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 22nd 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, DXY, Gold and altcoins via OTHERS.
Firstly, let's take a look at the calendar, with a relatively light week ahead:
MONDAY: ECB PRESIDENT LAGARDE SPEECH
TUESDAY: BOE GOVERNOR BAILEY SPEECH
TUESDAY: FED CHAIR POWELL TESTIFIES
WEDNESDAY: US CPI (JAN) (YOY): (CONSENSUS 2.9% VS PREVIOUS 2.9%)
WEDNESDAY: FED CHAIR POWELL TESTIFIES
THURSDAY: US PPI (JAN) (YOY): (CONSENSUS N/A VS PREVIOUS 3.3%)
FRIDAY: US RETAIL SALES (JAN) (MOM): (CONSENSUS 0% VS PREVIOUS 0.4%)
Now, let's dig into asset-specific price-action for the week ahead, looking firstly at Bitcoin:
Bitcoin:
Price: $97,874
Weekly:
If we begin by looking at the weekly for BTC/USD, we can see that following the Monday volatility last week, price bounced off range support at $92 and closed back near the weekly open, though still below $99k reclaimed resistance. The resilience here is noteworthy and momentum on the weekly just looks like it has been resetting as price has consolidated in this multi-month range. Unless we close the weekly below $92k, I don't think there is any reason to expect much by way of downside from here to be honest; if we do close below $92k, I think we retest that trendline and potentially even wick below it before finding support somewhere in the 80s. For the time being, there is literally nothing bearish about structure or momentum despite the constant flip-flopping with regards to sentiment. If range support does hold as I expect it to and we close the weekly above $99k, $108k is getting taken out next and once we flip that prior all-time high as support we are off to the races for $125k as the next major overhead resistance.
Daily:
Looking at the daily, we can see that price has been consolidating in tight ranges and closing around the daily open for several consecutive days, with momentum now looking as though it has bottomed out. If we reject here early this week below $99k, we should take out yesterday's low back into the 2025 open at $93.3k, which I do expect to act as support if this range is to hold - if we close the daily below $93.3k, the wick into $91k is getting filled in and at that point I'd be shocked if we didn't blow out the very bottom of the range at $89k. If, however, we hold above $93.3k this week and the daily flips $99k from reclaimed resistance into support, I think we take out $102.5k into a fresh February high above $102.8k and then the reaction there will be very telling as to whether we have juice for continuation or if that was a bull trap. Let's see how this week unfolds but I remain bullish here expecting an upside breakout of this range and $125k to trade in February.
Looking now at potential intraweek setups, on the long side you would want to see $99k held below early this week, setting up more highs to be run later on post-headline risk Wednesday (CPI) into the weekly close. In that scenario, I would wait for yesterday's low to be run towards the yearly open and then buy the reclaim of $95.6k, looking for fresh monthly highs at $102.8k:
On the short side, you would be looking for price to make new monthly highs before Wednesday into trendline resistance and then reject post-CPI, looking to play that back towards the weekly lows:
And here we can see a snapshot of positioning on Velo and CoinGlass, with open interest flatlining since last Monday and a persistent aggregate spot premium:
3-month annualized basis is also now back down to ~8%, around the summer 2024 lows, which, given price is still flirting with $100k provides confluence for an upside breakout of the range, in my opinion:
And finally here's a snapshot of anticipated 1-week and 1-month liquidation levels:
Ethereum:
Price: $2650
ETH/USD
Weekly:
If we begin by looking at ETH/USD on the weekly timeframe, we can see that last week's insane volatility led to price wicking below trendline support, the Q4 2024 open and the 200wMA all the way into the 2024 open and range support at $2150, only to bounce to close back above the 200wMA at $2627, on higher volume than the August 5th capitulation. I think it is highly probable that price has marked a bottom for ETH/USD with last week's candle, and now it is as a case of short-term trajectory. If we now push higher back into $2850 and reject, confirming it as support turned resistance (and the loss of a key pivot), I would expect the short-term trajectory to be to the downside, likely retesting the 200wMA at $2480 and backfilling some of the wick before marking out a higher-low from which to attempt a reversal. That said, if we do see that play out, this long-term trendline is no longer support until we reclaim it subsequently, so we could be looking at several weeks of ranging in that scenario before a reclaim and a push back above $2850. On the bullish side, if we hold above the 200wMA this week and reclaim $2850 as support, closing the weekly above that level, we have then reclaimed that pivot plus the multi-year trendline after a major capitulation event, and I would then expect price to move in a manner more akin to a v-reversal to force buyers to chase price higher into the monthly close. Again, no reason to expect this massive $2150-$4100 range for the past 12+ months to break down and lead to significantly lower prices unless we close the weekly below $2280, thereby turning weekly structure bearish and flipping the 200wMA into resistance. Either chop or up much quicker than most are likely anticipating - depends on the reaction at $2850.
