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 13th 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, the Dollar Index and altcoins, via OTHERS.
Firstly, let's take a look at the calendar:
TUESDAY: FOMC MINUTES
WEDNESDAY: CORE PERSONAL CONSUMPTION EXPENDITURES (MOM) (OCT): (CONSENSUS 0.3% VS PREVIOUS 0.3%)
WEDNESDAY: INITIAL JOBLESS CLAIMS (CONSENSUS N/A VS PREVIOUS 213K)
THURSDAY: TOKYO CONSUMER PRICE INDEX (YOY) (CONSENSUS N/A VS PREVIOUS 1.8%)
Now, let's dig into asset-specific price-action for the week ahead, looking firstly at Bitcoin:
Bitcoin:
Price: $98,594
Weekly:
Beginning with the weekly, we can see that BTC continued to build upon recent momentum, rallying once again off the weekly open near $90k and pushing for its first ever test of the six-figure mark, finding - as you would expect - resistance in that area that led to a weekly close at $98k, with momentum indicators on this timeframe continuing to point to higher prices.
We are now, as stated, in the first major resistance cluster since entering price discovery, as the psychological $100,000 level will, in my view, open up significant FOMO once cleared, much like $10k in 2017. This is also the 1.618 extension of the bear market (at $103k) and the 200% extension of the 2024 range (at $98.7k), so it is probable that we have to test this zone a few times before we are able to accept above it, particularly in the context of the ~3k in spot BTC in the ask side across Coinbase and Binance. Nonetheless, the figure itself is largely meaningless, and nothing in structure nor momentum here suggests we are forming a local top. Now, if we clear $100,000 and push beyond this psychological level, only to reject higher and close back below the level, then we may have the makings of a local top, but this is something we cannot yet assess. If we do see that $103k level tagged this week and then price close the week below the weekly open at $98k, then we can look for downside. For now, this just looks like it is ready for another leg higher on the weekly timeframe, where acceptance above $100k opens up $124k as the next resistance cluster, where there is plenty of confluence for a local top and where on-chain metrics are likely to become a little more frothy should this occur soon. That level is the 300% extension of the 2024 range and the 200% extension of the bear market, as well as the 350-day moving average multiplied by 2, which is a Pi Cycle MA that has found resistance in previous cycles. This is where I am currently expecting a more significant correction to occur, but let's see how this final week of November unfolds...
Daily:
Looking at the daily timeframe, we can see that daily structure is still bullish and AO is still pointing towards growing momentum, whilst RSI is showing some early signs of waning momentum. As I've mentioned before, in strong trending environments, these early potential divergences can often be invalidated before they play out, but this is something to keep an eye on, where a daily close below recent support at $96k, would open up the move into $93.3k to retest resistance as support, with $90k as the major level below that. If we wick below $96k and close back above it, that's looking pretty clear for continuation into $100k for the next attempt. If we are able to close the daily above $100k, that level should immediately hold as resistance turned support later in the week to confirm a move higher, where any close back below that level immediately after closing above it would look like a deviation.
Turning now to potential setups for the week, for those looking for a short, you want to see $100k taken out definitively early this week, ideally prior to the heavy day of data on Wednesday, with a short entry on a close back below $100k and looking for the bottom of the range at $95.6k, where is something of a double bottom into 200hMA and trendline support:
For those looking for the long through $100k, you obviously want to see $100k continue to hold as resistance early this week, maybe painting a double top before retracing through the weekly open at $98k into that $95.6k region, clearing out those stops prior to Wednesday and looking to long the reclaim, adding half on a close back above the weekly open for what is likely to be the breakout move beyond $100k:
And here is a snapshot of current positioning across Velo and CoinGlass:
And finally the 1-week and 1-month anticipated liquidation levels, which could act as a magnet should price trade towards them:
Ethereum:
Price: $3494
ETH/USD
Weekly:
Looking at ETH/USD on the weekly, we can see that despite the bearish reversal candle close last week, the pair invalidated this by rallying off support at the weekly open around $3050 into $3500, rejecting at that local resistance below trendline resistance to close out the week at $3365, with momentum ticking higher once again. From here, if we can close the weekly through $3500, we should see expansion through the next level of trendline resistance towards the 2024 high at $4093 in December. If we wick above $3500 this week into trendline resistance and then close back below $3365, that would look quite bearish short-term, where we are likely to take out stops below $3050 before any further attempt at continuation higher.
Daily:
If we turn to the daily timeframe, we can see that daily structure remains bullish here and, as expected, price front-ran the confluence of untested support at $2850 before bouncing higher, with momentum indicators also pointing higher now. We rejected the $3500 breakout but today price is attempting this once again, where any rejection up here will open up a sweep of the weekend lows, likely into $3250 mid-week before another attempt at the $3500 break. A daily close above $3500 will lead to a swift move through $3570 to take out that untapped high into trendline resistance, acceptance above which grants clear skies for $4090. No reason to be bearish short-term unless the weekly rejects at $3570 and then closes back below $3365, as mentioned above.
ETH/BTC
Weekly:
Looking at the weekly for ETH/BTC, we can see how price flushed lower as anticipated, before front-running the big 0.03 level and rallying off 0.0316 as support to close the week above 0.0355. This is promising, particular in the context of waning seller momentum, but we need to see reclaimed resistance at 0.0365 immediately flipped as support off this weekly open rally, where a weekly close above that level opens up that 0.0417 retest, which is a pivotal level. Acceptance above 0.0417 is the signal for continuation higher towards the 2022 lows, long-term trendline resistance and the 360wMA up near 0.049. Deviating above 0.0365 this week only to close below the weekly open would suggest we do indeed need to test 0.03...
