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Posted by: Stan NordFX
« on: September 02, 2024, 12:57:22 PM »

August 2024 Results: Three NordFX IB Partners Earned Over $77,000 in a Month


The brokerage company NordFX has summarized the trading performance of its clients for August 2024. Additionally, the social trading services, CopyTrading and PAMM, along with the profits earned by the company’s IB partners, were evaluated.

● In August, the top, "golden" spot on the podium was claimed by a client from South Asia, account No. 1782XXX, who earned 142,908 USD from trading gold (XAU/USD).
– The second place was secured by a trader from Western Asia, account No. 1785XXX, who also traded the XAU/USD pair, earning 32,471 USD.
– The TOP-3 is rounded out by a client from East Asia, account No. 1609XXX, with a profit of 24,196 USD. However, unlike the top two leaders, this impressive result was achieved through bitcoin (BTC/USD) trading.

● The situation in NordFX's passive investment services is as follows:
– A month ago, in our CopyTrading review, we mentioned the signal Bro, which, at that time, had increased the initial deposit by a staggering 554% in just 6 days (!). However, we cautioned that such exceptional results could only be achieved through highly aggressive trading, which also meant the risk of losing the entire investment was extremely high. This warning proved to be well-founded, as by 13th August, the deposit losses had reached 100%. Thus, Bro lasted only three weeks before ceasing to exist.
This is precisely why it is essential to consider not only profit but also drawdown. For this reason, we continue to monitor the signals NordFXSrilanka and Quiet_trade_USD. Of course, their profits may not seem as impressive at first glance, but they still far exceed the interest rates on USD bank deposits. Thus, NordFXSrilanka has shown a growth of 48% over 236 days with a maximum drawdown of less than 10%. Quiet_trade_USD has achieved a profit of approximately 15% since the end of February this year, with a moderate drawdown slightly exceeding the same 15%.
– On the PAMM service showcase, a startup Gold24 has already appeared. The name of this account speaks for itself – trading is conducted exclusively on NordFX's popular XAU/USD pair. The number "24" in the name could signify 24-carat purity (pure gold without any alloys), or perhaps it indicates that trading on the pair is conducted 24 hours a day. We consider both possibilities equally likely. Regardless, in just three months of operation, the manager of this account has achieved a profit of 73% with a maximum drawdown of 31%.
 
● The TOP-3 NordFX IB partners received the following commissions in August:
– The highest commission of 36,691 USD was awarded to a partner from South Asia, account No. 1576XXX.
– The second place goes to another partner from the same region, account No. 1678XXX, who earned 27,244 USD.
– Finally, the TOP-3 is completed by yet another partner from South Asia, whose account No. 1678XXX differs only in the last three digits. His commission amounted to 13,690 USD.
 
Notice: These materials are not investment recommendations or guidelines for working in financial markets and are intended for informational purposes only. Trading in financial markets is risky and can result in a complete loss of deposited funds.



Posted by: Stan NordFX
« on: September 01, 2024, 08:54:18 AM »

Forex and Cryptocurrency Forecast for September 02 – 06 2024

EUR/USD: Dollar Takes the Offensive

● Since the beginning of July, the DXY dollar index had been declining, reaching an eight-month low of 100.51 on 27 August. The primary reason for this negative trend was the concern about a potential slowdown in the U.S. economy. According to the markets, to support the economy, the Federal Reserve (Fed) was expected to begin easing its monetary policy (QE) and aggressively cutting interest rates. As early as July, several members of the Federal Open Market Committee (FOMC) were ready to vote for a rate cut. However, they refrained from doing so, deciding to wait until September to make a decision based on more up-to-date macroeconomic indicators. A 25 basis points (bps) rate cut at the FOMC meeting on 18 September is almost universally anticipated. Moreover, the likelihood of a 50 bps cut reached 35% last week. The futures market also estimated that the total reduction in the cost of dollar borrowing by the end of the year would amount to 95-100 bps. As a result, such actions by the U.S. central bank were expected to lead to a sharp increase in risk appetite and exert additional pressure on safe-haven assets, including the U.S. currency.
In light of forecasts for a U.S. economic slowdown, market participants began discussing a reduction in divergence with the Eurozone and the UK. Consequently, the euro and pound became the main beneficiaries, as clearly reflected in the EUR/USD and GBP/USD charts. However, as the ancient wisdom goes, all good things must come to an end. Life, like the stripes of a zebra, alternates between good and bad times. Thus, after a period of gains, the euro and pound have now entered a darker phase. (Although, to be honest, it’s not entirely dark, just somewhat grey).
● It turns out that things are not so bad in the U.S. After all. According to preliminary data released on Thursday, 29 August, the country's GDP grew by 3.0% in Q2, surpassing both the forecast of 2.8% and the previous figure of 1.4%. On the same day, labour market statistics showed that the number of initial jobless claims in the United States remained virtually unchanged, standing at 231K compared to the forecast of 232K and the previous figure of 233K. Additionally, the Core Personal Consumption Expenditures (Core PCE) Price Index, a key inflation indicator, remained steady in August at 2.6% year-over-year, in line with the July figure and slightly below the forecast of 2.7%.
● From all the figures mentioned above, it is clear that fears of an economic slowdown and a cooling U.S. labour market are greatly exaggerated. It is also premature to declare a final victory over inflation, just as it is too early to assume that the Fed will cut interest rates by 100 basis points by the end of the year. As Raphael Bostic, President of the Federal Reserve Bank of Atlanta, wisely pointed out, it would be undesirable to find ourselves in a situation where, after easing monetary policy, we need to tighten it again. As another saying goes, "haste makes waste."
The idea that there is no need to rush is further supported by the replacement of the elderly Joe Biden with Kamala Harris in the presidential race. For the first time since April of last year, the Wall Street Journal's polls show the Democratic candidate's rating, albeit slightly, surpassing that of Republican Donald Trump. Therefore, forecasts of a U.S. economic recession should also be postponed for the time being. In this context, Citigroup economists believe that September will be a period when the potential outcome of the presidential election could become a source of significant volatility. However, regardless of how candidate ratings fluctuate, this factor of uncertainty will continue to support the dollar as a safe-haven currency.
● All the above suggests that the markets may be significantly overestimating the speed and scale of QE from the Federal Reserve. On the other hand, they may be underestimating the European Central Bank's (ECB) resolve to take similar actions.
It is worth recalling that on 6 June, the pan-European regulator cut the interest rate by 25 basis points to 4.25%. Many assumed that after this move, the ECB would pause and observe the Fed's actions (where the rate stands at 5.5%). However, it is possible that such expectations are misguided. The weakness of the German economy and other Eurozone countries should push the ECB towards more active steps in the direction of QE. (Macroeconomic data released on Tuesday, 27 August, showed a decline in Germany's GDP by -0.1% quarter-on-quarter, compared to +0.2% in Q1). Inflation is also falling sharply: Germany's Consumer Price Index (CPI), according to preliminary data, decreased from +0.3% to -0.1% month-on-month. The same trend is evident across the Eurozone as a whole: according to data published on Friday, 30 August, the CPI here dropped year-on-year from 2.6% to 2.2%. This is very close to the target level of 2.0%. Therefore, it is quite possible that at its meeting on 12 September, the ECB, when choosing between fighting inflation and supporting the economy, may opt for the latter and cut the rate by another 25 basis points.
● It appears that market participants have taken our arguments into account. At least, after surging to 1.1201, the EUR/USD pair returned to its 19 August levels by the end of the week, finishing the five-day period at 1.1047. (The GBP/USD pair demonstrated similar dynamics, where this reversal could also mark the first step in a trend shift from north to south).
The median forecast for EUR/USD in the near term is as follows: 75% of analysts are in favour of further dollar strengthening and a decline in the pair, while 25% expect it to rise. In technical analysis on D1, 25% of oscillators are coloured red, 35% green, and the remaining 40% are neutral grey. Among trend indicators, 35% have sided with the reds, while 65% voted for the greens. The nearest support for the pair is located in the zones of 1.0985-1.1015, 1.0880-1.0910, 1.0780-1.0825, 1.0725, 1.0665-1.0680, and 1.0600-1.0620. Resistance zones are found in the areas of 1.1090-1.1105, 1.1170-1.1200, followed by 1.1230-1.1275, 1.1350, and 1.1480-1.1505.
● The upcoming week promises to be quite eventful, interesting, and volatile. Starting from Tuesday, 3 September, through Thursday, 5 September, data on business activity (PMI) across various sectors of the U.S. economy will be released. Additionally, on 4, 5, and 6 September, we can expect a wave of U.S. labour market statistics, including key indicators such as the unemployment rate and the number of new non-farm jobs created (NFP). As for the Eurozone, Thursday, 5 September, will be noteworthy for retail sales data in the region. And at the very end of the workweek, on 6 September, the Eurozone GDP volume will be announced. Moreover, traders should keep in mind that Monday, 2 September, is a holiday in the U.S. as the country observes Labour Day.


CRYPTOCURRENCIES: The Fed, a Cup Handle, and the Banana Season of Madness



● Inflation is one of the key indicators influencing the monetary policy and interest rate decisions of the U.S. Federal Reserve. These, in turn, are among the primary factors determining the attractiveness of cryptocurrencies for investors. A recent example of this was the dovish speech by the head of the U.S. Central Bank, Jerome Powell, at the Annual Economic Symposium in Jackson Hole, USA, on 23 August. Powell did not rule out a series of interest rate cuts for the remainder of the year. The market reacted to this with a plunge in the DXY Dollar Index to 100.60 and a nearly 7% surge in the BTC/USD pair, from $60,800 to $65,000.
However, the rally did not continue. The eight-day period of net inflows into spot BTC ETFs, during which they attracted over $756 million, ended on Tuesday, 27 August. On that single day, more than $127 million flowed out of cryptocurrency funds. As a result, the BTC/USD pair plummeted and found support only in the $58,000 zone. Naturally, the leading cryptocurrency dragged the altcoin market down with it.
● According to analysts at QCP Capital, the trigger for the market crash was the uncertainty among participants regarding the future of the leading cryptocurrency. As a result, traders were quick to lock in profits. In this situation, while the market sentiment remains bullish, QCP Capital believes that a rapid rise in BTC prices should not be expected for now. Signals of renewed interest in BTC from large institutional investors are necessary to resume active growth. Michael van de Poppe, the head and founder of MN Trading, also believes that bitcoin has not yet fully escaped the "range of lows" between $61,000 and $62,000. In his view, a decisive breakout from this range is essential to confirm a rally toward BTC's all-time high.
Analysts at Glassnode agree with their colleagues. They believe that in the short term, BTC is unlikely to surpass the $70,000 mark. However, according to their observations, "both on-chain indicators and perpetual contracts show that the period of equilibrium is coming to an end, with the beginning of increased volatility and trading volume," which could allow the asset to break out of its narrow price corridor.
● Samson Mow, a bitcoin maximalist and a well-known figure in the crypto industry, has raised concerns by drastically reducing his BTC price forecast by a factor of ten. Just recently, in July, Mow declared that the leading cryptocurrency would reach $1 million within a year. However, in a new comment, he stated that "as long as bitcoin's price remains below $0.1 million, the coins are being sold at a discount." This comment has led the crypto community to believe that he may have lost faith in a powerful bull rally. The $0.1 million mark refers to $100,000, which means that anything below this figure is considered a discounted price, and $100,000 is what Mow now sees as the fair value of bitcoin. (For reference, Samson Mow is a crypto investor, entrepreneur, blogger, and television host. He was the CEO of the blockchain company Pixelmatic and the Chief Strategy Officer at Blockstream. He is currently the CEO of JAN3 and Pixelmatic.)
Another influencer, Anthony Scaramucci, CEO of SkyBridge Capital, shares a similar view on the "fair" value of bitcoin. He continues to uphold his forecast that digital gold will rise to $100,000, driven by spot BTC-ETFs. However, he has now cautioned that reaching this target may be delayed from the end of 2024 to 2025 due to regulatory uncertainty and the increasing prevalence of crypto fraud. "I could be wrong about the timing, but not the actual outcome. I genuinely believe that bitcoin will reach $100,000; it just might take longer," he wrote.
● Renowned macroeconomist Henrik Zeberg is convinced that a recession in the United States is inevitable, potentially arriving as early as Q4 of this year. Moreover, he believes it will be the worst since the Great Depression of 1929. According to Zeberg, the upcoming bear market will unfold in two stages: a deflationary phase followed by stagflation, with an intermediate rebound as the Fed intervenes in 2025. After this, there will be a "blow-off top," where prices skyrocket to unsustainable levels before plummeting rapidly.
Alongside this forecast, Zeberg has revised his target figures for stock indices and bitcoin upwards. According to his BlowOffTop business cycle model, the price of the leading cryptocurrency should rise to $115,000-$120,000 by the end of 2024. However, the economist cautions that this surge will be short-lived.
Arthur Hayes, former CEO of the crypto exchange BitMEX, also weighed in, suggesting that a reduction in Federal Reserve interest rates might temporarily diminish the appeal of traditional financial instruments, causing speculative investors to focus more closely on cryptocurrencies. However, Hayes warns that this rate reduction "will have only a short-term effect, much like sugar provides a quick burst of energy." He believes that assets like bitcoin are likely to benefit from the increased liquidity in financial markets, but overall, the Fed's decision could further exacerbate inflationary pressures.
● Shifting from fundamental to technical analysis, the forecast by the analyst known as MetaShackle is noteworthy. He suggests that bitcoin's continued consolidation within an increasingly narrow price range makes its breakout inevitable. On a larger scale, this range acts as the "handle" of a 3-year "cup." "BTC is forming a massive 'Cup and Handle' on the daily/weekly chart. Such a formation has never been seen before in the history of cryptocurrencies, and it will surely lead to an incredible run to levels that will shock the world," writes MetaShackle.
The "Cup and Handle" pattern is a bullish chart formation in trading. It typically consists of a rounded bottom (the cup), followed by a slight downward drift (the handle), indicating a potential upward breakout. The "largest cup and handle in cryptocurrency history," as described by MetaShackle, begins with bitcoin's peak in November 2021 at $69,000. This was followed by a bear market that consolidated over the next two years, forming a cup with a bottom at $15,500. The opposite rim of the "cup" is marked by a new all-time high in March 2024 at $73,800. After this, the "cup" formation was completed, and the "handle" phase began. This next phase has been ongoing for six months, consolidating with a slight downward trend.
Traders use this model to determine price targets by measuring the depth of the "cup" and projecting that distance upwards from the breakout point of the "handle." According to MetaShackle's calculations, BTC could rise from the bottom by 761% and soar to $130,870.
Another well-known analyst, Gert van Lagen, also believes that the chart shows bitcoin transitioning from a downtrend to an uptrend. Bitcoin is currently moving around the "handle," he notes, "on the verge of entering the banana zone," signifying a period when BTC and altcoins experience explosive price growth. Previously, Real Vision's Jamie Coutts stated that the leading cryptocurrency is about to "enter a season of madness." According to Coutts, by the end of the year, bitcoin's price could exceed $150,000.
Two weeks ago, we mentioned another analyst, Rekt Capital, who predicted a surge in the first cryptocurrency's value in October. His forecast was based on a different pattern forming on the BTC/USD chart: a "bull flag," where the breakout height equals the height of the flagpole.
● At the time of writing this review, on the evening of Friday, 30 August, the BTC/USD pair is trading around the $59,100 zone. The total market capitalization of the crypto market stands at $2.07 trillion, down from $2.24 trillion a week ago. The Crypto Fear & Greed Index has risen from 27 to 34 points, but it remains in the Fear zone.
● And finally, some encouraging statistics. According to consulting firm Henley and Partners, the number of bitcoin millionaires (those holding more than $1 million in BTC) has increased by 111% since January 2024, reaching 85,400 individuals. If we consider not only the holders of the flagship asset but crypto millionaires in general, the number is even higher: 172,300 people. This represents a 95% increase compared to a year ago when the figure was 88,200. The number of individuals with digital assets worth $100 million or more has grown by 79% to 325 people. Six new members have joined the ranks of crypto billionaires, bringing the total to 28.

NordFX Analytical Group

Notice: These materials are not investment recommendations or guidelines for working in financial markets and are intended for informational purposes only. Trading in financial markets is risky and can result in a complete loss of deposited funds.

