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 28th 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, Copper, DXY and SPX.
Firstly, let's take a look at the calendar, with a very busy week ahead:
MONDAY: US S&P GLOBAL COMPOSITE PMI (MAR): (CONSENSUS N/A VS PREVIOUS 51.6)
WEDNESDAY: US DURABLE GOODS ORDERS (FEB): (CONSENSUS -0.7% VS PREVIOUS 3.2%)
THURSDAY: US GDP (Q4 ANNUALIZED): (CONSENSUS 2.3% VS PREVIOUS 2.3%)
THURSDAY: US INITIAL JOBLESS CLAIMS: (CONSENSUS 225K VS PREVIOUS 223K)
FRIDAY: US CORE PCE (MOM) (FEB): (CONSENSUS 0.3% VS PREVIOUS 0.3%)
FRIDAY: US MICHIGAN CONSUMER SENTIMENT INDEX (MAR): (CONSENSUS 57.9 VS PREVIOUS 57.9)
Now, let's dig into asset-specific price-action for the week ahead, looking firstly at Bitcoin:
Bitcoin:
Price: $86,977
Weekly:
If we begin by looking at BTC/USD, we can see on the weekly that price rallied off the open last week, pushing through the prior weekly high to close at $86.1k. Despite this, we remain below key range support turned resistance at $89k and within the weekly range of that larger capitulation candle. We are currently supported by the trendline from the summer 2024 lows and I would expect that underside retest of range support to occur this week, where any reclaim of $89k on the weekly timeframe begins to look very constructive for continuation higher. That said, I do not expect the first test to be successful, rather anticipating some resistance leading to a higher-low formation above the $76k lows going into April. Nothing here is currently suggestive of a much more protracted correction back below prior all-time highs at $74k - but if we did lose $78k support and close back inside $74k it becomes significantly less likely that April is bullish. For now, this pretty much just looks like every other expansion -> correction -> range pattern we've seen since the 2022 lows.
Daily:
Turning to the daily, we can see that there is a marginal breakout attempt occurring here on daily RSI, as price is flipping key resistance as support at the March open and 200dMA. This is constructive but we are now simply pushing into a huge cluster of overhead resistance. As mentioned above, I do not expect the first attempt of the $89k-93k area - in which we have prior range support, the yearly open and trendline resistance from the highs - to be successful for a reclaim; rather, I think it is more probable we reject in that range and retest the $84k area in early April, likely forming a higher low above the $81-82k support cluster before continuing higher back into the Q1 range. I would not turn structurally bearish on BTC (several more months of correction and ranging with no attempts at new highs) unless we flipped the 360dMA and March 2024 highs around $74k as resistance.
Now, looking for intraweek setups, our long scenario from last week is still actually in play (and playing out almost perfectly) but if you didn't catch that, then you could look to long a sweep of the weekly open into the range between $84.3k -> $85.8k early this week if you get it for that $90k test:
On the short side, you want to see that weekly open and low left untapped early this week as price grinds higher and then look for signs of exhaustion and subsequent breakdown up near $89-90k, looking to fade that back into $85.7k:
And here's 3-month annualized basis:
As well as a snapshot of positioning on Velo and CoinGlass:
And finally here are the 1-month and 1-week anticipated liquidation levels:
Ethereum:
Price: $2081
ETH/USD
Weekly:
Beginning with the weekly for ETH/USD, we can see that price is marking out a swing-low here above the summer 2021 lows a $1738 and has caught a bit of a bounce, but remains capped below major support turned resistance at $2158, with the 2024 open above that at $2281. Momentum remains bearish here, as does structure, and as I mentioned last week I'd not be looking for ETH longs until it convincingly reclaims the range or capitulates into $1420; until then, no man's land...
Daily:
Looking at the daily, we can see that much like BTC daily RSI is looking to break out here as price has broken above local trendline resistance and reclaimed $2000 as support. Again, this is promising, but there's still a massive cluster of supply right overhead so longs are unfavourable right here, and I would expect $2158 to act as resistance on the first test, after which we could look for the formation of a higher-low on both price and momentum to indicate a structural shift. If we see that followed by a reclaim of $2158 as support, then we have the makings of a sustainable reversal, where higher timeframe acceptance back above $2281 makes this move into $1738 look like a huge bear trap. Let the next couple of weeks of price-action play out before jumping into ETH exposure though, in my opinion...