Daily:
Looking at the daily, we can see how price is currently playing out as anticipated last week, with that deviation through support at 0.0346 and what appear to be a reclaim today, though we need to see a daily close above the level to confirm this. This would also validate the growing divergence in momentum, which is pointing at seller exhaustion into this zone. If we do get that daily close today, we should see the trendline retested alongside 0.0365 reclaimed resistance; accept above both and I find it hard to imagine that this is a second fakeout...
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Gold:
Price: $2586
Weekly:
Looking at the weekly for Gold, we can see that price bounced almost exactly at our $2535 level marked out in last week's post, pushing off the weekly open into resistance at $2680, breaking through to close at $2711, with trendline support holding firm. We are now at the point where this could either become a lower high from which a deeper correction is due, marking this out as a mid-term top, or continuation through $2800 occurs, with $3000 as the next major resistance. Momentum is mixed, but weekly structure remains intact, and so we should expect to see continuation. We would have to look to the lower timeframes (including the daily) for a clearer view here.
Daily:
Looking at the daily, I have marked out the two trajectories that we might expect to play out from here, where the bearish scenario would see this rally retraced back through the second trendline support, confirming the parabola breaking and shift to bearish daily structure, with acceptance below $2535 leading to a deeper retracement into $2430, where the 200dMA is sat. The bullish scenario should see a higher-low now form back above this trendline, leading to a daily close above $2682 and then continuation through last week's high at $2727, back into fresh all-time highs and beyond. Let's see how this week plays out.
Dollar Index:
Price: $106.55
Weekly:
If we begin by looking at the weekly for DXY, we can see that the Dollar closed above the 2023 highs at 107 and firmly through resistance at 105.5, and a pattern it appears to potentially be mirroring here is that of the post-2016 Trump election, where immediately after the election the Dollar was bid through range highs at 100, before finding resistance at 103.7 at the turn of the New Year and then capitulating back into range lows throughout 2017. If we see something similar play out here, we should see the Dollar capped going into year-end and a reclaim of range resistance at 105.5, leading to that move back to range lows next year. If, instead, 105.5 acts as support going into 2025, we have something of a new paradigm and potentially some headwinds for risk assets more broadly, given the tightening effect of a very strong dollar on global financial conditions.
Daily:
Looking at the daily, we saw momentum divergence on that push higher through the 2023 highs, which has not yet locked in but is something to keep an eye on, as trend exhaustion up would be very telling. If we do push lower from here having run that 2023 high, look for a breakdown below the RSI trendline support that has been suggestive of strong momentum to the upside, alongside price below 105.5, which would turn daily structure bearish and likely mark that Trump top. If, instead, this daily divergence is invalidated - as often occurs with strong trends - we should see the Dollar push back through 107 and accept above it as support, printing a higher-high beyond 70 on RSI too, indicating another leg higher is likely.
Others:
Price: $344.9bn (3.5mn BTC)
OTHERS/USD
Weekly:
Looking at the weekly for OTHERS, we can see that following my last post a couple of weeks ago, the altcoin market has continued to rally, pushing through resistance $280bn as anticipated, flipping that as support last week to push up into $340bn, marginally closing above trendline resistance from the prior cycle highs and March 2024 high, below which it is now sat. Momentum has been supportive, looking very much like late 2023 here, with plenty of room for upside. Given the extent of the rally over the past few weeks, it would not surprise me to see a week of consolidation below the 2024 high at $367bn or some sort of corrective action if we push into that level, before continuation higher from early December, through the 2024 highs into fresh all-time highs beyond $492bn. Once we close the weekly above $367bn, there is no real resistance before the all-time high retest, except the $420bn area. Onwards and upwards into 2025.
Daily:
Looking at the daily, we can see how this could play out, with a push into $367bn early this week leading to a correction towards reclaimed support around $300-310b around the monthly close, leading to that next leg higher through 2024 highs into January, where we are likely to be testing at the very least the $420bn area. Daily structure is very much bullish and momentum indicators do not yet point to exhaustion on this timeframe, so keep an eye on that this week in case we do see some divergences develop. Other than that, not a great deal to add for now except that dips are buying opportunities for the coming weeks and months.
OTHERS/BTC
Weekly:
Looking at the weekly for OTHERS/BTC, we can see how the altcoin market deviated below that 3mn BTC level, printing momentum divergences before reclaiming that level immediately and flipping it as support, then continuing higher last week through 3.3mn BTC to retest major support turned resistance at 3.6mn, below which we are now sat. Flipping this level turns weekly structure bullish, after which point I think it's very clear that altcoins will be outperforming Bitcoin for several weeks at least. Above that level, we likely push for 2024 highs and the 200wMA retest at ~5mn BTC going into 2025. We are still very much following prior cyclical patterns, albeit a bit more choppy, with 'easy mode top' likely to occur in Q1 if this pattern persists. No bearish talk about alts vs BTC unless we now lose the 3mn level again...
Daily:
Finally, looking at the daily, we can see how this is mapping out the trajectory mapped out a couple of weeks ago pretty tightly so far, with 200dMA resistance capping the market at present, as we would expect. We should see some further consolidation here above 3.27mn BTC going into December and then accept above 3.6mn as the signal for a sustained reversal over the subsequent weeks. Daily structure is bullish here, and momentum continues to print higher-highs having broken the downtrend, now accepting above 61 on daily RSI for only the second time since 2024 began; remember what I said about the second breakout - I would be surprised if this signal is a false one given the false signal in September...
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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