This blog references an opinion and is for entertainment and informational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
In this 11th Market Outlook here at Ostium Research, we'll be taking a look at the week ahead in markets, focusing specifically on price-action, positioning and event risk for Bitcoin, Ethereum, Copper, the Dollar Index and altcoins via OTHERS.
Firstly, let's take a look at the calendar:
After a gigantic previous week, we do have a relatively light week ahead, with some speeches amidst inflation and growth data:
TUESDAY: VARIOUS FED SPEECHES
WEDNESDAY: US CPI (YOY) (CONSENSUS 2.6% VS PREVIOUS 2.4%)
THURSDAY: INITIAL JOBLESS CLAIMS (CONSENSUS 222K VS PREVIOUS 221K)
THURSDAY: FED CHAIR POWELL SPEECH
FRIDAY: RETAIL SALES (MOM) (OCT) (CONSENSUS 0.3% VS PREVIOUS 0.4%)
Now, let's dig into asset-specific price-action for the week ahead, looking firstly at Bitcoin:
Bitcoin:
Price: $81,376
Weekly:
If we begin by looking at the weekly for BTC/USD, we can see that last week was an historical week, with price bouncing off prior resistance at $69k and rallying through the Election & FOMC into fresh all-time highs beyond $74k, continuing higher to close the week at $80,427 on growing volume. Momentum looks to be building now but with plenty of room for upside and weekly structure looks fantastic here. If you're thinking about fading this immediately, your sacrifice will be remembered.
But, where do we head now that we're in price discovery? Well, if you've been following my updates on the 11-week lagged correlation to a liquidity proxy, Bitcoin continues to stick tightly to that trajectory and has 3-4 weeks of further upside before a top, if that correlation sticks. We are now firmly beyond prior highs and the next level of higher timeframe resistance would be the 1.618 extension of the 8-month range we have emerged from. which is around $89k; and given its proximity to the next major cluster of meaningful resistance at $100k, I do think we find some sellers below $90k going into mid-December. For now, we should see price continue to push higher towards that level. Unless we close back inside prior highs at $74k, absolutely zero reason to be bearish here.
Daily:
Turning to the daily, we can see that daily momentum keeps ploughing higher, confirming the strength of the trend. Price closed above $74k late last week and then chopped higher into the weekend before expanding yesterday towards $82k, around which level the pair is now finding some resistance. Honestly, I don't think you're going to get much by way of a deep pullback here just yet given the context of last week; rather, late longs will have to keep chasing this higher with shallow intraday pullbacks until we reach more meaningful supply, like that ~$88-90k zone. No signs of exhaustion yet, by any means.
Now, given this structure, the lower timeframes will be more helpful in providing levels to trade at, and there are two potential long scenarios this week...
The first would be a shallow pullback early this week into $80k, taking out the overnight lows into weekend demand below the weekly open at $80.4k, followed by a reclaim of weekly open as support; we would then expect continuation higher to $83k and beyond:
The second long scenario, which would be more fortunate for those hoping for a deeper pullback, would be grinding lower making a series of untapped highs into and below the weekly open, then puking below the Sunday low at $78.4k into demand above prior resistance at $77k. You could look to add half in that region and add more on a weekly open reclaim for price discovery:
And here's the snapshot of positioning on Velo - interestingly, a lot of the OI has been washed since the all-time high breakout and funding is barely positive:
And here's CoinGlass:
Finally, here are the anticipated 1-week and 1-month liquidation levels that could act as a magnet should price begin to move towards them:
Ethereum:
Price: $3149
ETH/USD
Weekly:
Beginning with the weekly for ETH/USD, we can see here that last week printed a monster candle for the pair, bouncing at long last off that 200wMA and trendline confluence through the Q4 open at $2600 into the major pivot at $2850, slicing through it like butter to close out the week at $3186, firmly above both the pivot and trendline resistance from May. We are now sat above reclaimed support at $3052, but in no man's land beyond that, with no real resistance on the higher timeframes all the way back towards the 2024 highs at $4100, except for some final trendline resistance currently sat above $3600. Weekly momentum is turning higher and looks very much in the position it was in October 2023, supportive of a sustained reversal into the new year. If you're looking for an entry, any dip back towards $2850 is likely to be front-run given how massive that level is, but around that area would be opportune, with invalidation on a weekly close back below $2850. Onwards and upwards to retest the $4k supply zone...
Daily:
Looking now at the daily, we can see how much momentum came in as price bounced off support at $2400, pushing through every minor and major resistance all the way through the cluster between $2850-3050, until it found some resistance at $3255. Momentum looks very strong here and I would expect any pullbacks to be shallow, where any move below $3050 into the 200dMA is likely to find demand and front-run that perfect $2850 reclaimed support level. From here, I expect the pair to continue towards $3555 as the next major resistance and untapped swing-high, confluent with trendline resistance from the 2024 highs; accept above that and we move for new all-time highs. No need to be bearish unless this accepts back below $2850.
ETH/BTC
Weekly:
If we now turn to ETH/BTC, we can see that there was some movement at long last, with the pair deviating below support at 0.0365 before rallying hard, breaking back above 0.0383 as reclaimed support but finding resistance at 0.0403, below which it closed. Whilst this is indeed promising, there is work yet to be done for ETH bulls, with 0.0417 as the major level to be reclaimed. Keen readers of this outlook will recall I mentioned countless times that it appeared ETH/BTC was awaiting acceptance above $74k on BTC before marking out its cycle low. That appears to be playing out so far, but we need to see continuation of this momentum though 0.0417 to confirm our view. If we do see that, it is very likely the cycle low is in and we move towards that long term trendline resistance.
