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 36th 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, DXY and SPX.
Firstly, let's take a look at the calendar, with a mixed bag of data in the week ahead, before we head into a huge first week of June:
MONDAY: ECB LAGARDE SPEECH
TUESDAY: BOJ UEDA SPEECH
TUESDAY: US DURABLE GOODS ORDERS (APR): (CONSENSUS -8% VS PREVIOUS 9.2%)
WEDNESDAY: RBNZ INTEREST RATE DECISION: (CONSENSUS 3.25% VS PREVIOUS 3.5%)
WEDNESDAY: FOMC MINUTES
THURSDAY: US GDP ANNUALIZED (Q1): (CONSENSUS -0.3% VS PREVIOUS -0.3%)
THURSDAY: US INITIAL JOBLESS CLAIMS: (CONSENSUS 230K VS PREVIOUS 227K)
FRIDAY: US CORE PERSONAL CONSUMPTION EXPENDITURES (MOM) (APR): (CONSENSUS 0.1% VS PREVIOUS 0%)
FRIDAY: US MICHIGAN CONSUMER SENTIMENT INDEX (MAY): (CONSENSUS 51 VS PREVIOUS 50.8)
Now, let's dig into asset-specific price-action for the week ahead, looking firstly at Bitcoin:
Bitcoin:
Price: $109,833
Weekly:
If we begin by looking at the weekly for BTC, we can see that last week bounced off $104k as resistance turned support and made new all-time highs through $109.3k into $112k, before closing the week at $109k on marginally higher volume than the preceding three weeks. Across both CME futures and crypto-native spot/perps, BTC closed at new highs - this is not bearish. That said, given 7 consecutive weeks of gains from the lows and price now having made new highs, this next week or two would be where I would expect a shallow pullback to set the June lows and continue to rip from there into July. Weekly momentum is still building, which is good to see, and if $109k acts as support this week then we should extend beyond $112k into that first week of June, where I would be expecting that monthly low to form. This is my base case regardless of how this week closes, to be honest. Ultimately, I am expecting $124k to be tagged in June, with a possibility we extend into $133k by July.
Daily:
Looking at the daily, we can see that price pushed through that minor trend exhaustion, which was something I mentioned last Wednesday, thus invalidating the bearish divergence that many were looking at, with price and daily RSI making new highs together. We closed multiple days through $109.3k as the prior high, then baiting breakout longs which got liquidated immediately as price retraced back below the prior high but found support at $107k, which currently is capping downside. A daily close below that level opens up a retest of the huge resistance turned support cluster around $104k. If $107k holds early this week, we push through $112k and that's where it's possible we form some trend exhaustion across lower timeframes from which we get that red week into early June.
Now, looking at potential setups for the week, on the long side you want to see $112k highs remain unswept early this week, with price retracing through the weekend lows at $106.7k, then looking to buy those liquidations into the monthly close as price reclaims that level as support, adding more back above $109k and looking for continuation through $112k towards $124k later in June:
The short setup would be textbook if we get it, which is price to ramp high early this week, taking out the $112k highs and then forming some momentum divergence up there, with shorts becoming favourable on a subsequent breakdown back below $112k, looking for all of the weekend gains to be erased back into $106.7k:
And here's a snapshot of positioning across Velo and CoinGlass:
And here's 3-month annualized basis:
And Bitcoin OI vs Altcoin OI:
And finally some of the expected 1-week and 1-month liquidation levels:
Ethereum:
Price: $2568
ETH/USD
Weekly:
If we begin by looking at ETH/USD on the weekly timeframe, we can see that price had another consolidation week last week, holding above the 200wMA at $2450 but remaining capped by the Q4 2024 open at $2600. This is perfectly normal after the monster candle a few weeks ago, and I would expect to see significant extension higher once we close that weekly through this $2600 level. There is zero reason to be bearish on the pair unless we now lose $2158 as support on the higher timeframes. Short-term, I would not be surprised to see one more push lower to retest the 2024 open at $2281, particularly if we see some weakness in BTC in early June, followed by expansion through $2600 into the cluster of major resistance between $2850-$3050, which I mentioned last week was likely to be the last major resistance before the $4k retest.
Daily:
Looking at the daily, we can see that momentum has reset nicely on this timeframe and $2394 is currently acting as reclaimed support, so there is a chance that we're actually forming a higher-low above it here and price is now going to extend higher. An early signal for this, in my view, would be a daily close through $2710, where the two prior daily highs and 200dMA are sat, as long as momentum also makes a higher-high with price above ~70 on RSI. This would give me confidence that the local lows are in and we likely push into that $2850-$3050 range, where trendline support turned resistance will also look to cap the rally. If you are long ETH from lower, that range would make a nice exit with a view to look for fresh longs only when $3050 and that trendline are reclaimed as support, as I expect a pretty sharp push towards 2024 highs following that. This structure only turns short-term bearish if we close the daily below $2394, where we would expect a deeper pullback into $2281 or as low as $2158 to follow in early June before continuation higher - and to be clear I do not expect $2158 to now be flipped back into resistance before we trade $4xxx.
