Trading legend Nik, also known as @cointradernik on Twitter, joins us for our second weekly Market Outlook 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 & concluding with an overview of the altcoin market via the "others" section. Please note none of this is financial advice.
In this second 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 & concluding with an overview of the altcoin market via OTHERS.
Firstly, let's take a look at the calendar:
It's another busy week as we lead up to September FOMC, with five key events this week that will be driving the macroeconomic narrative moving ahead: much like last week, the focus will be on data that strengthens or weakens growth and labour market fears vs. inflation fears, with the added headline risk of the first Trump vs. Harris debate. We believe this latter event risk to be the most poignant for crypto specifically, this week.
TUESDAY: US PRESIDENTIAL DEBATE
WEDNESDAY: US CONSUMER PRICE INDEX (CONSENSUS: 2.6% YOY VS PREVIOUS 2.9% YOY)
THURSDAY: ECB MONETARY POLICY (CONSENSUS: 4% VS PREVIOUS4.25%)
THURSDAY: INITIAL JOBLESS CLAIMS (CONSENSUS: 231K VS PREVIOUS 227K)
FRIDAY: MICHIGAN CONSUMER SENTIMENT (CONSENSUS: 68 VS PREVIOUS 67.9)
Now, let's dig into asset-specific price-action for the week ahead, looking firstly at Bitcoin:
Bitcoin:
Price: $55,197
Thoughts: Firstly, let's take a look at these two higher timeframe charts published below, highlighting the weekly and daily view for BTC, before looking at a couple of hourly charts with potential setups, plus an overview of market positioning.
Weekly:
Beginning with the weekly, we can see that the prior week’s retracement of the push off of support led to another move lower last week, with the September Open at $59k acting as resistance, and the week closing out at $54.9k. We remain marginally above support at$53.6k that held price up in July, but the clean close beneath support at $56.4k is not promising for short-term bulls. Weekly momentum also appears to have broken down here.
From here, if last week’s high and the monthly open cap prices once again this week, I would expect $53.6k to give way and lead to price filling in the August wick to take out the $49.3k low, likely testing that trendline support from the cycle lows at some point in the next couple of weeks. If that area then holds and provides support, that would make a strong case for a local bottom leading into the most favourable period for Bitcoin historically, post-FOMC event risk.
If, however, bulls are able to show up in force this week and hold that $53.6k level as reclaimed support and a higher-low above the August lows, we should see last week’s high give way and price accept above the monthly open, confirming this move below it in early September as a deviation to mark out the monthly low. From there, we should see $59k act as support for another test at major resistance closer to $65k.
Daily:
Looking now at the daily, we can see that price did take out that cluster of lows beneath $56.4k as anticipated last week, but the volume of spot selling was too aggressive despite the relatively benign data – and that led to acceptance beneath $56.4k as support turned resistance. Subsequently, we saw price push lower back into that 360-day moving average, which had acted as support in early August. It acted as supported again last week, with price bouncing to reclaim $53.6k as support for now, popping up over the weekend and now ranging between $56.4k and $53.6k.
Bulls do not want to see this roll over beneath $56.4k and turn the 360-day moving average into resistance this week, as that will be the clearest signal for that wick fill mentioned above into $49k. If, however, price can hold above $53.6k here as it did in early July, and then go on to reclaim $56.4k as support, that would begin to look more like a higher-low formation on this timeframe, with the September open then the key level to find acceptance above for confirmation of this setup.
Now, let’s look at a couple of potential setups for the week, given this higher timeframe overview and the likely focus around the debate in ~48 hours as the pivot for the week.
Above, we can see how there are two lows unswept at present: $53.6k from the weekend and $52.6k as last week’s low. If price was to sell-off into Tuesday night and take out those lows and then reclaim $53.6k as support post-debate, that would be a nice setup for a long for the rest of the week, with $56.4k as the first target, followed by the September open.
If, however, we just keep grinding up into the debate and stretch as far as to take out the September open at $59k, liquidating shorts (as are highlighted in the charts below) and then reject post-event and turn $58.6k into resistance on Wednesday, that would look like the weekly high is in and we could expect to see $56.5k retested, followed by the weekly open at $54.9k and likely lower if that $56.5k area gave way again.
Now, let’s take a look at positioning, where we can see a build-up of shorts in that $56.5k-$58.5k range:
And finally, we can see that expected liquidation levels align with this view that mid-$58k is likely to act as a magnet at some point this week:
Ethereum:
Price: $2326
Thoughts: Let's begin by looking at the weekly and daily timeframes for the Dollar pair before moving onto ETH/BTC.