Daily:
Looking at the daily, we can see that daily structure is bearish and momentum is being capped on every push higher, with price now consolidating around the $2550-2700 range. Rejection below $2700 this week and price then closing the daily below $2550 would lead to more of that wick being filled in towards $2400 as major support. If, however, price closes the daily above $2700 this week, it reclaims the trendline on this timeframe and I would fully expect that $2850 retest to come soon after that, where if we flip it back into support as momentum breaks out of this downtrend, that would be a signal that the bottom is almost certainly in and we are likely to push into that cluster of resistance around $3050. Above that level, I think we retest the top of the range at $4100 given what has preceded.
ETH/BTC
Weekly:
On the weekly view for ETH/BTC, we can see how price found support last week where it bottomed in Dec 2017 and Dec 2020 - around 0.023. There is no sign on this timeframe of momentum exhaustion, but we similarly did not see exhaustion before reversal on those two occasions. Rather, what ETH bulls really need to see here is an immediate reclaim of 0.0319 as support, given that that was the weekly candle that preceded the capitulation. Nonetheless, weekly structure remains bearish here until the pair closes back above 0.037 as the last swing-high. I think what we are more likely to see is a reclaim of 0.0319 followed by a higher-low above 0.023 before an attempt at 0.037, as opposed to a v-reversal of the past couple of months of downside on this pair. Despite the awful structure, it is now quite hard to be mid-term bearish on ETH/BTC given where we have traded into combined with sentiment. If we close the weekly below 0.023, 0.016 is the last level of major support on the chart since 2019.
Daily:
An alternative trajectory to the reclaim -> higher-low -> reversal scenario outlined above would be fore some sort of continuation chop lower this next week or two that does print momentum exhaustion, from which we then could look for more of a v-reversal type of scenario into March. Beyond that, honestly very little to add for now on this pair...
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Dollar Index:
Price: 107.8
Weekly:
Looking at the weekly for the Dollar Index, we can see that despite last Monday's sharp rally on tariff fears, DXY rejected below the 2025 high and pushed lower, back into the yearly open, around which it closed the week. We did have some more tariff headlines come through, but notably the market-wide effects were more muted. This kind of makes sense to me given that the market has already seen that the tariffs are categorically not a prerequisite/non-negotiable for trade in Trump's mind - rather, within 24 hours of last Monday's volatility, Trump had already conceded and delayed after constructive talks, reaffirming - at least from the POV of a market that on the preceding Friday had already believed this to be true - that the tariffs are first and foremost a bargaining chip. He is willing to apply them, but more notably he is willing to negotiate. I would expect that unless something concrete resembling a real trade war emerges, the tariff headlines will continue to produce more muted volatility spikes. This, in turn, should mean that the Dollar does not spike higher again, and regularly scheduled programming can resume to some degree. This does not mean that we necessarily see the Trump 2017 fractal play out, as there are many more factors at play, but from a price-action POV if we see a weekly close back below the 2023 high at 107, we should go down and retest the multi-year range resistance at 105.5, which is the key level. If that level gives way, then we can be much more certain of a similar pattern to 2017 playing out, with much of H1 2025 likely to be spent back inside that 100-105.5 range.
Daily:
Looking at the daily, we can see that 107 is currently acting as support and price is consolidating between that level and the 2025 open at 108.2 We do have bearish daily structure and now a lower-high below that 2025 high, alongside a momentum breakdown, so if we see that 2025 open act as resistance this week we should then break back below 107 and confirm the continuation of the downtrend towards 105.5 as the main area of interest. Once we get into that area it's a little more difficult to determine where we are headed: if we find support above it and turn daily structure bullish, it's likely we retest yearly highs; if we close back inside 105.5 and it becomes resistance, we're likely headed back to 103.3, if not lower back into range support at the 100 level. For now, this remains short-term bearish. Close back above 108.2 and flip it into support and we can consider a breakout to new yearly highs.
