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 ninth 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:
In stark contrast to last week, we have a very heavy week ahead across all fonts, but particularly regarding labour market data:
TUESDAY: JOLTS JOB OPENINGS (SEP) (CONSENSUS 7.99M VS PREVIOUS 8.04M)
WEDNESDAY: US GDP ANNUALIZED Q3 (PREL.) (CONSENSUS 3% VS PREVIOUS 3%)
WEDNESDAY: US ADP EMPLOYMENT CHANGE (OCT) (CONSENSUS 115K VS PREVIOUS 143K)
THURSDAY: BANK OF JAPAN INTEREST RATE DECISION (CONSENSUS N/A VS PREVIOUS 0.25%)
THURSDAY: INITIAL JOBLESS CLAIMS (CONSENSUS 231K VS PREVIOUS 227K)
THURSDAY: CORE PERSONAL CONSUMPTION EXPENDITURES (YOY) (CONSENSUS N/A VS PREVIOUS 2.7%)
FRIDAY: NONFARM PAYROLLS (OCT) (CONSENSUS 123K VS PREVIOUS 254K)
FRIDAY: ISM MANUFACTURING PMI (OCT) (CONSENSUS 47.6 VS PREVIOUS 47.2)
Now, let's dig into asset-specific price-action for the week ahead, looking firstly at Bitcoin:
Bitcoin:
Price: 68,642
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 price retested trendline resistance from the all-time high as support, having closed above it the preceding week. That trendline held firm and price bounced to close the weekly at $67.9k. We remain capped around $69k resistance, but as long as last week's low continues to hold as support, we should expansion this week through $69k towards an all-time high retest, particularly in the context of what is the most consistently bullish calendar week of the year historically for Bitcoin. If we close the week below last week's low, we have some bigger issues to contend with for short-term bullishness, given the rejection from key resistance and potential deviation; until that happens, there is no reason to be bearish here. Momentum is also starting to tick higher and is supportive of expansion here for BTC.
Daily:
Looking at the daily, we can see that last week was very choppy indeed, with price rejecting at $69k resistance and retracing off the weekly open into that trendline retest, finding support at prior resistance ~$65.2k and then bouncing back into resistance at $68.8k. We then rejected again on Tether FUD and Iran headlines back into the trendline, but held a higher-low and subsequently retraced the dump once again back towards that $68.8k area, around which price is currently sat. Momentum indicators continue to point to higher prices here with no signs of trend exhaustion. Holding above last week's low is now vital given the massive resistance into support flip and multiple tests of that area. Close the daily above $70k this week and I think we teleport through to $72k to take out that clean double top, above which there really is no resistance to all-time highs. If we do reject up here again and accept below last week's low, I am looking at the Q4 Open & 200dMA at $63.3k to get tagged and likely wicked through as it is such a clean level, thereby baiting breakdown shorts before a reversal.
Now, looking at the hourly, I have presented a potential long and short scenario for this week below.
The long scenario would be to hold below the prior weekly high earl this week, take out the Sunday lows into the 360hMA and 200hMA and then reclaim the weekly open at $67.8k, providing a tight invalidation on a long into $70k+:
The short scenario would be for us to keep grinding higher into $70k and then reject after taking out all those untapped highs, where any close back inside $69k would open up a retracement into the weekly open and below to tidy up that Sunday low at $67.4k:
I've also provided a snapshot of current positioning below via Velo and CoinGlass:
In the CoinGlass chart, we can see how much OI was opened up from around $66.9k, so if we do reject up here and retrace back into the weekly open, it would not surprise me to see a lot of this flushed before another attempt at $70k:
Finally, here's a look at expected liquidation levels on the weekly and monthly timeframe:
Ethereum:
Price: $2532
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 ETH/USD on the weekly timeframe, we can see that price rejected the breakout beyond local trendline resistance and closed back inside it, losing the Q4 open and wicking below the September open at $2512 into the 200wMAat $2364 before closing back near that $2500 area. We continue to put in higher-lows above that confluence of support, but make no mistake ETH is trading like a piece of shit here. It is unlikely we actually get a sustainable push higher until we see BTC/USD break new all-time highs, and the $2850 remains the key level to be watching. As long as continue to hold above the long-term trendline support and the yearly open, there's no reason to expect a bearish trend to develop (especially given how BTC/USD is shaping up), but simultaneously until we close the weekly through $2850 it is likely we just keep chopping up and down week to week until BTC is in price discovery.
Daily:
As you'll see on the daily chart above, I have removed my anticipated trajectory as it is no longer playing out given last week's rejection above $2700, where we should have seen bulls step in on a retest of the Q4 open for continuation into $2850. Instead, price close back below it and puked lower, forming that higher-low above $2394. We are continuing to form a series of higher-lows, which is promising, but we do also now have a multitude of untapped lows that could provide a liquidation cascade if ETH is too weak to hold $2394 over this next week or two. As long as it holds last week's low, the structure is fine (albeit frustrating) and we should see another attempt at $2700 going into early November. If we accept above $2700 on the next attempt, it is highly improbable that too is a fake-out and we should see continuation into that massive confluence of resistance between $2850-3000, where trendline resistance, prior support, the 360dMA and 200dMA are all lining up.
