In this sixth 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 and Copper. This week, we'll be doing top-down analysis from the monthly view, given the fresh monthly and quarterly open. We'll be back to covering altcoins next week.
Firstly, let's take a look at the calendar:
For once, it feels like we have a relatively quiet week ahead as pertains to data releases, with a heavier focus on speeches throughout the week...
WEDNESDAY: FOMC MINUTES
THURSDAY: CONSUMER PRICE INDEX (YOY) (CONSENSUS: 2.3% VS PREVIOUS 2.5%)
THURSDAY: INITIAL JOBLESS CLAIMS (CONSENSUS: 223K VS PREVIOUS 225K)
FRIDAY: PRODUCER PRICE INDEX EX FOOD & ENERGY (YOY) (CONSENSUS: N/A VS PREVIOUS 2.4%)
FRIDAY: MICHIGAN CONSUMER SENTIMENT INDEX (CONSENSUS: 70.1 VS PREVIOUS 70.1)
Now, let's dig into asset-specific price-action for the week ahead, looking firstly at Bitcoin:
Bitcoin:
Price: $63,440
Thoughts: Firstly, let's take a look at these three higher timeframe charts published below, highlighting the monthly, weekly and daily view for BTC, before looking at an hourly chart, plus an overview of market positioning.
Monthly:
Beginning with the monthly timeframe for BTC, we can see that September closed green after forming a higher-low above the August low, closing firmly above 59k resistance turned support that has held firm since March. We remain capped by 65.5k, as has been the case for the past couple of months, and a monthly close above that level would be the clearest signal for continuation higher into all-time highs and beyond. And until we see a monthly close below 59k, there is no reason to be turning bearish here on this timeframe.
Weekly:
Now looking at the weekly timeframe, we can see that price rejected trendline resistance last week from the weekly open at 65.6k and sold off, retracing towards 59k but front-running the retest as support and bouncing to close the week at 62.8k. Weekly momentum indicators look to be supportive of a turn higher here, but a weekly close through that trendline and 65.5k resistance is vital to confirm the strength we've seen since September. Weekly structure is bullish here following that marginal higher-high, and any further weakness below last week's low should still be considered as a potential higher-low formation given this structure. That said, if last week's low can hold here as a front-run of that 59k level that has been so critical this year, then it is likely we see the top side of last week's range taken out, particularly as there was no wick at all - we sold off from the first minutes of the weekly open without retest or sweep. Once we get that move through 65.5k, the reaction will be telling: close and flip that level as support and it is game on for an all-time high retest; sweep and reject again and we have a high probability that 59k is being tested again.
Daily:
Looking at the daily, we can see that price broke that trendline support from the 53.6k low, selling off sharply from the open as anticipated in last week's post. We saw price continue to retrace through 62.3k, clearing the cluster of lows, and then finding support above the September open and right around prior resistance at 60.8k. We have since bounced off that support, with momentum indicators marking out a series of higher-highs and lows also. We are now pressing up against the 200dMA and Q4 Open around 63.3-63.6k, which is a strong resistance cluster. If we can close through that cluster on the daily, it is likely we take out last week's high into a trendline retest near 66k. If we reject here, it is likely we take out the weekend lows back, potentially towards that 60.8k area, to mark out a higher-low before that push up. Further, if 60.8k does not hold as support, there is a chance daily structure could turn bearish on a close below last week's low, but we would also be pressing right into major demand below that at 58.6-59k. If we do reach towards last week's low, what bulls want to see is a sweep into 59k followed by a reclaim of 60.8k as support, confirming a local bottom.
Given all of the above, if we look at the hourly chart below, we can see the recent structure more clearly:
We have driven above the Q4 open into resistance and if we fall back below the Q4 open it is likely we run that cluster of equal lows into 61.5k before continuation higher, deviating reclaimed support at 62.3k before pushing back above it (which would potentially make for a nice long entry for those looking for one).
