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 32nd 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 and SPX - a slightly shorter piece this week after the past couple of particularly intense weeks...
Firstly, let's take a look at the calendar, with a much quieter week ahead:
TUESDAY: ECB LAGARDE SPEECH
TUESDAY: VARIOUS FED GOVERNOR SPEECHES
WEDNESDAY: VARIOUS FED GOVERNOR SPEECHES
WEDNESDAY: US S&P GLOBAL MANUFACTURING PMI (APR): (CONSENSUS 49.4 VS PREVIOUS 50.2)
WEDNESDAY: US S&P GLOBAL SERVICES PMI (APR): (CONSENSUS 52.8 VS PREVIOUS 54.4)
THURSDAY: US DURABLE GOODS (MAR): (CONSENSUS 2% VS PREVIOUS 1%)
THURSDAY: US INITIAL JOBLESS CLAIMS: (CONSENSUS 221K VS PREVIOUS 215K)
FRIDAY: US MICHIGAN CONSUMER SENTIMENT INDEX (APR): (CONSENSUS 50.8 VS PREVIOUS 50.8)
Now, let's dig into asset-specific price-action for the week ahead, looking firstly at Bitcoin:
Bitcoin:
Price: $91,317
Weekly:
Beginning with the weekly for BTC/USD, we can see that price consolidated last week right above that Q2 open but firmly below prior range support at $89k on low volume. This was expected given the previous week's price-action during a tumultuous week that took BTC below the $76k swing-low into March 2024 highs at $73.7k, where price bounced hard on good volume to close out the week above the prior weekly open. Early trading this week has seen a strong bounce right off that weekly open at $85.1k, with BTC pushing through multi-month resistance at $89k to poke its head back inside the range, pushing as high as $91.5k today. We are still very early in the week but this is promising stuff during a period in which I have been anticipating the Q1 headwinds to turn into Q2 tailwinds, beginning with that early April weakness. Whilst I do not expect this momentum to last through the entire week, we could see continuation into the yearly open at $93.5k before any significant downside, with a weekly close above $89k turning weekly structure bullish. What is in favour of the bears here is that we formed the weekly low right at the weekly open, and usually we would expect this level to be retested during the week unless this is breakaway type of price-action. As long as we do not give up all the week's gains here and close back below $85k, I would expect continuation back into the range overhead in early May, followed by an attempt at all-time highs.
Daily:
Looking at the daily, we can see that price has firmly broken and closed beyond trendline resistance from the all-time highs, whilst momentum has turned markedly bullish, providing confluence for the view that this breakout is indeed the real one and the mid-term bottom is now in at $73.7k. Following multiple days of tight consolidation below the prior April high and above the Q2 open, price closed through $86k on decent volume yesterday before continuing through the 200dMA and multi-month resistance at $89k today. We are now sat above that cluster of support turned resistance, with yet still more resistance above all the way into the 2025 open at $93.5k. Flip that level as support and the next level of resistance is $99k, followed by all-time highs at $110k. I expect we find some resistance here between $91k and $93.5k on this first attempt and to be honest I would be very surprised if that weekly open remains unswept before the range is reclaimed as support - thus we could see something like $93k into $83k before $110k over the coming weeks. As long as we don't now flip $83k into resistance, we don't need to think about another attempt at the lows just yet...
Now, we are a couple of days into the week but, if I'm looking for setups from here, we could look to long any sweep of the weekly open and subsequent reclaim, ideally before Friday, allowing for a multi-day reversal into a strong weekly close. That's a lot of volatility to potentially play out over the next 48 hours though, so I'm not very confident you get this opportunity this week, but rather the following week into early May:
A nicer intraweek setup would actually be to fade another push higher tomorrow into the first test of the yearly open at $93.5k, as long as we see some sort of breakdown on the lower timeframes and some trend exhaustion, looking for price to trade at least back into $88.5k if not $86k:
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: $1697
ETH/USD
Weekly:
If we begin by looking at ETH/USD on the weekly timeframe, we can see that price found support again at the 360wMA last week, remaining capped by $1750. Early trading this week found support again at $1535 and price is now trading right back into that local resistance, so not much has actually changed as of yet for the pair. If we can close the weekly back above $1750 this week, we could look for longs next week into $2077, but right now you're just stuck in a 15% range. There is not much by way of longer-term prospects for ETH/USD until it reclaims the multi-year support at $2158 - above that level I think it's pretty clear that ETH trades back to the $4000 multi-year resistance over subsequent months, but that is still some way away yet. And there is not much upside in being short here either unless we close below $1420, given the precipitous drop from there into 2022 lows.
Daily:
Turning to the daily, we do see the first signs of an actual momentum shift, depending on how the next couple of days go, but price has to validate this by reclaiming $1750 as support. If we do see that, we could look to play $1750 long into $2077 with $1535 as a hard stop but exiting more swiftly if $1750 starts to be reclaimed as resistance, so the R/R is pretty decent. Conversely, if we wick above $1750 and reject and do turn that level back into resistance, we can be certain $1535 lows are getting swept, so there's your potential short. A few more days of price-action should make the path ahead a little clearer...
