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 12th 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, Gold, Copper and the Dollar Index.
Firstly, let's take a look at the calendar:
MONDAY: BANK OF JAPAN GOVERNOR UEDA SPEECH
WEDNESDAY: ECB PRESIDENT LAGARDE SPEECH
THURSDAY: INITIAL JOBLESS CLAIMS (CONSENSUS 222K VS PREVIOUS 217K)
THURSDAY: S&P GLOBAL COMPOSITE PMI (NOV) (CONSENSUS N/A VS PREVIOUS 54.1)
FRIDAY: MICHIGAN CONSUMER SENTIMENT INDEX (NOV) (CONSENSUS 73 VS PREVIOUS 73)
Now, let's dig into asset-specific price-action for the week ahead, looking firstly at Bitcoin:
Bitcoin:
Price: $91,767
Weekly:
If we begin by looking at BTC/USD on the weekly timeframe, we can see that last week was another very strong week for Bitcoin, rallying off the weekly open into and beyond $90k, closing the week out at $89.9k on growing volume and momentum. We are now sat right around that 1.618 extension of the 2024 range with an obviously massive level of overhead resistance at $100k, where we have the 1.618 extension of the bear market and the 200% extension of the 2024 range. Given how this structure and momentum is looking at present, there is no implication of a deep correction just yet, nor any signs of exhaustion; rather, we should expect continuation through last week's high into that $98k-$100k zone this week, as long as we don't deviate $93.5k and then reject. Intraweek dips are for buying.
Daily:
Looking now at the daily, we can see that price is consolidating up here around $90k, in something of an ascending triangle pattern, with no signs of exhaustion as of yet on momentum indicators. It would not surprise me to see some of these local lows taken out as a fresh week begins before another attempt at all-time highs, where we should then expect demand to step in and push this higher. Unless we start forming bearish divergence up here on the next push beyond $93.5k, there really is nothing bearish about this structure at present. Nothing much else to add for now on this timeframe.
Now, given all of the above, let's take a look at a couple of potential setups that could present themselves this week.
Firstly, if we are looking for longs, we want to see $93.5k capping price early in the week, thereby leaving that liquidity unswept; if we push lower over the next 24-48 hours, a deviation below the weekly open at $89.9k, potentially through that trendline support to bait breakdown shorts, followed by a reclaim of weekly open would be a trigger for a long to new all-time highs and beyond, with $100k as the major overhead resistance:
For the particularly brave amongst you who want to short this market, you'd want to see more stops building up above the trendline, price to take out last week's high and overextend and then reject sharply, leading to a reclaim of $93.5k as resistance, where we could enter shorts back towards $85k:
Here is a quick snapshot at positioning across Velo and Coinglass, with nothing majorly concerning yet beyond the possibility of a flash funding reset on any downswing:
And finally here are the 1-week and 1-month anticipated liquidation levels that could act as a magnet should price trade towards them:
Ethereum:
Price: $3121
ETH/USD
Weekly:
If we begin by looking at ETH/USD on the weekly timeframe, we can see that despite a push higher last week into $3468, the pair rejected and closed the week right at reclaimed support around $3050, above which it is currently consolidating. $2850 remains an untested key pivot here following the breakout candle, so if we see any weakness this coming week following that bearish weekly close we should see buyers step in above $2850 to protect that structure. This could also align with a retest of trendline resistance as support. Weekly structure is clearly bullish here so any pull-backs should be viewed as opportunities to position for higher prices going into December.
Daily:
Looking now at the daily, we can see that price is consolidating above a cluster of resistance turned support with confluence at the 360dMA and 200dMA above $2850. This supports the idea that any movement lower into this zone should be met with demand and price should put in a higher-low within this bullish structure. If we do see that occur this coming week, we can expect to see continuation higher into December with $3565 as the first major resistance, followed by the 2024 high at $4093. Momentum is not showing any signs of trend exhaustion here and daily structure remains bullish, again supporting the idea that ETH/USD should be pushing higher soon.
ETH/BTC
Weekly:
If we look at the weekly view for ETH/BTC, this one is particularly brutal. We could have seen a cycle low form the prior week if that momentum had been confirmed with continuation through major resistance at 0.0417 last week; instead, the pair capitulated and retraced the entire gain back into fresh cycle lows below 0.0347. There is now no major support for another 10-15% move lower, so the onus is on whatever remains of ETH bulls to step in here and confirm this ugly structure as breakdown bait: if we see demand step in this week and price close back above 0.0347, rather than turn that level into resistance, there is a chance that despite this looking horrendous we are still carving out the lows. If instead 0.0347 acts as resistance this week and we close below last week's low, I think it is highly probable 0.03 gets attempted over the coming weeks.
