In this fifth 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 altcoin market, via OTHERS.
Firstly, let's take a look at the calendar:
What a surprise - another busy week ahead. We've got speeches, plus growth and labour market data, all building up to the big one: NFPs.
MONDAY: FED CHAIR POWELL SPEECH
TUESDAY: ISM MANUFACTURING (CONSENSUS: 47.5 VS PREVIOUS 47.2)
THURSDAY: ISM SERVICES (CONSENSUS: 51.6 VS PREVIOUS 51.5)
THURSDAY: INITIAL JOBLESS CLAIMS (CONSENSUS: 220K VS PREVIOUS 218K)
FRIDAY: NON-FARM PAYROLLS (CONSENSUS: 140K VS PREVIOUS 142K)
Now, let's dig into asset-specific price-action for the week ahead, looking firstly at Bitcoin:
Bitcoin:
Price: $63,561
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 few hourly charts with potential setups, plus an overview of market positioning.
Weekly:
If we begin by looking at BTC/USD on the weekly timeframe, we can see that last week saw continued strength, albeit diminishing, as price pushed up off the weekly open into trendline resistance from the March all-time high, closing out at $65.6k. Most importantly, despite being capped at the trendline, the pair closed above the prior weekly swing-high, confirming bullish market structure. From here, we should see any downside lead to the formation of a higher-low above $53.6k, with ~$58.6k as the strongest level of demand. Given quarterly end window dressing and the first week of Q4 being imminent, I would expect to see this higher-low form this week, also likely setting the low for October.
If we can hold above $58.6k going into next week, it is likely that price attempts a trendline breakout, where any weekly close above that trendline will open up an all-time high retest over the subsequent week or two - in short, close above $66k and it is likely we trade $73k in October. If, however, we deviate above the trendline, reject and close back below it, that could trap breakout longs and leads to a squeeze to the downside - but we should still anticipate a higher-low formation subsequently above $53.6k given the current market structure and the seasonal period into which we are headed. Unless we now close the weekly below $58.6k, I see no reason why $53.6k would be retested and potentially broken to the downside, so that's the line in the sand at present.
Daily:
Looking at the daily, we can already see some evidence of derisking into the Q4 open, with price having consolidated above the 200dMA and taking out the prior swing-high at $65.5k before now breaking back inside that level and moving below local trendline support. Momentum indicators still look supportive here, but a daily close below this trendline would suggest further derisking later into the week, with $62.3k remaining unswept as a cluster of clean lows, with $60.8k as support beneath that level. Close the daily below $62.3k rather than sweep it and daily structure turns bearish, opening up a deeper retracement back towards the September open and major support between $58.6k-59k, where one would expect demand to step in to form that higher-low.
If we sweep $62.3k early this week and close back above it going into the weekly close, that may well be the higher-low formation from which we see continuation through the trendline resistance next week.
Not much else to add here for now but potentially a huge 10-14 days ahead...
Now, looking more closely at the week ahead, there are a couple of potential long setups, depending on the extent of the retracement. The reason these longs seem favourable at present is not only because of the shift to weekly bullish structure, but because currently the weekly high formed in the first 5 minutes of the weekly open. It is very rare that the weekly high or low forms in the first 5 minutes of the week and does not get retested later in the week, so, if we can continue to hold below that $65.6k area going into NFPs, there's a good chance we get mean reversion after the event risk and take out the weekly highs.