ETH/USD
Weekly:
Beginning with ETH/USD on the weekly timeframe, we can see that price followed BTC lower last week, breaking below the prior weekly lows after rejecting the September open at $2512, but finding support above the multi-year trendline support and 200-week moving average to close the week at $2297. Momentum indicators made a lower low, which is not promising for bulls, but this cluster of strong support continues to act resilient for now.
For the week ahead, bulls want to see this support cluster find significant demand and reclaim that September open at $2512 as support, with any weekly close above that level looking constructive for higher prices going into the rest of September, with $2850 the primary overhead resistance. If, however, price is unable to break above last week’s high, instead turning that monthly open into resistance this week, it is unlikely that this support cluster continues to hold as well as it has done, with $2160 expected to give way in that scenario; a weekly close beneath which would open up a much larger retracement into $1756. If we wick below $2160 deeply, however, and then reclaim the 200wMA at $2300 (and thus the yearly open) as support subsequently, that would be a very nice signal for a local bottom.
Daily:
Turning to the daily, we can see that the trajectory marked out last week as a bull case is currently playing out, with those unswept lows at $2394 getting taken out late last week as price retested the trendline and bounced. We do have some divergence here for momentum, as price closed below the yearly open but formed a higher low on RSI and has subsequently reclaimed that yearly open at $2281. Bulls now want to see $2394reclaimed as support, leading to a breakout beyond that steeper trendline resistance. If we see that occur, the September open is likely to act as the next pivot for price, with a deviation above$2512 and subsequent rejection likely leading to another move lower back into $2281 and likely beyond that given the number of tests of support. If, instead, price closes above $2512 on the daily timeframe and turns it into support, that would be validation of a September low likely being in and ETH/USD making its ascent towards that major resistance cluster between $2717 and $2850. Meanwhile, acceptance below $2158 this week would be suggestive of that next leg lower into$1756.
ETH/BTC
Weekly:
Looking at ETH/BTC on the weekly, we can see that the pair continues to consolidate at resistance turned support around 0.0416. Weekly momentum is beginning to flatten out as price chops around here, but this is still a very clear downtrend.
From here, any weekly close below 0.0416 would signal continuation of the multi-year trend lower, with 0.0365 as the likely next level of interest, beyond which there really is no support at all all the way into 0.023. It is likely the pair does find its cyclical bottom somewhere between 0.0365 and here at 0.0416 given the significance of these levels, but bulls need to step in here and begin flipping some support turned resistance levels back into support, with the first of these being 0.0445.
Daily:
On the daily timeframe, we can see that momentum is diverging significantly into this support level, which is somewhat promising as a sign of seller exhaustion, but again buyers should be stepping inhere to validate that divergence. If we see the pair rally this week and turn 0.043 into support, daily structure will turn bullish for the first time since July, which opens up that more significant level at 0.0445 for reclaiming as support. That being said, even then there is the most pivotal level to overcome ahead at 0.0463 – flip that into support and it is likely we see the trendline retested at the very least, though more likely that we confirm a sustained reversal given the prior lack of sellers into 0.0416.
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Gold:
Price: $2494
Thoughts:
Weekly:
Beginning with the weekly view for Gold, we can see that price continues to consolidate right below that all-time high print at$2531, now tightening its range and finding support at prior resistance around $2486. As mentioned last week, we do have the beginnings of momentum divergence up here but nothing yet would validate that for shorts to look favourable – and in strong trending environments these perceived divergences are often invalidated.
Bulls are sitting comfortably up here, as there is plenty of room for prices to correct and move lower towards that $2430 area without looking even remotely bearish. A weekly close below $2430 would begin to look like this push into $2531 was a deviation above prior range resistance, but even in that scenario the risk/reward is unfavourable for shorts from that point, as we have trendline support not far below. For longer-term bearishness, a weekly close below $2278 and that trendline would be a trend and market structure shift, opening up a further 10-15% of downside back towards $2075.
Looking above, as mentioned last week, the next major level once Gold gets a weekly close through$2531 will be in that $3000 area, and longs continue to be favourable above $2530 towards that level.
Daily:
Turning now to the daily timeframe, we can see a more local trendline support from the July lows marked out here, and if the pair was to retrace below the September open through $2486 into that trendline, we could begin to look for long setups for fresh highs. One such setup would be a deviation below the trendline and below resistance turned support at $2431, leading to a sharp reclaim of the trendline as support, where we could look to get long with invalidation below $2431 and a target beyond $2550.
Not much else to add here for now...
