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 23rd 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 moderately busy week ahead:
TUESDAY: RBA INTEREST RATE DECISION (CONSENSUS 4.1% VS PREVIOUS 4.35%)
WEDNESDAY: RBNZ INTEREST RATE DECISION: (CONSENSUS 3.75% VS PREVIOUS 4.25%)
WEDNESDAY: FOMC MINUTES
THURSDAY: US INITIAL JOBLESS CLAIMS: (CONSENSUS 216K VS PREVIOUS 213K)
FRIDAY: US S&P GLOBAL COMPOSITE PMI (FEB): (CONSENSUS N/A VS PREVIOUS 52.7)
Now, let's dig into asset-specific price-action for the week ahead, looking firstly at Bitcoin:
Bitcoin:
Price: $95,963
Weekly:
Beginning with the weekly view for BTC/USD, we can see that price continued to consolidate within the multi-month range last week, printing an inside week within the previous weekly range, holding firmly above range support at $92k but below key resistance at $99k. Volume is declining and momentum has flattened out and we are likely very close to some form of expansive move, be it to the upside or the downside subsequent to this compression. Given the formation of the inside week, we can look for inside week failure should price trade beyond either side of last week's range but close back inside it: thus, if we wick below last week's low and then reclaim it, it is likely we see upside from there through $99k; conversely, if we take out $99k this week and close back below it, it is likely we retest $92k. If we don't form inside week failure and simply break and accept through either side of last week's range, I would fully expect that to be the direction of the next major move, so acceptance below $93.5k this week (and likely the yearly open) and we have a high probability for a breakdown of the range and more meaningful correction; acceptance above $99k and I think we see $109k tested swiftly afterwards and continuation beyond that. I am heavily leaning towards an upside breakout of the range before month-end.
Daily:
Looking at the daily, we can see that this past couple of weeks has seen particularly brutal chop as price compressed below $99k resistance, holding firm above the yearly open. Momentum is also flat and we are now just awaiting some sort of volatility to emerge from this tight range. A daily close below the yearly open at $93.3k would be the first sign that the momentum is likely to kick in to the downside, whereas wicking below this two-week range into the yearly open and finding some demand would be a very promising sign that the bottom of the range will remain protected and to expect $99k to be taken out. Not much else to add here for now, but if we do get acceptance below $93.3k I'd be expecting the 200dMA to be retested at ~$80k, whereas acceptance above $99k leads to that $125k zone being tagged, in my view.
Now, looking at potential intraweek setups, a really nice long would be for price to continue to compress and bleed lower early this week below that local trendline, forming lots of untapped swing-highs, before capitulation below $94k into the yearly open and a sharp reversal from there back above the weekly open at $96k; in that scenario, you bid the breakout retest, stop below the weekly low and look for fresh February highs beyond $102.7k:
On the short side, you want to see the highs above $99k taken out into resistance, then see rejection and a breakdown later in the week, anticipating inside week failure from which point it would be very probable that we run into that $92k level next week:
And here's a snapshot of current positioning via Velo and CoinGlass:
And 3-month annualized basis is now back down to around 6%, which marked the lows all of 2024:
And finally a look at anticipated 1-week and 1-month liquidation levels:
Ethereum:
Price: $2677
ETH/USD
Weekly:
If we begin by looking at ETH/USD on the weekly timeframe, we can see that price also formed an inside week much like BTC, but this was inevitable given the size of the previous weekly range. Nonetheless, the same rule does apply here, where any wick below $2600 into the 200wMA at $2485 followed by a reclaim of $2600 would look very promising for another test of $2850 - and, in my view, likely a reclaim of that level. If, however, we grind higher this week and take out $2850 before rejecting and closing back below that level, that would look quite bearish for the rest of February, with a higher probability of $2600 being taken out into the monthly close. Again, if we do not see inside week failure form and we get acceptance either side of the range this week, that will likely dictate direction for weeks to come, with a close below $2600 likely leading to much of that wick being filled in back towards $2280, with the long term uptrend invalidated; conversely, acceptance above $2850 would be as clear a signal as one could want that the next move for ETH is back towards the top of the range at $4100 fr another test.
Daily:
If we look at the daily, we can see how my more probable outcome would play out here, with a wick below the cluster of lows into $2550 early this week followed by a sharp reversal, turning daily structure bullish with higher-highs and higher-lows, alongside a momentum breakout. If we see something like that begin to play out, I think adding some exposure below $2550 early this week and adding more aggressively once $2850 is reclaimed makes sense, with clear invalidation. Acceptance below last week's cluster of lows, flipping it as resistance, and we likely have another leg lower to come.