Below, you can see the deeper retracement scenario:
And here is the shallower, choppier long scenario - in both scenarios you want to see long liquidations, shorts building up, funding turning negative and spot premiums growing (as highlighted in the CoinGlass chart further down):
Now, despite this early derisking, if we then mark out a higher-low above $62.3k today and grind higher the rest of the week, taking out the weekly high and the weekend highs, building up long positioning and liquidating early shorts, we can then look to play the downside on a move back inside the weekly open late in the week, looking for $62.3k stops to get swept:
And here are a couple of charts showing current positioning:
On the CoinGlass chart, I have highlighted the sort of signature bulls looking for longs want to see appear - vice-versa for bears looking for shorts higher up:
And below are the monthly and weekly expected liquidation levels:
Ethereum:
Price: $2600
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 continued higher last week, holding firmly above the September open at $2512 and closing the week at $2657, continuing to be capped below that major pivot at $2850. We still have bearish weekly structure whilst $2850 is capping price, but as mentioned last week there is a major cluster of support below, above which we are cautiously bullish ETH/USD. From here, bulls want to see a higher-low form again above the long-term trendline support and the 200wMA, assuming no progress is made towards a retest and breakout beyond $2850. A weekly close above that level turns weekly structure bullish and likely leads to a new leg higher for the pair into fresh yearly highs later this year going into 2025. The bear case here would either be a close below the yearly open at $2281 or a deviation above $2850 and subsequent rejection.
Daily:
Looking at the daily, the squiggly marked out a few weeks ago appears to still be playing out fairly accurately, with the 360-day moving average capping price at present and the pair consolidating between it and the September open. If ETH can hold above the September open at $2512 this week, it is likely that $2707 resistance gets flipped next week and price pushes higher into $2850. If, however, the daily begins to close below $2512, it is likely we are returning to $2395 to retest reclaimed support and potentially mark out another higher-low before pushing higher. Again, no reason to get majorly bearish unless the yearly open gives way...
ETH/BTC
Weekly:
Looking at the weekly for ETH/BTC, we can see that price wicked above local trendline resistance into 0.0418 last week and rejected, closing the week back near 0.0405, but 0.0402 is currently acting as support and momentum looks to be bottoming out at present. Whilst we remain capped by that support turned resistance at 0.0418, it is hard to get super bullish on the pair given the structure and trend. If that gets reclaimed, we would expect to see continuation higher into the next major resistance closer to 0.0445. If we reject below 0.0418 again and lose 0.04 this week, fresh lows are likely, with 0.0365 still the major support below.
Daily:
Turning to the daily view for some clarity, we can see that momentum is starting to push higher from here, with a clean breakout above trendline resistance and subsequent retest as support, where price is currently holding for now. As mentioned last week, if this really is the bottom, we should see a pretty sharp reversal back through these minor levels, reclaiming 0.0418 as support and then quickly pushing to retest 0.0445 from below as support turned resistance, with the massive 0.0463 level above that - and that is really the key zone to be looking at for a sustained reversal. Close the daily below 0.04 here and 0.0383 gets taken out, with fresh lows below that.
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Gold:
Price: $2645
Thoughts:
Weekly:
On the weekly view for Gold, we can see continued strength, as anticipated last week, with price making fresh all-time highs into $2687. There is no need to fight the trend, as we have been saying for weeks, with momentum continuing to grow and price with no major Fib resistances until the $3000 area. The rally continues to steepen, and dips are opportunities to long. We expect some sort of pull-back early in Q4 to be met with further strength and would consider a retest of $2535 as a golden opportunity, pardon the pun. Very little else to add at present on this timeframe for Gold...
Daily:
Turning now to the daily, we can see the steeper curve of the rally since August more clearly, with trendline support marking out the higher lows since then. We have found some resistance below $2700 and price is turning lower at present, but there are no signs of momentum exhaustion yet. If we do push lower this week into $2595, we can expect prior resistance to act as support and mark out another higher-low above the trendline, with the 1.618 extension of the current trend up near $2750 as the target for any long exposure going into October. Until we break and close below this August trendline - and we have no momentum exhaustion - there is no reason to be looking for shorts at present.
Copper:
Price: $4.61
Thoughts:
Weekly:
Beginning with the weekly view for Copper, we saw massive strength last week, with price rallying off the prior resistance turned support at $4.32, straight through the $4.36 resistance and filling in that gap into $4.62 immediately, closing marginally below that reclaimed resistance. We are now at a historically huge level for Copper, with any weekly close through this level confirming continuation of the long-term trend higher through to $4.92 and likely beyond into fresh yearly highs above $5.17. Weekly structure is bullish here and so we should expect any dips to form higher lows, where a pull-back into $4.36 could make for an ideal entry. Momentum indicators have turned higher and look to be supportive of continuation also. The short-term bearish scenario here would simply be for price to reject here near $4.60 and close the weekly back below it, opening up that pull-back into $4.36 for the retest. If ISM prints this week show signs of recovery, particularly in New Orders (and China keeps pushing out stimulus), expect continuation higher.
