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 15th 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, which is absolutely stacked with interest rate decisions around the world:
TUESDAY: RBA INTEREST RATE DECISION (CONSENSUS 4.35% VS PREVIOUS 4.35%)
WEDNESDAY: US CONSUMER PRICE INDEX (YOY) (NOV) (CONSENSUS 2.7% VS PREVIOUS 2.6%)
WEDNESDAY: BOC INTEREST RATE DECISION (CONENSUS 3.25% VS PREVIOUS 3.75%)
THURSDAY: SNB INTEREST RATE DECISION (CONSENSUS 0.75% VS PREVIOUS 1%)
THURSDAY: ECB INTEREST RATE DECISION (CONSENSUS 3% VS PREVIOUS 3.25%)
THURSDAY: US PRODUCER PRICE INDEX (YOY (NOV) (CONSENSUS 2.5% VS PREVIOUS 2.4%)
Now, let's dig into asset-specific price-action for the week ahead, looking firstly at Bitcoin:
Bitcoin:
Price: $99,460
Weekly:
If we begin by looking at the weekly for BTC/USD, we can see that last week closed above $100,000 for the first time in Bitcoin's history, eclipsing the prior two weekly highs above $99k, on slightly declining volume but still positive momentum. Weekly structure is bullish, as is momentum, and acceptance above this resistance cluster should lead to continuation higher.
The reason I say 'should' is because those who have been following along with my updates on X will be aware of the 11-week lagged M2SL/DXY (liquidity proxy) correlation that has been incredibly tight all of 2024 for Bitcoin, almost perfectly mapping out price-action to this day. This correlation calls for a multi-week correction beginning this week and potentially not marking out a bottom until late January / early February, assuming the correlation continues to stick with the accuracy it has shown all year. The reason I mention all of this is because we are now at the inflection point, where either the correlation persists and we do get that multi-week correction, or the weekly structure and momentum weigh more heavily, breaking the correlation and ushering in a new regime of price-action and a leg higher in Bitcoin that will take it to ~$125k, where plenty of confluence sits for the next area of major resistance.
Early signs that the correlation has broken and we are beginning a new leg higher would be quite simply acceptance above last week's high at $104k: close this week above that level and I think we squeeze higher into $125k before year-end, where are more likely to see a corrective patch. Early signs that the correlation persists would be deviating last week's high and rejecting hard, closing this week back below the prior multi-week resistance at $99k; in that scenario, I'd be confident the correlation will keep playing out and we'll see BTC move lower into January, at least through the $89k level. Big week ahead...
Daily:
Turning now to the daily, we can see that there is some waning momentum here and that the series of higher-lows formed on RSI since August may roll over, suggesting a breakdown in momentum; that would occur if we see RSI accept back below 50 this week, which would be supportive of that corrective period beginning now for BTC. For now, however, momentum has not broken down and daily structure is still bullish. We should see any weakness early this week met with another attempt at last week's high, where the reaction will be telling. Close the daily above $104k and flip that level as support and we've got clear skies ahead for $125k; deviate, reject and accept back below $99k, leading to a move below the Dec open at $96.5k, and we're quite clearly exhausted up here.
Now, given all of the above, let's look at two potential setups for the week...
For the long side, you want to see price continue to grind lower early this week leaving the weekly open and weekly high (which formed in the first 5 minutes of the week) untapped. In most cases, these highs get revisited later in the week, so you could look for longs around the Dec open, adding on a reclaim of $99.3k as support and looking for fresh all-time highs into $104k much later into the week, where it becomes more likely too that the correlation is breaking:
For the short side, quite simply you want to see the opposite: if we take out the weekend highs into $104k, reject somewhere up there and accept back below the weekly open at $101.2k, that's not looking good for long exposure and no doubt we'd have baited breakout longs that will be squeezed. From there, it would be expect that price continues lower to retest the trendline later in the week, where again it looks more likely that the correlation persists and a larger correction is beginning:
Below we can see a snapshot of positioning across Velo and CoinGlass, which given the flash crash last week is now more supportive of a correlation break (i.e. prices accepting above $104k), as we don't have much derivatives froth at all on BTC:
This is further evidenced by the 3-month annualized basis:
And here we can see anticipated 1-week and 1-month liquidation levels:
Ethereum:
Price: $3863
ETH/USD
Weekly:
Beginning with the weekly for ETH/USD, we can see that price closed firmly above the final trendline resistance, finding support above it last week and expanding into a marginal new yearly high above $4093, then closing the week around $4000 on growing volume and momentum. If we see any retest of that trendline this week, that should act as support and lead to another test of $4093, where a weekly close above that level opens up the move into $4400 and subsequently fresh all-time highs beyond $4900. There is absolutely zero reason to be bearish on ETH here looking at this structure and momentum, and even if BTC corrects lower it is my view that ETH will pick up the slack going into year-end regardless. No bearishness unless we close the weekly back below $3450.
