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 20th 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, with a very busy week ahead:
TUESDAY: US DURABLE GOODS ORDERS (DEC): (CONSENSUS 0.8% VS PREVIOUS -1.2%)
WEDNESDAY: BANK OF CANADA INTEREST RATE DECISION: (CONSENSUS 3% VS PREVIOUS 3.25%)
WEDNESDAY: FEDERAL RESERVE INTEREST RATE DECISION: (CONSENSUS 4.5% VS PREVIOUS 4.5%)
THURSDAY: ECB INTEREST RATE DECISION: (CONSENSUS 2.75% VS PREVIOUS 3%)
THURSDAY: US GDP ANNUALIZED (Q4): (CONSENSUS 2.7% VS PREVIOUS 3.1%)
FRIDAY: US CORE PERSONAL CONSUMPTION EXPENDITURES (MOM) (DEC): (CONSENSUS 0.2% VS PREVIOUS 0.1%)
Now, let's dig into asset-specific price-action for the week ahead, looking firstly at Bitcoin:
Bitcoin:
Price: $98,965
Weekly:
Beginning with the weekly, we can see that BTC rallied off resistance turned support at $99k last week, pushing into fresh all-time highs marginally above $108.4k before rejecting post-inauguration and returning to close out the week at $102.6k after a very late sell-off into the weekly close amidst equity futures gapping down. Nonetheless, we closed above support and, for those that have been reading my thoughts on X, you will be aware that a swing-failure of the highs was exactly what I expected to see around the Trump headlines. We have a huge week ahead for macro, both for monetary policy, growth and inflation data and for domestic earnings in the US. No doubt the volatility of last week will persist here before we begin February, and we can see that as of today BTC is already pushing lower off the weekly open, having formed the high of the week almost immediately. Price has taken out last week's low around $99.4k, so this is where bulls should be showing up if this range is to break out to the upside. A weekly (and monthly) close below $99k and the short-term bullish outlook becomes less probable, and I would expect to see the wick below the bottom of the range taken out at $89k in that scenario; until we confirm that, however, the bias remains to the upside for me, where any weekly close above $102.6k would look like fresh highs are imminent.
Daily:
If we look at the daily, we can see how price found resistance at $106k, wicked above that level through all-time highs and then turn $106k into resistance again, which preceded this collapse back through reclaimed resistance around the weekly open at $102.6k. We are now pushing through mid-range at $99k, taking out last week's low into support. This area should now act as support if we are bullish, but at worst case if we see another leg lower pre-FOMC on Wednesday into the 2025 open at $93.3k, that would be a high R/R long entry given the very tight invalidation (if we close below $92k support post-FOMC that's a pretty clear sign we're going to take out $89k). Bears want to see $99k now act as resistance this week post-FOMC leading to a weekly close below that key pivot. Acceptance back above the weekly open indicates this was a bear trap.
Now, looking at setups, given the volatility already this week it is a little more difficult to pick out a setup beforehand, as you're probably going to have to be more reactive. Nonetheless, if we do get a deeper than anticipated wick, I think from a risk/reward POV, it's a no brainer to look for longs down at the yearly open as long as we trade that pre-FOMC - I wouldn't want that long going into the weekly close:
A nice short setup would be for price to grind higher from here back above the weekly open to take out the weekend highs pre-FOMC, where any subsequent breakdown could be faded back into the weekly lows; what happens from there I have no idea as a lot will hinge upon the press conference to be honest - any hint of walking back the hawkishness of December and/or compromise with Trump and we likely rip higher:
And here's a look at CoinGlass and Velo for positioning, which shows significant amount of short positioning early this week, flipping funding negative:
And here's a look at 3-month annualized basis, which continues to decline in this range:
And finally a view of anticipated 1-week and 1-month liquidation levels that could act as magnets should price begin to trade towards them:
Ethereum:
Price: $3069
ETH/USD
Weekly:
Beginning with the weekly view for ETH/USD, despite the rejection at $3475 resistance last week, there really isn't much that has changed here for the pair. We're still sat below resistance and above support at $3050, with major support below at $2850, still sat above the multi-year trendline and still forming what appears to be a year-long inverse H&S into all-time highs. As long as we keep chopping around in this range, the picture has not altered - if we close the weekly below $3050, we retest $280 into the long-term trendline support; and as long as we can hold above both of those, this is still an uptrend, regardless of how abysmal the actual performance has been. Acceptance back above $3650 = new all-time highs, in my view, as I don't expect the fourth test of $4100 to hold.