Daily:
Looking at the daily, we can see the strength of this move off the lows, with price closing firmly through $4.36 and then catapulting higher, looking to push through $4.61 resistance today into a new gap fill opportunity, where a daily close above $4.70 would likely lead to further expansion into $4.91 with haste. If we look at recent trends higher in copper, there are definitely periods where price just continues to grind higher with very shallow pull-backs, so unless we do reject here and close back below $4.60, reclaiming it as resistance, it is not necessarily probable that we go for the retest of the breakout zone at $4.36. If we do get it, bid.
Others:
Price: $226.7bn (3.57mn BTC)
Thoughts:
OTHERS/USD
Weekly:
Beginning with OTHERS/USD, we can see on the weekly timeframe that the altcoin market has finally turned weekly structure bullish, having marked out that higher low in August and then continued higher through the 200wMA, pushing last week marginally above both trendline resistance from the 2024 highs and the prior swing-high at $227bn, closing the week out at $233bn on growing volume. Momentum is also turning in its favour, and given the historical outperformance in the seasonal period ahead, one would expect that this structure is validated by another higher-low and higher-high over the coming weeks. If we can form a higher-low above the 200wMA from here at $195bn and then push through $230bn, that would look very much like the beginning of a new wave of outperformance, with fresh yearly highs through $367bn likely to follow over the subsequent months. The market is still adhering to the parabola from the cyclical lows, but should now begin to accelerate above it and steepen out the rallies going into year-end if this is the beginning of a sustained reversal. No reason to be bearish now unless we close the weekly below $170bn.
Daily:
Looking at the daily view, we can see that the market extended through trendline resistance which had capped highs since March, up towards the 200dMA, finding resistance below it at $237bn and now turning lower, with daily structure and momentum indicators firmly bullish. We are now retesting the 360dMA as support, with it having acted as support back in July and then resistance in August. We are also sat right above that trendline retest and reclaimed support at $217bn. The market will show considerable strength if it forms its higher-low above this cluster before breaking higher through the 200dMA and $255bn resistance level, where those still on the sidelines can have greatest confidence in continuation through to $300bn and beyond. If we close the daily back below $217bn, expect a deeper retracement back towards $200bn to potentially mark out that higher-low.
OTHERS/BTC
Weekly:
Looking now at the weekly timeframe for OTHER/BTC, we can see that last wee showed signs of life in the market, with alts outperforming BTC off support at 3.275mn BTC into support turned resistance at 3.6mn, which is the first major level that needs to be flipped to show structural shift into bullishness for the altcoin market. Above that level, it is likely we see acceleration of altcoin outperformance, with another 20%+ of strength into 4.4mn BTC before resistance is likely to be found. Above 4.4mn, which marked out the bottom in 2021 and early in 2022, fresh highs for OTHERS/BTC becomes highly probable, through 5.38mn BTC into the huge gap between there and fresh all-time highs. But for now, 3.6mn BTC stands in the way, and this level needs to be confirmed as support before we can be confident in sustained reversals. Back below 3.275mn and things begin to look bleak once again for altcoin outperformance.
Daily:
Finally, turning to the daily timeframe, we can see that daily structure is now bullish and momentum is supportive of continuation higher, where we should expect any dips here this week to mark out a higher-low. If we close the daily through 3.6mn BTC, we do have the 200dMA to contend with at 3.85mn just above that, where we can expect a local top to form before continuation towards 4.4mn. All the signs are here for strength, to be honest - and as long as 3.275mn is not lost early in October I think it is likely OTHERS/BTC is just following historical cyclical patterns and will be trading back near 2024 highs into year-end and beyond.
We hope we've provided some value here – good luck with the trading week ahead!