Daily:
Looking at the daily, I have marked out the steep trendline support marking out the lows since mid-November, and this trendline currently remains intact. Should it continue to do so this week, we should mark out a low early in the week above the trendline and then close the daily above the 2024 high at $4093, flipping that as support and continuing higher into 2025. If, instead, we see a trendline break, my view currently is that we deviate the December open at $3700 into resistance turned support and then push on from there. Not much else to add here for now...
ETH/BTC
Weekly:
Now, looking at ETH/BTC on the weekly, we can see how last week followed on from the momentum of the previous week, rallying into resistance around 0.0403 and closing the week at 0.0396. I am expecting to see further continuation of this reversal through 0.0403 into 0.0417 this week, which will be the real test, as acceptance above that level opens up a much larger reversal back towards long-term trendline resistance and the 2022 lows at 0.049. Should we deviate this resistance cluster and then begin to reject and close below 0.0383, we can consider this a failed attempt at a bottom, but for now it is looking promising indeed. Weekly structure turns bullish on acceptance above 0.0417 also.
Daily:
Looking at the daily, we can see how our expectations that the second breakout beyond local trendline resistance was unlikely to be another fake-out, and that appears to be true so far, with the trendline turning support and leading to expansion. We should now see 0.0383 act as support and the pair flip 0.0403 this week, leading to a test of 0.0417, where we may need to see some consolidation before acceptance above that key pivot. Once that level is flipped, the 200dMA is the next target at 0.0445.
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Gold:
Price: $2650
Weekly:
Beginning with the weekly view for Gold, we can see how price has been holding strong above trendline support, consolidating for the past few weeks below $2727 and forming another higher-low above that trendline last week. We should be close now to determining the mid-term trajectory, where a weekly close below the trendline would open up a deeper correction through $2535 towards $2430, whilst a weekly close above $2727 would suggest the next leg higher is beginning towards $3000; for now, we have to wait and see what price does. A close below $2535 on the weekly would also turn structure bearish, which would confirm that mid-term top.
Daily:
Looking at the daily, we can see the two trajectories marked out from a couple of weeks ago, with the more bullish path currently playing out. If we see Gold push from here through $2685 and flip the $2727 high as support, that would be very much a confirmation of the next period of price-action, likely taking price through $2800 towards $3000. If, instead, we see gold form a lower high this week below $2685 and then turn trendline support into resistance below $2590, that would confirm the more bearish path is ahead, leading to a deeper correction through the November lows back into the lower trendline and 200dMA for the first test since February 2024, sat around $2450...
Copper:
Price: $4.27
Weekly:
Looking at the Copper chart on the weekly, we are finally seeing signs of that reversal off the major support cluster, likely in part due to the headlines coming out of China regarding a renewed loose stance on fiscal policy. We await more concrete policy but for now the price-action is suggesting the market believes China, where any weekly close back above $4.36 would confirm this as a mid-term low from which we are likely to retest the $4.70 high and expand beyond that to the top of the multi-year range near $5. No bearishness unless we accept below $4.
Daily:
On the daily, we can see that the 360dMA acted as support and momentum is now ticking higher, with price sandwiched between this support and the reclaimed resistance cluster around the 200dMA, with trendline resistance also ahead from the yearly highs. If this is the bottom, we should see the $4.20 area act as support and price flip $4.36 over the next few weeks, leading to a trendline breakout attempt, followed by another test of $4.70, likely in early 2025. If my view here is wrong, my long will be invalidated on acceptance below the 360dMA at $4.09.
Dollar Index:
Price: 105.6
Weekly:
Beginning with the weekly for the Dollar, we can see that last week rejected below the 2023 highs again but managed to close marginally above 105.5, not yet confirming that the move into 107.8 was a deviation of the range. If this is the case, this week should see the Dollar close below 105.5, from which point we are likely to see a deeper move lower back towards the 200wMA and bottom of the range over the coming weeks and months. If, however, this week sees 105.5 hold as support and DXY push higher from here, we are likely seeing the beginning of a broader uptrend, following which the 2023 high at 107 should be flipped as support and the Dollar see expansion through 108. We're approaching that inflection point here.
Daily:
If we drop into the daily, we can see how our expectations for momentum exhaustion and a breakdown in RSI have played out so far, but this needs to be further validated by price making another lower-low and lower-high below 105.5, which would all but confirm this move above the range as a deviation and I would expect the 200dMA and 360dMA confluence at prior resistance turned support ~103.7 to be the next magnet for the Dollar from there. If momentum breaks back above that trendline marked out whilst price accepts above the 2023 high at 107, clear skies ahead for the Dollar through 108 and beyond...
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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