ETH/BTC
Weekly:
Looking at ETH/BTC, as expected last week simply saw price compress after a huge capitulation wick into historical support. Bulls want to see last week's lows hold as local support and this week see the pair attempt a reclaim of 0.03 as support, above which we can start getting more bullish. Close the week below last week's low and it becomes more probable that we get a deeper fill of the wick before an attempt at a reversal. Nothing else to add here for the time being...
Daily:
Looking at the daily, we can see that momentum continues to be capped and trendline resistance has capped price all year. A strong breakout above both trendlines following a reclaim of 0.03 as support makes it much more likely that we have seen *the* cycle low for ETH/BTC, from which point a sustained reversal can begin. Until we see that, it's safe to assume we keep chopping around, with downside more likely on acceptance below 0.026, as mentioned above.
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Gold:
Price: $2900
Weekly:
Looking at the weekly for Gold, we can see that price moved higher last week as anticipated, coming just shy of of the $3000 level we've had marked out as higher timeframe resistance for months. Price rejected below that level but ultimately closed green, and momentum on the weekly continues to point to further upside. Should this week close in the red and a swing-high form below this key resistance zone, then we can look at another local top for Gold, with that $2727-2790 range likely to be retested subsequently. Close above last week's high and this scenario is invalidated and we no doubt tag the $3000 level.
Daily:
Dropping into the daily, we can see that daily momentum has broken down and this may be an early signal that the multi-month uptrend is now failing. If we see price wick above $2950 early this week and then reject and close below $2884, that would be a really nice local top formation, from which I would expect more correction and consolidation back towards prior all-time highs over the coming weeks, resetting momentum before beginning another leg higher through $3000. If we flip $295 as support this week, we take out $3000 and then the reaction up there will be telling as to whether this has more juice or not...
Copper:
Price: $4.69
Weekly:
If we begin by looking at the weekly for Copper, we can see that last week wicked above the multi-month reclaimed resistance at $4.70, pushing into $4.90 before finding resistance below that historically significant level. Price rejected and closed back below $4.70 marginally. Nonetheless, the trend is strong, momentum is making higher highs and weekly structure is bullish. If we correct here after the past couple of weeks of rallying, dips are for buying, in my view. Any retest of $4.40-4.45 could make for a nice long setup. I took 25% off of my long position early last week and will look to re-add if the correct entry presents itself; if we simply close above $4.70 this week and flip that as support, I think we retest $4.90, above which we take out the 2024 high at 5.17.
Daily:
Looking at the daily, we can see there is some momentum exhaustion up here but the daily trend is still supportive. If we push lower from here through $4.57, breaking the daily structure, that makes our corrective scenario more probable, with a retracement back into trendline support from the yearly lows and potentially as deep as the 200dMA before continuation higher through March into April. If this momentum exhaustion is invalidated by $4.70 acting as support and price climbing through last week's high, then I think we take out $4.90 swiftly and retest the 2024 high within a couple of weeks...
Dollar Index:
Price: $106.43
Weekly:
Beginning with the weekly, we can see that the Dollar Index continues to play out as anticipated, with the 2025 open at 108.2 acting as resistance last week and the Dollar puking lower back below the 2023 high at 107 to close the week at 106.4. I think from here it is very likely we retest multi-year range resistance at 1055, where we may see demand step in. We continue to follow the 2017 Trump fractal, and whilst I don't expect it to play out identically, it is my base case that any demand from 105.5 is short-lived, leading to DXY trading back inside the multi-year range for most of the rest of H1 going into Q3. Close the weekly back above the yearly open and I will change my tune.
Daily:
On the daily, we can see this all much more clearly, with price playing out near-perfectly to last week's Outlook. 108.2 was reclaimed as resistance, marking a lower-high, and bearish daily structure was confirmed on a close back below 107. Momentum broke down and is now trending lower, capping the highs. This is everything we'd want to see for continuation lower into 105.5 this week. Looking at the other side, if DXY was to mark a low here and push higher back above the yearly open, closing above 108.2, daily structure would turn bullish on that higher-high formation and we would no doubt see a momentum breakout and reclaim of that pivot at 50 on RSI, which in turn would likely lead to another test of the yearly highs. For now, I continue to expect a bleed lower into 105.5.
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.