Daily:
Looking at the daily, we can see how this might play out for a potential bottoming structure here, given there is some momentum exhaustion on this most recent capitulation (and there have been generally rising lows on momentum since August as the pair has pushed lower. The point is, despite this trend exhaustion, ETH bulls have not capitalised and validated this by turning structure bullish, and we now need to see 0.0347 immediately reclaimed as support and price then breakout beyond trendline resistance a second time, where the second breakout is much less likely to be a fake-out; if we see that, it is likely we see 0.0417 retested swiftly. If not, look out below...
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Gold:
Price: $2586
Weekly:
If we begin by looking at the weekly for Gold, we can see that the pair topped out just shy of $2800 before retracing much of the September rally back towards prior resistance turned support at $2535, above which it is currently sat, right at trendline support. This is exactly the region that short-term bulls want to ensure gets protected, as a close back inside $2535 opens up the likelihood of a deeper correction into $2435 and the next trendline. Weekly momentum has now reset, so would be supportive of continuation higher if we can get some constructive price-action on the lower timeframes, where any formation of a weekly swing-low would likely lead to the next leg up into $3000.
Daily:
Looking now at the daily, we can see that the most steep trendline broke and turned resistance, reclaiming resistance at $2693 before capitulating lower, through $2600 into that prior resistance at $2535 where price found support. We are now sat right around the next trendline with plenty of support below, but both $2600 and local trendline resistance from the all-time high are now capping price. Closing back above $2603 would be a promising sign indeed, where any higher-low formation beyond that would look like a bottom to me and I would expect at the very least a retest of $2693 as reclaimed resistance, where - if it holds and price rejects - we could see the beginning of a much deeper correction back towards the 200dMA. If it gives way, onwards and upwards to $3000. For those looking for a long entry on Gold, this area us opportune given the tight invalidation, as any acceptance below $2535 here would lead to $2435 being retested, confluent with that 200dMA.
Copper:
Price: $4.12
Weekly:
On the weekly timeframe, we can see that last week was weak for Copper, breaking through $4.32 as multi-week support and capitulating lower into the 200wMA and trendline support. As mentioned last week, we anticipated that acceptance below $4.32 would lead to a retrace back into the major support cluster, which is where we find ourselves now, and no doubt Copper has been weighed on heavily by the persistent bid in the Dollar of late. Nonetheless, this structure remains bullish for now on the weekly timeframe and we are now sat at 200wMA support, around which bottoms have formed since 2022. I am re-punting a long here at $4.11 after closing out for a loss with a very tight stop on a weekly close below $4.05 (hard stop $3.80), again looking to hold this for the next leg higher into and above $5. If the weekly begins to accept below $4, this weekly structure turns bearish and the trend begins to look like it is turning, hence the invalidation.
Daily:
Looking at the daily, we have confluence down here with the 360dMA, which marked out the bottom in August, and price is finding support right around the trendline at present. For those who desire more confirmation before getting involved, marking out a higher-low here and then reclaiming $4.36 as support would be a higher probability entry for continuation higher into year-end back above $4.70 resistance, in my view, where your invalidation would then be this 360dMA low. I would prefer to take the punt here given the tight invalidation. Let's see how this week unfolds...
Dollar Index:
Price: 106.4
Weekly:
Now, looking at the weekly timeframe for the Dollar, it is safe to say my expectations of 105.5 capping the rally were decidedly wrong, with Dollar strength continuing through that level towards the 2023 highs at 107, below which it currently sits. Given how far we have now come, it would be very surprising indeed if we don't take out that high before the next trend in either direction is set. If we accept above 107, flip it as support and continue higher, that is a really bad sign for risk assets, particularly those with high beta to financial conditions, at least a little later down the line as those tighter financial conditions make themselves apparent. If, however, much like post-Trump election in 2016, the Dollar bid falters as we approach Christmas and having taken out 107 we mark out a deviation and close back inside 105.5, then we likely begin the journey back to the bottom of the range, which - if we look back at January 2017 -> January 2018 - was the Trump path.
Daily:
Finally, looking at the daily, we don't really have a great deal else to highlight on this timeframe, as we are just pushing higher at present on good momentum into the 2023 high. Structure is bullish and there is not yet confirmed trend exhaustion. What us risk asset bulls want to see is a deviation above 107 met with momentum divergence, leading to a rejection and close back below 105.5 and local trendline resistance; that would be a very clean signal that the mid-term top is in for the Dollar. Remember, policy makers around the world are incentivised to coordinate to keep a lid on the Dollar, as a multi-year range breakout for DXY would be very painful indeed for many economies and obviously no bueno for liquidity conditions.
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.
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