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 19th 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: PRESIDENTIAL INAUGURATION
WEDNESDAY: ECB PRESIDENT LAGARDE SPEECH
THURSDAY: US INITIAL JOBLESS CLAIMS (JAN 17): (CONSENSUS 215K VS PREVIOUS 217K)
FRIDAY: BOJ INTEREST RATE DECISION: (CONSENSUS 0.5% VS PREVIOUS 0.25%)
FRIDAY: S&P GLOBAL COMPOSITE PMI (JAN): (CONSENSUS N/A VS PREVIOUS 55.4)
Now, let's dig into asset-specific price-action for the week ahead, looking firstly at Bitcoin:
Bitcoin:
Price: $107,972
Weekly:
Beginning with the weekly, we can see that last week saw the bottom of the range swept exactly as anticipated, taking out $90k before reversing and rallying sharply through $99k resistance to close out the week at $101.2k. This occurred on the highest volume in several weeks, with momentum still supportive of further upside. We did reject just below all-time highs last week but early trading this week saw price rally off the weekly open at $101.2k into a fresh all-time high at $109.4k, with Trump's inauguration ahead. Purely from a price-action perspective, we swept the bottom of a multi-month range and immediately reversed to take out the all-time high, so we should now see continuation through that high towards the confluence of Fib resistance around $125k. Obviously, a weekly close above $108k would cement this, but given the volatile week ahead there is a non-zero chance we push into that level this week itself. Nonetheless, a weekly close above $108k is unequivocally bullish and will lead to the next leg higher; if, instead, we see a deeper wick above today's high and then rejection, with price closing the weekly back inside $108k, that looks like a failed breakout and we would then look for $99k to be retested as support.
Daily:
Dropping into the daily, we can see that price is currently forming a bullish engulfing of the prior three daily candles, which, if we then close the daily above $108.4k, would likely lead to a breakaway move like the Nov 5th candle through prior all-time highs. If, instead, having swept the all-time high we now close back below yesterday's high, this would look like a deviation of the weekend range and I would expect to see continuation lower through the weekly open into $99k support from there, where bulls would want to see a significant bid step in to protect that level for another retest of all-time highs. The more bearish scenario would be for price to close the daily back below $99k this week, following which it becomes more probable that - at the very least - the 2025 open at $93.3k is retested. If we look at momentum, RSI is breaking higher and is pushing into an area that has acted as resistance for much of the past year - accept back above 70 on daily RSI and that would add confluence to the breakaway move akin to Nov 5th.
Now, trading anything on leverage this week is potentially a daft idea, particularly over the next 48 hours, but for those looking for a long setup, you actually want to see some sort of sharp sell the news around the speech without price having taken out that $109.4k high from earlier today, with a wick below $99k and subsequent reclaim acting as the first entry, with additional entries back above that weekly open for the 'real' breakout move through $108k. Given that the low of the week formed in the first half hour of the weekly open, I think there's a good chance we do see something fast and violent like this play out, assuming moderately positive to neutral headlines regarding crypto from Trump - obviously, if he comes out with a commitment to explicitly buying Bitcoin, that's your breakaway type of move.
Headline risk, in my view, is skewed heavily to the upside over the next 24 hours, so shorts aren't really what I'd be looking at given the risk you get blown out and your stop doesn't trigger. Nonetheless, if you're a brave soul, you want to see another push through $109.4k around the speech and then a hard rejection and close back inside $108.4k, looking to short as close to an underside retest as possible with invalidation above the all-time highs, looking for that reversal back into the weekly open but likely through that level into $99k:
Here's a look at 3-month annualized basis, which is still not particularly frothy:
And here's a snapshot of positioning across Velo and CoinGlass, which shows a sharp flip from an aggregate spot basis and neutral funding to some early signs of froth following this morning's rally:
And here are the anticipated 1-week and 1-month liquidation levels:
Ethereum:
Price: $3364
ETH/USD
Weekly:
Beginning with the weekly for ETH/USD, we can see that last week saw price wick below reclaimed support at $3050 towards that $2850 level but catch a bid above it, as anticipated, closing the week back above support but rejecting again at $3475 resistance. We are now in a range between key support and key resistance and until we see the weekly accept above or below either side of this range we should expect some further chop. My view here is that we've retested demand and should not now need to go back and test $2850 again if this is bullish, so any weekly close back below $3050 would now look quite bearish, with a retest of the long-term trendline likely to follow. The level I am looking at here for a 'real' breakout is $3650; above that we likely break that $4100 resistance and continue towards all-time highs. The next ~90 days are historically the most bullish for Ethereum, so we'll see if seasonality prevails yet again...