Posted by: Stan NordFX
« on: August 21, 2024, 08:13:21 AM »

CryptoNews

– Following the stock market crash on "Black Monday," August 5th, the World Gold Council (WGC) decided to examine the behaviour of various asset classes and explain why bitcoin should not be considered "the new gold."
First, the WGC highlighted volatility. For instance, the weekly volatility of physical gold in 2024 was 13.83%, while for bitcoin, it was 53.62%. "Gold and bitcoin are at opposite ends of the volatility spectrum," WGC analysts write, emphasising that gold has always played the role of a safe-haven asset on a global level. As for bitcoin, it is more of an indicator of how widely blockchain technology is used, so its behaviour resembles that of tech company stocks.
As an example, WGC experts suggest considering the correlation with the S&P 500 index in 2022. Based on this, they conclude that the onset of the Russia-Ukraine conflict "underscored gold's role as a safe-haven asset protecting investors from risks," which differentiates it from the leading cryptocurrency.
Furthermore, the WGC modelled the impact of adding these assets to an investment portfolio in a range of 2.5% to 10%. The Council concluded that gold reduces volatility and improves returns, even when its share in the portfolio is increased. However, the situation with bitcoin is different: the higher its share, the greater the risk of losses.

– According to data from the cryptocurrency exchange Crypto.com, the number of cryptocurrency holders grew by 6.4% in the first half of 2024, from 580 million people to the current 617 million. Meanwhile, the number of Ethereum holders increased by 9.7%, from 124 million to 136 million. Among holders of the first cryptocurrency, the growth was 5.9%: 314 million compared to 296 million at the end of December 2023.
According to Crypto.com analysts, the broader adoption of ETH followed the Dencun update in March. The hard fork resulted in some second-layer ETH blockchain protocols reducing transaction fees by 99%.
Key factors for bitcoin included the April halving, the launch of the Runes protocol, and the approval of spot BTC ETFs, which attracted over $14 billion in institutional investment.

 – Considering the current consolidation, crypto market participants are focusing on how bitcoin will trade in the short to medium term. Given that the leading cryptocurrency ended July in the red, it cannot be ruled out that August will also close with losses. According to PricePredictions' Artificial Intelligence, on August 31st, the coin will trade at $53,766, and in the last decade of September, it will approach $48,000.

–  The analyst known as Crypto Banter disagrees with AI. He pointed out that the Stochastic RSI momentum indicator is entering the investment zone, signalling the possibility of adding BTC to investors' portfolios. Crypto Banter also highlights bitcoin's Fear and Greed Index levels as important indicators for identifying potential market bottoms and profitable entry points. In his observations, current conditions suggest that now is an optimal time to open long positions on BTC, which is fluctuating within key support and resistance levels of $56,000 and $62,000, respectively.

– In China, cryptocurrency trading and mining are banned by law. However, according to the CEO of the analytics platform CryptoQuant, Ki Newbie trader Ju, miners from China account for 54% of global cryptocurrency mining. Additionally, according to a TechFlow survey, for 25% of respondents, crypto trading is the most important source of income and the main occupation in life.
49.14% of Chinese people consider themselves experienced experts in the digital market, while the remaining 50.86% regard themselves as beginners. More than half of the respondents admitted to experiencing a significant level of anxiety when dealing with cryptocurrencies. At least 60% admitted to being superstitious, and 40% reported praying to the "god of prosperity" before engaging in market transactions.
70% of respondents prefer to trade on the cryptocurrency exchanges Binance and OKX. In addition to bitcoin, respondents named Ethereum, Solana, BNB, and the meme coin PEPE as the most profitable assets.

– The personal account of MicroStrategy founder Michael Saylor holds bitcoins worth $1 billion. He revealed this figure himself in a recent interview with Bloomberg. However, four years ago, it was known that the businessman owned more than 17,000 coins.
Saylor is known for his commitment to bitcoin. And this is well-founded—over the past four years, MicroStrategy has invested about $8.4 billion in this asset, bringing its reserve to 226,500 coins, which has yielded a profit of more than $5 billion. As a result, the company's shares have risen in value by 995%. During the same period, the leading cryptocurrency has appreciated by approximately 500%.

– The Ripple (XRP) token is displaying a bullish signal, pleasing the bulls of this altcoin. Technical indicators point to an inverted "Head and Shoulders" pattern on the daily chart of the altcoin, with the second shoulder almost ready to form.
Since the court ruling in the case between the SEC (the U.S. Securities and Exchange Commission) and Ripple, the XRP token has been correlating with major cryptocurrencies such as bitcoin, Ethereum, and Solana. Leaning on the $0.55 support, it has been trading in a narrow sideways trend along with the aforementioned assets since the 50% decline that followed the court ruling. As a result, Ripple has recently begun to form the base of the second shoulder in the bullish pattern with a potential risk-to-reward ratio of 1:2.

– The U.S. Federal Reserve and the Treasury-controlled Financial Crimes Enforcement Network (FinCEN) have proposed amendments to the Bank Secrecy Act, equating the "rights and obligations" of the dollar and cryptocurrencies. After revising the definition of "money" in this Act, federal supervisory authorities will be able to impose new reporting requirements on financial institutions to track all domestic and cross-border cryptocurrency transactions. The amendments, if approved by Congress, are scheduled to take effect in September 2025.

– The author of the bestseller "Rich Dad Poor Dad," financier Robert Kiyosaki, believes that people are wrong to turn to the U.S. Federal Reserve for support, as this institution consists of highly educated but poor employees. "The Fed cannot save you," the entrepreneur declares. "It's time to save yourself. Buy more gold, silver, bitcoin, and stop listening to highly educated poor people."
Kiyosaki predicts that in the face of the upcoming market downturn, the prices of precious metals will rise several times over. And bitcoin, in his opinion, may become the most effective protection against "theft of savings by authorities and bankers." Recall that he previously stated that key technical indicators point to a stock market crash, and against this backdrop, the price of "digital gold" could easily reach $10 million per BTC.

– Michael Van De Poppe, CEO of MN Trading, is convinced that bitcoin will reach a new peak this autumn. The main driver for its growth will be institutional investors, who actively bought the coin when its price dropped. The analyst also believes that the recent correction could trigger a strong rally in September or October of this year, as long as bitcoin itself stays above the $57,000 mark.
Approximately the same timeline for the start of the bull rally was predicted by the analyst known as Rekt Capital. He suggested that about 160 days after the halving, bitcoin will enter a parabolic phase. According to his calculations, this should happen at the end of September 2024.

– Matthew Sigel, Head of Digital Assets Research at VanEck, is also optimistic. He believes that bitcoin will approach its all-time high immediately after the U.S. presidential election: "A typical seasonal pattern is observed where the first cryptocurrency usually struggles between one and three months after the halving," he writes. "Thanks to the influx of liquidity, bitcoin should soon show growth."
The analyst pointed to the weakening of the forced sales factor and predicts that bitcoin will follow gold. According to VanEck's top executive, in 2025, financial markets will be influenced by a monetary policy easing, and because of this, BTC will surpass its all-time high.
According to Matthew Sigel, regardless of who becomes the next U.S. president, the market should be prepared for four years of reckless fiscal policy, and it is during this period that the first cryptocurrency will reach its peak values.
Let us remind you that the digital asset management company VanEck recently released a new forecast for bitcoin. It envisages three possible BTC price levels depending on the development of the market and the adoption of bitcoin as a reserve asset worldwide. According to the base scenario, by 2050, the flagship cryptocurrency could reach $3 million per coin. In the bearish scenario, the minimum BTC price will be $130,314. If the VanEck bullish scenario comes true, in 26 years, 1 bitcoin will be worth $52.4 million.


Posted by: Stan NordFX
« on: August 18, 2024, 08:12:34 AM »

Forex and Cryptocurrency Forecast for August 19 – 23, 2024


EUR/USD: Wall Street Triumphs Over the Dollar


● The Dollar Index (DXY) fell throughout the beginning of the week, while the EUR/USD pair rose. This was due to the after-effects of the "Grey Friday" on August 2 and the "Black Monday" on August 5, which we covered in detail in our previous review. The EUR/USD pair reached a local high of 1.1046 after the release of the US Consumer Price Index (CPI) for July on Wednesday, August 14. The data showed that annual inflation had fallen to 2.9%, below both the previous reading and the forecast of 3.0%. The Core Consumer Price Index (Core CPI), which excludes volatile food and energy prices, rose by 3.2% year-on-year in July compared to 3.3% in June.
● This decrease in inflationary pressure, despite the CPI still being above the Fed's target level of 2.0%, has strengthened the argument that the regulator may lower interest rates at its September meeting. Analysts had already considered such a move highly likely, given other indicators pointing to a slowdown in the US economy. Among these indicators are the lowest Manufacturing Business Activity Index in eight months and the rise in unemployment to 4.3%. According to strategists at Principal Asset Management, the current CPI data "eliminate any obstacles related to persistent inflation that could have prevented the Fed from beginning a rate-cutting cycle in September."
(Remember that the Federal Reserve started raising interest rates to combat inflation, which reached 9.1% in July 2022, a record high in many decades. As a result of this tightening (QT), after a year, in July 2023, the rate reached a 23-year high of 5.50%, where it remains to this day).
After the release of inflation data on August 14, stock indices (S&P500, Dow Jones, Nasdaq) rose. The DXY reached a minimum but then slightly strengthened, as the CPI figures were far from radically changing the situation.
● Thursday, August 15, brought another batch of important data from the US. After declining by -0.2% in June, retail sales in July exceeded the forecast of 0.3% and rose by 1.0%. This marked the fastest growth since the beginning of 2023. Market participants also closely monitored the US labour market data following the disappointing figures of "Black Friday." This time, the data was positive: initial jobless claims for the week amounted to 227K, which was lower than both the previous figure of 234K and the forecast of 236K. Additionally, the world's largest retailer, Walmart, reported increased revenue and raised its profit forecast.
Weak consumer spending typically leads to layoffs and higher unemployment, which reduces people's ability to spend. In contrast, the growth in retail sales and Walmart's performance indicate a revival in the consumer market. Yes, the US economy's growth is still slowing, but fears of a recession, if not entirely gone, have at least significantly diminished.
These news events, on the one hand, dispelled the spectre of a recession but, on the other, reinforced confidence in a Fed rate cut in September. As a result, the DXY rose alongside Wall Street stock prices. It is quite rare for a safe-haven asset to rise in parallel with investor risk appetites, but that's exactly what happened this time. However, it was the stock indices that held back the dollar's bull rally, preventing it from strengthening further. In the end, the pressure on the dollar from the stock exchanges was so strong that the EUR/USD pair turned north and ended the week at 1.1027.
● According to forecasts, the Fed is expected to lower interest rates by a total of 95-100 basis points (bps) by the end of the year. Currently, the US Central Bank is inclined to cut the rate by 25 bps in September. However, if the August labour market report disappoints traders again, the FOMC (Federal Open Market Committee) may be forced to lower the rate by 50 bps at once—from 5.50% to 5.00%, which could significantly weaken the US dollar's position.
As of the evening of August 16, at the time of writing this review, 60% of analysts favoured the dollar's strengthening and the pair's movement to the south, while 40% supported the euro's strengthening. In technical analysis, all 100% of trend indicators and oscillators on the D1 chart point to the north, although 20% of the latter are in the overbought zone. The nearest support for the pair is located in the 1.0985 zone, followed by 1.0950, 1.0890-1.0910, 1.0825, 1.0775-1.0805, 1.0725, 1.0665-1.0680, and 1.0600-1.0620. Resistance zones are found in the areas of 1.1045, 1.1100-1.1140, 1.1240-1.1275, 1.1350, and 1.1480-1.1505.
● In the upcoming week, on Tuesday, August 20, the Eurozone inflation figures (CPI) will be released. The following day, the minutes of the latest FOMC meeting will be published. On Thursday, August 22, business activity indicators (PMI) will be released for various sectors of the German economy, the Eurozone as a whole, and the United States. Additionally, the traditional weekly statistics on initial jobless claims in the United States will be published on that day. Also on Thursday, the Annual Economic Symposium in Jackson Hole (USA) will commence, running through Saturday. This important event, dedicated to monetary policy issues, has been held since 1981 and brings together Central Bank leaders and leading economists from many countries around the world.


GBP/USD: The British Pound Gains Strength


● The dynamics of the GBP/USD pair were naturally influenced not only by macroeconomic statistics from the US but also by economic data coming out of the UK. Last week saw a considerable amount of such data.
The acceleration of the pound's growth occurred against the backdrop of strong unemployment figures from the UK, which exceeded expectations. On Tuesday, August 13, it was revealed that the unemployment rate fell in June, reaching 4.2%. This represents a significant improvement compared to May, when the rate was 4.4%. Given that the forecast predicted a rate of 4.5%, this data made a strong impression on the market. Such a decrease in unemployment indicates positive changes in the labour market and could be a sign of economic stabilization, contributing to increased investments.
● The following day, on Wednesday, August 14, consumer inflation data was released. The Office for National Statistics reported that the CPI rose for the first time this year to 2.2% year-on-year. This increase followed two consecutive months of remaining at the Bank of England's (BoE) target level of 2.0%. Although the result was slightly below the forecast of 2.3%, the pound experienced only a minor and brief decline against the dollar, as markets raised the probability of a 25 bps rate cut by the BoE in September from 36% to 44%.
It is worth noting that inflation in the UK reached a 41-year high of 11.1% in October 2022. This was driven by a sharp rise in energy and food prices following Russia's invasion of Ukraine, as well as labour shortages due to COVID-19 and supply chain disruptions. However, thanks to a well-thought-out monetary policy, price pressures were significantly reduced, and consumer inflation in the UK is now lower than in the Eurozone and the US. However, the Bank of England expects the CPI to rise, reaching approximately 2.75% by the end of the year, as the impact of the sharp drop in energy prices in 2023 fades. According to BoE economists, the CPI is expected to return to the target of 2.0% only in the first half of 2026.
According to some experts, much (if not all) of the GBP/USD pair's behaviour will depend on the pace of monetary policy easing by the Fed and the BoE. If the US interest rate is lowered aggressively while the Bank of England delays similar measures until the end of 2024, the bulls on the pound may have a good opportunity to push the pair towards the 1.3000 level.
● On Thursday, August 15, the British currency continued to strengthen following the release of strong GDP data. The UK's Office for National Statistics (ONS) reported that the economy grew by 0.6% quarter-on-quarter in the second quarter. On an annual basis, growth reached 0.9% compared to 0.3% in the previous quarter. According to analysts, these figures confirm the trend of the country's economic recovery after the recession, despite the impact of widespread strikes and poor weather, which slowed consumption in June.
● The GBP/USD pair closed the week at 1.2944. Economists at Scotiabank expect further growth towards the 1.2950-1.3000 range. As for the average forecast, 30% of experts support Scotiabank’s view, 50% anticipate a strengthening of the dollar and a decline in the pair, while the remaining 20% remain neutral.

Regarding technical analysis on the D1 chart, similar to the EUR/USD situation, all 100% of trend indicators and oscillators point to the north (with 15% of the latter indicating overbought conditions). In case the pair falls, it will encounter support levels and zones around 1.2900, followed by 1.2850, 1.2795-1.2815, 1.2750, 1.2665-1.2675, 1.2610-1.2620, 1.2500-1.2550, 1.2445-1.2465, 1.2405, and 1.2300-1.2330. If the pair rises, it will face resistance at 1.2980-1.3010, followed by 1.3040, 1.3100-1.3140, 1.3305, and 1.3425.
● In the upcoming week, the calendar highlights Thursday, August 22, when, along with business activity data from the Eurozone and the US, similar PMI figures from S&P Global for the UK will be published. At the very end of the workweek, on Friday, August 23, a speech by the Governor of the Bank of England, Andrew Bailey, is expected.

USD/JPY: A Very Quiet Week

● The past week was surprisingly calm for the USD/JPY pair. Some activity was observed with the release of several Japanese economic indicators on Thursday, August 15. According to preliminary data, the country's economy grew by +0.8% in Q2 (market expectations were +0.5%). This was a significant improvement, as GDP had declined by -0.6% in Q1 2024. Similarly, in annual terms, GDP growth reached +3.1% after a contraction of -2.3% in the previous quarter.
Consumer spending rose for the first time in five quarters, increasing by 1.0% in April-June. This was driven by an increase in average wages in the country by more than 5% following spring negotiations between companies and trade unions, marking the largest increase in over 30 years.
● After the release of this data, the USD/JPY pair showed a slight increase, but then retraced downward, ending the workweek at 147.60. The analysts' forecast for the near term is as follows: one-third expect the pair to move upward, one-third anticipate a decline, and the remaining third have taken a neutral stance. Among trend indicators on the D1 chart, 75% are coloured red, and 25% are green. Among oscillators, 50% align with the red, 25% with the green, and the remaining 25% are in neutral grey.
The nearest support level is in the 146.55-146.90 zone, followed by 145.39, 143.75-144.05, 141.70-142.15, 140.25-140.60, 138.40-138.75, 138.05, 137.20, 135.35, 133.75, 130.65, and 129.60. The nearest resistance is located in the 148.20 zone, followed by 149.35, 150.00, 150.85, 151.95, 153.15, 154.20, then 154.85-155.20, 156.80-157.20, 157.70-158.25, 158.75-159.00, 160.20, 160.85, and 161.80-162.00, with further resistance at 162.50.
● No significant events or macroeconomic data releases related to the state of the Japanese economy are scheduled for the upcoming week.


