Author: Ostium
Translation by: ShenChao TechFlow
This article only represents personal opinions, aimed at providing entertainment and informational reference, and is not investment advice. For investment advice, please consult a qualified professional.
In Ostium Research's 15th market outlook, we, together with @cointradernik, analyzed the market dynamics for the upcoming week, focusing on the price trends of Bitcoin, Ethereum, gold, copper, and the US Dollar Index, as well as market positions and potential event risks.
Important Economic Calendar for This Week
This week will witness several important global interest rate decisions, with extremely high market attention:
Tuesday: Reserve Bank of Australia (RBA) Interest Rate Decision (Expected 4.35%, Previous 4.35%)
Wednesday: US Consumer Price Index (CPI) Year-on-Year (November) (Expected 2.7%, Previous 2.6%)
Wednesday: Bank of Canada (BOC) Interest Rate Decision (Expected 3.25%, Previous 3.75%)
Thursday: Swiss National Bank (SNB) Interest Rate Decision (Expected 0.75%, Previous 1%)
Thursday: European Central Bank (ECB) Interest Rate Decision (Expected 3%, Previous 3.25%)
Thursday: US Producer Price Index (PPI) Year-on-Year (November) (Expected 2.5%, Previous 2.4%)
Bitcoin
Current Price: $99,460
Weekly Analysis
Last week, Bitcoin historically closed above $100,000 for the first time, surpassing the previous two weekly highs above $99,000. Although the trading volume slightly decreased, the price momentum remains strong, and the weekly structure stays bullish. Currently, Bitcoin has stabilized above the critical resistance range. If the price continues to gain market recognition, further increases are likely.
However, it should be noted that Bitcoin's price movements this year are highly correlated with a '11-week lagged M2SL/DXY liquidity correlation'. This correlation almost precisely predicted Bitcoin's price fluctuations in 2024. If this correlation continues, Bitcoin could enter a multi-week price correction this week, with a bottom potentially forming only by the end of January to early February next year.
However, it is also possible that this correlation has been broken. If Bitcoin's weekly structure and momentum dominate, prices may usher in a new round of increases, targeting ~$125,000, which is the next major resistance area.
Key Observation Points:
If the closing price this week is above last week's high of $104,000, it may indicate that the correlation has been broken, and Bitcoin is expected to rise to $125,000 before the end of the year.
If the price fails to hold above $104,000 this week, falling below $99,000, it may indicate that the correlation continues to play a role, and Bitcoin may further test lower levels before January, possibly even breaking below $89,000.
In summary, this is a very critical week for Bitcoin's trend, worth close attention.
Daily Analysis:
On the daily chart, Bitcoin's momentum is starting to weaken. Since August, the series of higher lows formed by the RSI (Relative Strength Index) may face a pullback. If the RSI falls below 50 and stabilizes below this level this week, it may signal that Bitcoin is entering a correction phase. However, current momentum has not completely collapsed, and the daily structure remains bullish. Any pullback early this week may test last week's high again, and the market's reaction to this will determine the next trend. If the daily closing price breaks above $104,000 and turns it into support, Bitcoin is expected to rise to $125,000; but if the price fails to hold this level and falls below $99,000, even below December's opening price of $96,500, it may indicate the market's momentum is exhausted.
Bullish Strategy: If the price continues to slow down at the beginning of the week and the weekly opening price and weekly high (formed at the beginning of this week) are not touched, consider building a long position near December's opening price. Once the price stabilizes above $99,300 and turns it into support, further accumulation can be considered, targeting a new high of $104,000 later this week. This trend is more likely to indicate that Bitcoin's correlation has been broken.
Bearish Strategy: If the price breaks above the weekend high to $104,000 but is then rejected and falls below this week's opening price of $101,200, this may trigger a long squeeze for bulls, leading to further price declines. Later this week, it may test the trend line support, while also indicating that correlation remains and a larger-scale correction is beginning.
Current market positions show that last week's flash crash has cleared the over-leveraged derivatives market, providing stronger support for Bitcoin's price to break above $104,000. Changes in the three-month annualized basis and liquidation levels further validate this.
This can be further validated by the three-month annualized basis:
Additionally, the expected 1-week and 1-month liquidation levels are displayed below.
Ethereum
Current Price: $3863
Weekly Analysis
Ethereum's price solidly broke through the final trend line resistance last week and found support above it, subsequently rising to an annual high of $4093, ultimately closing around $4000, accompanied by an increase in volume and momentum. If the price tests this trend line this week, it is expected to use it as support and push the price to test $4093 again. Once the weekly closing price breaks above this level, the price is expected to further rise to $4400, even challenging the historical high of $4900. From the current structure and momentum, Ethereum still maintains a strong bullish trend, and I believe Ethereum will continue to strengthen before the end of the year, even if Bitcoin pulls back. Only if the weekly closing price falls below $3450 will the bullish view need to be reassessed.
