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 26th 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 DXY.
Firstly, let's take a look at the calendar, with a moderately busy week ahead:
MONDAY: JAPAN GDP (QOQ) (Q4): (CONSENSUS 0.7% VS PREVIOUS 0.7%)
WEDNESDAY: ECB PRESIDENT LAGARDE SPEECH
WEDNESDAY: US CONSUMER PRICE INDEX (YOY) (FEB): (CONSENSUS 2.9% VS PREVIOUS 3%)
WEDNESDAY: BANK OF CANADA INTEREST RATE DECISION: (CONSENSUS 2.75% VS PREVIOUS 3%)
THURSDAY: US PRODUCER PRICE INDEX EX FOOD & ENERGY (YOY) (FEB): (CONSENSUS N/A VS PREVIOUS 3.6%)
FRIDAY: US MICHIGAN CONSUMER SENTIMENT (MAR): (CONSENSUS 64 VS PREVIOUS 64.7)
Now, let's dig into asset-specific price-action for the week ahead, looking firstly at Bitcoin:
Bitcoin:
Price: $82,323
Weekly:
If we begin by looking at BTC/USD on the weekly timeframe, we can see just how ugly last week's candle was, selling off from the weekly open into the weekly close at $80.7k. Despite the aesthetics of the print, we still formed an inside week within the prior weekly range. Thus, we have the possibility for inside week failure to form, most likely occurring to the downside here, thereby opening up a retest of the top of the range next week. Obviously, there is a long week ahead, and the inside week failure formation is only validated if we sweep last week's low or high and close back inside either, thereby leaving the other side of the range as a target. If, instead, we close either side of the inside week, or we paint another inside week within this one, that's not inside week failure. Looking at price-action, we are sat above trendline support from the August 5th low but are very much in no man's land between the prior cycle high range between $70-74k and the range support from which we have just broken down at $92k. I don't think it's worth taking any longer-term positions within this area; rather, if we break the capitulation wick lows at $78k and flush into $75k, that's very likely to be a huge area of demand from which we could form a major bottom; or await a weekly close back above ~$92k for a higher probability of continuation of the trend.
Daily:
Looking now at the daily, we can see that price sold off hard on Sunday, breaking back below the March open to close below the 200dMA, pushing below local support at $81.3k and putting in a low at $80k. This could very well still be a higher-low above that $78k swing-low, but daily structure here is unquestionably bearish. If we find resistance early this week around that March open, deviating above the 200dMA and then moving back below it, that would likely trigger the next leg lower through $78k towards the 360dMA at $75k. If, however, we flip the March open as support again and hold above that level post-CPI Wednesday, there's a good chance we squeeze for another test of multi-month range support turned resistance between $90-92k and that trendline resistance from all-time highs. A momentum breakout on daily RSI above 50 would provide confluence for the beginnings of a more sustainable reversal.
Now, looking at potential intraweek setups, I would actually prefer to see March open hold as resistance early this week, price flush at least yesterday's low at $80k (but more ideally flush the $78k low) pre-CPI and then look to long either a reclaim of weekly open if we only flush $80k or a reclaim of $78k if that level gets taken out. I'd then look to hold this for the weekend highs at $86.8k as a first target:
On the short side, grinding higher from this early unswept Monday low to take out the weekend highs pre-CPI, then breaking down and turning intraday structure bearish alongside a momentum breakdown would be entry #1, followed by entry #2 on a close below $84.3k post-CPI, looking for $78k at the very least but likely $75k in that scenario:
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: $2065
ETH/USD
Weekly:
If we begin with the weekly for ETH/USD, we can see how atrocious that weekly close was, with price selling off from the weekly open around the 200wMA at $2467 and pushing through multi-year support at $2158 to close firmly below that level. After a couple of long wicks into that demand zone, there is only a mild hope left for ETH bulls that this is a huge bear trap, and that is only likely to be the case if this week sees that range reclaimed immediately trapping the breakdown shorts below $2158. If we see that, we could get a squeeze into the coming weeks that retests the 200wMA and trendline resistance, but there is zero reason to be excited about ETH until it both breaks out beyond trendline resistance and then forms a higher-low subsequently above $2158. If the range lows hold as support turned resistance then this is going to $1750 pretty swiftly, with $1420 the next level of support below that.
Daily:
Turning to the daily, we can see that there is some momentum exhaustion beginning to appear here but until we see daily structure turn bullish and daily RSI break back above ~51 I think it is more likely the divergences are invalidated by another leg lower. If we do break higher from here, however, a daily close back above the 2024 open at $2281 followed by a higher-low above $2158 would look very much like a local bottom. Price would then likely break that more recent trendline resistance and squeeze higher from there into the larger resistance cluster around $2550. If, however, we push higher early this week into that $2158-2280 range, deviate the top of the range and then break back below $2158, I think you see $1750 tagged pretty sharply.