CRYPTOCURRENCIES: Bitcoin's Snake Trend

● Unlike the first ten days of August, the past week was relatively calm. Bitcoin, of course, continued to react to US macroeconomic data, but unlike stock indices and the dollar, the reaction of the leading crypto asset was rather muted. The BTC/USD pair moved in a narrow sideways channel, slightly undulating between resistance at $62,000 and support at $58,000. (Two timid attempts to break below this support don't really count).
● According to analysts, at the current price of bitcoin, many public mining companies are in a difficult financial position. This is due to both the increased complexity of computations and the drop in revenues following the halving. Miners faced another blow on the last day of July. It is important to note that the mining difficulty is adjusted every two weeks based on the total power of the mining equipment in use. This adjustment is necessary to maintain the block mining speed at roughly one every 10 minutes. On July 31, the difficulty increased by 10.5%—the largest jump since October 2022.
As a result, according to Ki Newbie trader Ju, CEO of the analytical firm CryptoQuant, the average cost of mining one bitcoin is currently around $43,000. While this figure is lower than the current price of BTC, it does not take into account the repayment of loans previously taken out for the construction of data centres and the purchase of equipment, as well as various overhead and administrative expenses.
Experts at TheMinerMag, based on financial reports for Q2, calculated the total cost of the coins mined in July for leading mining companies. It turns out that companies like Marathon Digital and Riot are operating at a loss. However, they continue to accumulate digital gold reserves, Currency carry trade on its future price increase.
● It's worth noting that Marathon Digital is currently the largest miner in the world, with a market capitalization of $4.44 billion. According to company representatives, Marathon views bitcoin as its "primary strategic treasury asset." In addition to mining, Marathon is also increasing its reserves by "applying a multifaceted strategy for purchasing bitcoins." Just recently, the company bought additional digital gold worth $249 million, issuing bonds maturing in 2031 to finance the purchase. The average purchase price was around $59,500 per coin, bringing Marathon's total holdings to over 25,000 BTC (approximately $1.48 billion). This significant investment reflects the company's confidence in the continued price growth of the leading cryptocurrency.
● Another major player exuding confidence is MicroStrategy, which has announced the potential addition of up to $2 billion to its already massive bitcoin portfolio. According to the company's financial report, in the second quarter, it acquired 12,222 BTC for $805.2 million, bringing its total bitcoin holdings to 226,500 coins (worth more than $13 billion at current prices).
Over the past four years, MicroStrategy has invested approximately $8.4 billion in BTC, yielding a profit of more than $5 billion. As a result, the company's stock price has increased by 995% since 2020. Interestingly, Arkham has even created a dedicated portal to track MicroStrategy's bitcoin purchases. The potential injection of another $2 billion into BTC will undoubtedly attract significant attention from market participants.
● Data from the analytics firm Glassnode also confirms that large investors have shifted towards long-term accumulation of bitcoins. The Accumulation Trend Score (ATS) metric, which evaluates changes in market balances, has recorded the highest possible value of 1.0. This indicates significant bitcoin accumulation in recent times. Previously, PitchBook reported that venture capital investments in the crypto industry increased by 2.5% from April to June, marking the third consecutive quarter of positive capital inflows.
● According to experts at Santiment, renewed market excitement could push bitcoin back to the $70,000 zone, with a subsequent achievement of a new all-time high at $75,000 in the short term. The analyst known as TheScalpingPro also believes that despite the recent dip, bitcoin is capable of a bullish rally. In his view, the leading cryptocurrency is forming a classic parabolic curve, often associated with a strong upward momentum. This curve suggests that within a 6-12 month horizon, BTC could experience rapid growth with a potential target of around $180,000, followed by a sharp correction.
Another analyst, TheMoonCarl, suggests that a decisive breakout and consolidation above the $60,000 resistance could lead to a rise to $125,000. This forecast is based on the formation of a "cup and handle" pattern. TheMoonCarl cited BTC's price movement in 2021 as an example, noting that if bitcoin reaches the $70,000 level, the next target could be $125,000.
● CryptoQuant holds a different view, believing that in the short term, bitcoin does not show signs of recovery. The high volatility of cryptocurrencies, the decline in stocks of leading technology companies associated with artificial intelligence, such as Nvidia, Google, and Microsoft, combined with rising geopolitical tensions, are pushing investors to seek safer investments, such as physical gold. On Wednesday, August 13, the price of gold reached another all-time high of $2,477, and according to some experts, this precious metal has a strong chance of rising to $3,000 by the end of the year.
● Long-term forecasts for bitcoin remain extremely impressive, ranging from total collapse to soaring to the Moon and beyond—to the edges of the Solar System. For instance, the digital asset management company VanEck has released a new forecast that outlines three potential price levels for BTC, depending on market development and the global adoption of bitcoin as a reserve asset. According to the base scenario, by 2050, the flagship cryptocurrency could reach $3 million per coin. In the bearish scenario, the minimum value of BTC would be $130,314. However, if VanEck's bullish scenario comes to pass, in 26 years, one bitcoin could be worth $52.4 million, nearly 900 times more than its current value.
● Unfortunately, as of the evening of Friday, August 16, at the time of writing this review, the BTC/USD pair has yet to reach $50 million or even $3 million and is trading at $59,300. The total cryptocurrency market capitalization stands at $2.08 trillion (down from $2.11 trillion a week ago). The Crypto Fear & Greed Index has dropped from 48 to 27 points, shifting from the Neutral zone into the Fear zone.
● In conclusion, a few words about… copyrights. This is precisely what we want to secure for ourselves. Let us explain. Everyone knows that an upward trend is called bullish, and a downward trend is bearish. But what do we call a sideways trend? No name? Now, take a look at the BTC/USD chart from this week: does it remind you of anything? Yes, it’s like a snake slithering and winding along the ground. This is why we propose calling the sideways trend from now on the "Snake Trend," and we officially request that the authorship of this term be attributed to us.



NordFX Analytical Group
 

Notice: These materials are not investment recommendations or guidelines for working in financial markets and are intended for informational purposes only. Trading in financial markets is risky and can result in a complete loss of deposited funds.

Posted by: Stan NordFX
« on: August 14, 2024, 10:34:12 AM »

CryptoNews

– According to analysts, with the current bitcoin price ranging from $58,000 to $61,000, many publicly traded mining companies are in a difficult financial position. This is due to both the increase in mining difficulty and the decrease in revenues following the halving. The miners faced another blow on the last day of July. It is worth recalling that the mining difficulty is adjusted every two weeks depending on the total power of the mining installations involved. The adjustment is necessary to maintain the block mining speed at one block every 10 minutes. On 31 July, the difficulty surged by 10.5%, the largest increase since October 2022.
As a result, according to Ki Newbie trader Ju, CEO of the analytical firm CryptoQuant, the average cost of mining one coin is currently around $43,000. Of course, this figure is lower than the current BTC price; however, it does not account for loan repayments taken earlier to build data centres and purchase equipment, as well as various overhead and administrative costs.
Experts from TheMinerMag, based on financial reports for the second quarter, calculated the full cost of the coins mined in July for leading mining companies. It turns out that companies like Marathon Digital and Riot are operating at a loss. However, they continue to accumulate reserves of digital gold, counting on its future growth. It is worth noting that Core Scientific followed the same path until 2022, but the subsequent bear phase led to its bankruptcy (though it was officially termed "business reorganisation").

– The mining company Marathon Digital announced that it would label all of its blocks mined in the USA with the mark "Made in the USA." According to some experts, this is a "nod" to Donald Trump, who stated during his election campaign that all remaining bitcoins should be mined in the United States. Marathon CEO Fred Thiel emphasised that his company is the only major miner capable of implementing this initiative, as it has its own MARA Pool and can guarantee that all blocks mined within it are indeed "Made in the USA."
As of today, Marathon is the world's largest mining company with a market capitalisation of $4.44 billion. Its shares, traded under the ticker MARA on Nasdaq, have fallen by 43.3% since the beginning of the year. The company explained that the results were impacted by equipment failures, power transmission issues, an increase in network hashrate, and the April halving. Currently, Marathon's bitcoin reserves exceed 20,000 BTC (approximately $1.2 billion). Recently, the company announced the issuance of bonds worth $250 million, maturing in 2031. The proceeds from their sale will be used to purchase new bitcoins, indicating confidence in the continued growth of the leading cryptocurrency's price.

– MicroStrategy has announced a potential injection of up to $2 billion into its already enormous bitcoin portfolio. According to the financial report for the second quarter, the company acquired 12,222 BTC for $805.2 million, bringing the total number of bitcoins to 226,500 (currently worth over $13 billion). The crypto market eagerly anticipates this move, as such large inflows could lead to a potential rise in BTC's price.
Over the past four years, MicroStrategy has invested approximately $8.4 billion in bitcoin, generating more than $5 billion in profit. As a result, the company's shares have risen by 995% since 2020. Interestingly, Arkham even created a dedicated portal to track MicroStrategy's steps in purchasing the leading cryptocurrency.

– According to CoinShares, Ethereum outpaced bitcoin from 5 to 9 August in terms of investment in cryptocurrency funds by nearly 12 times. Capital inflows into ETH-based derivatives reached over $155 million, with the majority ($105 million) coming from nine recently launched US spot ETH-ETFs. Financial instruments based on BTC saw their market capitalisation increase by only $13 million. Multi-cryptocurrency funds received investments totalling $18.3 million.
CoinShares notes that over the past month, capital outflows from BTC-based funds totalled $366 million. Half of these funds may have been the source of the inflow into ETH derivatives. 

– El Salvador has finally secured investments for the construction of Bitcoin City. Most of the funding will be provided by the Turkish holding company Yilport. The initial agreement was reached after the country's president, Nayib Bukele, visited Turkey two years ago.
The Bitcoin City project was first introduced in November 2021 as a "tax-free city" that would be funded by mining powered by local volcanoes. The "city of the future" aims to attract digital nomads and crypto companies. According to the authorities, this project will create thousands of new jobs and "attract even more investments into basic digital infrastructure."

– According to IntoTheBlock, the recent drop in Ethereum's price has reduced the number of holders of this altcoin with unrealised profits to 66%. At the beginning of August, that figure was 75%. As a result, 9% of coin owners suffered losses or broke even due to the dump. Meanwhile, the number of BTC holders who remain profitable stands at 81%. Analysts believe this indicates that the leading altcoin is undervalued relative to the leading cryptocurrency. As a result, it could quickly regain lost ground. This is confirmed by the emerging flow of investments from spot BTC-ETFs to ETH-ETFs.

– Digital asset management company VanEck has released a new forecast for bitcoin. It outlines three possible BTC price levels depending on the development of the market and the adoption of bitcoin as a reserve asset globally. According to the base scenario, by 2050, the flagship cryptocurrency could reach $3 million per coin. In the bear scenario, the minimum price of BTC would be $130,314. If the VanEck bull scenario comes true, one bitcoin could be worth $52.4 million in 26 years.

– The GameFi sector, or cryptocurrency gaming, is showing strong growth, with this sector attracting $1.1 billion in investments in the first half of 2024 alone. Crypto exchange and Web3 company Bitget recently published a report based on a survey of players of tap-based games operating on the "play-to-earn" principle within the Telegram messenger. Approximately 86% of respondents play the mega-popular Hamster Kombat. Following it are Tapswap and Blum, with 79% and 78% of users playing them, respectively. Yescoin and Catizen are also among the top five most popular games. According to Telegram founder Pavel Durov, the number of Hamster Kombat clicker players reached 239 million people within three months, with 4-5 million users joining the game every day.

– According to Santiment experts, a renewed hype in the market could push bitcoin back to the $70,000 range, reaching a new all-time high of $75,000 in the short term.

– CryptoQuant takes a different view. They believe that although bitcoin has managed to break through an important resistance level in the current bull cycle, the asset shows no signs of recovery in the short term. The high volatility of cryptocurrencies, the decline in the shares of leading AI-related technology companies such as Nvidia, Google, and Microsoft, combined with growing geopolitical tensions, are forcing investors to seek safer investments such as physical gold. On Wednesday, 13 August, its price reached another all-time high of $2,477, and according to some experts, this precious metal has a good chance of reaching $3,000 by the end of the year.

– According to the analyst known as TheMoonCarl, bitcoin is aiming to rise and consolidate above the $60,000 level. TheMoonCarl believes that a confident break of this key resistance could lead to $125,000. This forecast is based on the formation of a "cup with handle" pattern.
The cup part represents a period of consolidation and recovery, where the coin's price gradually formed a rounded bottom or solid support level. After the cup, the handle forms a brief period of consolidation or a minor correction, which bitcoin appears to be experiencing now. TheMoonCarl cited BTC's price movement since 2021 as an example. He also noted that if bitcoin successfully breaks out of this handle formation and then reaches $70,000, the next target could be $125,000. This figure is obtained by adding the height of the cup to the breakout point.

– Another analyst, TheScalpingPro, believes that despite recent volatility, bitcoin is capable of a bullish rally in the long term. In his opinion, the leading cryptocurrency is forming a classic parabolic curve often associated with strong upward momentum. The curve suggests that BTC could experience rapid growth with a potential target around $180,000. After reaching it, a sharp correction could be expected.

– The US Securities and Exchange Commission (SEC) has postponed its decision on the launch of a bitcoin-ethereum ETF. This product from Hashdex, which takes into account the market value changes of the two flagship assets, could have been the first universal ETF on the US market. However, SEC experts considered the launch of the BTC-ETH-ETF premature and requiring further study.
Earlier, Matthew Sigel, Head of Digital Assets Research at VanEck, stated that an exchange-traded fund tied to the Solana cryptocurrency could soon be offered to investors.

Posted by: Stan NordFX
« on: August 07, 2024, 10:33:57 AM »

CryptoNews of the Week



– Another bearish bitcoin cycle started on 29 July after the BTC/USD pair reached a high of $70,048. The primary cryptocurrency continues to be pressured by the potential sale of coins returned to creditors of the bankrupt exchange Mt.Gox, as well as those assets confiscated by law enforcement agencies, including the US.
The decline in quotations is occurring amidst investors fleeing risks and a global stock sell-off triggered by concerns about the prospects of the world economy in general and the economies of countries such as Japan and the US. Negative sentiments are further exacerbated by tensions in the Middle East, uncertainty regarding the Federal Reserve's monetary policy, and the policy of the new US president to be elected in November.
On Friday, 02 August, bitcoin spot ETFs experienced the largest outflow of funds in the past three months. The head of cryptocurrency investments at Evergreen Growth, Hayden Hughes, believes that digital assets have become victims of the unwinding of carry trade operations using the Japanese yen after the Bank of Japan raised interest rates. However, the more apparent driver for the sell-off was the publication of extremely disappointing data from the US labour market.
The US Bureau of Labor Statistics (BLS) report showed that the number of non-farm payrolls (NFP) increased by only 114K in July, lower than both the June figure of 179K and the forecast of 176K. Additionally, it was revealed that the unemployment rate has been rising for the fourth consecutive month, reaching 4.3%. These data have raised concerns about a possible recession in the US, triggered a fall in Treasury bond yields, panic on Wall Street, and a sell-off of risky assets, including stocks and cryptocurrencies.
On "Black Monday," 05 August, bitcoin temporarily fell to $48,945, and ethereum to $2,109. The drop was the sharpest since the collapse of the FTX exchange in 2022. Long leveraged positions worth almost $1 billion were liquidated. In total, from Sunday evening, the overall market capitalization of the crypto market fell by more than $400 billion.

– At the opening of stock exchanges on Monday, 05 August, MicroStrategy shares, the largest corporate holder of BTC, immediately fell by 22%. (It is worth noting that just last week, MicroStrategy increased its bitcoin reserves to 226,500 BTC, and the company's founder, Michael Saylor, announced that bitcoin quotations would reach $13 million per coin by 2045).
Metaplanet securities, which calls itself the "MicroStrategy of Japan," fell by 18% – from 820 yen to 670 yen. "Black Monday" also affected the crypto exchange Coinbase, whose shares lost 18.5% in value. Public miners' shares also suffered significant losses: the three largest US companies by market capitalization – MARA, CleanSpark, and Riot Platforms – fell by 19.1%, 24.9%, and 16.7%, respectively.

– Disappointing macroeconomic statistics indicate the need for active measures to support US economic growth. According to several analysts, the current situation should push the Federal Reserve to start easing monetary policy and lowering interest rates as early as September. Recent shocks in traditional markets "increase the likelihood that less restrictive monetary policy will come sooner rather than later – which is good for cryptocurrency," claims Sean Farrell, head of digital asset strategy at Fundstrat Global Advisors.

