In this fourth 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:
It's yet another busy week, as they all seem to be of late, with six key events that will be driving the macroeconomic narrative, all happening later on in the week:
THURSDAY: SNB MONETARY POLICY (CONSENSUS: 1% VS PREVIOUS 1.25%)
THURSDAY: US DURABLE GOODS ORDERS (CONSENSUS: -2.8% VS PREVIOUS 9.8%)
THURSDAY: US GDP ANNUALIZED (Q2) (CONSENSUS: 3% VS PREVIOUS 3%)
THURSDAY: INITIAL JOBLESS CLAIMS (CONSENSUS: 226K VS PREVIOUS 219K)
THURSDAY: FED CHAIR POWELL SPEECH
FRIDAY: CORE PERSONAL CONSUMPTION EXPENDITURES (MoM) (CONSENSUS: 0.2% VS PREVIOUS 0.2%)
Now, let's dig into asset-specific price-action for the week ahead, looking firstly at Bitcoin:
Bitcoin:
Price: $63,564
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:
From the weekly timeframe, we can see that BTC had another strong week, cementing the momentum it established the prior week. We pushed off the weekly open above reclaimed support at $58.6k all the way into $64k, closing marginally below weekly highs at $63.6k on growing volume. We are now, however, pressing right up against significant overhead resistance, with trendline resistance from the all-time highs having capped price for almost 200 days, as well as the prior swing-high at $65.5k and reclaimed resistance in that region from the previous cycle. Given this, it is now unfavourable to be looking for longs right here, with price unlikely to take out this huge cluster of resistance on the first attempt this week. Instead, bulls simply need to see another higher-low form above $59k in the next week or two to continue building on the momentum of the past couple of weeks.
We do still have a series of lower-highs, so until that pattern is broken with a weekly close through $65.5k, market structure remains bearish on this timeframe. When we do see that confirmation, it is likely that the next move will be through all-time highs into price discovery. For mid-term bears, you would be looking for $65.5k to hold as resistance and price to close below $53.6k, confirming a fresh lower-low and likely beginning a deeper retracement through $49k. Until that occurs, seasonality is starting to favour continuation higher into Q4.
Daily:
Turning now to the daily timeframe, we can see how strong this push off the 360-day moving average has been, having marked out that higher-low and then continued through local trendline resistance back above the September open at $59k. This level then acted as support last week, with price forming some trendline support and pushing off that through the prior weekly high at $60.8k into the 200dMA at $64k, where it has now been consolidating for a few days, right below that major cluster of resistance. Daily structure is clearly bullish here, and momentum indicators support this.
For the week ahead, any deviation through the 200dMA that takes out the $65.5k swing-high and rejects would be a favourable short setup for a retracement at least back into $60.8k for a retest. A daily close through $65.5k would be the first signal that this time is different and that the series of lower-highs since March is being broken. If we don't take out that high but rather retrace right from this area, we would need to look at lower timeframe price-action to assess whether longs make sense in the $60.8k area or whether another stab at the September open is likely. If we closed the daily below $59k, that would be no bueno for this bullish momentum and we could expect another test of the 360-day moving average to follow.
Now, looking at how price might play out over the coming week, we have two potential setups:
Below, you can see a favourable long setup, where price grinds lower from here, holding below the weekly open at $63.6k and takes out the cluster of weekend lows at $62.3k, deviating below trendline support into prior resistance turned support between $60.8k and $61.4k around Thursday, where there is significant headline risk. If we then see $62.3k reclaimed as support, we could look to play that long back into weekly highs above $65k to take out that double top at $65.5k, where it would be most prudent to hedge long exposure given the significant resistance.
For the short side, if we hold above those weekend lows and push through $65.5k into Thursday, building up long positioning, we could look for shorts on a rejection and reclaim of $65k (and the Monday high) as resistance, looking for the weekend lows at $62.3k to be swept:
And here is a quick glance at positioning via Velo and Coinglass:
We can see in the Coinglass chart above that there are two distinct periods in which Binance got aggressively long and have yet to be liquidated, with a move below $59k likely to take out a large number of them, so that is something to be aware of. That said, aggregate funding during both periods was declining, despite OI ramping higher, which is likely due to a combination of a solid spot bid last week and shorts being more aggressive across other exchanges.
