BTCManager’s Weekly Cryptocurrency Market Outlook January 17

Every week, BTCManager provides a cryptocurrency market outlook, highlighting the best opportunities in the largest cryptocurrencies, such as bitcoin, ether, and others.

BTC-USD (Bitstamp)

The weekly outlook for bitcoin is shown below and the market is gearing up to test $890.00, a key support now turned resistance. A break above $890.00 will see the market test the next resistance at the 50 percent level of the Marubozu candlestick formed the week beginning December 26 (highlighted by the blue ray).

Also, notice that the base line held as support, suggesting upward momentum will dominate, as the market managed to hold above the base line (red) at $802.58 and the previous week’s candlestick closed at $821.86. Therefore, limit buy orders are suggested around the base line, currently at $802.58. Moreover, the conversion line (blue) remains in an upward trend and is higher than the base line, suggesting bullish momentum is more likely to take charge.

However, we also see from the chart below that the price action is now below the conversion line, which will provide resistance at $930.44 this week. A close higher than $930.44 on Sunday January 22 will provide a strong bullish signal and point to another test of the $1000 handle. On the other hand, if $930.44 is rejected, we will likely see BTC-USD trade between $930 and $800, stuck between the conversion and base line until we get a breakout.

Another interesting aspect of the chart to notice is that two fractal levels are in the process of being formed (highlighted by the yellow rays); a fractal sell level (resistance) at the recent high of $1139.89 and a fractal buy level (support) at $751.34. As long as this week’s price action remains below $1139.89, a fractal resistance will be confirmed at this level.

News out of China spooked markets, pushing BTC-USD to a fresh low of $751.34 but the market has since recovered. To form a fractal support at this new low, and provide renewed upward momentum, BTC-USD will have to remain above $751.34 until January 29. Once confirmed, this will further strengthen the bullish outlook over the long-term.

Our plan of action is to place limit buy orders just above the key resistances ahead, that is just at prices just higher than $890.65 and $944.20, e.g. $891.65 and $945.20.

Also, we could set limit buy orders near the base line, that is around $802.58. If the market turns lower, the zone around $800.00 should see buying interest and form a floor for bitcoin over the short-term.

Additionally, we look for the weekly close of the current candlestick to determine positions in BTC-USD. Firstly, a close higher than the conversion line at $930 will justify long-term buy positions with a target of at least $1000. Secondly, a weekly close below the base line, that is below $802.58, will justify long-term sell positions with a target of $608, the upper support level provided by the Ichimoku cloud.

ETH-USD (Kraken)

ETH-USD looks to be returning to the equilibrium zone, show below by the Ichimoku cloud around $10.95 to $12.50 for first half of 2017. We highlighted in our previous cryptocurrency report that we looked for a break above fractal resistance at $8.89 for a resumption of the uptrend. While ether made a fresh high at $11.63, this signal was not confirmed. However, since then the base line has moved lower and ETH-USD looks ready to take an attempt at the most recent fractal resistance at $14.45.

For this week, we suggest limit buy orders just above $11.63 with a target of $14.45. If the price action moves above $11.63 this week, a fractal sell level will be invalidated. However, if the market remains below this recent high until January 22, then a fractal sell level will form, renewing downward momentum.

However, using the Ichimoku system, there could be some bullish, although weak, signals by January 22. For example, we see that the base line has moved lower and a weekly close above the base line will provide a bullish signal and point to further gains for ETH-USD. The market is currently testing this resistance at $10.18. The next resistance will be found at $13.54, the upper span prior to the full formation of the Ichimoku cloud.

The Awesome Oscillator is pointing to an emergence of bullish momentum, as the indicator is trending higher and displays green bars. However, the oscillator remains in the negative zone and a cross above the zero threshold is required to give further bullish confirmation.

Alternatively, if this week’s candle fails to close above $10.18, then a sell position will be favoured. The next support will be found at the conversion line, around $8.77. Therefore, if the buy signal is invalidated, a bearish outlook is necessitated and we look to place limit sell orders just below $8.77. These positions could target the recent fractal supports at $7.01 and $5.92.

XMR-USD (Poloniex)

Monero continues to follow bitcoin, displaying a tailcoat effect. Notice that the weekly chart below is very similar to bitcoin’s price outlook. We have seen XMR-USD retreat lower after establishing a fresh all-time high at $18.46, cutting the market short of the $20 handle. Bullish momentum will dominate according to the Awesome Oscillator and the relative position of the conversion line and base line, so buy positions are favored in the short term.

Since the base line has held as firm support around $9.87, pointing to further upside for XMR-USD. The conversion line provides resistance at $12.51, with further resistance at the fractal level at $15.2499. Therefore, we look to place limit buy orders just above $9.87 and $15.249.

Therefore, we look for a weekly close above $12.51 to justify long-term buy positions, whereas a weekly close below the base line at $9.87 will necessitate long-term sell positions in XMR-USD.

ETC-USD (Poloniex)

After breaking a key resistance at $1.41, Ether Classic looked to solidify its gains but has not been able to sustain the bullish momentum, dipping back below this crucial level. Therefore, sell positions are advised in the short-term. Also, notice that the Awesome Oscillator on the daily timeframe, shown below, has moved into negative territory; this suggests bearish momentum is just gaining a foothold, with more possible losses for ETC-USD.

The daily chart below signals that ETC-USD will return to equilibrium, indicated by the Ichimoku cloud, resting around $1.00. The price action is below the conversion line, suggesting further downside is likely. Further support lies around $0.70.

The conversion line currently stands at $1.2938 and could be an optimal position to sell ETC-USD. Alternatively, to get in on the current downtrend, set a limit sell order just below the most recent fractal support at $1.125. Buy positions could be set near the base line, which offers support around the $1.00 handle, or wait for a daily close above the conversion line.

DASH-USD (Poloniex)

Along with monero, DASH-USD is also showing some interesting price action, moving higher with bitcoin. The weekly chart below illustrates a bullish outlook. If buyers in the market can maintain this upward surge until the end of the week, DASH-USD will be in a position to establish more gains. The conversion line is above the base line, suggesting upward momentum will dominate. Also, we see that the Awesome Oscillator is trending higher and in positive territory, indicating bullish momentum is strengthening.

Therefore, we look to place limit buy orders just above the most recent fractal resistance, that is just above $15.249. If this week’s price action remains below the recent high around $16.94, then we will see a fractal sell level form and we anticipate bearish momentum to start to take hold. In this scenario, DASH-USD will tend towards equilibrium as indicated by the flat conversion line, that is the market will be attracted to $12.57.

A weekly close below $12.57 will invalidate the bullish outlook and in this case, we should see the market tend toward the Ichimoku cloud, that is sub-$10. Therefore, we establish sell positions in DASH-USD if the market is below $12.57 by the week beginning January 23.

MAID-BTC (Poloniex)

Another potential altcoins that will perform strongly is MaidSafeCoin (MAID). Last week, MAID-BTC saw impressive gains, show below, and closed above the conversion line. Also, notice that since forming a bottom around 0.00007529, volumes traded on the Poloniex exchange have picked up sharply, indicating increasing interest in trading this crypto-pair and the potential for larger moves to the upside.

A fractal resistance stands in MAID-BTC’s way at 0.00013676 and could be a barrier to further upside. However, a weekly close above 0.00013676 will open up the Ichimoku cloud and a move as illustrated below by the green arrow. Once confirmed, we will then look for a Kumo, or Ichimoku Cloud, breakout. A break above the Ichimoku cloud will confirm a long-term uptrend is in place and act as another entry point to buy MAID.