3 coins to keep an eye on | 23 MAY 2023

HOLO

HOLO has retraced into the bottom quarter of its 2023 range, increasing the odds that the price will find at least short-term support.

The price is testing possible support around $0.001637, near December's monthly open. This level is also near the midpoint of May 8th's weekly wick and overlaps with a daily gap from March. Bulls rejected bears at this level in early May and could find support at it again.

Just above, bulls rejected bears on the weekly chart on March 6th near $0.001692. The price might retrade to and find resistance at this level. It also contains the 18 EMA and is where bears rejected bulls in mid-May after a gentle move upward.

A strong rally will likely aim for bears' stops trailed above the $0.001751 daily swing high. Above this high, a weekly gap at $0.001767 and the 40 EMA may provide stiff resistance. Tuesday's AMA could reveal news to catalyze this stop run.

Q4 formed relatively equal lows near $0.001380. Bulls' stops under these lows might continue to draw the price downward.

If bears keep the upper hand, May's relative equal lows near $0.001575 offer a tempting target for a sweep into the bottom of January 9th's weekly gap. Bulls also rejected bears near this level on March 11th. If this move occurs, the open weekly gap and mid-May's retracement mean that it could happen very aggressively.

Like HOLO, POND has also dropped into the bottom quarter of 2023's range, increasing the chance for a short-term rally.

Bears' stops above relative equal highs at $0.00899 provide a clear potential upside target. Above these highs, an unfilled weekly gap reaches up to $0.00932, where bulls rejected bears during the week of March 6th. This area, near the 40 EMA, could provide resistance and a possible bearish turning point.

A spike further might reach slightly higher to the base of late April's consolidation. This level also has confluence with the first unfilled daily gap after May 6th's breakdown.

The price is consolidating inside possible support between $0.00877 and $0.00849. This zone saw accumulation before May 11th swept bulls' stops under March 6th's weekly low.

If bears regain control - more likely after a possible sweep of the $0.00899 highs near Thursday's event - they may push for bulls' stops under May 12th's swing low at $0.00802.

If this drop happens, the price could find support near $0.00793. Bulls rejected bears on the weekly chart at this level in November. It also saw significant accumulation before the early 2023 rally.

Unlike HOLO and PON, UTK has already rallied from the bottom quarter of its range. This price climb could aim to give buyers a chance to sell before traders "sell the news" of Thursday's rebranding.

Bears have rejected bulls on the weekly chart between approximately $0.1241 and $0.1184. The price recently ran into this level, and then the four-hour chart showed some signs of distribution. This level might provide resistance that causes a retracement soon.

A daily gap near the midpoint of the current rally, around $0.1061, may be a potential retracement target. The price could aim to rebalance this area, which also holds the 40 and 18 EMAs.

If bulls can find the strength to push through resistance, aggressive bears' stops above $0.1298 are the next target. Bears rejected bulls in October, February, and April near $0.1349 on the monthly chart. This level might provide resistance if bulls can continue the rally.

A drop below the $0.1061 daily gap may find its next speed bump near $0.0948. Bulls accumulated here in December on the monthly chart. The weekly chart shows that they rejected bears near this level multiple times, and the daily chart shows accumulation before a stop run at the origin of the most recent rally.

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The higher timeframe charts of Bitcoin exhibited bearish momentum in recent weeks, and the failure to break above $28k last week meant the bears remained in control.

The short-term range presented important levels for traders to watch out for.

The buyers were not yet in control of Bitcoin’s trend, and this might not change next week.

Bitcoin saw a false breakout past a short-term range following last weekend’s positive developments regarding the U.S. debt ceiling talks. The past week of trading saw Bitcoin fall back within said range.

Traditional markets have outperformed Bitcoin and Ethereum, especially over the past week. Meanwhile, the higher timeframes showed BTC in the grip of bearish momentum. Traders could look to profit from a drop in prices next week.

The bulls have already been trapped once- will this pattern repeat?

Source: BTC/USDT on TradingView

The range (orange) extended from $26.1k to $27.5k. Over the past few days, BTC managed to bounce from mid-point support at $26.8k. The 4-hour market structure was bearish, and the RSI showed momentum was neutral.

The findings from the OBV were more impactful. When Bitcoin surged above $28k, the OBV was unable to breach a resistance level from earlier in May. This suggested that demand was not sufficient to force a breakout.

Bitcoin was forced to reverse thereafter. With the daily timeframe showing momentum was downward, traders can be bearishly biased. Monday could see a liquidity hunt toward $28k or above for BTC.