ETH/BTC
Weekly:
If we look at the weekly timeframe for ETH/BTC, we finally got the move we have been expecting for months now, as the pair broke support at 0.0383 and capitulated lower in an ugly looking candle into that 0.0365 level I have had marked out for God knows how long now. Whilst blind bidding this level isn't wise, we are now at the last major level of support on the higher timeframes, with the next support down at 0.03. This combined with how close I believe BTC now is to price discovery gives us some indication that we are very close to marking out a cycle low, in my view. If we close the weekly below 0.0365 and hold below it the subsequent week, that is your signal that ETH still has a good 20% further to fall potentially vs. BTC. If, instead, it wicks below 0.0365 and closes back above it as BTC/USD breaches $74k, that's what I am looking for to confirm a bottom.
Daily:
If we look at the daily, I have marked out what this could potentially look like, as price bounces a little here off this support and then prints a final capitulation wick into a swing reversal as BTC accepts at new highs. If we do see something like this play out, acceptance above trendline resistance and reclaiming 0.0383 as support will be the signal for a broader reversal and likely mark out that cycle low formation. If, instead, we reject 0.0383 after BTC breaks new highs and continue breaking down below 0.0365 again, look out below... all the way into 0.03.
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Gold:
Price: $2732
Thoughts:
Weekly:
Looking at the weekly timeframe for Gold, as of last week we hit the $2750 level we had marked out as a possible area for a local top formation, but given the strength of the weekly close, the support of a parabolic trend which continues to mark out higher-lows and no signs of trend exhaustion just yet on this timeframe, it is possible we still have juice for the big $3000 push. As long as Gold holds above $2683 and the most recent trendline, it is likely this just keeps marching higher. If we do break back inside $2683 and close below the local trendline, then we can be more certain of a local top formation and the end of this particular parabolic rally.
Daily:
Looking at the daily, we can see that there is confluence around $2820 for the next level of minor resistance, as it is the 200% extension of the initial trend and the 100% extension of the more recent push higher and subsequent higher-low. As long as $2686 acts as support here, we likely see acceptance above $2757 into price discovery, with that $2820 area the most likely area for a breather. Again, until we see some sort of deviation of the all-time highs and subsequent breakdown and acceptance below some of this supportive structure, it's just stupid trying to call tops. Further, whilst we do have the makings of some trend exhaustion on this timeframe, the strongest trends tend to invalidate these divergences before they even form so if we push above $2757 this week and momentum keeps ticking higher, that is precisely what I would expect. No local top until the most recent trendline s broken, turning $2686 back into resistance.
Copper:
Price: $4.39
Thoughts:
Weekly:
Not a huge amount has changed on the weekly timeframe for Copper, having pulled back from resistance into my long entry zone and now consolidating right around prior resistance turned support at $4.36. As I mentioned last week, the higher timeframes for Copper are very much bullish and supportive of higher prices going into year-end, so as long as we don't close below $4.05 on the weekly it makes sense to remain bullish. Once we start pushing higher off this support zone, we should be looking at ~$5 as the next resistance, with the final target at the 1.618 extension of the current swing and the 100% extension of the larger swing at $5.43.
Daily:
Looking at the daily, we can see that we are chopping around above support having marked out this higher low around the 200dMA, with RSI having also reset. From here, as long as we don't close below the 200dMA, we should see be seeing continuation fairly soon back into the Q4 open and beyond. If we do close below $4.32, we want to see buyers step in at the September open at $4.21 and confirm the move as a deviation, reclaiming the 200dMA and $4.32 as support swiftly, which will likely fuel that push higher. If we do get down towards $4.21 and buyers are nowhere to be found, we no doubt will be retesting the trendline support, where we should expect significant demand to step in to protect this bullish structure.
Dollar Index:
Price: 103.9
Thoughts:
Weekly:
Looking at the weekly for the Dollar, we can see that price pushed right up into the resistance area at 103.7 and closed marginally above it last week. If we close the week below 103.7 this week, this will begin to look like a deviation, from which point we have the makings of a lower-high and then are likely to see trend continuation lower back into the range lows and below that going into 2025. If, instead, we accept above 103.7 this week and turn it into support, we are going to be squeezing higher into 105.5, where we have multi-year resistance and trendline resistance from the 2023 highs, which could be a massive headwind for risk asset returns short-term. Let's see how this week unfolds...
Daily:
Finally, looking at the daily, we can see that there is some indication that price is finding resistance up here, though no trend divergence just yet. Nonetheless, if we spend several days chopping around this key level and then break and close back inside 103.3, turning that confluence into resistance, that would be a huge signal that a top is in here for the Dollar, in my view. As mentioned above, hold this 103.3-103.7 range as support and we likely have another leg higher to contend with in November. Nothing much else to add here for the time being...
I hope you've found some value in the read this week.
Oh, and if you've not tried out Ostium yet, you can now do so here with the launch of their public mainnet.