ETH/BTC
Weekly:
Looking firstly at the weekly for ETH/BTC, we can see that price bounced marginally above reclaimed support last week at 0.023, but weekly momentum remains bearish with no trend exhaustion apparent. Nonetheless, we are at a key historical level that has provided major support historically, with no major support below into the 2019 low, thus, if we are to see a show of strength, it really needs to be from here. What would be promising would be a massively push off this reclaim towards 0.027 and then a higher-low formation above 0.023. Ultimately though, this is still going to be bearish from a weekly structure POV until we reclaim 0.03, so if you want to catch ETH/BTC closer to the lows you'd have to drop into the daily timeframe; if you're happy to await a much stronger signal for potentially a multi-month reversal, a weekly close above 0.03 is the signal and we probably retest 0.049 at the very least from there...
Daily:
Now, looking at the daily, we still have bearish momentum and bearish structure but price is now marking out a higher-low above 0.023. If this is a local bottom, we should see resistance here flipped as reclaimed support and then price push higher into that 0.027-0.029 cluster for a second attempt. Subsequent to that, a higher-low forming above 0.023 going into early April is what you'd look to buy with invalidation on a daily close below last week's low, as any loss of that level opens up another leg lower into that 2019 low. Not much else to add here for the time being.
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Copper:
Price: $5.20
Weekly:
Looking at the weekly for Copper, I am very happy to see that we have finally tagged the $5.20 level that was my final target for my swing-long position from $4.06 and I have taken off all exposure here above the 2024 highs. I have no doubt that this trend will persist given the weekly structure and momentum, but we are now at all-time highs and multi-year resistance and I wouldn't be surprised to see some sort of pull-back and corrective price-action before continuation higher. If we close March above $5.20, that's a very clear signal for the coming months and I would look for any pull-back into $4.90 in April as a potential to re-add exposure with redefined risk/reward, but let's see what happens over the next couple of weeks. Looking purely at fib extensions, the next resistance should be around $5.45 if $5.20 doesn't cap it here.
Daily:
Dropping into the daily, we can see how daily momentum continues to be supportive of the trend, with no trend exhaustion as of yet. Fib extensions of the trend off the yearly open would suggest $5.57 as a local resistance area, where the 1.618 extension sits. If we accept above 2024 highs here, that $5.45-5.60 range is likely where the next local top forms and from where we could expect a multi-week correction in this longer-term uptrend. There is zero reason to be actively looking for shorts in this market.
Dollar Index:
Price: 103.53
Weekly:
Looking at the weekly for the Dollar Index, we can see that DXY is finding some support here above the 200wMA and around prior resistance at 103.7, with last week closing green and engulfing the previous week, but remains capped by 103.75. If this week see some continuation through last week's high, we should push towards 105 where I expect a lower-high to form in the broader downtrend from the 2025 highs. If, however, last week was a bit of a bull trap, we should see 103.75 swept this week and then DXY break lower from there, rejecting any move higher and retesting the 200wMA at 102.3. I fully expect Q2 to continue this trend lower into the bottom of the multi-year range.
Daily:
As outlined in the last Outlook, we saw momentum divergence form on the daily for DXY around support which has led to the small bounce last week into 103.75, but the 200dMA and 360dMA are sat overhead below 104.6. If we get some continuation of the bounce, I expect that 200dMA to be difficult to overcome and price to form that lower-high below trendline resistance from 110. If we flip 103 as resistance again, that's the signal for the beginning of the next leg lower into 102, with the 2024 open at 101 the major level of support below. No shift in mid-term outlook unless DXY flips 105.5 as support.
SPX:
Price: 5733
Weekly:
Beginning with the weekly for SPX< we can see that price closed below the January low at $5776 and capitulated lower, below resistance turned support at $5658 into $5505, where it marked a low above trendline support from 2024 lows. We have since bounced marginally to push back towards that January low but we are by no means out of the woods yet. One thing I will say, however, is that all of this momentum exhaustion we have seen since March 2024 may already have played out its downside over the past few weeks, resetting momentum to the Q4 2023 lows. This is about as much as we might expect if we remain in a long-term uptrend here. Obviously, if this is the beginning of an equity bear market, that view is invalidated and any leg lower from here through $5500 would be met with lower-lows in weekly momentum. I do not believe that is where we stand and rather expect any potential move through $5500 to form momentum divergence from which we rally higher. Looking ahead, assuming the uptrend persists, we should see any breakout above all-time highs at $6135 be validated by weekly RSI making higher-highs above 64, confirming the next phase of the bull market.
Daily:
On the daily, I have marked out the two rough trajectories that I expect are most likely from here, with the first seeing continuation of this bounce into the range between the 200dMA and 2025 open at $5906, leading to a higher-low above $5660 and subsequently continuation higher in Q2 into new highs in May. The more bearish path see rejection around the 200dMA and January lows leading to a fresh leg lower into early April, with the 360dMA being a potential target for the low, where we form trend exhaustion into that lows and then reclaim $5505 and continue higher from there. Acceptance below the 360dMA would be a signal that a much more protracted correction likely into bear market territory is likely, in my view.
I hope you've found some value in the read this week!
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