, with such a sharp upward creep indicating that XMR-USD is likely to galvanize its gains in the coming couple of weeks.

A weekly close higher than the base line (red) at $94.55 will give stronger bullish confirmation. Immediate support stands at $86.42.

VTC-USD (Bittrex)

Vertcoin burst through our targets at $2.13 and $3.44 to reach a high of $4.85 last week. However, the altcoin has since settled near the $3.00 psychological level at the time of writing. With the December halving upcoming, the bullish trend may not be over just yet.

The monthly price action is displayed below and shows VTC-USD is set for the highest close since early 2014. A monthly close above the conversion line, i.e., $2.44, will give further bullish confirmation. Not many cryptocurrencies have surpassed the price they were at during or just shortly after their launch, but vertcoin could break to new all-time highs against the dollar in the upcoming weeks.

The weekly price action is shown below and shows that the market has already retraced 50 percent. We now look for breaks of the Fibonacci resistances at $3.17 and $3.81 to expect a test of the recent high at $4.85. If the uptrend continues, we could target the first extension, which suggests VTC-USD could move as high as $7.57 if there is a test of the October high. On the other hand, a move below $2.65 could invalidate the bullish outlook.

Against bitcoin, the long-term trend is suggested to remain bullish for vertcoin, as shown below. The market remains above the fractal resistance at 0.00045977. While the market tested 0.00072626, we expect a new ceiling to be formed, with the possibilities indicated by the Fibonacci extension levels and perhaps, more optimistically, the only fractal resistance which now stands in the way, namely at 0.0025, is the high from June 2015.