– According to Jan3 CEO and former Blockstream head Samson Mow, evaluating the situation with bitcoin during periods of market financial turmoil is challenging. However, an analyst under the pseudonym Rekt Capital believes that the first cryptocurrency could see a price surge as early as October. He says the forming chart creates a bullish flag, which inspires optimism. "While bitcoin shows the possibility of a downward deviation in the near future, [however] the first cryptocurrency is slowly approaching its historical breakout point 150-160 days after the halving," notes Rekt Capital. He believes that although a price breakout will occur, it is not worth expecting an update to the historical maximum reached in March in the medium term.
The expert also emphasized that the current position in the crypto market suggests that BTC is unlikely to fall to $42,000, as buyers show strong support for the asset.

– Renowned analyst and trader, head of Factor LLC Peter Brandt noted that as a result of the market collapse, the situation has become similar to that recorded in 2016. Eight years ago, bitcoin fell by 27% after the halving that took place in July, and this year the coin's price dropped by 26%.
After hitting a low of $465 in August 2016, the price of bitcoin rose by 144% by early January 2017. Drawing an analogy between trends, Brandt suggests that an upward trend may soon emerge, and the BTC price could update its all-time high (ATH) in eight weeks (i.e., in early October). If this time digital gold appreciates to the same extent as in 2016, its price will be $119,682.
However, ITC Crypto blockchain project founder Benjamin Cowen holds a different view and believes that the bitcoin exchange rate dynamics will reflect the trend seen in 2019 when the coin appreciated in the first half of the year and depreciated in the second. In this case, the downward trend will continue, and BTC will see new lows.

– Analysts at Bernstein believe that bitcoin's reaction as a risky asset to general macroeconomic and political signals is not surprising. "A similar situation was observed earlier during the sudden collapse in March 2020. However, we remain calm," explained Bernstein. The experts noted that the launch of spot BTC-ETFs helped simplify investments in the first cryptocurrency and prevented its price from falling to $45,000. This time, the crypto industry's response to external factors will also be restrained, and the recovery of stock market indices will allow cryptocurrencies to show a slight but noticeable growth.
The company's analysts also warn that the "Trump factor" will influence the first cryptocurrency's price. "As the gap between Trump and Kamala Harris narrows, bitcoin and altcoins have traded weakly. We expect bitcoin and cryptocurrency markets to remain in a narrow range until the US elections, changing in response to catalysts such as presidential debates and the final election result," said Bernstein experts.

– Back in December 2022, the Reserve Bank of India launched a digital version of the rupee (CBDC), stating that transactions in such currency would be more confidential than in fiat. Initially, only Indian banks could conduct transactions with it through their mobile apps. The implementation process of the national CBDC was quite slow, and by the end of June this year, just over 1 million retail transactions had been recorded. This figure was achieved only after local banks began offering customers bonuses for using the virtual rupee and started paying part of employees' salaries in CBDC.
Most likely due to the low popularity of the novelty, the regulator announced in April 2024 that any financial companies with payment services could participate in the project. It was recently revealed that companies such as AmazonPay, GooglePay, and Walmart-backed PhonePe have expressed their desire to join the testing of the electronic rupee. Besides these US payment giants, Indian fintech companies Cred and Mobikwik plan to join the project.

– QCP Group has proposed a rather unexpected version regarding the cause of the crypto market crash. "The drop in cryptocurrency quotations to more than a five-month low was mainly caused by the sale of ethereum by the Jump Trading team," QCP Group believes. According to their information, Jump Trading unlocked 120,000 wETH tokens on Sunday, 04 August. Most of the coins were sold on 05 August, negatively impacting ethereum and other assets' prices. QCP Group suggests that the market maker either needs liquidity urgently on the traditional market or has decided to exit the market entirely due to reasons related to LUNA tokens.
For reference: On 21 June 2024, the US Commodity Futures Trading Commission (CFTC) launched an investigation into Jump Trading's activities, as the company acquired LUNA tokens at a price 99.9% below market value, and the subsequent sale of the coins caused a collapse in the asset's quotations. On 24 June, Kanav Kariya, president of Jump Crypto, a subsidiary of Jump Trading, resigned.
Posted by: Stan NordFX
« on: August 04, 2024, 02:50:26 PM »

USD/JPY: New Surprises from the Yen and Bank of Japan

● The USD/JPY pair has recently earned titles such as "the package of surprises" and "the most intriguing pair on Forex." Last week, with the help of the Bank of Japan (BoJ), it confirmed these titles. What everyone had been waiting for finally happened – the Japanese central bank raised the key interest rate at its meeting on Wednesday, 31 July. What was unexpected was the magnitude of the increase: 150 basis points, from 0.10% to 0.25%, reaching a level not seen since 2008. This decision was made by the Board of Directors with a vote of 7 to 2. Throughout July, the regulator and other representatives of Japanese financial authorities had consistently expressed their readiness to tighten monetary policy. However, the decisiveness of this move caught many market participants by surprise.
"If the economy and prices move in line with our forecasts, we will continue to raise interest rates," said Bank of Japan Governor Kazuo Ueda at the post-meeting press conference. "In fact, we haven't significantly changed our forecast since April. We don't consider 0.5% to be a key barrier for rate hikes."
● At the recent meeting, the regulator also presented a detailed plan to slow down the large-scale bond purchases, taking another step towards gradually ending the decade-long cycle of economic stimulus. It decided to reduce the monthly bond purchases to ¥3 trillion ($19.6 billion) from the current ¥6 trillion in Q1 2026. This decision followed a survey of market participants on the extent to which the regulator should scale back the large purchases. Some called for a threefold reduction, while others suggested a one-and-a-half times cut. The Bank chose a middle ground, deciding to halve the purchases.
● The decision to raise the rate was made against the backdrop of rising inflation in the country, increasing wages, and service prices. Another reason, undoubtedly, was the weakening yen, which had been barely prevented from a complete collapse through numerous currency interventions. At the beginning of July, the Japanese currency weakened to a 38-year low against the US dollar. This caused serious concern in society, contributed to inflation, and negatively affected the government's rating. Now, officials can proudly present themselves to their fellow citizens – on 2 August, the USD/JPY pair recorded a low at 146.41, a level last seen on 12 March 2024. Thus, thanks to currency interventions and the rate decision, the yen strengthened by more than 1,550 points in just four weeks.
● Thus, the Bank of Japan is tightening monetary policy (QT) against the backdrop of easing policies (QE) in the US and Europe. This is happening amid a -1.8% (y/y) contraction in the country's GDP in Q2. Household spending is also declining despite rising wages. If the Japanese central bank continues to raise rates rapidly in an effort to curb inflation and support the national currency, it could push the economy back into sustained deflation and lead to a more severe GDP contraction.
● The USD/JPY pair ended the past five-day period at 146.52. The expert forecast for the near future is as follows: 65% voted for a correction and a rebound of the pair upwards, while the remaining 35% took a neutral position. The number of supporters for further strengthening of the yen was zero this time. However, it is worth remembering the pair's titles mentioned at the beginning of the review, which have often seen it act contrary to any forecasts. All 100% of trend indicators and oscillators on D1 point to a further decline of the pair, although a quarter of the oscillators indicate it is oversold. The nearest support level is around 145.90-146.10, followed by 144.30-144.70, 143.40, 141.60, 140.25-141.00, 138.40-138.75, 137.20, 135.35, 133.75, 130.65, and 129.60. The nearest resistance is in the 148.30-148.90 zone, followed by 150.85-151.00, 154.65-155.20, 157.20-157.40, 158.25, 158.75-159.00, 160.20, 160.85, 161.80-162.00, and 162.50.
● No significant macroeconomic data releases regarding the state of the Japanese economy are scheduled for the coming days.

CRYPTOCURRENCIES: Donald Trump – "Master" of the Price


● The main event of recent days in the crypto world was the annual Bitcoin-2024 conference in Nashville (USA). The highlight of this conference was the speech by Donald Trump. The former and possibly future President of the United States promised to fire SEC Chairman Gary Gensler if elected and appoint key regulators who will be friendly to the crypto industry. "From now on, the rules will be written by those who love your industry, not hate it," Trump declared, receiving a standing ovation from the audience.
The politician also intends to end the war on digital assets, turn the US into the cryptocurrency capital of the world, and include the government's existing bitcoins in the national strategic reserve. Trump also stated that "one fine day" bitcoin would surpass gold and silver in market capitalization. Following these promises and forecasts by the presidential candidate, the BTC/USD pair surged, reaching $70,000 on July 29. However, it failed to set a new all-time high.   
● A known supporter of physical gold and a fierce critic of digital gold, financier Peter Schiff believes Trump should have kept his mouth shut. According to Schiff, the Biden administration, out of a desire to harm its competitor, will now sell everything in the government's crypto stash, leaving not a single satoshi. It turns out these are not empty predictions – as reported by Arkham Intelligence, 30,000 BTC out of the 200,000 owned by the US government have already started moving. Against this backdrop, the leading cryptocurrency plunged, reaching a local bottom of $62,210 on the first day of August.
● Summer 2024 has been tough for bitcoin. The crypto market faced significant pressure due to the German government's sale of 50,000 BTC (approximately $3.0 billion) confiscated by the police. Additionally, another 62,000 coins (about $4 billion) were distributed to creditors of the bankrupt crypto exchange Mt.Gox, which collapsed 10 years ago. According to the analytical agency Glassnode, the total pressure for June-July amounted to 147,500 bitcoins (around $10 billion).
It should be noted that the flagship cryptocurrency has honourably withstood the bear attacks. Contributing to its resilience were the launch of exchange-traded spot ETFs, the April halving, and the anticipation of an imminent easing of the Federal Reserve's monetary policy. Long-term holders (LTHs) also supported the prices, not only refraining from selling but continuing to add to their wallets. The Glassnode data clearly shows how recent months' sell-offs by short-term holders (STHs) have been offset by purchases from long-term holders.
Of course, if the Biden administration decides to part with all 200,000 BTC, it will exert new downward pressure on the prices. However, the market will likely cope with this issue, and any price decline is not expected to be very severe or long-lasting.
● Economist and trader Alex Krüger believes that bitcoin is in a super-cycle. According to him, Wall Street and the traditional financial world have fundamentally changed the nature and structure of the digital asset market. As a result, downside volatility will be much more limited, and buyer activity will significantly increase. "Essentially, a super-cycle means the following," explained the expert, "it's not that we no longer have bears or corrections, and we just keep going up. It means that upcoming corrections will be shallow and won't last forever."
"The main driving force behind this change," Krüger continues, "is that Wall Street is here, and ETFs [exchange-traded funds] are now here, which has fundamentally altered the market structure. [...] The share of bitcoin ownership is currently very low in aggregate terms and, of course, in portfolios. The marketing pitch from Wall Street is that this figure should be around 2%." Based on this, the economist believes the super-cycle will continue until this target is reached.
Analyst Daan de Rover, better known on social network X as Crypto Rover, expects the BTC price could exceed $800,000. De Rover bases his forecast on Trump's remarks that bitcoin could surpass gold in market capitalization. If this happens, according to the analyst's calculations, the value of 1 BTC would be exactly $813,054.
● Another speaker at the Nashville conference was MicroStrategy founder Michael Saylor, who announced that bitcoin's price will reach $13 million by 2045. According to his calculations, with the current bitcoin price around $65,000, its market capitalization is $1.3 trillion – just 0.1% of global wealth. With an annual return of approximately 29%, digital gold will reach a market cap of $280 trillion and represent 7% of global wealth by 2045. According to Saylor, this is an average result. If the bullish forecast materializes, the price of 1 BTC will reach $49 million, totalling 22% of global wealth. If the bearish forecast plays out, the figures will be $3 million and 2%, respectively.
The MicroStrategy founder is confident that all physical capital – from stocks and bonds to cars and real estate – is subject to the laws of thermodynamics, including entropy, which is the tendency of energy to disperse over time. "Entropy dilutes the value of physical assets. It sucks capital out of them." According to Saylor, the primary cryptocurrency is an exception to this rule because it "does not exist in the physical world" and has an "infinite lifespan." "Bitcoin is immortal, immutable, and incorporeal," making it "the solution to our economic dilemma," the billionaire stated.
● 2045 is still a long way off. Regarding the near-term horizons, the head and founder of MN Trading, Michaël van de Poppe, believes that "Donald Trump's speech [in Nashville] had a positive impact, thanks to which bitcoin could test its all-time high in the coming weeks." "As long as it stays above $60,000-62,000, we have good prospects for further growth," the expert stated.
Some experts, such as Dan Crypto Traders and Tanaka, predict BTC will rise to $100,000 and ETH to $8,000-10,000. The well-known analyst Plan B forecasted bitcoin's price to reach $140,000. After the flagship cryptocurrency hit $70,000 on July 29, he wrote, "I expect bitcoin's price to double from today's value within 3-5 months." Plan B explained his prediction by stating that after the April halving, "miner revenues have bottomed out, meaning less profitable miners have stopped. Only the most profitable ones (with the latest equipment and lowest electricity costs) have survived." "The battle is over, the difficulty will continue to rise. And investors will take over pricing," Plan B stated.
● As of the evening of Friday, August 2, the BTC/USD pair is trading at $62,400. The total market capitalization of the crypto market is $2.22 trillion (down from $2.42 trillion a week ago). The Crypto Fear & Greed Index has dropped from 68 to 57 points over the past 7 days but remains in the Greed zone.


NordFX Analytical Group
 

Notice: These materials are not investment recommendations or guidelines for working in financial markets and are intended for informational purposes only. Trading in financial markets is risky and can result in a complete loss of deposited funds.

Posted by: Stan NordFX
« on: August 04, 2024, 02:49:10 PM »

Forex and Cryptocurrency Forecast for August 05 – 09, 2024


EUR/USD: What the ECB and Fed Will Do

● There was a significant amount of news last week, so we will highlight and analyse only the most important ones.
Germany set the tone for European statistics, with consumer inflation rising instead of falling. According to the initial estimate, the Consumer Price Index (CPI) increased year-on-year from 2.2% to 2.3%, and month-on-month from 0.1% to 0.3%.
The following day, similar figures for the Eurozone as a whole were released. Preliminary data showed that CPI in July rose to 2.6% (y/y) compared to 2.5% in June, whereas the markets had expected a decline to 2.4%. Alarmingly, core inflation (Core CPI), which excludes volatile components such as food and energy prices, remained at 2.9% for the third consecutive month, against a forecast of 2.8%.
Some economic media outlets described this as an "unpleasant surprise" for the European Central Bank. It was anticipated that the ECB, at its meeting on 12 September, following the first rate cut in June, would take a second step and lower it by another 25 basis points to 4.00%. However, given the unexpected rise in CPI, this task becomes more challenging. Bloomberg currently forecasts that inflation will decrease to 2.2% in August. But, considering the current trend, this may not happen. It is quite possible that if the figure does not decline, the ECB may pause and keep the rate unchanged. This is further supported by the preliminary estimate of Eurozone GDP, which grew from 0.4% to 0.6% (y/y) in Q2. This indicates that the European economy is capable of coping with the regulator's fairly tight monetary policy.
● Another significant event of the week was the meeting of the Federal Open Market Committee (FOMC) of the US Federal Reserve on 30-31 July. It was decided to keep the key rate unchanged at 5.50%, where it has been since July 2023.
In the accompanying comments and Jerome Powell's speech, it was noted that inflation has decreased over the past year and, despite progress towards the 2.0% target, it remains somewhat elevated. It was also stated that economic activity continues to grow at a steady pace, with job growth slowing and the unemployment rate, though increased, remaining low. (The ADP employment report for the US, also released on 31 July, was disappointing, showing a decline from 155K to 122K).
CME derivatives estimate the probability of three Fed rate cuts by the end of the year at 74%. However, considering the cautious approach of the US central bank to economic regulation and its aim to maintain a balance between economic growth, the labour market, and reducing inflationary pressure, the Fed may limit itself to just two or even one act of monetary easing this year. The next Fed meeting will take place on 18 September and will be accompanied by an updated medium-term economic forecast, which will shed light on many issues concerning the market.
● The dollar's position could have been strengthened by key business activity data and US labour market figures released on 1 and 2 August, respectively. However, the PMI in the manufacturing sector showed a decline from 51.6 points to 49.6, falling below the 50.0 threshold that separates growth from contraction. Additionally, according to the report from the US Bureau of Labor Statistics (BLS), the number of non-farm payrolls (NFP) in the country increased by only 114K in July, which is lower than both the June figure of 179K and the forecast of 176K. Other data in the report indicated that the unemployment rate rose from 4.1% to 4.3%.
● After the publication of this data, Bloomberg reported that the likelihood of a 50 basis points rate hike in September increased to 90%. Consequently, the EUR/USD pair soared to 1.0926, then finished the working week at 1.0910.
As of the evening of 2 August, all 100% of surveyed analysts consider this rise in the pair to be temporary and expect the dollar to regain its positions soon, with the pair heading south. In technical analysis, 100% of trend indicators on D1 hold the opposite view, pointing north. Among oscillators, 75% point north, while the remaining 25% look south. The nearest support for the pair is located in the 1.0825 zone, followed by 1.0775-1.0805, 1.0725, 1.0665-1.0680, 1.0600-1.0620, 1.0565, 1.0495-1.0515, 1.0450, and 1.0370. Resistance zones are found around 1.0950-1.0980, 1.1010, 1.1050-1.1065, 1.1140-1.1150, and 1.1240-1.1275.
● In the upcoming week's calendar, Monday, 5 August, is notable for the release of the US services sector PMI. The following day, data on retail sales volumes in the Eurozone will be released. On Thursday, 8 August, the traditional statistics on the number of initial jobless claims in the United States will be published. At the very end of the working week, on Friday, 9 August, we will learn the revised consumer inflation (CPI) data for Germany, the main engine of the European economy.