Daily:
Looking at the daily, we can see that daily structure is bearish but we found support above the 360-day moving average, which is now forming a higher-low above $3050 support. Momentum is choppy here and trendline resistance from the December high is capping price, but as mentioned above if we can push through $3476 here and flip $3650 into support, I would expect the picture to look a lot clearer, with bullish structure and momentum. The bounce today has taken ETH back above the yearly open at $3330 but $3476 continues to cap the upside, so any daily close below $3330 here will likely lead to another test of the $3050 support, a daily close below which begins to look more bearish, as outlined previously. If we can hold above the yearly open today and then that level acts as support over the next day or two, I would expect the trendline to give way and price to finally break and close back above $3475 and then attempt the cluster of resistance above that...
ETH/BTC
Weekly:
Looking at ETH/BTC on the weekly, the weakness from a couple of weeks ago with the pair closing back below 0.0365 led to a breakdown below local support and the lowest weekly close so far this cycle, with the pair pushing into 0.03 and closing out at 0.0317. This now looks horrendous structurally and any weekly close below 0.03 opens up a lot more downside before the next major support at 0.023, so this region should be considered a last stand for bulls. It was exactly this level which marked the bottom in March 2021, but unlike then ETH/BTC does not have bullish weekly structure preceding it. Until we see the pair back above 0.0365, I don't think there's much point looking for ETH longs over BTC longs, despite the forthcoming seasonality; that said, as soon as we close the weekly back above 0.0365, I think we see a very sharp reversal of the past few months of downside.
Daily:
Looking at the daily, again momentum broke down and daily structure is clearly bearish here, with 0.0318 now acting as support turned resistance. This is not a pretty picture by any stretch, but often this is exactly how ugly things are when bottoms form, particularly given prevailing sentiment around ETH. Nonetheless, until daily structure turns bullish and actually gives you reason to pay attention, ignore the pair. I would want to see some sort of momentum exhaustion on a push below 0.03 or a higher-high and higher-low formation on this timeframe to become interested again. Again, above 0.0365 things become a lot more interesting...
Subscribe to Ostium Labs
Receive the latest updates directly to your inbox
Your subscription could not be saved. Please try again.
Your subscription has been successful.
Dollar Index:
Price: 108.75
Weekly:
Looking at the weekly for the Dollar Index, we can see that price rejected the 2025 high to close the week in the red for the first time in months, which may be the beginning of the reversal, if the Trump fractal is playing out in a similar manner to 2017. Dollar bears want to see continuation of this momentum lower this week, with any close below the trendline leading to a retest of the 2023 highs at 107. Close back inside 107 and I would expect a much deeper reversal to unfold; flip 107 into support and the next leg of the trend higher likely begins from there through 110.
Daily:
If we look at the daily for greater clarity, we can see momentum exhaustion into the highs and RSI capped again where it has for several months now, providing confluence for the idea that dollar strength is overextended up here and we should see some meaningful reversion. Daily structure is still currently bullish but this momentum divergence is leading price lower, and if we close below 107.8 daily structure would turn bearish after a trendline breakdown: this, in turn, would likely lead to further breakdown in momentum and a retest of that 107 level, where the reaction will be telling. My current view is that there's a high probability this whole move above 107 has been a range deviation similar to that of 2017 and we are likely to see price return to trading inside that range in Q1.
OTHERS:
Price: $350.6bn
OTHERS/USD
Weekly:
Beginning with the weekly view for OTHERS, we can see that the altcoin market is currently consolidating above the yearly open at $335bn and above trendline resistance turned support from the prior cycle highs, whilst being capped by the March 2024 high at $367bn. Currently, this does very much just look like consolidation after the multi-week rally post-Trump election, but if we were to see OTHERS now reject again here and close below the trendline and the yearly open, flipping both as resistance, then we are likely to see another 20% or more of downside, with $280bn as the next major support. To the upside, if we close the weekly above the March 2024 highs and flip them as support again, I think we begin the next leg higher that takes the altcoin market to all-time highs beyond $500bn into its mania phase.
