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 14th 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, the Dollar Index and altcoins, via OTHERS.
Firstly, let's take a look at the calendar:
MONDAY: ISM MANUFACTURING PMI (NOV): (CONSENSUS 47.5 VS PREVIOUS 46.5)
TUESDAY: JOLTS JOB OPENINGS (OCT): (CONSENSUS 7.49M VS PREVIOUS 7.44MN)
WEDNESDAY: ECB PRESIDENT LAGARDE SPEECH
WEDNESDAY: S&P GLOBAL COMPOSITE PMI (NOV): (CONSENSUS 55.3 VS PREVIOUS 55.3)
WEDNESDAY: ISM SERVICES PMI (NOV): (CONSENSUS 55.5% VS PREVIOUS 56)
THURSDAY: INITIAL JOBLESS CLAIMS: (CONSENSUS 220K VS PREVIOUS 213K)
FRIDAY: NON-FARM PAYROLLS (NOV): (CONSENSUS 183K VS PREVIOUS 12K)
FRIDAY: MICHIGAN CONSUMER SENTIMENT (DEC): (CONSENSUS 72.9 VS PREVIOUS 71.8)
Now, let's dig into asset-specific price-action for the week ahead, looking firstly at Bitcoin:
Bitcoin:
Price: $96,018
Monthly:
If we begin by looking at the monthly for BTC, we can see that November closed about as strong as one could possibly hope for, rallying off the monthly open at prior cycle highs and pushing all the way up into $99k, closing out the month at $96.4k on growing volume and momentum. I don't think it needs to be said that there is nothing bearish about this at present, and given the structure and momentum here we should expect expansion beyond $100k in December going into 2025. Expansion through $100k that leads to a close back below $96.4k would be the only thing that looks short-term bearish, but given the likelihood of a quarterly and yearly close significantly above prior cycle highs, it's not a scenario that is overly concerning. I expect we see a very strong Q1, in which we can begin to look for all the top signs that everyone is so obsessed with at present. Any dips early in December are likely to be golden opportunities.
Weekly:
Looking now at the weekly, we can see that last week closed as an inside week, with the entire weekly range trading inside the previous week's range. Therefore, we can first look at the extremes of this range as areas to do expect a reaction: should we take out last week's low into $89.8k and then close the weekly back above that low, we can expect the next move to be one that takes out the range highs into $100k; conversely, should we take out the highs early this week and close back inside last week's range, we can expect next week to take out $90k. Pretty straightforward. Obviously, closing the week either side of the range negates this formation and would likely be followed by continuation in that direction, so if we close below $90k this week, we likely have a deeper retracement underway before another attempt at $100k can be made; and if we close above $100k, well... price discovery continues. There is nothing yet to suggest exhaustion on this timeframe, by the way.
Daily:
Looking at the daily, we can see that price is now just chopping around as one might expect at this key level, though we have put in a higher-low at $90.8k. If we close the daily below that low, we turn daily structure bearish given this lower-high below $99.8k from late last week, and in that scenario I would expect to see continuation lower through the untapped lows around the mid-$80k region before a bottom can form. If we wick below $90.8k this week and then close back above (potentially triggering that inside week failure), we can look to play the long back towards $100k and beyond; and vice-versa for a wick above $100k this week and closing back below last week's high ~$99k.
Looking at this more granularly on the hourly, we can see how these long and short setups could present themselves:
The long setup would see derisking into NFPs Friday, taking out the prior weekly low before reclaiming late in the week, where we could look for longs anticipating inside week failure to form and the subsequent week to see a sharp rally back to the other side of the range as headline risk is in the rear view:
The first short setup is the inverse of the above, anticipating inside week failure to form as price rallies into NFPs Friday, taking out all-time highs and then rejecting and accepting back below the prior weekly high, then moving lower next week to take out $90k:
And the second short setup (which could be flipped long at the other end) assumes inside week failure does not form and all of this volatility occurs within the week, with price taking out $100k pre-NFP, where we could look to short acceptance back below the highs back to range lows later in the week, where if we see a wick below and acceptance back above we could flip long for a subsequent $100k retest going into mid-December:
And here's a snapshot of positioning across Velo and Coinglass, as well as the 3-month annualized basis:
And finally the 1-week and 1-month expected liquidation levels that could act as a magnet as price trades towards them:
Ethereum:
Price: $3665
ETH/USD
Monthly:
If we begin by looking at the monthly, we can see that November closed very strong indeed for Ethereum, pushing off the multi-month support above the yearly open and trendline, through $2850 as a key pivot and all the way into a monthly close at $3706. Needless to say much like BTC/USD there is nothing bearish about this and we are now just sat below 2024 highs at $4093, which should be tested in December. If we see a dip early in the month to set the monthly low, I would expect $2850 to be front-run again given how clean the level is - and we can look to the daily for potential levels to be looking at. All-time highs will follow swiftly if we close December above the 2024 high at $4093.