Dollar Index:
DXY
Price: 101.19
Thoughts:
Weekly:
If we begin by looking at the Dollar on the weekly timeframe, last week saw DXY bounce off the 200-week moving average, having now consolidated around long-term range support at 101 for 3 weeks now. Given the extent of the sell-off going into Jackson Hole, this much consolidated post-event was anticipated, and now all eyes will be on FOMC. If we see continued consolidation and even relief to the upside for DXY over the next week or so, we could see another leg lower beginning for the Dollar through range support going into month-end. If, however, we see further downside this week below 100, wicking again through the 200wMA, this would be suggestive of some upside relief post-event next week.
Dollar bulls want to see the 200wMA and range support hold firm over the next couple of weeks and then see demand step in after event risk has subsided, leading to a reclaim of support turned resistance at 102.15, opening up a retest of the more pivotal resistance at103.7 in October. Dollar bears, however, want to see 102.15 cap any rallies in September and price to then close firmly through 100, turning the 200wMA into resistance and making new lows below 99 towards that 97 handle.
Daily:
Looking now at the daily, we can see the bearish trajectory marked out here, with upside through 101.5 into 102, deviating above that prior support around FOMC and then turning 101.5 back into resistance and losing the yearly open once again from there. This would open up a fresh downside leg through that 2023 low for the Dollar, as mentioned prior. Acceptance above 102 as reclaimed support would be bullish, and subsequently we could see that resistance cluster of the 200-day moving average, 360-day moving average and historical resistance at 103.8 getting retested.
OTHERS:
MarketCap: $186bn / 3.36mn BTC
Thoughts:
OTHERS/USD
Weekly:
Looking at OTHERS/USD on the weekly, we can see that price found support above prior resistance turned support at $165.5bn last week and closed the week fractionally green. Unlike Bitcoin, momentum indicators held up and are looking like they have bottomed out for now on this timeframe. We remain nonetheless in a downtrend since May, with rallies capped by trendline resistance, but there are some promising developments here.
Bulls want to see $165.5bn now hold as support for the altcoin market, confirming a higher-low, from which another test of trendline resistance can occur, with the parabolic curve currently still intact. There is a chance we do just chop here for another week or two, but if this broader uptrend is to remain we should see $227bnretested in the coming weeks, where any close above that level would turn weekly structure bullish (and follow a trendline breakout).Subsequently, we could see another leg higher for the altcoin market to begin, with yearly highs as the first primary resistance beyond $240bn, followed by all-time highs.
If, however, we remain capped by trendline resistance, and price then closes the weekly through $165.5bn, turning that level back into resistance, it is likely we see alts mark down considerably once again, with $130bn as the next major support – and the 360-week moving average below that at $116bn, which marked the two prior bottoms in December 2022 and June 2023. For those looking for the highest probability moment to be overweight alts, weekly closes through $240bn are your signal.
Daily:
Turning to the daily view, we can see this higher-low being marked out at present, with price finding support at $170bn and momentum turning higher also. If the daily now closes below last week’s low, that would open up a wick fill (much like on BTC ~$49k), where $150bnwould be retested. Whilst last week’s low holds as support, this looks like it has no real resistance to overcome all the way back towards the 360-day moving average and prior support turned resistance at $217bn, above which there is a significant resistance cluster. The mid-term path for altcoins is likely to be very clear as we move into October…
OTHERS/BTC
Weekly:
Beginning with the weekly timeframe for OTHERS/BTC, we can see that despite Bitcoin losing support last week, alts priced in BTC held up well, rallying off the weekly lows to close the week at highs, marginally back above support at 3.28mn BTC. Alts have spent a couple of months now chopping around in the valley of despair, and this most recent push higher is suggestive of a momentum shift. Trendline resistance looks ready to be broken here, and if this momentum holds, we should see OTHERS/BTC continue higher into 3.6mn BTC over the next couple of weeks, where any acceptance above that level would turn weekly structure bullish and open up another leg higher into 4.36mn BTC.
As long as that ~3mn level holds as support, this looks very much to be marking out a midterm bottom for alts against Bitcoin. Looking ahead, if 4.4mn BTC gives way in Q4, we would expect fresh highs through 5..44mn to follow going into year-end.
Daily:
Concluding with the daily, we can see clear signs of seller exhaustion on this timeframe, with the more recent divergence be invalidated by this bounce back above reclaimed support. Hold above 3.28mn BTC this week and it is likely we see daily structure shift bullish with a close above 3.5mn BTC, where resistance at 3.6mn comes into view. This is coupled with a trendline breakout on this timeframe, validating that momentum shift. Looking at this structure, it only makes sense to return to bearish bias for alts vs. BTC if we lose ~3mn as support.
And that draws this second Market Outlook to its end!
We hope we've provided some value here – good luck with the trading week ahead!