In previous posts, I have highlighted how the past two cycles were eerily similar with regards to duration, with both the duration from halving to cycle top and from BTC making a new all-time high to the cycle top being almost identical at 546 and 343 days, respectively. This cycle, if we take the marginal new all-time high that formed in March 2024, we'd be looking at early February 2025 (a few weeks from now) for the cycle top if the duration was to mirror prior cycles; whereas the halving to the top would still indicate we have months to go, with late October being the date marked out. If, however, we use the November 2024 all-time high breakout, which in many respects felt more like the 'real' all-time high breakout for Bitcoin, we get that mirror image duration across both measures, with October/November looking like the cycle top, if these duration fractals play out. Now, for those who have read my series of posts on cycles, you'll know that historically the crypto cycle extends as long as the business cycle extends, and we are also still very much 'mid-cycle' for the US economy, in particular.
Taking all of this into consideration, it is currently my view that we see some sort of mid-term top in late Q1, or early Q2, followed by the 'brutal shakeout' characteristic of summers in prior cycles, followed by a final ascent into Q4 for crypto more broadly. This would mean no multi-year top on OTHERS until October or November. Now, if things change with regards to where I believe we are in the business cycle or we so vastly overextend and pull forwards gains in Q1, I will adjust my view, but currently that is the picture as I see it.
On the weekly timeframe, we are still seeing the altcoin market play out a classical parabolic ascent, with this cycle incorporating aspects of both the 2017 and 2021 cycles; for what it's worth, I definitively reject the idea that cycles no longer exist for crypto ex-Bitcoin; whether we are at the 'supercycle' point for Bitcoin itself remains to be seen, but I don't currently believe so.
Daily:
Looking at the daily, we can see OTHERS broke out above local trendline resistance, swept the yearly open and found support above the December lows and is now range-bound between $300bn and $400bn, with the yearly open providing support at $335bn. If we accept below $335bn here this week and flip it into resistance, I think we take out $300bn into $280bn, potentially retesting the 200dMA and 360dMA around $260bn before a longer-term bottom is found - that's the bearish scenario. The bullish scenario is OTHERS holds the yearly open this week, closing above $367bn and flipping $400bn into support going into the end of the month, with February then taking the altcoin market through $420bn resistance to retest all-time highs at $490bn, with price discovery beyond that...
OTHERS/BTC
Weekly:
Looking at the weekly for OTHERS/BTC, we can see that the market rejected the 360wMA and pushed lower, trading below 3.6mn BTC and now retesting the 3.275mn BTC area, which marked out the December low. This is not particularly strong price-action, as structure - which was looking promising - is now looking weaker. We do still have bullish weekly structure as long as we protect the 2.85mn BTC low and form a higher-low above it, but to be honest a weekly close below 3mn BTC would make it highly probable that low gets taken out. For now, 3mn BTC is very strong support, so if we retest that level this week but close back above 3.275mn BTC, that would look like the higher-low formation from which we see continuation higher again. The really bearish scenario would be a weekly close below 2.8mn BTC, where all the post-Trump bullish structure is undone and we likely see continuation of altcoin underperformance from there.
Daily:
Finally, looking at the daily, we can see that daily structure remains bearish with support flipping into resistance at 3.6mn BTC and trendline resistance also capping upside. We lost the 200dMA yesterday and alts are now retesting the December low support, where any close below this level does open up that retest of 3mn BTC, which would be your final stand demand zone. If we find support here, however, it would be wise to wait for a clean breakout above trendline support and acceptance above 3.6mn BTC before looking to add any exposure, as that also turns daily structure bullish and would make this past few days of price-action look like a bear trap.
Wild week ahead, I'm sure...
I hope you've found some value in the read this week - you might wanna dial down the leverage for the next few days.
Oh, and if you've not tried out trading Real-World Assets on Ostium yet, you can now do soherewith the launch of their public mainnet.
-2025-01-20_09_46_35.png)
-2025-01-20_09_47_34.png)