GBP/USD: BoE Doves vs. Hawks, Score 5:4


● After the US Federal Reserve meeting, the market's attention shifted to the Bank of England (BoE) meeting on Thursday, 1 August. The interest rate on the pound had been at a 16-year high of 5.25% since August 2023. Now, for the first time in over four years, the British central bank lowered it by 25 basis points to 5.0%. The decision was made with a narrow margin – five members of the Monetary Policy Committee (MPC) voted for the reduction, while four voted to keep the rate unchanged. It should be noted that this outcome generally matched forecasts. The markets had estimated the probability of a rate cut at just 61%, despite the country's inflation being at the target level of 2.0% for the past two months.
As noted, this move was challenging for the regulator, as several Committee members expressed concerns about rising wages and persistent inflation in the services sector. Former Prime Minister Rishi Sunak welcomed the BoE's decision as "good news for homeowners" and a sign that the Labour Party had "inherited a strong economy." However, he also expressed concern that wage increases in the public sector could jeopardise further rate cuts.
● Let us quote some key points from the Bank of England's statement following the meeting. The regulator significantly revised the country's GDP growth forecast for 2024 to +1.25% (May forecast: 0.5%), with expected growth of +1.0% in 2025 and +1.25% in 2026. At the same time, the BoE anticipates "slackness as GDP slows and unemployment rises." According to the Bank of England's forecast, the unemployment rate will be 4.4% in Q4 2024, 4.7% in Q4 2025, and the same in Q4 2026.
Regarding consumer inflation, the CPI is expected to rise to approximately 2.75% in the second half of 2024. However, over the next three years, the Consumer Price Index is expected to fall to 1.5%, based on market interest rates. The BoE forecasts the interest rate at 4.9% in Q4 2024, 4.1% in Q4 2025, and 3.7% in Q4 2026. It is also stated that the "MPC will ensure that the bank rate remains sufficiently restrictive for as long as necessary until the risks of inflation returning are mitigated." Additionally, the statement includes the obligatory phrase that the scope of monetary policy will be determined and adjusted at each meeting.
● The market reacted to the rate cut to 5.0% with a weakening of the British currency and a drop in the GBP/USD pair to the level of 1.2706. However, the pound was subsequently supported by weak US labour market statistics, leading to a sharp upward movement of the pair towards the end of the working week, ultimately closing at 1.2804.
● All 100% of experts, when giving forecasts for the coming days, expect the dollar to strengthen and the pair to decline, just as with EUR/USD. As for the technical analysis on D1, 50% of trend indicators are green, while the other 50% are red. Among oscillators, only 10% are on the green side, another 10% are neutral grey, and 80% are on the red side, with 15% of them signalling oversold conditions.
In case the pair falls, support levels and zones are expected at 1.2700-1.2750, then 1.2680, 1.2615-1.2625, 1.2540, 1.2445-1.2465, 1.2405, and 1.2300-1.2330. If the pair rises, it will encounter resistance at levels 1.2855-1.2865, then 1.2925-1.2940, 1.3000-1.3040, and 1.3100-1.3140.
● No significant macroeconomic data publications regarding the state of the UK economy are expected in the coming days.

Posted by: Stan NordFX
« on: July 30, 2024, 04:27:43 PM »

CryptoNews of the Week


– One of the speakers at the annual Bitcoin-2024 conference in Nashville (USA) was the United States presidential candidate Donald Trump. He promised to dismiss the Chairman of the Securities and Exchange Commission (SEC), Gary Gensler, if elected, and to appoint regulators who are friendly to the crypto industry to key positions. "From now on, the rules will be written by those who love your industry, not hate it," Trump declared, receiving a thunderous applause from the audience.
The politician also intends to end the war on digital assets, transform the USA into the world's cryptocurrency capital, and establish a strategic national bitcoin reserve. Trump also stated that "one day," bitcoin will surpass gold and silver in market capitalisation.
Trump's Republican colleague, Senator Cynthia Lummis, went even further. She has prepared a bill requiring the US government to create a reserve of 1 million bitcoins within 5 years. "The goal is to recognise bitcoin as a durable asset. This is digital gold," Lummis stated.

– The head and founder of MN Trading, Michael van de Poppe, commented: "Bitcoin has once again reached the $70,000 mark. Donald Trump's speech had a positive impact, which may allow bitcoin to test its all-time high in the coming weeks. As long as it stays above $60,000-62,000, we have good prospects for further growth."
Some experts, such as Dan Crypto Traders and Tanaka, predict that BTC could rise to $100,000, and ETH to $8,000-10,000, while analyst Daan de Rover, known on the social media platform X as Crypto Rover, expects the price of BTC to exceed $800,000. De Rover bases his forecast on Trump's remarks that bitcoin could surpass gold in capitalisation. According to the analyst's calculations, if this happens, the value of one BTC would be exactly $813,054.

– Former NSA and CIA special agent, Edward Snowden, who has found asylum in Russia, also spoke at Bitcoin-2024 via internet connection. During his speech, he urged American voters to remain critical and not to trust politicians blindly. He mentioned that political figures and parties have their own agendas and are simply trying to garner the support of the bitcoin community. Therefore, it is important to "cast a vote, but not join a cult."
Snowden also expressed serious concerns about privacy issues related to the first cryptocurrency. He reminded the audience that bitcoin transactions are not entirely anonymous, despite common misconceptions, as they can be traced back to specific individuals. "They know what you read, what you buy, who you send [bitcoin] to, whom you support politically, where your donations go: this information is available to them. They can draw conclusions about your thinking and beliefs," Snowden stated.

– Another speaker at the conference in Nashville was the founder of MicroStrategy, Michael Saylor, who announced that bitcoin prices would reach $13 million by 2045. According to his calculations, with the current bitcoin price at around $65,000, its market capitalisation is approximately $1.3 trillion, only 0.1% of the world's wealth. With an annual return of about 29%, digital gold could reach $280 trillion and 7% by 2045.
Saylor noted that this is an average projection. If a bullish scenario unfolds, the price of 1 BTC could reach $49 million, accounting for 22% of global wealth. Conversely, if a bearish scenario occurs, the figures would be $3 million and 2%, respectively.
The MicroStrategy founder is confident that all physical capital, from stocks and bonds to cars and real estate, obeys the laws of thermodynamics, including entropy, the tendency for energy to dissipate over time. "Entropy dilutes the value of physical assets. It drains capital from them." According to Saylor, the main cryptocurrency is an exception to this rule because it "does not exist in the physical world" and possesses "infinite lifespan." "Bitcoin is immortal, immutable, and intangible," he stated, calling it "the solution to our economic dilemma."

– The University of Wyoming (USA) has established the UW Bitcoin Research Institute, as announced by the university's director, Bradley Rettler. The announcement highlighted that many studies on bitcoin are of poor quality because they are conducted by individuals who do not fully understand the asset. "Some researchers are not even aware of the supply limit: perhaps the most defining characteristic of bitcoin. Others make erroneous assumptions about the demographics of its users. [...] Such mistakes find their way into journalism and politics," Rettler wrote, adding that the institute aims to produce high-quality publications.

– Scammers have published a fake video on YouTube, appearing to show Elon Musk speaking at the Bitcoin-2024 conference and promising a free cryptocurrency giveaway. The deepfake of the Tesla and SpaceX CEO was created using artificial intelligence. In the video, users are instructed to send any amount of BTC, ETH, DOGE, or stablecoins like USDT to a specified address. In return, the scammers promise to double the sent amount.
It is reported that over 70,000 people have viewed this "broadcast," resulting in several tens of thousands of dollars being "donated" to the scammers. It is worth noting that theft using deepfakes of Musk has occurred repeatedly. In November 2023, perpetrators promoted another cryptocurrency giveaway in his name, promising a 200% bonus on the amount invested.

– The well-known analyst known as Plan B has forecasted that the price of bitcoin will rise to $140,000. After the flagship cryptocurrency reached $70,000 on 29 July, he wrote: "I expect the price of bitcoin to double from its current value within 3-5 months."
Plan B explained his prediction by noting that following the halving in April, "miner revenue has hit rock bottom, meaning less profitable miners have stopped operations. Only the most profitable ones (with the latest equipment and the lowest electricity costs) have survived." He added, "The battle is over; difficulty will continue to rise. Investors will take over the pricing," indicating that the market dynamics will increasingly be influenced by investor sentiment and actions.

– Economist and trader Alex Krüger believes that bitcoin is in a super cycle. According to him, Wall Street and the traditional financial world have fundamentally changed the structure of the digital asset market. Due to the new nature of the crypto market, downward volatility will be much more limited, and buying activity will significantly increase due to pressure from Wall Street to expand access to digital assets.
"The essence of the super cycle," explained Krüger, "is not that we no longer have bear markets or corrections and are just going up. It means that upcoming corrections will be shallow, and this won't last forever."
"The main driving force behind this change," Krüger continues, "is that Wall Street is now involved, and ETFs [exchange-traded funds] are here, which has radically altered the market structure. [...] The proportion of bitcoin ownership is currently very low in aggregate terms and certainly within portfolios. Wall Street's marketing push suggests that this figure should be around 2%." Based on this, the economist believes the super cycle will continue until this target is reached.


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

#eurusd #gbpusd #usdjpy #btcusd #ethusd #ltcusd #xrpusd #forex #forex_example #signals #cryptocurrencies #bitcoin #stock_market
Posted by: Stan NordFX
« on: July 28, 2024, 08:49:20 AM »

BITCOIN: Bullish Flag or Bearish Den?

Experts at JPMorgan note that the current bitcoin price significantly exceeds its mining cost (~$43,000) and appears overvalued compared to its "fair" price adjusted for volatility (~$53,000). According to JPMorgan, the substantial upward deviation from this fair price "limits the potential for long-term growth." However, they have forecasted positive market dynamics in August, attributed to the diminishing negative impact of the sale of coins confiscated by German authorities and the distribution of coins to clients of Gemini and Mt.Gox.

At the beginning of the year, Nigel Green, CEO of deVere Group, predicted that bitcoin would soon rise to $60,000, and his forecast proved accurate. Now, he believes that the demand for the leading cryptocurrency will continue to grow, potentially reaching $100,000 by the end of the year. "Bitcoin is likely the best asset in terms of growth potential by the end of the year," the financier writes. "Many are expecting it to reach $100,000 by year-end. Is this possible? Quite possibly, because the supply of bitcoin is limited. This means that if demand for BTC increases, so will the price. Bitcoin is not the same as the US dollar, where the Federal Reserve can simply print more."

Green also mentioned that the potential election of Donald Trump as US President could positively impact bitcoin's price.

Analyst and trader known by the nickname RLinda identifies the bullish flag pattern as a key indicator of potential upward movement for BTC. This formation, observed on both daily and weekly charts, is characterized by a sharp upward move followed by a phase of consolidation. RLinda anticipates that a breakout from this consolidation will continue the previous uptrend, potentially targeting around $90,000.

Support and resistance levels play a crucial role in this analysis. Key support levels at $59,300 and $63,800 have shown strong buying interest and stability. The high trading volumes at these levels reinforce the expectation that they will hold during any potential pullbacks. Critical resistance levels are noted at $67,250 and $71,754. Breaking through these resistance points is necessary for BTC to advance towards higher targets. The all-time high (ATH) at $73,743 is particularly significant; a successful breakout above this level could trigger further bullish momentum.

Peter Brandt, the head of Factor LLC, has entered into a debate with RLinda. The legendary trader expresses skepticism that bitcoin will surpass $71,000 and set a new price record. "I try to be as honest as possible in identifying patterns. The current stagnation in the bitcoin market should not be called a flag (it has lasted too long); it represents a descending channel. Anything that lasts longer than 4-6 weeks is not a flag," Brandt wrote.

According to some analysts, the flag pattern observed on the BTC/USD chart suggests an impending bullish rally. However, the descending channel that Brandt refers to indicates a potential decline in the coin's price. This pattern is characterized by lower highs and lows, established after BTC reached its all-time high in March. Based on the chart published by Brandt, he believes that bitcoin's price will not break the resistance line, which lies around $71,000. In this scenario, a bearish trend could begin, with the digital gold potentially dropping to $51,000. The descending channel is slightly widening, suggesting that price volatility may increase over time.

On Thursday, 25 July, the BTC/USD pair dropped to the support zone of $63,200-63,800 and encountered additional support from the 200-day moving average (DMA200). Following this, it reversed direction and started to move upwards. As of the evening of Friday, 26 July, it has nearly recovered its weekly losses and is trading at around $67,500. The total market capitalization of the crypto market has remained relatively stable at $2.42 trillion, compared to $2.43 trillion a week ago. The Bitcoin Fear & Greed Index has risen from 60 to 68 points over the past seven days, remaining in the Greed zone.

ETHEREUM: ETH-ETF – Disappointment Instead of Hope

On 23 July, the long-awaited spot ETFs for Ethereum were launched in the US, providing investors with access to the altcoin through traditional brokerage platforms. On the first day of trading, the turnover reached $1.1 billion, which was 24.4% of the turnover of BTC-ETFs, aligning with optimistic forecasts. However, trading volume isn't the only metric to consider. The net inflow of investments into ETH was significantly lower than that into bitcoin, with $107 million compared to $655 million, respectively, showing a sixfold difference.

The situation worsened as the initial enthusiasm for Ethereum ETFs quickly faded, causing ETH/USD prices to decline sharply, despite the trading volume surpassing $1.0 billion again. The decline was triggered by a significant outflow of funds from a single issuer, Grayscale's Ethereum Trust ETF (ETHE). According to SoSoValue, Grayscale's ETHE lost $484 million on the first trading day and nearly $327 million on the second day, totalling $811 million. In contrast, most other spot ETH-ETFs, including ETHA from BlackRock, ETHW from Bitwise, and FETH from Fidelity, showed growth in inflows. However, these inflows were insufficient to offset the losses from Grayscale's ETHE.

This situation mirrors the experience with Grayscale's GBTC fund in the early weeks following the launch of the bitcoin ETF. Both Grayscale funds were converted from trust to spot ETFs. If the outflow rate from ETHE matches that of GBTC, it could negatively impact all newly established ETH-ETFs.

Moreover, macroeconomic factors contributing to the (hopefully temporary) stock market downturn, the ongoing situation with Mt.Gox, and the lack of staking in ETFs, which deprives the altcoin of the advantage of passive income, also play a role. Additionally, Ethereum's practical applications are increasingly being outperformed by competitors such as Tron and Solana. Experts also remind us of the upcoming US elections, where statements and actions by key political figures could create new opportunities and threats for the market.

Analysts at cryptocurrency market maker Wintermute believe that demand for Ethereum will fall short of expectations, predicting investments in these derivatives will range between $3.2 billion and $4.0 billion in the first 12 months after trading begins. As a result, they expect Ethereum's price to rise to a maximum of $4,300 in 2024.

In contrast, researchers from ASXN offer a more optimistic forecast. They predict that the monthly capital inflow into Ethereum ETFs will range from $800 million to $1.2 billion, implying a total investment of at least $6-7 billion in these funds by the end of the year, significantly exceeding Wintermute's estimate.

Adding to the positive outlook, experts from QCP Capital noted that following the launch of similar BTC-ETFs, bitcoin's price initially fell to $38,000 but then surged to new all-time highs within two months, posting a 90% increase. (However, it is worth noting that the BTC halving may have played a significant role at that time.) The dynamics of Ethereum will become clearer in the near future. Currently, ETH/USD recorded a weekly low of $3,089 and, as of the evening of Friday, 26 July, is trading around $3,200.