Daily Analysis
The daily chart shows that Ethereum's trend line support since mid-November remains solid. If the price continues to maintain above this trend line this week, it is expected to form a low at the beginning of the week, followed by a daily closing price breaking above the 2024 high of $4093 and turning it into support, pushing prices further up towards 2025. If the price falls below the trend line, it may retreat to December's opening price of $3700, turning it into new support before continuing to rise.
ETH/BTC Analysis
Weekly Analysis
ETH/BTC continues the rebound momentum from the previous week on the weekly chart, with prices rising to near the resistance level of 0.0403 and closing at 0.0396. This week is expected to further break above 0.0403 and test 0.0417, which will be a decisive resistance. If the price breaks above and stabilizes above 0.0417, it may trigger a larger reversal, targeting the long-term trend line resistance and the 2022 low of 0.049. If the price deviates from this resistance range and falls below 0.0383, it may indicate a failed bottoming process. The weekly structure also turns bullish due to acceptance above 0.0417.
Daily Analysis:
From the daily chart, we previously expected that after breaking through the local trend line resistance, there would be no further false breakouts, and it seems this expectation is correct. The trend line has turned from resistance to support, pushing prices further up. Next, we expect 0.0383 to become a new support level, and prices are expected to break above and stabilize at 0.0403 this week, then initiate a test towards 0.0417. Near this critical point, the price may need to go through a period of consolidation to confirm the validity of the market's breakout at this point. Once successfully breaking above 0.0417, the next target will be the 200-day moving average (200dMA) at 0.0445, which may become a key resistance for subsequent rises.
Gold
Current Price: $2650
Weekly Analysis
From the weekly chart of gold, the price has been running above the trend line support, consolidating below $2727 for the past few weeks, and last week formed a higher low above the trend line. The current market is approaching a critical decision point. If the weekly closing price falls below the trend line support, it may trigger a deeper correction, targeting $2535 and $2430 sequentially; while if the weekly closing price breaks above $2727, it may signal the beginning of the next round of upward trends, targeting $3000. The market is currently in a wait-and-see state, needing to wait for the price to further confirm its direction. If the weekly closing price falls below $2535, it may turn into a bearish structure and confirm the formation of a mid-term top.
Daily Analysis
The daily chart shows that gold is following the previously marked bullish path. If the price breaks above $2685 and turns $2727 into support, this will confirm the next phase of the upward trend, targeting a breakout above $2800 and moving towards $3000. However, if the price forms a lower high below $2685 this week and breaks below the trend line support to below $2590, this will confirm a bearish path, potentially leading to further price corrections below the November low, testing the trend line support below $2450 and the 200-day moving average.
Copper
Current Price: $4.27
Weekly Analysis
From the weekly chart of copper, the price is finally showing signs of a rebound from the major support area, which may be related to recent news about China's fiscal policy easing. Although specific policies have not been clarified, the market's price movements have already reflected expectations of a shift in China's policy direction. If the price closes above $4.36 on a weekly basis this week, it will confirm that the current level is a mid-term bottom, with the subsequent test of the high at $4.70, and further rising towards the multi-year range top around $5. As long as the price stays above $4, the market structure remains bullish.
Daily Analysis
The daily chart shows that copper prices are supported at the 360-day moving average, and momentum indicators also show that prices are rising. Currently, the price is between this support and the resistance area near the 200-day moving average, while the trend line resistance at the annual high still needs to be broken. If the current trend is established as a bottom, the $4.20 area is expected to become support, and prices may break above $4.36 in the coming weeks, attempting to break through the trend line resistance and retest the $4.70 high in early 2025. If the price falls below the 360-day moving average ($4.09), it may indicate that the current bullish view has failed.
US Dollar Index
Current Price: 105.6
Weekly Analysis
The US Dollar Index failed again last week to break above the 2023 high, closing slightly above 105.5, and has not confirmed that the price move towards 107.8 is a 'false breakout'. If the price closes below 105.5 this week, it could trigger further corrections, targeting the 200-week moving average and the range bottom, expected to be achieved in the coming weeks or months. However, if the price holds above 105.5 and rebounds from there, it may signal the beginning of a larger upward trend, subsequently turning the 2023 high of 107 into support, with price targets pointing above 108. The market is currently approaching this critical turning point.
Daily Analysis
From the daily chart, the weakening momentum of the US Dollar Index and the expected pullback in the RSI have partially materialized, but the price still needs further confirmation. If the price forms lower lows and highs below 105.5, this will confirm that the previous upward move was a false breakout, and the price is expected to pull back to the convergence area of the 200-day and 360-day moving averages (around $103.7), which is the previous resistance turned support area. However, if the price breaks above the trend line and stabilizes above the 2023 high of 107, the US Dollar Index will further rise, targeting above 108.