Weekly:
Looking at the weekly, we can see that price closed last week at weekly highs, on growing momentum, pushing through $3500 resistance as expected into the final trendline resistance capping the pair below that yearly high. We should now see $3500 act as support, but should the shallow dip give way to a deeper retracement early this month, taking out last week's low and the double bottom at $3052 but front-running $2850 would be a golden opportunity indeed. Weekly structure is bullish and momentum is making higher-highs each week, with AO flipping positive. This is a dip-buying environment for ETH with $4093 as the next major resistance before we run those all-time highs.
Daily:
Turning now to the daily, we can see that despite the choppy push higher, there is no real momentum divergence formation up here at present; obviously, if we now close back below $3450 and RSI breaks these higher-lows since mid-Nov, then we can consider this as trend exhaustion and that deeper retracement through $3052 into the 200DMA and 360dMA confluence becomes probable; until then, we should expect this momentum consolidation to lead to expansion higher with $3450 acting as support before price pushes through $3750 towards $4093.
ETH/BTC
Monthly:
Looking at the monthly for ETH/BTC, November printed the first bullish close in six months, deviating below 0.0365 only to close the month above it at 0.0384, which is promising. Momentum is still dreadful on this timeframe, but it will take some time to turn around on the monthly. What bulls want to see here is continuation through December into 2025, with ETH/BTC closing the year back above 0.0417 to confirm that cycle bottom. If we do see that, Q1 is likely to be very strong for ETH, as it has been historically post-election. If we close December below 0.0365, there is work yet to be done by the remaining ETH bulls...
Weekly:
Looking at the weekly, we did get that momentum continuation following the reversal candle the prior week, with the pair pushing off the weekly open back above 0.0365 to close out at 0.0381. Weekly RSI is now making higher-highs following the trend exhaustion into support, which is good to see, but weekly structure is still bearish as long as 0.0417 is capping price. Close the weekly above there and it is likely much of this recent grind lower is undone rapidly back towards the long-term trendline resistance and 2022 lows at 0.049. Close the weekly below 0.0365 and we're taking out 0.0318 into 0.03 before we see any further attempts at the formation of a low, but I am leaning heavily towards the lows now being in, as we will see more clearly on the daily...
Daily:
If we turn now to the daily, we can see how price rejected the breakout beyond multi-month trendline resistance in November, leading to that move to fresh lows below 0.0346 into 0.0318 later in November, where trend exhaustion appeared and price bottomed out. We have since rallied back above 0.0346 through resistance at 0.0365 and finally through that trendline once again, flipping it as support last week. Given this structure and context, I am leaning heavily towards the idea that this second breakout beyond the trendline is not another fake-out, which should mean 0.0365 acts as support this week and price moves higher subsequently through 0.0383 to retest 0.04, where any acceptance above the November high confirms that cycle low and sustained reversal ahead. Accept back below 0.0365 and I am wrong here and we see 0.0318 ran once again, most likely.
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Dollar Index:
Price: $106
Monthly:
Beginning with the monthly for the Dollar, November saw continued strength following that October rally off the multi-year range lows, with DXY pushing through resistance at 105.5 into and beyond the 2023 highs at 107, finding resistance at 107.7 before rejecting and closing back near multi-year range resistance at 105.5. This deviation of the range followed by rejection is beginning to look quite similar in its signature to the post-Trump Dollar boom in late 2016, that led to range highs being run into 103.7 before a full retracement of the range breakout, confirmation of a deviation and retracement back to range lows at 93 within 9 months. It's a bit early to be calling for that, but the rejection above 2023 highs is a start. If we see Dollar strength persist in December, with acceptance above the 2023 highs at 107, this view is likely incorrect and we would see continuation through 107.8, which could act as a significant headwind going into 2025 for emerging markets and the wider risk appetite. I am leaning heavily towards the view that this was a deviation above 2023 highs, however, and we should see dollar strength continue to wane here into early 2025, where a December close below 105.4 would convince me that Q1 sees the bottom of the range retested at 101.