Daily:
Looking at the daily, I have marked out how this trajectory might play out, where we take out the prior swing-low through the 200dMA into $2850 and then, if demand steps in, await a trendline breakout following a reclaim of $3050 as support. That would be entry one for a higher-probability long on ETH, followed by entry two on a reclaim of the 2025 open, with invalidation then below $2850 (but likely worth closing out if we subsequently closed back below $3050) and looking for $4100+. Let's see what happens over the next couple of weeks...
ETH/BTC
Weekly:
Looking at ETH/BTC, there is still nothing quite yet on a price-action basis that would suggest it's time to pay attention, as we close marginally below 0.0318 but held above 0.03 last week. Really, we want to see some volatility either side on a lot of volume - a deep wick below 0.03 followed by a reclaim or demand stepping in right here and flipping 0.0365 as support. Until we see that, it is a waste of brain cells to be watching the ETH/BTC pair. On a sentiment basis, last week very much felt like the 'death of ETH' parties of March 2021.
Daily:
Looking at the daily, there again isn't a great deal here to work with: we have 0.0318 flipping as resistance with price now consolidating between it and 0.03 as support, with no real clear momentum exhaustion to be found. I think we are just waiting for some sort of clear catalyst to spark some volatility. If we see 0.03 taken out this week, look for a lot of volume coming in below that level followed by a reclaim of 0.03 as support to begin considering some sort of bottom; if we don't see that and instead just continue to grind lower and accept below 0.03, there really isn't much higher timeframe support below it so the pair would be in no man's land...
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Gold:
Price: $2763
Weekly:
If we begin by looking at the weekly for Gold, we can see that last week printed an all-time high weekly close, pushing off resistance turned support at $2683 to close at $2765 with momentum still suggesting plenty of room for upside, with no signs of exhaustion. I would expect to see an all-time high breakout follow, as long as we can hold above $2680 this week; push back below that level and this begins to look like a fake-out, but for now this looks legit, and any weekly close above $2793 is likely to begin the next leg higher into that $3000 area.
Daily:
Turning to the daily, we can see that price has just been grinding higher, making higher-highs and lows as momentum has also inched higher, flipping $2727 resistance last week and now consolidating below all-time highs. Again, unless this now breaks back below $2727 and that reclaimed trendline, thereby likely also breaking back below $2680, we should expect the trend to persist and accelerate through the highs. If we do reject this week and turn $2680 back into resistance, that'll likely set up for a really nice short all the way back into $2590 and lower to be honest.
Copper:
Price: $4.31
Weekly:
Looking at the weekly for Copper, price did pretty much exactly what I expected trendline resistance from the 2024 highs: wicked through and closed back below, now consolidating right around resistance. I am expecting the next attempt at $4.36 to be the breakout move, where trendline resistance is flipped as support and price continues its long-term trend higher back into $4.70 followed by $5. That long-term trend begins to look like it is ending if we accept below $4. For now, the trend is your friend...
Daily:
Looking at the daily, we can see that rejection more clearly, faking out above the trendline then breaking back below but consolidating around that $4.32 level, just below the 200dMA. We may get another stab lower from here, so if you're looking for an entry, below last week's low would look decent from a R/R perspective, with invalidation at $4 below the yearly open and a first target of $4.75. Daily structure is currently bullish here, which is why we should anticipate a higher-low formation within the larger trend, ideally above that reclaimed trendline. Momentum also put in a higher-high and is now resetting around 50. There maybe some fuckery around the monthly close but we should see continuation higher in February.
Dollar Index:
Price: 106.75
Weekly:
Beginning with the weekly, we can firstly see that so far the Trump fractal is playing out fairly accurately; obviously, it is highly improbable we get the exact same pattern of price-action, but should we now see the Dollar break back below the multi-year range resistance at 105.5, having now push marginally back below the 2023 high at 107, that would confirm for me that the move out of the range was a fake-out and that the Dollar is likely to spend the foreseeable future range-bound again between 100-105 (before eventually continuing to push higher again to fresh cycle highs as has been the general pattern since 2008). Contrary to this would be 105.5 acting as support and then the Dollar breaking back above 107 over the coming weeks; movements like that would look more like a breakout -> retest than a deviation...
Daily:
Turning finally to the daily, we can see that price did break down below trendline support following momentum exhaustion into the highs, flipping 107.7 as resistance once again and notably breaking below the 50 level on RSI, which has acted as a sort of momentum reset support for the entirety of the rally since Q4. This could be an early indicator that the fake-out scenario is more valid than the breakout/retest scenario, particularly if 50 begins to act as momentum resistance on any bounces from lower down. For now, it looks pretty clear that the dollar is headed for than range resistance retest at the very least, as long as it holds now below 107.7.
I hope you've found some value in the read this week!
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.
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