This would likely be followed by a reversal if the lack of demand continued. Meanwhile, a true breakout was also possible, one that bears should be cautious of. Therefore, the stop-loss can be set near the $28.5k mark, above recent highs.

The rising volume of sellers supported the bearish case

Source: Coinalyze

The spot CVD was in a sharp decline toward the end of May. This trend continued over the past few days as well, although its pace slowed down. Overall, it continued to show selling pressure was dominant.

The Open Interest was flat over the past two days, and hardly moved in recent hours. This was a sign of sidelined speculators.

They could be enticed into entering long positions on BTC if it breaks $28k. But, if the sellers prevailed thereafter, these late bulls would be a juicy target for the bears.

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Understanding market structure is crucial for successful trading, yet it’s often overlooked. Many traders don’t invest enough time and effort into learning about market structure, which can be a costly mistake. In this post, I’ll dive into the key aspects of market structure, using clear illustrations and real-world examples to help you understand this important topic.

Table of Contents

What is Market tructure?

How to draw and find market structure?

Types of the Market trends:

Type of Market structure

Illustration: Bullish market structure

Illustration: Bearish market structure

Illustration: Ranging/sideways market structure

What is an uptrend?

What is a downtrend?

What is a range?

Exhibits: Bullish market structure

What is Market structure?

Market structure is a framework for comprehending the movements and behaviour of markets.

In layman’s terms, it is a basic form of understanding how markets move.

It can be seen as the flow of the price between a series of swing highs and swing lows.

The market moves in trends, which are the result of various patterns and structures that form and evolve over time.

The price action is how the market moves based just on price, without the consideration of trends and how they may continue. But the market structure is focused mainly on the trend.

Exhibit: Various structures and patterns evolving over time into different trends

It’s determined by identifying swing highs and swing lows on a price chart, which represents the path the price takes from one point to another. In essence, market structure is the visual representation of the trend in the market. For instance, in a bullish trend, you’ll see a series of higher highs and higher lows, while in a bearish trend, the price will form lower highs and lower lows.

The market structure allows you to be in sync with the market and avoid counter-trend trading, which enhances the probability of your setups.

Exhibit: Market structure favouring longs

How to draw and find market structure?

To assess the structure, we start by connecting the swing highs and swing lows on a price chart to reveal the trend.

If the price is forming a series of higher highs and higher lows, it indicates a bullish structure, suggesting that buyers are in control.

Conversely, if the price is forming lower highs and lower lows, it points to a bearish structure, indicating that sellers are dominating the market.

Although identifying market structure seems simple, it requires practice and experience to master the art of reading price charts accurately

Types of the Market trends:

As a trader, it’s essential to recognize that the market can trend in three different directions. Being able to identify when a shift in the trend occurs based on the timeframe you’re observing is crucial to profitable trading. The three types of market trends are: 1. Bullish (Uptrend) 2. Bearish (Downtrend) 3. Ranging (Sideways)

Type of Market structure

There are broadly 3 types of structure.

1. Bullish structure 2. Bearish structure 3. Ranging/sideways structure

Illustration: Bullish market structure

Illustration: Bullish market structure

Illustration: Bullish market structure

In a bullish market, the price forms a series of higher highs and higher lows.

Illustration: Bearish market structure

Illustration: Bearish market structure

Illustration: Bearish market structure

In a bearish market, the price forms a series of lower highs and lower lows.

Illustration: Ranging/sideways market structure

Exhibit 3: Ranging market structure

In a ranging market, the price may form a series of relatively equal highs and lows.

What is an uptrend?

Characterised by a bearish market structure.

Formation of lower highs followed by lower lows.

For a downtrend to stay intact, it must preserve its descending structure – lower highs must follow lower lows.

Lower highs are allowed if the price goes into compression or re-distribution.

What is a downtrend?

1. Characterised by a bearish market structure.

Formation of lower highs followed by lower lows.

For a downtrend to stay intact, it must preserve its descending structure – lower highs must follow lower lows.

Lower highs are allowed if the price goes into compression or re-distribution.

What is a range?

A range is a zone where the price finds itself bouncing between two levels.

These levels are – range high and range low.

The size of the range is dependent on different factors such as asset class, demand-supply, volatility, etc.

A lot of times, the structure won’t be as clear as you want it to be. Conversely, sometimes the structure will replicate the textbook. Hence, you need to be flexible in your approach.

Sometimes, trading in range-bound markets can be challenging due to the choppiness in price movements. However, when the price action is more defined, some traders may prefer to trade the range by executing breakout trades or mean reversion trades from the range high to the range low or vice versa.

It is better to combine market structure with other concepts/indicators for better results.

Exhibits: Bullish market structure

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