Gold:
Price: $2900
Weekly:
If we look at the weekly chart for Gold, we have been steepening the rate of ascent over the past few weeks, pushing through prior highs at $2793 as anticipated and closing at $2860 last week, with price pushing above $2900 early this week. We are headed for the big $3000 level that I have had marked out for months as the 300% extension of the multi-year accumulation range and given the confluence of factors I expect that level to be where Gold next takes a little breather. Dips back into trendline support and prior highs are for buying and both structure and momentum are firmly bullish for now.
Daily:
Looking at the daily, momentum continues to grow with this rally since late December and this really looks like it wants a bit of a blow-off top. As long as we don't close back below today's low at $2860 (the weekly open), I expect price to just continue pushing towards $3000 this week. If we do close below $2860, then we are likely to get a bit of a pull-back towards that prior ATH at $2795, likely front-running that a bit to form a higher-low before continuation of the trend. Zero reason to be bearish unless we see acceptance back inside $2795 as reclaimed resistance.
Others:
OTHERS/USD
Price: $266bn
Weekly:
Looking at the weekly, we can see that last week closed at $261bn for OTHERS, firmly above prior resistance turned support at $237bn and of course the 200wMA, whilst below support turned resistance at $280bn. Weekly structure is still bullish here, as we have not closed below the November swing-low that preceded the run into the December highs - all the downside subsequent to that high has been internal structure to the original swing-point. That said, for any short-term bullishness to renew, you want to see OTHERS now push off from last week's capitulation even and reclaim $280bn this week as support - if we see that, then we likely retest the yearly open from below, where any acceptance above $335bn would confirm this entire move lower as a particularly brutal bear trap within this multi-year uptrend. If, however, OTHERS rejects $280bn this week and closes below $237bn, then this looks much worse for alts vs USD and we are likely to retest the 200wMA at $210bn and potentially much lower. Anything between $237bn and $280bn is just further chop, subsequent to which I would expect to see continuation higher. If we look at the general trend since the 2022 bottom, price has returned into the channel of re-accumulation that has preceded the continuation higher - breaking below the 200wMA and that November swing-low at ~$190bn would be the clearest sign that this trend is over and we would be much more likely to trade back towards the 360wMA from that point at $130bn.
Daily:
On the daily, I have marked out the non-choppy trajectories from here, where if OTHERS rejects this week at $280bn and then forms a lower-high below $254bn on this timeframe, we're likely taking out $237bn into the bottom of the wick. For the bulls, consolidating here early this week as a higher-low above the wick and then reclaiming $280bn as support is step one, which would likely be followed by a retest of trendline resistance into the 2025 open; close above both of those and it's pretty clear where alts are headed. If we just chop around here this week between $237bn and $280bn then I think it becomes more probable we break higher going into the monthly close.
OTHERS/BTC
Weekly:
Now, looking at the weekly for OTHERS/BTC, despite breaking fresh lows last week below ~2.8mn BTC (a fresh cycle low), we continue to print momentum exhaustion. This exhaustion has to be capitalized on with a reclaim of support at ~3mn BTC to begin to look more constructive for short-term prospects. If, instead, we reject below 3mn BTC this week and close below the weekly open at 2.7mn BTC, there is a high probability the divergence is invalidated and we then just have a breakdown below multi-year support. In that scenario, I would exit the alts I purchased over the past 3-4 days, as my expectation here is that last week marked the bottom in altcoin dominance. Acceptance below 2.7mn BTC with invalidation of this momentum exhaustion opens up significant further downside for alts vs. BTC. If I am correct, however, we should see a reclaim of this support area followed by a higher-low back above 3mn BTC going into the February close, with acceleration higher in March. If the classical altcoin cycle is to play out like historically, then it should play out something like what I have marked out on this chart.
Daily:
Turning finally to the daily, we have momentum being capped on pushes higher, so a momentum breakout on a reclaim of ~3mn BTC alongside a trendline breakout from the December highs would be a lot of confluence for the OTHERS/BTC cycle lows being in. This coupled with some of the worst sentiment I have ever seen around alts over the past week would be promising indeed for the months to come - hence why I rotated some BTC into alts this past week. Now, as mentioned above, if we merely squeeze higher and reject this key cluster of resistance and then break fresh lows, that's also a pretty clear sign that this setup is not valid and there is much more underperformance ahead for alts vs BTC, so I would look to rotate back out in that scenario.
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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