NordFX Analytical Group
 

Notice: These materials are not investment recommendations or guidelines for working in financial markets and are intended for informational purposes only. Trading in financial markets is risky and can result in a complete loss of deposited funds.

#eurusd #gbpusd #usdjpy #btcusd #ethusd #ltcusd #xrpusd #forex #forex_example #signals #cryptocurrencies #bitcoin #stock_market
Posted by: Stan NordFX
« on: July 28, 2024, 08:42:58 AM »

Forex and Cryptocurrency Forecast for July 29 – August 02, 2024


EUR/USD: Europe is Not Doing Very Well, the US is Not Doing Very Badly

The main events in the currency market will unfold in the upcoming week, with meetings scheduled for Wednesday, 31 July, when the Bank of Japan and the Federal Reserve's FOMC (Federal Open Market Committee) will convene, followed by the Bank of England's meeting on Thursday, 01 August. Even if interest rates and other monetary policy parameters remain unchanged in all three cases, investors will closely listen to the statements made by regulators at the subsequent press conferences, trying to predict their next steps. Therefore, in anticipation of these events, we have focused more on the cryptocurrency market in this review, while still covering Forex.

In early July, one of our review headlines read: "The US is Not Doing Very Well, Europe is Not Doing Very Badly." This time, we have reversed the positions of the US and Europe, prompted by the macroeconomic statistics released last week.

Vladimir Lenin, the leader of the Communists who led the 1917 revolution in Russia, stated in one of his works that "politics is the concentrated expression of economics." In our view, the reverse is also true: not only does politics depend on economics, but economics also depends on politics. This is exemplified by the scales, with the current monetary policy of the Federal Reserve on one side, and the concerning prospects of Donald Trump’s return to the White House on the other.

The restrictive tariffs that Trump aims to implement in the trade war with Beijing will create new problems for the Chinese economy, which is already struggling. This, in turn, will negatively impact Europe, particularly Germany, which accounts for half of the EU's exports to China. Within just three months, Germany's business activity indicators have shifted from slowing growth to abandoning optimism about economic prospects. The recent Business Activity Index (PPI) values for Germany, released on Wednesday, 24 July, were all in the red zone, falling below both previous figures and forecasts. Both the manufacturing PPI and the composite PPI are below 50 points, indicating regression. These German indices have dragged down overall European metrics, which have also turned worryingly red. While the US economy is merely slowing down slightly, the recovery of the Eurozone risks being reversed.

The preliminary data on business activity in the United States, released on the same day, 24 July, showed that the PPI in the manufacturing sector decreased from 51.6 to 49.5 points, disappointing the market, which had expected a rise to 51.7. However, the same index in the services sector increased to 56.0, surpassing both the previous value of 55.3 and the forecast of 54.4.

The Composite Purchasing Managers' Index (PMI) rose to its highest level since April 2022. The real surprise, however, came from the US GDP data released on Thursday, 25 July. According to the Bureau of Economic Analysis' initial estimate, the Gross Domestic Product in Q2 2024 grew by 2.8% on an annualised basis. This followed a 1.4% growth in Q1, exceeded the market expectations of 2.0%, and confirmed the belief that the US economy will not fall into recession. Further details in the report showed that the core Personal Consumption Expenditures (PCE) price index increased by 2.9% on a quarterly basis, which was lower than the 3.7% growth recorded in the previous quarter, though slightly above the forecast of 2.7%.

The unrest that began on 17 July in the stock market (detailed in the cryptocurrency review) increased demand for the dollar as a safe-haven currency, strengthening it by more than 100 points. However, for the last three days of the trading week, EUR/USD moved within a narrow range of 1.0825-1.0870 in anticipation of next week's events, with the final note sounding at the 1.0855 mark.

As of the evening of 26 July, analysts' forecasts for the near future are as follows: 40% predict a rise in the pair, while 60% expect a decline. In technical analysis, 65% of trend indicators on the D1 chart remain in favour of the euro, while 35% support the dollar. Among oscillators, there is considerable confusion: 25% are in green, 35% are neutral-grey, and 40% are red, with a quarter of them signalling oversold conditions. The nearest support levels for the pair are at 1.0825, followed by 1.0790-1.0805, 1.0725, 1.0665-1.0680, 1.0600-1.0620, 1.0565, 1.0495-1.0515, and 1.0450, 1.0370. Resistance zones are located at 1.0870, 1.0890-1.0910, 1.0945, 1.0980-1.1010, 1.1050, and 1.1100-1.1140.

The upcoming week, as mentioned, promises to be very eventful, interesting, and volatile. On Monday, 29 July, retail sales volumes will be released, followed by preliminary data on GDP and consumer inflation (CPI) in Germany on 30 July. On the same day, GDP data for the Eurozone as a whole will also be published.

The key day will be Wednesday, 31 July. On this day, consumer inflation (CPI) data for the Eurozone will be released, followed by the FOMC meeting of the Federal Reserve. It is expected that the regulator will again leave the key interest rate unchanged at 5.50%. Therefore, market participants will be particularly interested in the FOMC's Economic Projections Summary and the subsequent press conference of the Fed leadership. The following day, Thursday, 01 August, final data on business activity (PPI) in various sectors of the US economy will be published.

Additionally, throughout the week (30, 31 July, 01 and 02 August), there will be a significant influx of labour market statistics from the United States, including key indicators such as the unemployment rate and the number of new non-farm jobs created (NFP).

USD/JPY: "The Most Intriguing Pair in Forex"


While the dollar has recently been strengthening against the euro and the pound, the situation with the Japanese yen has been quite the opposite. This wasn't just a retreat of the US currency, but rather a panicked flight. On Friday, 19 July, strategists from ING, a major Dutch banking group, described the USD/JPY pair as a "bundle of surprises," retreating to the 155/156 range. A week later, they referred to it as "the most intriguing pair in Forex." This time, the minimum was recorded at 151.93, in the key zone of 151.80-152.00, which coincides with the highs of October 2022 and 2023.

The yen began its resurgence like a Phoenix on 11 and 12 July when the Bank of Japan (BoJ), to support the national currency, purchased an estimated ¥6.0 trillion. On 17 July, USD/JPY came under pressure again due to another currency intervention. Analysts, examining BoJ's accounts, estimated the size of this intervention at approximately ¥3.5 trillion.

Then came a new surge. It is worth noting that on 03 July, USD/JPY reached a high of 161.94, a level not seen in 38 years. Now, in just three weeks, it plummeted by 1,000 (!) points, triggering widespread liquidation of positions across all markets, affecting everything from the yuan to various asset classes, including Japanese stocks, gold, and cryptocurrencies.

On Thursday, 25 July, the yen's exchange rate against the dollar rose to its highest level in over two months. This time, the cause seems to be not the currency interventions of the Japanese central bank but the expectation that the interest rate gap between Japan and the US will narrow on 31 July. Swap markets are currently pricing in a 75% probability of a BoJ rate hike on Wednesday, compared to 44% earlier in the week. Moreover, economists at ING believe the BoJ might raise the rate by an unprecedented 15 basis points (bps) for Japan.

They note that "Tokyo's consumer price data showed that core inflation fell to 2.2% year-on-year in July (from 2.3% in June), but the BoJ's preferred measure, core inflation excluding fresh food, rose to 2.2% in July from 2.1% in June." Based on this, ING suggests a 50% chance that inflationary pressure in the services sector will continue to rise, which could lead the BoJ to increase the rate by 15 bps at the upcoming meeting and simultaneously reduce its bond purchase program.

If something like this occurs, macro strategists at State Street Global Markets believe that the resurgence of the Japanese currency could lead to a significant adjustment in global trading strategies in the foreign exchange market, particularly in carry trades. Carry trades involve borrowing in low-yielding currencies, such as the yen, to invest in higher-yielding currencies.

USD/JPY ended the past trading week at 153.75. According to analysts at State Street Global Markets, "the yen rally may continue ahead of the Bank of Japan meeting next week." As for the median forecast by experts for the near term, it is as follows: 20% expect the pair to move south, further strengthening the yen, 30% predict a rebound north, and the remaining 50% have taken a neutral stance. Among oscillators on the D1 chart, 90% favour the Japanese currency, with 20% indicating the pair is in the oversold zone, and the remaining 10% are neutral. Trend indicators show 85% favouring the strengthening of the yen, while 15% support the dollar. The nearest support level is around 151.80-152.00, followed by 149.20-149.50 and 146.50-147.25. The nearest resistance is located in the 154.70-155.20 range, followed by 157.20-157.40, 158.25, 158.75-159.00, 160.20, 160.85, 161.80-162.00, and 162.50.

Apart from the Bank of Japan meeting on Wednesday, 31 July, no other significant events, including the release of important macroeconomic statistics concerning the state of the Japanese economy, are scheduled for the coming days.

CRYPTOCURRENCIES: Politics Engages with the Digital Market

As early as the mid-19th century, French writer Charles de Montalembert warned, "You may not be interested in politics, but politics is interested in you." This sentiment is vividly illustrated by recent developments in the market for risk assets, including cryptocurrencies.

The past week was disappointing for investors, although the troubles began earlier, on Wednesday, 17 July. On that day, the shares of some of the world's largest semiconductor manufacturers plummeted, causing the stock market to reach its worst condition in several months. This reaction was due to the tensions in US-China trade relations and comments from former (and possibly future) President Donald Trump regarding Taiwan. Shares of several semiconductor companies sharply declined under the weight of geopolitical tension, with some losing over 8% and a giant like Nvidia dropping by 6%. As a result, the S&P 500 Index fell by 1.39%, marking its largest drop since late April, and the tech-heavy Nasdaq fell by 2.77%, its worst performance since the end of 2022.

However, the troubles for the stock market did not end there. Exactly one week later, on Wednesday, 24 July, the US stock market closed with even greater losses. The S&P 500 and Nasdaq indices dropped by 3.6% and 2.3%, respectively, after Tesla's Q2 results revealed a profit decline of more than 40% compared to the previous year. Tesla's shares fell by more than 12% in just one day. Alongside Tesla, shares of Alphabet, Visa, Microsoft, Nvidia, and other technology companies also declined. The seven largest IT giants lost $770 billion in market capitalization in one day. This turmoil occurred amidst ongoing issues with Microsoft's global Windows system outage, which affected many sectors.

Naturally, such market dynamics impacted the riskiest of assets—cryptocurrencies. It's worth noting that the prices of both bitcoin and ethereum appeared quite strong at the start of the past week. However, they eventually succumbed to the pressure and also declined. In addition to global geopolitical factors, cryptocurrencies had their own specific reasons for this downturn.

The market was shocked when US President Joe Biden announced on Sunday, 22 July, that he would not seek re-election. This decision sparked a debate about how it might impact the digital assets market. Many analysts and influencers argue that only a victory by Donald Trump could provide a strong bullish impulse to the industry. This view is shared by experts at JPMorgan. Analyst Josh Gilbert stated, "The longer we see Trump leading in the election odds, the more valuable crypto assets will become after his victory." He further explained, "It's hard to imagine Kamala Harris or another Democratic candidate overthrowing Trump's lead in the polls just three months before the end of this election race.".

Trump's Republican ally, Senator Cynthia Lummis, suggested backing the dollar with bitcoin to improve the country's financial system. A similar approach was proposed by Markus Thielen, founder of 10x Research. He believes that Trump could announce at the upcoming Bitcoin-2024 conference that he plans to make bitcoin a strategic reserve asset for the US government. Currently, the government holds only 212,800 BTC, worth approximately $15 billion, compared to its gold reserves of around $600 billion. If the government were to double its bitcoin holdings, it would have an impact on the price nearly equivalent to the net inflow effect on spot BTC-ETFs since the beginning of the year.

Bloomberg reports that bitcoin miners and crypto companies, previously hindered from going public in the US, could benefit under a second Donald Trump presidency. The agency cites the opinion of Christian Catalini, founder of the Crypto-economics Lab at the Massachusetts Institute of Technology. He believes that "almost everyone in America will benefit if they choose to operate under new rules after they are implemented."

In June, Trump met with miners and expressed his desire for all remaining bitcoin to be "made in the USA." Following Joe Biden's poor performance in debates and an unsuccessful assassination attempt on Trump, the price of bitcoin rose by 10%, while shares of the two largest public miners, Marathon Digital and Riot Platforms, increased by 30%. Cipher Mining's stock prices gained nearly 50%. For the first time since the crypto market crash in 2022, companies in the sector are planning initial public offerings (IPOs). Stablecoin issuer USDC, Circle, filed for an IPO in January with a valuation of $33 billion. Crypto miner Northern Data, which is actively expanding its AI computing division, is considering listing in the US, with a potential valuation of $16 billion. Kraken, the second-largest exchange in the country, is also preparing to go public.

However, all of this is speculative and dependent on future developments. Josh Gilbert, while optimistic about Trump's influence on the cryptocurrency market, cautions that "a lot can happen between now and the election, so nothing is certain." Gary Black, Managing Partner of The Future Fund, echoed this sentiment, warning his 433,000 followers on X that a Trump victory is far from assured. "Those who think Trump/Vance will secure an easy win are getting ahead of themselves," Black wrote.

Arthur Hayes, the former CEO of the crypto exchange BitMEX, also expressed skepticism. He believes that voters who support cryptocurrency may lose influence over politicians once the presidential election is over in November 2024. If a regulatory framework for digital assets is not established before the election, the elected president and their administration may shift their focus to other pressing issues. Geopolitical concerns could overshadow discussions about cryptocurrencies, with the president's attention potentially diverted to international conflicts, particularly involving Iran and Russia. Hayes argues, "The capital needed to support laws promoting cryptocurrency development could be redirected towards addressing more urgent foreign policy issues. Therefore, regulatory clarity should be sought now, before the political landscape changes post-election."

continued below...
Posted by: Stan NordFX
« on: July 24, 2024, 02:07:06 PM »

CryptoNews of the Week


– The rise in cryptocurrency prices is likely to be tactical and is not expected to mark the beginning of a prolonged upward trend, according to JPMorgan. The bank's experts noted that the current price of bitcoin significantly exceeds its mining cost ($43,000) and, compared to gold, appears overvalued relative to the "fair" price adjusted for volatility ($53,000). A significant upward deviation of prices from this latter parameter "limits the potential for long-term growth."
Analysts forecasted positive market dynamics in August, owing to the reduced impact of the sale of coins confiscated by German police and the distribution of coins among clients of Gemini and Mt.Gox. In this case, the price of bitcoin is expected to align with the trend in gold futures, where a recent rise has been observed. Experts also noted that both assets would benefit in the event of Donald Trump's victory in the upcoming U.S. presidential election.

– Bloomberg also reports that bitcoin miners and crypto companies, previously hindered from going public in the U.S., would benefit from a second term of Donald Trump’s presidency. The agency cites Christian Catalini, founder of the Cryptoeconomics Lab at the Massachusetts Institute of Technology, who stated, "Almost everyone in America would benefit if they chose to operate under the new rules once implemented."
In June, Trump met with miners, stating that bitcoin mining should become the "last line of defense against CBDCs." He added that he wants all remaining bitcoin to be "made in the USA."
Following Joe Biden's poor performance in the debates and a failed assassination attempt on Trump, the price of bitcoin rose by 10%, and shares of the two largest public miners, Marathon Digital and Riot Platforms, increased by 30%. Cipher Mining’s shares surged by nearly 50%. For the first time since the crypto market crash in 2022, industry companies are planning initial public offerings. USDC stablecoin issuer Circle filed for an IPO in January with a valuation of $33 billion. Crypto miner Northern Data, which is actively developing AI computing capabilities, is considering a U.S. listing, with a potential valuation of $16 billion. Kraken, the country's second-largest exchange, is also preparing for a stock market listing.

– U.S. President Joe Biden shocked the markets on Sunday, 22 July, when he announced his withdrawal from the presidential race. Some analysts suggested that this move could benefit bitcoin and other crypto assets, while others warned that investors should temper their excitement.
Analyst Josh Gilbert stated that Trump's increased chances of re-election represent "a huge boost for the asset class": "The longer we see Trump leading in the election odds, the more crypto assets will be worth following his victory." Gilbert explained, "It is hard to imagine Kamala Harris or another Democratic candidate overthrowing Trump's lead in the polls just three months before the end of this electoral race," but added, "a lot can happen during this period, so nothing can be ruled out."
Gary Black, managing partner of The Future Fund, shares a similar view. He warned his 433,000 followers on X that a Trump presidency victory is still far from certain. "Those who think that Trump/Vance will secure a decisive victory are getting ahead of themselves," Black wrote.