Finally, the liquidation heatmap below shows that at the very least it is high probability that the weekend lows below $62.3k are swept this week:
Ethereum:
Price: $2644
Thoughts: Let's begin by looking at the weekly and daily timeframes for the Dollar pair before moving onto ETH/BTC.
ETH/USD
Weekly:
If we begin by looking at the weekly view for ETH/USD, we can see that price found support last week at the 200wMA and rallied off the weekly open, pushing all the way through the week beyond the September open at $2512 to close out at $2580. This is exactly what we were anticipating in the last post, and now it is likely we see a retest of that all-important $2850 level as support turned resistance in the next couple of weeks. If the pair can hold above the September open this week, I think early October sees that retest occur, with trendline resistance above that to content with. Only when we find acceptance above that pivot will ETH/USD have the all-clear for another run at yearly highs, but for now the weekly structure remains bearish. As mentioned last week, despite this bearish structure, we are cautiously bullish ETH/USD as long as the major cluster of support around the yearly open continues to hold.
Daily:
Dropping into the daily timeframe, as you can see, the trajectory of the pair continues to adhere to our expectations outlined in the first of this series of Outlooks, having formed a higher-low above the yearly open last week and bounced through trendline resistance from the July highs. Subsequently, price reclaimed support at $2400 and continued higher from there through the September open, now acting as support. We are now sat right above prior support at $2548 with the 360-day moving average overhead at $2760. This is no man's land - there is no real favourable short or long setup just here, but if we were to deviate through $2717 and close below the September open, that would provide a short setup back into the yearly open down at $2280. Conversely, if we deviate below $2512 this week, taking out the weekend lows, and then rally back through the weekly open at $2580, we could look for an intraweek long into $2760. Again, until we are clear of $2850 and trendline resistance, enthusiasm should be pared back.
ETH/BTC
Weekly:
Looking at the weekly timeframe for ETH/BTC, we can see that price did find support in the middle of this key pivot zone last week, bouncing around 0.0383 to close the week green and back above 0.0405. That being said, this is too early to turn max bull on the pair, as we are now sitting right up against historical resistance at 0.0418 after an early push this week. Whilst that 0.0365 level remains untested and structure remains bearish, it is likely rallies continue to get faded. For a more sustained reversal, bulls want to push firmly back above 0.0418 and then reclaim 0.0445 as support; in that event, it becomes highly probable that the cycle lows are in for the pair. If we do find resistance up here this week and close back below 0.04, it is likely that 0.0365 area gets tested as support.
Daily:
Turning now to the daily, we can see that price bounced sharply off 0.0383, reclaiming local support at 0.0402 before breaking above recent trendline resistance from the 0.0463 swing-high. Price closed above, retested and has since bounced off that trendline, and if bulls have formed the bottom already, then there really should be no looking back given how depressed the price-action has been. There was no signs of trend exhaustion on momentum indicators, hence why I am hesitant to call a bottom just yet. If we do close the daily back below 0.04, that would open up an opportunity for momentum divergence to form on a final push lower into 0.0365. If the bottom is already in, we should see sharp continued momentum with shallow intra-day pullbacks all the way into 0.0445 as the first major resistance, with that level turning reclaimed support in October. In that scenario, we could expect to see 2022 lows retested at 0.049, followed by long-term trendline resistance and the 200 and 360-day moving averages. Euphoria begins above that trendline.