Daily:
Looking at the daily, we can see that the pair closed above trendline resistance which has capped the highs since August and is now retesting that trendline as support, as well as 0.0383. If it can hold above here, consolidate and push beyond 0.0417, that looks very much like a bottoming pattern to me and we would expect to see the 200dMA retested up near 0.0476 subsequently. If, instead, it fails here and gives way, reclaiming 0.0383 and the trendline as resistance, we are going to see the pair take out 0.0347 and probably form some bullish divergence down there from which we could see a more sustainable reversal.
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Copper:
Price: $4.33
Weekly:
Looking at the weekly view for Copper, we can see that not much has changed recently, despite the Darth Maul candle last week wicking either side of this major support level. We continue to see consolidation and a momentum reset here as Copper builds a base above $4.30, and unless we see a move below the September open at $4.21 there is no short-term concern for the swing long position I have open from $4.35. If we do lose the September open, it is likely we retrace into the 200wMA and long-term trendline, so I may look to close and reopen lower down in that scenario. For now, this just looks like a higher-low forming above key resistance turned support before the next leg higher into $4.70 and beyond.
Daily:
Turning to the daily, we can see how choppy price-action has been of late, no doubt driven by the stubbornness of the Dollar, but price continues to hold the 200dMA as support. As mentioned, if we lose $4.21, we do have the 360dMA below that, confluent with the weekly view, therefore it would make sense to look for longs down there if we accept below $4.21. If we continue to hold this $4.30-4.35 area as support, we should see the Q4 open reclaimed at $4.55 next, above which daily structure turns bullish and we likely take another crack at the $4.70 double top, beyond which there is zero resistance back towards $4.90...
Dollar Index:
Price: 105
Weekly:
Looking at the weekly for the Dollar, we can see that despite rejecting below 105.5 resistance last week, the pair still closed above prior resistance at 103.7 and is pushing higher for the resistance retest early this week. If we do not reject at this multi-year major resistance (where momentum has also peaked out since mid-2023), we have some serious headwinds for risk assets and commodities, particularly Gold I would say. If, instead, this is the final squeeze into that resistance and we see trend exhaustion on the lower timeframes, we would need to see that close back below 103.7 to confirm the mid-term top. Acceptance above 105.5 and I think we blow out that 2023 high into 107+.
Daily:
Looking at the daily for DXY, we can see how there is some momentum divergence forming on this recent push higher, but we would need to see sellers step in and push this back below 103.7, where it initially found some resistance, confirming the deviation. If we see a daily close back below 103.7, the Dollar likely retests that area as resistance and collapses on a close below 103.3, which would confirm the quarterly high is in, in my opinion, from which we would return firstly to 102 to retest that level as reclaimed support. Nonetheless, in that scenario, I would expect any bounce from 102 to be short-lived and DXY to fall back below the yearly open at 101. This view is invalidated on acceptance above 105.5.
Others
OTHERS/USD
Price: $257bn (3.15mn BTC)
Weekly:
Beginning with the weekly view for OTHERS, we can see that as anticipated the altcoin market deviated below the 200wMA into the curve of the parabola before bouncing and reclaiming the 200wMA as support, but that was not all; alts pushed straight through the major support turned resistance level at $237bn that I have had marked out for months, expanding towards $280bn before finding resistance and closing out at $256bn. This was the highest volume candle for altcoins in aggregate all year and one of the highest of all-time. Momentum has pushed to make another higher-high and is now firmly in bullish territory, with significant room to the upside for a continued reversal. Altcoins should now hold above $237bn as reclaimed support and push through $280bn over the next couple of weeks, above which there is zero higher timeframe resistance into fresh yearly highs at $367bn. I am expecting we see continued strength from here into January.
Daily:
Looking at the daily, we can see that the 200dMA and 360dMA confluence around that $237bn area was accepted above and altcoins immediately expanded higher: reject, reject, accept -> teleport. As mentioned previously, this should now act as support on any rounded retest later this year, if we get one. Looking at the current trend, we are finding resistance around the 100% extension at present, having broken the downtrend in momentum. If we do pull back here, we likely form a higher-low on RSI above 50 and a higher-low above $240bn. From there, we can expect continuation into the 1.618 extension around $310bn, before expansion into yearly highs and beyond next year. Only acceptance back below $237bn would begin to look bearish now.
OTHERS/BTC
Weekly:
Looking at OTHERS/BTC, we can see how the altcoin market deviated below the double bottom around that ~3mn BTC mark, closing below that level the previous week but above trendline resistance turned support, then finding significant demand as BTC accepted above $74k, leading to a bullish engulfing of the previous week and acceptance back above the 3mn BTC level. This also locked in bullish divergence on the week and we want to now see acceptance above 3.275mn BTC as reclaimed support. Weekly structure turns bullish above 3.6mn BTC, which is the last stand of resistance for altcoin bears, above which I would expect to see acceleration in outperformance of alts vs BTC into fresh yearly highs above that 5.4mn BTC area. Acceptance below last week's low is where we should turn sharply bearish alts vs BTC.
Daily:
Finally, looking at the daily, I have marked out my expected trajectory for OTHERS/BTC going into year-end, should we see 3mn BTC hold as support here; lose that level and unfortunately it looks quite dire, as we would no doubt retest the 2.8mn BTC low and potentially push through it. Hold here, however, and reclaim the 200dMA and 3.6mn BTC level as support and things look very bright indeed. Not much else to add here for now except that it would be nice to see this momentum lead to some structural bullishness going into December.
I hope you've found some value in the read this week.
Oh, and if you've not tried out Ostium yet, you can now do so here with the launch of their public mainnet.