– Markus Thielen, the founder of 10x Research, suggested that the crypto-friendly Donald Trump might announce at the upcoming Bitcoin-2024 conference that he will make bitcoin a strategic reserve asset for the U.S. government. Currently, the government holds only 212,800 BTC, worth approximately $15 billion, whereas its gold reserves are around $600 billion. If the government were to double its bitcoin holdings, this would be "almost equivalent" to the price impact of the net inflow into bitcoin exchange-traded funds (ETFs) since the beginning of the year.

– U.S. Senator and Republican Party member Cynthia Lummis highlighted that during a recent major system outage at Microsoft, caused by a software update error from CrowdStrike, the bitcoin network remained unaffected, while other industries experienced complete chaos. The bitcoin blockchain and associated cryptocurrency services continued to operate without disruptions. The senator quoted the Latin phrase "Vires in Numeris," meaning "strength in numbers," underscoring that the primary cryptocurrency's network employs complex mathematical algorithms to ensure security and stable operation even in unpredictable technical circumstances.
Senator Lummis recently proposed backing the U.S. dollar with bitcoin to improve the country's financial system. She also voiced opposition to the introduction of a digital dollar, fearing it could compromise citizens' privacy..

– Arthur Hayes, the former CEO of the cryptocurrency exchange BitMEX, warned that voters supporting cryptocurrencies may lose their influence on politicians after the presidential elections in November 2024. He suggested that if a regulatory framework for digital assets is not established before the elections, the newly elected president and their administration are likely to shift focus to other pressing issues. Geopolitics may overshadow discussions about cryptocurrencies, with the president's attention potentially diverted to international conflicts, particularly those involving Iran and Russia.
"The capital required to support laws aimed at developing cryptocurrencies may be redirected to addressing more urgent foreign policy issues. Therefore, regulatory clarity must be achieved now, before the political landscape changes after the elections," Hayes stated.

– At the beginning of the year, Nigel Green, CEO of deVere Group, predicted a rapid rise in bitcoin to $60,000, which proved accurate. He now believes that the demand for the leading cryptocurrency will continue to grow, and its price could reach $100,000 by the end of the year. "Bitcoin is likely the best asset for growth potential by the end of the year," writes the financier. "It is currently priced at $65,000, but many expect it to hit $100,000 by year-end. Is this possible? Certainly, because the number of bitcoins is limited. If demand for BTC increases, the price will go up. Bitcoin is not the same as the U.S. dollar, where the Federal Reserve can simply print more." Green also noted that the possible election of Donald Trump as President of the United States could further benefit bitcoin.

– Analyst and trader RLinda identifies the bullish flag pattern as a key indicator of a potential upward movement for bitcoin. This pattern, observable on both daily and weekly charts, is characterised by a sharp upward movement followed by a consolidation phase. RLinda expects that a breakout from this consolidation could continue the previous uptrend, with a potential target around $90,000.
Support and resistance levels are crucial in this analysis. The key support levels at $59,300 and $63,800 have shown strong buying interest and stability. High trading volumes at these levels reinforce expectations that they will hold during any potential pullbacks.
Critical resistance levels are marked at $67,250 and $71,754. Overcoming these resistance points is necessary for BTC to advance towards higher targets. The all-time high (ATH) at $73,743 is particularly significant, with a successful breakout potentially triggering further bullish momentum.

– Peter Brandt, head of Factor LLC, expressed skepticism that the price of bitcoin will exceed $71,000 and set a new record. He stated, "I try to be as honest as possible when identifying patterns. The current stagnation in the bitcoin market is incorrectly labeled as a flag (it has lasted too long); it actually represents a descending channel. Anything that lasts longer than 4-6 weeks is not a flag," wrote Brandt.
The flag pattern, which some analysts believe has emerged on the BTC/USD chart, is typically a precursor to a bullish rally. However, the descending channel mentioned by the veteran trader suggests a price decline. This pattern is characterised by lower highs and lows, which have been established since bitcoin reached its all-time high in March.
Based on the chart Brandt published, he believes that bitcoin's price will not surpass the resistance line around $71,000. If this scenario plays out, a bearish trend may ensue, potentially driving the price of the digital asset down to $51,000. The descending channel is slightly widening, indicating that price volatility is expected to increase over time.

– Analysts from the cryptocurrency market maker Wintermute predict that Ethereum could rise to a maximum of $4,300 in 2024. They believe that demand for this altcoin will be lower than expected, estimating that investment in these derivatives will range between $3.2 billion and $4.0 billion in the first 12 months following the start of trading. Under this scenario, the ETH price could increase by a maximum of 24% during 2024, reaching approximately $4,300.
In contrast, researchers at ASXN have made a more optimistic forecast. They predict that monthly capital inflows into Ethereum ETFs will range from $800 million to $1.2 billion. This suggests that by the end of the year, at least $6-7 billion will be invested in ETH-based exchange-traded funds, significantly exceeding the figures provided by Wintermute's analysts.

– The pace of Ethereum's potential bull rally will heavily depend on the capital inflow into ETH-ETFs shortly after trading begins. However, the launch of these products has not yet generated significant excitement in the cryptocurrency market, with investors responding cautiously to the event. Experts from QCP Capital reminded that after the launch of similar BTC-ETFs, bitcoin's price initially dropped to $38,000, but then hit historical highs two months later. (Although, it should be noted that the BTC halving may have played a significant role at that time.)
Currently, the options market suggests a potential decline in Ethereum's price in the near term. This expectation is reinforced by news of pressure from the U.S. government and the situation surrounding Mt.Gox. These factors add uncertainty and create additional challenges for ETH's growth. "As a result, ETH's price may remain stagnant or even decline until a new catalyst emerges," QCP Capital analysts suggest.
Experts also caution against underestimating the impact of political factors. As the U.S. elections approach, cryptocurrency market volatility may increase. Statements and actions by key political figures can create new opportunities or threats. Therefore, investors should be prepared for price swings and closely monitor news developments.


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

#eurusd #gbpusd #usdjpy #btcusd #ethusd #ltcusd #xrpusd #forex #forex_example #signals #cryptocurrencies #bitcoin #stock_market
Posted by: Stan NordFX
« on: July 21, 2024, 08:50:12 AM »

USD/JPY: Bank of Japan – Are Surprises Expected on 31 July?

According to strategists from ING, USD/JPY "delivered a bundle of surprises this week, retreating to the 155/156 area." Frankly, the surprise for us was not the yen's strengthening, but these words from ING experts. After all, what's so surprising about it? In our reviews, we have repeatedly warned about possible currency interventions by Japan's financial authorities. And here they are.

Economists estimate that on Thursday and Friday, 11 and 12 July, the Bank of Japan (BoJ) purchased about 6.0 trillion yen to support the national currency. On Wednesday, 17 July, USD/JPY came under pressure again, likely due to another currency intervention. Analysing the BoJ's account movements, economists believe that the intervention on that day amounted to around 3.5 trillion yen. Whether this will have a lasting effect is a big question. Recent years' experience with similar actions shows that the effect is only short-term. This time, specialists from Germany's Commerzbank called the BoJ's interventions "spitting against the wind." Just two days later, on 19 July, after bouncing off a local low of 155.35, the pair surged to 157.85, jumping by 250 points.

"Aside from the disappointing business activity index in the services sector," analysts at Commerzbank observe, "which showed a reduction in activity in May, the foreign trade data was also unconvincing. One of the reasons for this was the weakening of imports, which does not bode well for the domestic economy."

"Bank of Japan must continue to hope that the unfavourable factor related to US interest rates will significantly weaken in the coming months, allowing the yen to stabilize without the need for constant defensive measures," the economists at Commerzbank conclude, likely referring to regular currency interventions as the "defensive measures."

In Tokyo, calls are growing louder that a weak yen has long outlived its usefulness. Investors trading short yen in carry trade strategies also have to contend with unwelcome currency interventions. Moreover, while the Bank of Japan's resources to support the yen are substantial, they are not unlimited. With this in mind, BoJ Governor Kazuo Ueda stated last month that the regulator might raise interest rates at the meeting on 31 July. Additionally, the Japanese currency received unexpected support from US presidential candidate Donald Trump, who stated in an interview with Bloomberg that an undervalued yen exerts negative pressure on the US manufacturing sector.

On 31 July, both the Fed and the BoJ will hold meetings. If the actions or accompanying comments from the Bank of Japan are more hawkish, it could provide a new driver for USD/JPY to decline. For instance, ING does not rule out the possibility that the pair could reach 153.00 by the end of the year.

The pair ended the past week at 157.45. Evaluating the near-term prospects, 40% of experts voted for the pair moving south and the yen strengthening, while the remaining 60% took a neutral stance. Among oscillators on the D1 chart, 100% are in favour of the Japanese currency, although 15% are in the oversold zone for the pair. The trend indicators present a more mixed picture: 60% point to the yen's strengthening, while 40% suggest an upward rebound.

The nearest support level is located around 155.35-155.70, followed by 154.50-154.70, 153.60, 153.00, 151.85-152.15, and 150.80-151.00. The nearest resistance is in the 158.25 zone, followed by 158.75, 160.20, 160.85, 161.80-162.00, and 162.50.

In the upcoming week, Friday, 26 July, stands out on the calendar. On this day, the Consumer Price Index (CPI) values for the Tokyo region will be published. No other significant macroeconomic statistics related to the state of the Japanese economy are scheduled for release in the coming days.

CRYPTOCURRENCIES: Surprise – Market Capitalisation Increases by $370 Billion in a Week

This week, bitcoin surged above $65,000, reaching a high of $67,490. This is the level it traded at on 17 June. Subsequently, the German government began liquidating crypto holdings confiscated by its police, causing BTC/USD to plummet. Over the past few days, Germany sold 50,000 BTC for approximately $3 billion, with the latest tranche of 3,846 BTC sold on 12 July.

Now, the market has digested the negative impact of this sell-off. The price of BTC is recovering amidst renewed capital inflows into spot bitcoin ETFs. According to Coinshares, from 8 to 14 July, about $1.7 billion flowed into all cryptocurrency investment products, including US spot ETFs. Of this, $260 million went to BlackRock's IBIT fund. Since the beginning of 2024, funds have received $17.8 billion, surpassing the total for 2021, which was the peak year for the previous crypto bull cycle. Not only American but also Hong Kong bitcoin ETFs are seeing inflows, attracting a record $37 million on 15 July alone.

Evaluating the inflow into spot ETFs, BlackRock CEO Larry Fink declared on CNBC that bitcoin is a legitimate financial instrument suitable for investment during times of heightened fear. Fink admitted that he "was a proud skeptic, but I’ve studied [bitcoin], and learned about it," and now acknowledges that he was wrong about the asset in the past.

The head of BlackRock emphasized that the first cryptocurrency offers an opportunity to invest "in something that is outside of any country’s control." He noted, "I’m not saying that there aren’t abuses, like in anything else, but it’s a legitimate financial instrument that can potentially provide non-correlated, unconnected types of returns."

The next phase following the sale of 50,000 German BTC will be the return of 142,000 BTC to former clients of the bankrupt crypto exchange Mt. Gox, which collapsed 10 years ago. Concerns arise from the fact that bitcoin has increased in value 130-fold during this time, and naturally, many recipients may want to convert their tokens to fiat immediately. However, not all Mt. Gox coins will be distributed to creditors in July. According to Arkham Intelligence, the first tranche of 45,000 BTC will be distributed to creditors through the Kraken exchange in the next one to two weeks. Overall, the pressure from Mt. Gox sales is not expected to exceed 75,000 coins by the end of the year.

Thanks to this information, panic among market participants has subsided. However, some analysts still believe that these payouts could push bitcoin's price down to $50,000. CoinShares predicts that if all 45,000 BTC are sold within 24 hours, the price could drop by 19% from current levels. Well-known analyst Alex Krüger estimates that the maximum price drop will not exceed 10%.

CryptoQuant CEO Ki Newbie trader Ju argues that fears about seller pressure are overestimated and will not disrupt the ongoing bull rally. He suggests that if the same volume is released over 30 days, the market will hardly notice it. Analysts at CoinMetrics also believe that the market should "absorb" the Mt. Gox creditors liquidating their assets if the sales are spread out over time, taking into account the current market depth and trading volumes.

At present, it is difficult to predict how aggressively former Mt. Gox clients will dispose of their unexpected digital windfall. However, most influencers agree that even if there is a negative effect, it will be short-lived. Katie Stockton, managing partner at Fairlead Strategies, confirmed in a CNBC interview that the long-term upward trend remains intact, and that bitcoin should be viewed as a long-term investment with significant growth potential.

Michael Saylor, co-founder and former CEO of MicroStrategy, stated that a decline in the value of the first cryptocurrency will not affect its attractiveness to investors. As evidence, he presented a table comparing the price dynamics of various asset classes over several years, including bitcoin, gold, emerging market stocks, emerging market bonds, and treasury bonds. The best performers were bitcoin, Newbie trader company stocks (U.S. Growth index), and the Nasdaq 100 index. From 2011 to 2024, bitcoin's value increased by 18,881%, while the Nasdaq 100 index grew by 931% and gold by 59%. Michael Saylor has previously predicted that bitcoin could reach $10 million in the future.

Analyst Benjamin Cowen also conducted a historical analysis. He examined the key parameter for investors: bitcoin's dominance level (percentage of the total market capitalization of all cryptocurrencies). Cowen notes a significant trend: since the end of 2022, the dominance of the flagship cryptocurrency has been steadily increasing. From 38% in late November 2022, it rose to 54% by July 2024. Cowen believes that stricter government control over spending in the U.S. favours bitcoin compared to riskier altcoins. While potential approval of an ETH-ETF might provide Ethereum with short-term growth, bitcoin will continue to increase its share of the overall crypto market capitalization, potentially reaching 60% by December 2024.

The highly anticipated launch of spot Ethereum ETFs is undoubtedly expected to be a significant event for the industry. Bloomberg's senior exchange analyst Eric Balchunas reported that these trades will begin in the US on 23 July. "The SEC (Securities and Exchange Commission) finally approached issuers on Wednesday [17 July], requesting them to return final [forms] S-1 and then request effectiveness [approval] for a Tuesday, 23 July launch," the expert wrote. He did caution, however, that this is contingent upon the absence of any "last-minute unforeseen issues." Balchunas' information was confirmed by sources at two potential issuers of the ETH-ETFs.

Peter Brandt, head of Factor LLC, has provided a forecast for Ethereum ahead of the launch of ETH-ETF trading. Previously, this legendary trader and analyst, known for accurately predicting the crypto winter of 2018 and many other market movements, has often criticized ETH. However, now he believes this altcoin is on the brink of significant growth. Brandt suggests that Ethereum has found support near the lower boundary of a rectangle formation, which took over four months to develop, and its next target will be levels above $5,600.

This positive outlook is supported by the trader known as Yoddha. He noted that the prolonged consolidation could provide the main altcoin with the strength needed for active growth. According to his calculations, Ethereum has the potential to move to levels above $10,000. Yoddha believes the peak growth for Ethereum will be recorded in 2025. As for the current all-time high (ATH), it was recorded on 7 November 2021, at $4,856.

Despite Ethereum's prospects, the leader in growth over the past few days has been Ripple (XRP). From 5 to 17 July, the coin saw an increase of approximately 47%. The catalyst for this surge was the traditional derivatives trading centers – CME and CF Benchmarks – announcing indices and reference rates for Ripple, which could facilitate institutional acceptance of this token.

In such a situation, the decision of OpenAI's ChatGPT-4o artificial intelligence, which was tasked with selecting three digital assets worth buying in 2024 for long-term investment, was surprising. The AI was guided by key factors such as "price dynamics over time, technological innovations, market adoption, and potential for future growth." Based on these criteria, ChatGPT created a relatively conservative long-term portfolio that included Bitcoin (BTC), Ethereum (ETH), and not Ripple, but Polkadot (DOT).

According to the AI, Bitcoin is a worthy candidate due to its price dynamics, technological progress, relatively broad adoption, and certain recognition by regulators. Ethereum was chosen for its technological innovations, particularly its transition to proof-of-stake (PoS), the growth of its ecosystem, and the network effects arising from the blockchain's popularity. Polkadot made it into the top three based on the network's interoperability and scalability, a strong development team, and a dedicated community. The AI model highlighted Polkadot's active work on parachain technology, emphasizing its high utility.

As of the evening of Friday, 18 July, BTC/USD is trading at $66,940, ETH/USD is around $3,505, and XRP/USD is at 0.5745. The total crypto market capitalization stands at $2.43 trillion, up from $2.06 trillion a week ago. The Crypto Fear & Greed Index has surged from 29 to 60 points over the past 7 days, moving from the Fear zone to the Greed zone.


NordFX Analytical Group
 

Notice: These materials are not investment recommendations or guidelines for working in financial markets and are intended for informational purposes only. Trading in financial markets is risky and can result in a complete loss of deposited funds.