If we look at Velo below, we can see there is nothing particularly stretched about positioning here - funding is neutral but there is some OI from the weekend that could be taken out if we do sweep the weekend lows:
Below, on the CoinGlass chart we can see this potential trajectory for continuation higher this week, should 62.3k not turn into resistance if we sweep those weekend lows. Accept below that area and it is likely the prior weekly lows get taken out:
And finally, we can see here the weekly and monthly expected liquidation levels:
Ethereum:
Price: $2429
Thoughts: Let's begin by looking at the monthly, weekly and daily timeframes for the Dollar pair before moving onto ETH/BTC.
ETH/USD
Monthly:
Beginning with ETH/USD, we can see from the monthly view that September bounced off the yearly open, deviating below the long-term trendline support, before closing firmly back above it. Whilst this is somewhat promising, the pair remains in a difficult range, trapped below support turned resistance at $2850 but holding firm above the major cluster of support around the yearly open. Until we see a monthly close through $2850, we should expect to see further chop. Now, that may well be October, given the bounce off the yearly open again early this month and subsequent push back above this trendline. Should we push above last month's high and accept through $2850, it is likely November and December make an attempt towards the yearly high. Until we close the monthly below the yearly open, there is no reason to expect continuation lower towards $1750.
Weekly:
Looking at the weekly, we can see that price sold off from the open last week, retracing into the 200wMA at $2337, wicking below into the 2024 open at $2281 and bouncing. The week closed marginally back above this support cluster and the trendline at $2430, and, if this weekly low is now protected, we should see continuation higher this week above the quarterly open at $2600 and through last week's high, with $2850 remaining the major line in the sand here. Again, until we close the weekly below this support cluster, we should be cautiously bullish here, particularly now that higher-lows above the 200wMA are forming and given our outlook on BTC going into the next couple of weeks.
Daily:
Turning now to the daily, we can see here that the trajectory marked out weeks ago did not quite play out following last week's move lower below reclaimed support at $2394, where I had expected demand to step in; nonetheless, whilst we did overshoot the downside, the higher-low has indeed formed, and for this to continue playing out as anticipated we should see some reversion back through the September open and Q4 open this week, which should not act as resistance. If they do cap price and we reject below $2600, there is a higher probability we break this trajectory and make another stab lower, likely taking out the $2158 lows before a sustained directional move can ensue, either to the downside if we accept below $2158 or to the upside if that level is swept and reclaimed as support. For now, however, the short-term bias is bullish given this structure, where any daily close above $2600 will open up $2850 as the major test.
ETH/BTC
Monthly:
Looking at the monthly for ETH/BTC, this continues to be a tale of woe for ETH holders, with September closing below the August close. We remain in this demand zone between 0.0365 and 0.0416, but there are zero signs yet on this timeframe that we have bottomed. If we are to mark a bottom in October, bulls want to see last month's low swept into 0.0365 and the push firmly back above the monthly open at 0.041, closing above 0.0416 to confirm a reversal into year-end. Close the monthly below 0.0365 and I don't need to tell you how ugly that begins to look for ETH/BTC...
Weekly:
Turning to the weekly, we can see that there are some minor signs of exhaustion appearing again to the downside, but nothing concrete nor actionable. Given this current structure of lower-lows and highs, we should still see 0.0383 give way and price capitulate into 0.0365 over the next week or two, particularly if BTC begins an ascent to all-time highs. Until we see either 0.0365 tagged and demand step in or bulls reclaiming 0.0416 as support, you should be focusing your efforts elsewhere. Not much else to add for now, but I think we are very close to a turning point...
Daily:
Finally, looking at the daily, I have marked out these two areas of interests for buyer demand: firstly, if we close the daily below 0.0383, we likely push lower again into the 0.0365 area I have had marked out for months now. If we then see lower timeframe structure looking bullish down there, that could mark out your local bottom. If instead we sweep 0.0383 this week but push higher, we can look for higher probability of sustained strength once 0.0416 turns support. What is interesting down here is that momentum seems to be supportive of the idea that sellers are exhausted in this zone. Let's see how the next week unfolds, but we're in spicy territory now.