ETH/BTC
Weekly:
For ETH/BTC, the weekly is starting off decently, with a wick lower into 0.0175 seeing some demand step in and price back above the weekly open. If this is to be the beginning of a more material reversal, we need to see more volume come in here and price close above last week's open. That would print a nice reversal hammer from which we'd wanna see continuation into the monthly close next week with another push higher. If we see 0.0187 act as resistance here, I think we keep grinding lower back through 0.0175 towards 0.016.
Daily:
Turning to the daily, we can see the beginnings of that reversal trajectory I had marked out but nothing to be particularly excited about yet. We have some momentum divergence into the lows but a tepid bounce as it stands right into local support turned resistance. Flip 0.019 as support and continue higher next week towards 0.0215 and we have a more material setup, where flipping trendline resistance and reclaiming 0.023 in early May is exactly what you want to see as an ETH bull. After four months of grinding lower this year, it does feel like we're getting close to the turning point but I am not looking to jump the gun.
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Gold:
Price: $3426
Weekly
If we begin with the weekly view for Gold, we can see that last week saw price flip channel resistance as support above the prior highs at $3167 and push higher into $3300, closing at weekly highs. This is exactly the sort of price-action you see in blow-off tops, with volume now declining as price pushes higher. That said, weekly momentum is still bullish, but if we look back at august 2020 we saw no trend exhaustion before the top formation on this timeframe. I mentioned a couple of weeks ago that we were at most a couple of months away from that multi-month if not multi-year top in Gold, where we could see a final blow-off top leg higher into $3600-3750. I think after the early price-action this week that that is exactly what we're looking at play out here, particularly with Gold now having all-time high mindshare whilst the Dollar is having front cover stories printed about its demise. I will review my prediction and say we're at most a couple of weeks away from a major top in Gold, much like August 2020. I think there's zero upside in naked shorting into a blow-off top (and I am long BTC / short Gold at present as a pair trade to express my view that Bitcoin outperforms Gold from here). That said, if we close back inside channel resistance and below $3280, I think we see $3000 trade next, followed by $2800 over the coming months. Something like a 25% drawdown from wherever the peak is makes sense to me, during which period I am expecting Bitcoin to take the reins.
Daily:
I have marked out a possible trajectory here for the rest of Q2 with another leg higher possible into early May, tagging $3600ish. To confirm the bearish bias, however, you want to see daily structure turn bearish as momentum breaks down, with a move back below $3280 being a very clear sign of a major top. We should then see price continue to push lower through Q2 towards at least $2950 before the longer-term consolidation / re-accumulation phase begins for Gold within its much longer-term bull trend. As long as there is central bank debasement, Gold will trend higher, but I think we're very close to the point at which every Gold bull who did not secure profits on this run-up watching their paper gains evaporate, whilst the masses searching 'how to buy Gold' into the top are left holding the bag for at least a few quarters. Invalidation of this view for transparency's sake would be $3280 turning support after a momentum reset and price making fresh highs subsequent to that, which would open up another few weeks of upside at least. But even in that scenario I don't think Gold trends higher beyond Q2, with H2 likely to be red given just how crowded the bet is.
SPX:
Price: $5260
Weekly:
Beginning with the weekly view for SPX, we can see how price closed below multi-year trendline support, bounced above the 200wMA and then retest the trendline, closing above it before rejecting and move lower once again. Price continues to be capped by trendline resistance from all-time highs, whilst momentum and structure are bearish. We are finding support here above $5100, which is promising, but whilst policy uncertainty between Trump/Xi and Trump/Powell remains at the peak, I think it is more likely than not that upside remains capped by 5500. Meanwhile, during this tariff pause period, I think it is also likely the $4800 lows remain intact, though I could see a brief wick below into the 200wMA at $4691 followed by more demand stepping in sometime in May. Ultimately, I expect equities to chop between $4800 and $5500 in May before uncertainty resolution drives the market higher, where a weekly close above $5500 and trendline resistance would confirm the path higher back towards all-time highs later this year. I only expect to see a weekly close below the 200wMA at $4691 and a subsequent leg lower towards $4100 in the event of escalation between the US and China moving beyond economics, or hard data beginning to confirm the likelihood of an entrenched global recession as opposed to a slowdown or shallow, technical recession (before inevitable coordinated intervention).
Daily:
Finally, dropping into the daily, we can see how momentum remains bearish, as does structure, but we are at present marking out a higher-low above that reclaimed support level at $5097. If this level holds this week, we could see continuation higher to retest the 360dMA at $5462 next week, though again I expect that resistance cluster to remain firm without de-escalation between the US & China and Trump & Powell. If, however, we reject up here below $5300 early this week and then close below $5097, that's where it becomes probable we at least retest $4933, if not wick the lows at $4813. Another big couple of weeks ahead, no doubt...
I hope you've found some value in the read this week!
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