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Gold:
Price: $2620
Thoughts:
Weekly:
Beginning with the weekly view for Gold, price discovery continues uninterrupted as the pair rallied off last week's high into fresh all-time highs at $2632, with ever-steepening advances, as highlighted by this summer's trendline support. Recall that potential momentum divergences are often invalidated before they even get a chance to form in parabolic advances and this appears to be unfolding here, as momentum looks ready to rip higher beyond the 2024 highs. There is no meaningful resistance on this timeframe until we start pushing towards that 300% fib extension at the psychologically-significant $3000 level. Nonetheless, if we do see Gold form a local top and then break and close below this trendline support, then we can start considering scenarios in which much lower prices can be expected. For now, it is unlikely this train is stopping and the advances will continue to get steeper into year-end. If we retest $2533 intraweek, that would be a buy-the-dip opportunity.
Daily:
Turning now to the daily timeframe, we can see more clearly how the parabolic advance is steepening, with trendline support since August forming higher-lows and pushing for swifter higher-highs, with last week finding support above $2550 before hitting $2632. Again, there are no momentum divergences on this timeframe, so it is probable that the trend persists going into October, with pullbacks likely to be shallow until we see momentum divergences begin to form, suggestive of a local top. Any deviation and reclaim of the local trendline this week would be an opportunity to get long, with the 1.61 fib extension at $2750 as the next major target. Long and strong...
Copper:
Price: $4.31
Thoughts:
Weekly:
Looking at the weekly timeframe for Copper, we can see that price has been in a broader uptrend since the 2022 lows beneath $3.27, making a series of higher-highs and higher-lows since then that culminated in the 2024 high at $5.17 a few months ago. This ended up being a deviation above the 2021 double top, with price rejecting and closing back below $4.91, leading to a multi-month downtrend. Price retraced into the 200wMA at $4.06, where it found support at prior resistance and has now turned weekly structure bullish once again, having formed a higher-low above the 200wMA a few weeks ago and then closing at $4.34 last week. Nonetheless, we are in a no trade zone here for this timeframe, with resistance right overhead at $4.36 but support below at the September open and below that at the trendline that has held since late-2023. If we close the weekly through $4.36, we can expect to see reclaimed resistance up near $4.62 retested, with any close above that leading to fresh yearly highs through $5.17. If, however, we reject here and close below the 200wMA, we would expect to see continuation lower into $3.80. Momentum indicators currently appear supportive of continuation of the longer-term trend higher from here into year-end.
Daily:
Looking now at the daily, we can see that daily structure is firmly bullish here with the 360-day moving average having marked out the bottom and the 200dMA now sat right at the September open. If we do sweep that support and push back above it, we can expect $4.36 to give way, with any acceptance above that level providing clear skies for another 5% move higher. Momentum is strong here with no trend exhaustion on this most recent push higher, and if growth data this week is favourable I think we have a setup for Q4 being strong for copper. As long as that longer-term trendline and $4 support continue to hold firm, the path of least resistance is up. Short-term, as long as $4.21 does not give way post-Thursday's data dump, it is highly probable that the local bottom is in and we move towards $4.60 over the next few weeks.
Dollar Index:
DXY
Price: 100.83
Thoughts:
Weekly:
Not a great deal has changed as of yet when we look at the Dollar Index on the weekly timeframe, with price still chopping around the 200wMA after the multi-month downtrend and now pushing right up against trendline resistance. Given this setup, it does look likely that some relief will come for Dollar bulls, with a weekly close above the trendline opening up a retest of that support turned resistance at 101.97. Close the weekly above that and we have a higher likelihood of a short squeeze all the way back into 103.76 before the next leg lower for DXY through the bottom of the range. Now, if we deviate above this trendline and close back below it next week, I think that's all the relief we're due for, and price is likely to lose support at 100 swiftly thereafter and make a move towards 98.
Daily:
Finally, looking at the daily timeframe, we can see that the lows were swept last week and price bounced, now pressed right up against that trendline. Close the daily back above the September open and we will likely see the top of this short-term range swept too at 101.5, with 101.97 the key support turned resistance beyond that. As mentioned before, if we do close above this trendline but September open caps price and we reject, look out below, as the 2023 low at 99 is unlikely to hold after a multi-year range breakdown, with 97.5 as key support below that. Not much else to add here until we see the reaction into the quarterly close and beyond...
We hope we've provided some value here – good luck with the trading week ahead!