ETH/BTC
Weekly:
Now, looking at ETH/BTC, we can see that price is still just chopping around above 0.023 but below 0.03, having now filled in most of that capitulation wick. Unless we close the weekly below 0.023, we should expect this chop to continue short-term. Close below that local bottom and the next support is the 2019 low at 0.0162, which would also likely send the Dollar pair closer to that ~$1400 level. Close the weekly above 0.03 and it looks like a major bottom is in. Until then, no need to pay much attention to be honest...
Daily:
Turning now to the daily, we can see that daily structure here is still bearish and we remain capped by trendline resistance, having turned 0.0268 support into resistance and pushed lower to fill in more of the wick. If we can reclaim 0.0269, breaking above that local trendline and that occurs on a breakout in momentum, then we have the early signs of a bottom formation. If 0.0269 turns reclaimed support, I would expect 0.03 to be retested from below, above which I would be much more confident in a trend shift for ETH/BTC.
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Gold:
Price: $2904
Weekly:
If we begin by looking at the weekly for Gold, we can see that it continues to consolidate below $2960 all-time highs with momentum starting to stall. Unless it can now close the weekly through $2960, flipping that level as support, I think it is more probable that some sort of correction is underway. The extent of that correction I am uncertain on, but at the very least I would expect $2727 to be retested over the coming weeks as long as we hold below $2960. That would be an opportunity to buy the dip for continuation of the longer-term trend higher through $3000.
Daily:
Looking at the daily, we can see how local trendline support has flipped resistance following the daily momentum breakdown, with $2948 now marking out a lower high. If you wanted to look for shorts, this sort of area has a very tight invalidation on a daily close above $2950, with a daily close through $2860 leading to that next leg lower into prior highs around $2790. If we do get that retest, the reaction around prior highs will dictate whether that is the extent of the correction or whether we have the potential for a 200dMA and trendline retest closer to that $2680-2730 zone, where I would love to look for swing longs.
Copper:
Price: $4.70
Weekly:
Beginning with the weekly for Copper, we can see that it marginally close above major resistance at $4.70 but it remains in this multi-week consolidation pattern for now. As long as $4.55 continues to act as support this week, I would expect Copper to continue higher from here through $4.90. If we lose $4.55, then we can likely expect a deeper correction towards $4.37 to mark out another higher-low before continuation higher. This is a structurally bullish chart with favourable seasonal and economic tailwinds, in my view, so I continue to look for opportunities to be add to my long. As I mentioned last time, I was hoping for a wick below the Q4 open closer to $4.40ish as a compounding opportunity but I did not get that, so I currently have around 70% of my original position still on from $4.05. Looking ahead, acceptance above $4.90 will bring with it the breakout leg through 2024 highs, into $5.45.
Daily:
Turning to the daily, we can see that momentum is stalling here despite the push off of $4.55 support, but daily structure is firmly bullish. As such, we could look to take longs on a pull-back into $4.62 this week with invalidation on a close below $4.55, as losing that level would likely lead to a deeper retracement, potentially losing local trendline support to form a base back near that 200dMA. Risk/reward is pretty good for this sort of long entry, so I'll be monitoring that intraweek. Conversely, if we don't get the pull-back into $4.62 and push higher from around here, I'll be watching for daily closes through $4.91 to confirm continuation of the trend higher into $5.17, where I will look to take some more of the position off.
Dollar Index:
Price: 103.55
Weekly:
Looking at the weekly, last week was one of the worst weeks for DXY in quite some time, with price selling off from the weekly open and trading straight back inside the multi-year range below 105.5, with no support offered at the level. The Dollar closed closer to 103.7 - a key prior resistance level from the 2017 and 2020 tops, around which it is now consolidating. If we do catch a bounce here, I think 105.5 now acts again as range resistance and we continue to play out a move to the bottom of the range in Q2, as anticipated. This weakness in the dollar should provide future tailwinds to risk and the severity of the move kind of makes me put my tin foil hat on with regards to there having been some sort of agreement finalised to keep the dollar weaker moving forwards. Acceptance back above 105.5 with that level flipping as support again would begin to invalidate the continued bearish stance on DXY.
Daily:
Finally, looking at the daily, we can see that momentum has been obliterated, with RSI as low as it was in August 2024 before the rate cutting cycle began. Given this alongside the level at which we are trading, it would not surprise me to see further consolidation here rather than continuation lower immediately, but I continue to expect any bounces to be sold with trendline resistance from the 2024 high likely to cap these. Ultimately, I expect a push into 105.5 over the coming weeks to lead to 101 traded in Q2.
I hope you've found some value in the read this week!
Oh, and if you've not tried out trading Real-World Assets on Ostium yet, you can now do soherewith the launch of their public mainnet.
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