#eurusd #gbpusd #usdjpy #btcusd #ethusd #ltcusd #xrpusd #forex #forex_example #signals #cryptocurrencies #bitcoin #stock_market
Posted by: Stan NordFX
« on: July 21, 2024, 08:47:28 AM »

Forex and Cryptocurrency Forecast for 22 – 26 July 2024


EUR/USD: FOMC - Are Surprises Expected on 31 July?

This review will begin somewhat unusually, not from the start, but from the end of the past work week. On the evening of 18 July and the morning of the 19th, system administrators and users encountered non-functional servers and PCs running Windows. These systems began displaying the "blue screen of death" (BSOD) and entered an endless reboot loop. This global Microsoft outage affected many countries, including the USA, the UK, Spain, Germany, Turkey, and Australia. Many users in China also experienced the "blue screens of death." Critical computer systems, including those of emergency services, hospitals, police, airports, railways, broadcasters, internet providers, telecom companies, and other organisations such as banks and exchanges, either ceased functioning or started malfunctioning. Consequently, the situation in financial markets at that moment became almost force majeure.

The cause of the outage was identified as a software update from cybersecurity firm CrowdStrike, which conflicted with a new Windows update released simultaneously. Microsoft stated that they had identified the problem and were taking easing steps. However, the duration of this work remains unclear.

Now let’s move on to the more "traditional" news of the week and discuss the chances of monetary policy easing. On Thursday, 18 July, the European Central Bank (ECB) held a meeting, and the day before, Eurostat published consumer inflation (CPI) data. According to the statistical office's final assessment, annual inflation decreased to 2.5% last month from 2.6%, in line with market expectations. The core indicator, Core CPI, which excludes food and energy, remained at 2.9%. It’s worth noting that it had shown a downward trend for nine months (from August 2023 to April 2024), reaching 2.7%. However, in May, it accelerated to 2.9% and remained at that level in June. Another inflation indicator, the Producer Price Index (PPI), registered at -0.2% month-on-month (forecast -0.1%) and -4.2% year-on-year (forecast -4.1%).

Commenting on these figures, ECB President Christine Lagarde stated that the regulator had made progress on the path to disinflation, as key inflation indicators are "moving in the right direction." However, she indicated that the ECB would not lower rates in July but did not rule out further steps towards monetary policy easing (QE) at the autumn meetings.

Of course, she knew what she was talking about: on the following day, at its meeting, the European Central Bank (ECB) kept the key interest rate unchanged at 4.25%. At the concluding press conference, Madam Lagarde did not say anything new. She pointed out the weakness of the European economy, noting that the risks to economic growth were leaning towards the downside. Regarding persistently high inflation, Ms. Lagarde reiterated that the ECB's decisions remain data-dependent. While she did not signal an imminent easing of monetary policy, she stated that the decision on the rate at the Governing Council meeting on 12 September remains "open."

The risk-averse market atmosphere and Christine Lagarde's dovish and vague comments prevented EUR/USD from continuing its move towards 1.1000, sending it down to the 1.0900 zone. On Friday morning, ECB Governing Council member and President of the Bank of France, François Villeroy de Galhau, stated that uncertainty regarding economic growth had increased compared to a few months ago. He added that the market's expectations regarding the ECB's rate forecast were justified. His colleague on the Governing Council, the head of the Central Bank of Lithuania, Gediminas Simkus, also agreed with the market's prediction of two more 25 basis points (bps) rate cuts by the end of 2024.

Such dovish sentiments from European officials could have exerted significant downward pressure on EUR/USD, but similar rhetoric is also coming from their counterparts across the Atlantic. The next FOMC (Federal Open Market Committee) meeting of the Federal Reserve is scheduled for Wednesday, 31 July. According to economists at Goldman Sachs, amid a sharp drop in U.S. inflation from 4.3% to 2.6%, the steepest decline since 1984, and a surge in unemployment from 3.6% to 4.1%, the regulator could begin gradually lowering the rate at this meeting. However, most FOMC officials, including Fed Chair Jerome Powell, assert that the time for easing monetary policy has not yet arrived and that it is necessary to wait for new data. They suggest that any changes could be discussed in September.

Currently, the probability of a rate cut for the dollar in September stands at 96%, while for the euro, it is slightly lower at 80% (considering the 25 bps cut that occurred in June).

So, if nothing happens on 31 July, the Fed rate will remain at 5.50%. Since the ECB rate is 4.25%, this gives a certain advantage to the American currency. If risk aversion continues to dominate the market, it will create additional pressure on EUR/USD.

The pair ended the past week at 1.0883. As of the evening of 19 July, the analysts' forecast for the near term is as follows: 55% of their votes are for the pair's rise, and 65% for its fall. In technical analysis, 80% of trend indicators still favour the euro, while 15% have switched to the dollar. Among oscillators, 85% are green, with 15% turning neutral. The nearest support for the pair is at the 1.0865 zone, followed by 1.0790-1.0805, 1.0725, 1.0665-1.0680, 1.0600-1.0620, 1.0565, 1.0495-1.0515, 1.0450, and 1.0370. Resistance zones are located around 1.0890-1.0915, 1.0945, 1.0980-1.1010, 1.1050, and 1.1100-1.1140.

In the upcoming week, data on retail sales volumes in Germany will be released on Monday, 22 July. Wednesday, 24 July, can be called PPI Day, as a stream of preliminary data on business activity in various sectors of the economies of Germany, the Eurozone, and the USA will be released. On Thursday, we will learn about the state of the American economy in Q2, with GDP figures for this period becoming available. Additionally, the traditional number of initial jobless claims in the United States will be published on this day. The last working day of the week is expected to be very volatile, as on Friday, 26 July, the USA will release the Core CPI inflation figures, which are a key reference for the Federal Reserve's monetary policy decisions.

GBP/USD: Bank of England – Are Surprises Expected on 1 August?


Our previous review of GBP/USD was titled "Pound Wins with Labour," and indeed, it has. Over the past week, the pair reached a high of 1.3043, rising to levels last seen a year ago in July 2023. In our view, this surge was driven more by political speculations surrounding the opposition's rise to power and the change of government in the UK than by economic indicators. What this reshuffle will actually deliver remains to be seen and assessed. For now, it is merely an opportunity to profit from new Prime Minister Keir Starmer's promises of a "national renewal."

The current macroeconomic statistics for the United Kingdom, published over the past week, did not provide much cause for optimism. Inflation data released on Wednesday, 17 July, was slightly higher than expected. The headline CPI came in at 2.0% year-on-year (market expectations were 1.9%), and the core CPI reached 3.5% (forecast was 3.4%). Although these figures are close to forecasts, they show that UK inflation remains stubborn and is resisting the Bank of England's (BoE) efforts.

On Friday, 19 July, the Office for National Statistics (ONS) published retail sales data for the UK, which also turned out to be disappointing. On a monthly basis, sales fell by -1.2% in June, following a rebound of 2.9% in May. Markets had predicted a decline of only -0.4%. The core retail sales indicator, excluding automotive fuel sales, fell by -1.5% month-on-month, compared to the previous jump of 2.9% and a forecast of -0.5%. The annual volume decreased by -0.2% in June, against a May growth of +1.3%, while the core figure declined by 0.8% year-on-year, compared to +1.2% the previous month.

In light of these data, the British currency began to lose ground, and GBP/USD ended the past week at 1.2912. Specialists at Singapore's UOB Bank believe that "the upward momentum has significantly weakened, and the pair's growth has come to an end." In their opinion, "the pound has likely entered a consolidation phase and will trade between 1.2850 and 1.3020 for some time."

Of course, much will depend on what happens at the BoE meeting on 1 August. The last rate change was a year ago, on 3 August 2023, when it was raised by 25 basis points to 5.25%. Now, according to analysts at Commerzbank, "the next Bank of England decision should be very interesting." They write, "We still lean towards the Bank of England soon making its first rate cut. However, whether this happens in August or September, the key point is that with the persistently high levels of core inflation and inflation in the services sector, a significant rate cut is unlikely. Therefore, in the medium term, the pound sterling should continue to receive good support.".

For now, the median forecast of experts for the near term is as follows: only 20% of analysts expect further strengthening of the pound and a rise in the pair, 60% predict a decline, and the remaining 20% have taken a neutral stance. As for the technical analysis on D1, 75% of trend indicators are green, and 25% are red. Among oscillators, 75% are green, 10% are neutral grey, and only 5% are red.

In the event of further declines, the pair will encounter support levels and zones at 1.2850-1.2860, followed by 1.2780-1.2800, 1.2610-1.2625, 1.2540, 1.2445-1.2465, 1.2405, and 1.2300-1.2330. In the case of a rise, resistance levels are expected at 1.2990-1.3005, followed by 1.3040, 1.3100-1.3140, 1.3265-1.3300, 1.3375, 1.3315, 1.3555-1.3640, and 1.3750.

The release of preliminary business activity (PPI) data for the UK economy on Wednesday, 24 July, stands out among the events of the upcoming week. No other significant macroeconomic data releases are expected in the coming days. The next important event, as previously mentioned, will be the Bank of England meeting on Thursday, 1 August.

continued below...
Posted by: Stan NordFX
« on: July 17, 2024, 01:51:47 PM »

CryptoNews of the Week


– This week, bitcoin rose above $65,000, returning to its trading position from 20 June. BTC's price recovery is driven by renewed capital inflow into spot bitcoin ETFs, which purchase cryptocurrency to back their shares. By the end of the trading session on 16 July, they had acquired 6,470 BTC worth approximately $422 million. Capital inflow into these funds has continued for eight consecutive trading days. According to CoinShares, from 8 to 14 July, a total of about $1.7 billion was invested in all cryptocurrency investment products, including US spot ETFs. Of this, $260 million was attributed to BlackRock's IBIT fund. Since the beginning of 2024, the funds have received $17.8 billion, already surpassing the entire inflow of 2021, which was the peak year for the previous bull market cycle.

– Bitcoin is a legitimate financial instrument for investment during times of heightened fear, according to BlackRock's CEO Larry Fink on CNBC. He stated that he "was a proud skeptic, but studied [bitcoin], learned about it," and now acknowledges that he was previously mistaken about the asset.
Fink highlighted that the first cryptocurrency offers an opportunity to invest in "something outside the control of any one country." "I'm not suggesting there are no abuses, as with everything else, but it's a legitimate financial instrument that allows you to have possibly uncorrelated, non-connected types of income," Fink added.

– Panic over payouts to creditors of the bankrupt crypto exchange Mt.Gox has subsided. While this may not have helped, it certainly did not hinder the rise in digital asset prices.
Approximately 65,000 BTC are expected to be distributed among Mt.Gox creditors soon, and all these coins could be put up for sale. However, Ki Newbie trader Ju, CEO of CryptoQuant, claims that fears about seller pressure are overrated and will not derail the ongoing bull rally.
CoinMetrics analysts also believe that the market should "absorb" Mt.Gox creditors liquidating their assets if the payouts are conducted orderly and spread over weeks, depending on current market depth and trading volumes. Even if creditors massively dispose of their returned assets, well-known analyst Alex Krüger estimates that the maximum bitcoin price drop will not exceed 10%.

– Bloomberg Senior ETF Analyst Eric Balchunas reported that trading of the long-awaited spot ETH-ETFs in the US will commence on 23 July. "The SEC (Securities and Exchange Commission) finally reached out to issuers asking for final [forms] S-1 to be returned on Wednesday [17 July], then requested activation [permission] for the launch on Tuesday, 23 July," the expert wrote. He added that this will happen if there are no "last-minute unforeseen issues." Sources in two potential Ethereum ETF issuers confirmed Balchunas' information.

– Peter Brandt, head of Factor LLC, gave a forecast for Ethereum ahead of the launch of spot ETH-ETF trading in the US. Previously, this legendary trader and analyst, who correctly predicted the 2018 crypto winter and many other market movements, repeatedly criticised ETH. Now, in his opinion, this altcoin is on the verge of significant growth. Brandt believes that Ethereum has found support near the lower edge of a rectangle that took over four months to form, and its next target will be levels above $5,600.
Trader Yoddha supported the positive forecast, noting that prolonged consolidation could give the leading altcoin the strength needed for active growth. According to his calculations, the cryptocurrency has prospects for moving above $10,000. The peak of Ethereum's growth, he believes, will be recorded in 2025. As for the current ATH (all-time high), it was recorded on 7 November 2021 at $4,856.

– Currently, Ripple (XRP), not Ethereum, has emerged as the growth leader among major altcoins, showing a weekly increase of about 35%. The catalyst for this surge was the announcement by traditional derivatives trading centres CME and CF Benchmarks of Indices and base rates for Ripple, which could promote institutional acceptance of this token.

– Analyst Benjamin Cowen is confident that bitcoin's dominance level (percentage of the total market value of all cryptocurrencies) is crucial for investors. He notes a significant trend: since late 2022, bitcoin's dominance has been steadily increasing. As of July 2024, it stands at 54.5%. Cowen believes that stricter government spending control in the US favours bitcoin over riskier altcoins. While the potential approval of ETH-ETF may provide Ethereum with short-term growth, bitcoin will continue to increase its share of the total cryptocurrency market capitalisation, possibly reaching 60% by December 2024.

– Wall Street Journal journalists reported that data on Donald Trump's election campaign funding indicates he has managed to attract donations from several significant figures in the crypto industry. They sent about $3 million to his campaign accounts. Among them were the creators of the Gemini trading platform, the Winklevoss twins, and Kraken exchange co-founder Jesse Powell.
Despite the relatively small amount, these cryptocurrency donations received extensive coverage in the US media. This strengthened voters' perception that Trump is friendly to the digital asset sector. Furthermore, in June, the politician promised that if he wins the upcoming presidential election, he will provide relief to miners. He positioned himself as someone ready to establish clear legislation for the industry and stop hindering the development of blockchain and cryptography technologies with repressive measures. This stance helped him gain many supporters among crypto enthusiasts who actively support the Republican leader's campaign.

– Former BitMEX CEO Arthur Hayes called the actions of the Winklevoss twins and Jesse Powell a mistake. In his opinion, Trump's pro-cryptocurrency statements seem insincere. "Trump's position is a calculated move to gain support from the population that owns cryptocurrencies, not a genuine belief in the advantages of digital assets. Most likely, under different political circumstances, Trump would change his stance. His primary goal now is to secure votes, not to protect the crypto industry," Hayes explained. According to him, Trump, being a shrewd politician, will say whatever people want to hear to get their votes. However, there are no guarantees these promises will be fulfilled.

– Analysts at Bernstein positively assessed the "Trump factor" for bitcoin miners. They suggest that in the current conditions, the quotations of companies in this segment will shift to growth, and their shares should be bought. "The Goldilocks scenario for mining is becoming more realistic: more chances for favourable political changes, the US becoming a dominant centre for bitcoin and next-generation chip mining, and the industry gaining recognition as an energy interconnector and becoming a reliable partner for AI data centres," Bernstein experts predict.

– However, the noise from mining has caused health problems for Texas residents. This state hosts 10 of the 34 major bitcoin mining companies in the US. Some miners, such as Marathon Digital and Hut 8, relocated there in 2021 when China imposed restrictions on the industry. Other companies chose Texas due to relatively low electricity costs. Hut 8 called the state "one of the lowest in local wholesale electricity prices in North America."
However, it turns out that the influx of miners into Texas has negatively impacted the state's residents. Specifically, due to the high noise level of 91 decibels produced by bitcoin mining rigs, some patients have been diagnosed with hearing loss. The noise from miners is comparable to the sound of a lawnmower or chainsaw, and according to the Hearing Health Foundation, sounds exceeding 70 decibels lead to severe problems, especially with prolonged exposure. Other health issues reported by Texas residents include sleep disturbances, dizziness, tremors, and even fainting.

– The artificial intelligence (AI) ChatGPT-4o from OpenAI selected three digital assets to buy in 2024 for long-term investment. The AI considered key factors such as "price dynamics over time, technological innovations, market acceptance, and potential for future growth." Based on these criteria, ChatGPT formed a relatively conservative long-term portfolio, including bitcoin, Ethereum (ETH), and Polkadot (DOT).
According to the AI, bitcoin is a worthy candidate due to its price dynamics, technological progress, relatively broad acceptance, and some regulatory recognition. As for Ethereum, it was chosen for its technological innovations, particularly its transition to proof of stake (PoS), ecosystem growth, and network effects arising from blockchain popularity. Polkadot's inclusion in the top three is of particular interest. ChatGPT considers it a valuable investment based on its network compatibility and scalability, as well as a strong development team and dedicated community. The AI model also highlights Polkadot's work on parachains as significantly useful technology.


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

#eurusd #gbpusd #usdjpy #btcusd #ethusd #ltcusd #xrpusd #forex #forex_example #signals #cryptocurrencies #bitcoin #stock_market

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