Subscribe to Ostium Labs
Receive the latest updates directly to your inbox
Your subscription could not be saved. Please try again.
Your subscription has been successful.
Dollar Index:
Price: 102.19
Thoughts:
Monthly:
Beginning with the monthly, we can see that September closed marginally below the yearly open, finding support at 100.2, which is a significant historical level. Since, the Dollar Index has bounced off long-term range support, pushing back above the yearly open at 101. There is significant overhead resistance around 103.7, which marked the highs in both 2016 and 2020 before large downtrends, and we should expect that level to cap any October rallies. If we see 103.7 give way, however, with October closing above it, that opens up a possible range high retest into 107, which would likely be detrimental to risk assets. Whilst 103.7 caps the Dollar, it is likely that any upside is short-lived, and given both the current structure and momentum, as well as the continuation of the rate cut cycle, it is more probable that the bottom of this range gives way going into 2025.
Weekly:
Looking at the weekly, we can see that DXY broke and closed above trendline resistance from the 105.5 high, with last week being particularly strong, pushing off the weekly open through multiple local resistance levels into 102. The week closed marginally above this prior support turned resistance level, potentially reclaiming it as support. If we hold above it this week, it is likely we do continue towards that 103.7 retest. If, however, we deviate above last week's high and then close the weekly back below 102, the local high may well be in, from which point we would be looking at 100 being retested as support going into November.
Daily:
I have marked out this possible trajectory into 103.7 on the daily timeframe, where we see a continued squeeze higher before momentum exhaustion into 103 and then another leg lower beginning much like that which began in June. This is only probable if we find support above that 102 level this week. If, as mentioned before, we close back below 102 and reclaim it as resistance, this move above the September open then looks like a deviation of the 101.5 range high, and we should expect to see the move faded and the bottom of the range (and the quarterly open at 100.4) retested. No longer-term bullish bias on the Dollar below 103.7.
Copper:
Price: $4.56
Thoughts:
Monthly:
Looking firstly at the monthly for Copper, we can see that September was hugely bullish, pushing off the open at $4.20 into reclaimed resistance at $4.62, closing out the month at $4.55. This confirmed the swing-low above prior resistance turned support around $4, within this long-term uptrend since 2022. You cannot really ask for a more bullish setup on the monthly timeframe, with momentum also having put in a higher-low. Given this structure, we should expect October to lead to a breakout beyond $4.60 resistance, where any monthly close above that level would be massive, given its historical significance. From there, price would look to fill in the gap into the 2024 high at $5.17 and beyond. Dips are for buying.
Weekly:
Turning to the weekly, we can see that weekly structure is firmly bullish and momentum indicators are supportive of continuation of this trend higher. We found resistance around $4.68 and have rejected, and if Copper now retraces back towards the prior resistance level at $4.36, that would make for a nice swing-long entry with invalidation on a close below $4.05, looking for $5.45. This broader rally is beginning to steepen, much like Gold, and we should expect pull-backs to become shallower going forward. A weekly close above $4.62 would open up the next leg higher into major resistance at $4.91, which has capped prices since 2021. Don't overthink this one - the trend is firmly bullish and everything is aligned for continued strength into 2025.
Daily:
Finally, looking at the daily, we can see a swing-high has formed around this resistance cluster and we are just about holding above the quarterly open. Given the outlook from the monthly timeframe, we are anticipating a green Q4, thereby we should be looking at a move below the Q4 open as a deviation and an opportunity to hunt longs. Should we close the daily below 4.55 this week, we likely begin that retracement towards the major support zone between $4.32 and $4.36, though it is probable that that area gets front run, so we should look towards the lower timeframes if price approaches that zone for a long signal. Momentum indicators look absolutely fine here, supportive of the idea that we are in a dip-buying environment. Daily close above last week's high and we see another 5% move up pretty swiftly...
We hope we've provided some value here – good luck with the trading week ahead!