Weekly:
Looking at the weekly, we can see how resistance could well be turning support here at that 105.5 level, which is something to be mindful of. If we do flip this level into support this week and then close the weekly above 107. that's an early sign that dollar strength is not done by any means. If instead we see the level give way this week and be reclaimed as resistance next week, then it is likely the local top is in for DXY and we see 103.7 retested as support next.
Daily:
Turning finally to the daily view, we can see how the expectation of last week - where trend exhaustion was followed by a breakdown in momentum - is playing out for now, and we should see a lower high form below the 2023 high followed by acceptance below 105.5 for this to be validated, with RSI making lower lows as price accepts below 105.5. This is something I will be paying close attention to this week given the significant amount of important data being released. A daily close above 107 with RSI making a clean break above that 70 level would suggest momentum is still very much with the Dollar bulls...
Others:
Price: $362.9bn (3.77mn BTC)
OTHERS/USD
Monthly:
Beginning with the monthly timeframe for OTHERS, we can see that altcoins had a great month, rallying through November into the monthly close at $363bn, right around the 2024 highs. Momentum ticked higher once again and there is nothing on this timeframe to suggest that December will not see continuation through the 2024 highs towards the all-time highs at $492bn. Much like BTC, if we wick above the 2024 highs into ~$400bn+ and then reject and close back below the monthly open at $363bn, then we have some short-term concerns for altcoins in Dollar terms. If that does not occur, we should be accepting above 2024 highs going into 2025, which is precisely the setup you want to see for price discovery market-wide in Q1.
Weekly:
Looking at the weekly, we can see that the altcoin market closed above trendline resistance from the all-time highs and 2024 highs last week, which is very promising indeed, also marginally closing above that $367bn yearly high. This is exactly what bulls want to see, with only one level of resistance remaining on this timeframe (~$420bn) before an all-time high retest. Looking ahead, if we do see the expected continuation towards all-time highs in Q1 and accept above those highs, I am looking at the 1.618 extension of the bear market at ~$750bn as the first likely area of major resistance in price discovery. More short-term, we should see any dips over the next week or two form higher-lows from which price continues higher into year-end. One thing to note here is that whilst the market is at yearly highs, momentum has plenty of upside relative to late 2023 and early 2024.
Daily:
Finally, looking at the daily, we can see how the market pushed off of reclaimed support at $301bn into the 2024 highs as expected last week, where OTHERS is now consolidating. We have steep trendline support, but importantly we have no signs of trend exhaustion on this timeframe yet, with momentum making higher-highs. If the market does break down here below the trendline and correct more deeply over the next week or two, we should see that $300bn area act as major support before continuation through $367bn into $420bn and beyond. If, however, any breakdown below this trendline is a fake-out, we should see immediate acceptance back above $367bn with daily momentum breaking through the 80 level on RSI, suggestive of another leg higher before any longer correction...
OTHERS/BTC
Monthly:
Looking at the monthly view for OTHERS/BTC, we can see how the classic altcoin cycle continues to be playing out as expected, with November confirming the October move as a bear trap, engulfing that entire range. I would now be very surprised to see another retest of ~3mn BTC as support for the market, rather expecting continuation in December into 4.3mn BTC as the next resistance area for alts. Acceptance above 4.3mn BTC would confirm another 20-25% of upside into the 'test pump' highs, beyond which we have the actual latter stages of the altcoin cycle and likely a major top some time in Q1 2025. As long as we are above the valley of despair lows, this is bullish for altcoins vs BTC going forward.
Weekly:
Turning to the weekly, we can see that the market validated trend exhaustion, confirming the move below 3mn BTC as a bear trap as the market reversed, reclaiming 3mn BTC as support and expanding higher through 3.6mn as a major pivot. Weekly structure is now bullish and momentum is making higher highs. We are now, however, at the 360wMA, which may act as some resistance here short-term, but we should now make a higher-low above 3.275mn BTC and then continue through the 360wMA towards 4.4mn BTC as the next resistance area. My expectation here is that altcoins continue to outperform from mid-December through Q1 2025, taking out the 5.4mn BTC level from earlier this year before marking out any major top. No altcoin bears allowed unless we close back below 3mn BTC.
Daily:
Finally, we can see that my little squiggly is playing pretty much as anticipated so far, and confluent with the 360wMA we have the 360dMA, which is a really important historical MA for altcoin outperformance vs BTC; accept above this and I really do think we accelerate with sharp but swift dips as altcoin dominance moves towards the yearly high. Daily structure is bullish and momentum does not show signs of weakness here, but some consolidation early in December is to be expected. If we can mark out a higher low above the 200dMA and then accept above the 360dMA, it's game on for early next year.
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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