ETH/BTC
Weekly:
Looking at ETH/BTC, on the weekly timeframe we can see that price continues to consolidate around reclaimed support at 0.023, having pushed into 0.0265 the prior week. Whilst momentum did get a push after that rally off 0.0185, it remains in a broader downtrend and we'd want to see weekly RSI above 50 here on the next leg higher. As long as 0.023 acts as support into early June, I think we push higher from there into 0.0294 as the next resistance, with any weekly close above that level turning structure bullish and opening up a much larger reversal, with 0.0365 as the next major level, followed by 0.042. Close the weekly back below 0.023 and then break down from there on the lower timeframes and I think much of this rally gets erased back towards that 0.0185 area.
Daily:
And looking at the daily, we can see how we played out that trajectory from April, pushing right into 0.0265 as anticipated and now consolidated after a shallow pullback, with momentum now reset. If we get one push lower here, I expect 0.0215 to act as support on the daily and price to v-reverse out of that level; conversely, if we hold above 0.023 here, a daily close through 0.0243 is what the bulls want to see for the next leg higher to begin. Looking ahead, I do expect the 200dMA to be tested in June and once that level and 0.0293 are flipped as support I expect the rally to grow sharper into 0.0365...
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Gold:
Price: $3333
Weekly:
Looking firstly at the weekly for Gold, we can see that price closed last week strong, pushing back through $3300 to close at $3350, but momentum remains weak for now. I mentioned last week that price closing above this cluster of resistance around $3330 would be an early sign that the pullback has played out and that Gold might want one more leg higher before any more meaningful correction, and we'd need to now see $3280 act as support this week for that to be in play. If we can push higher this week, I would expect $3500 to be taken out in early June and price to extend towards $3700 from there. If, however, we see weakness into the May close and price closes back below $3280, given how momentum looks I think the deeper pullback becomes more probable again, but we will find more clarity on the daily.
Daily:
I have marked out how this might play out here on the daily as we trade around this key level, with any breakout of trendline resistance and $3330 acting as support leading to a blow-off top of sorts into $3700ish, where we may see momentum divergences on the higher timeframes, but where we could look to long any pullback into trendline resistance turned support to play that leg higher with very tight invalidation. If this is a bull trap, we should see weakness on any push through trendline resistance, with an immediate rejection forcing late longs to puke and leading price lower, with any close below $3170 confirming further downside towards $29xx as the ultimate target for the correction, where I expect a new base to form.
DXY:
Price: 98.65
Weekly:
On the weekly for the Dollar Index, we can see how strongly price rejected the push higher, with last week trading lower off the weekly open all the way into the close at $98.65, where it is currently sat. We potentially have some weekly trend exhaustion forming here at the lows but, as I have mentioned multiple times, in strong trends these divergences get invalidated. Nonetheless, it's something to keep an eye on over the next week or two if price fails to break lower from here with momentum making that higher-low. If price does break lower, however, closing the weekly through 97.5, then we're looking at continuation of this much-accelerated depreciation in the Dollar, which should continue to provide tailwinds to risk out later into Q3 where we might usually see seasonal weakness, so again this is something I am paying close attention to. A weekly close through 97.5 and we trade 94.6.
Daily:
Now, painting the bull case on the daily, we have the first higher-high on daily RSI since the Jan top, and we may now be making a higher-low in momentum as mentioned above. If we mark out a higher-low in price also and then see DXY reclaim the May open at 99.3 this week, I would actually expect another rally towards 102 to ensue, likely faltering around trendline resistance (maybe a fake-out through it and subsequent breakdown). I think this would catch a lot of people off-guard given the consensus bearishness on the Dollar here. What will invalidate this short-term bullishness is price flipping 97.5 as support turned resistance. Big couple of weeks ahead for the Dollar, particularly given how huge next week could be on the data front.
SPX:
Price: $5875
Weekly:
Beginning with the weekly view for SPX, we can see that last week wicked above the prior weekly high but rejected, closing in the red but holding above a cluster of support, capped by the 2025 open at $5906. This, for me, is the crucial level for that next leg higher into the all-time high retest: close the weekly through $5906 again and I think we continue to squeeze in this sharp V-shaped reversal into $6150 over the coming weeks; conversely, whilst $5906 caps price, I expect a bit of a correction here into early June, probably filling in the gap into $5683, with $5500 likely to cap any downside - I just don't think you get a sustained move back below that level without another 180 pivot back to aggressive tariff wars and spending cuts, which seems beyond unlikely at this point. Momentum and structure look very similar to Covid here, and even more so the 1998 reversal. I think something like this would really catch a lot of people out, particularly given how positioning is only just start to come back into equities now that we're 20%+ higher off the lows. If you get a dip in early June, I think that's a golden opportunity for an all-time high break and subsequent price discovery - how long that price discovery lasts or how far price extends, I am unsure, though I do have 66xx in mind later this year now that all the Wall St analysts revised their year-end targets down from 66xx to 52xx.
Daily:
Finally, looking at the daily, we can see that daily structure remains bullish, as does momentum, with higher-highs and lows. Price, having been capped at the March open at $5963, then came back to retest the 200dMA last week at $5796, where it found support and is now bouncing. If $5906 caps the rally this week, I expect that to lead to the gap fill into $5683 in early June where it becomes more probable that vocal bears who missed the entire move from the April lows become vocal again - if they do, start laddering in your bids all the way into that 360dMA at $5530 if we're lucky enough to get that. As I said, invalidation on this is closing back below $5500. If we don't get that moderately deeper pull-back into the gap fill, look for the yearly open to be flipped as support and then bid any pull-back towards it from above, with the expectation that we continue to rip towards the highs subsequently...
I hope you've found some value in the read this week!
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