LandOfCash Forex expert advisors, Trailing EA, Indicators.

Forex Trading Expert Advisors (EA or automated trading system) and Custom Indicators (CI) for MetaTrader Platform.

LOCTrailing With Partial Close Expert Advisor protect your orders profit. Trail stop level for manual and automatic orders with different algorithms, move stop loss into breakeven.

LOCInfo Custom Indicator follow the simple rules and make the right decision when to buy or sell. View Moving Average, Stochastic indicators from multiple time frames in one place.

Stan NordFX
  • Posts: 625
  • Joined: 04/03/2018
NordFX: Best News & Analysis Provider 2023


UserPostedImage


Following the results of the voting on the information portal Forexing.com, the brokerage firm NordFX was acknowledged as the Best News & Analysis Provider 2023. The victory was secured "by a clear margin" with over 75% of the votes cast in favour of NordFX.

Forexing.com is one of the leading portals comprehensively covering news and events in the Forex, CFD, and Crypto industry. Winners of the Forexing Awards were determined by open voting by visitors of this online platform, making this award particularly valuable as it most objectively reflects the opinion of the professional community. We sincerely thank everyone who voted for the high appraisal of the work of the NordFX Analytical Group.

The congratulatory letter of this platform addressed to NordFX states: “We are thrilled to extend our heartiest congratulations to you for being honoured as the 'Best News & Analysis Provider' of the Year 2023. This prestigious award is a testament to your exceptional service and dedication in the brokerage industry. At Forexing.com, we take pride in recognizing and celebrating excellence within the financial sector. Our team reviews, rates, and nominates top companies in the industry. The awards recognize the best-performing retail International and regional Forex Brokers. Your achievement stands out as a significant contribution to the industry.”


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
Stan NordFX
  • Posts: 625
  • Joined: 04/03/2018
Forex and Cryptocurrencies Forecast for January 22 – 26, 2024


EUR/USD: Reasons Behind the Dollar's Strengthening

UserPostedImage


The past week was notably sparse in terms of macroeconomic statistics. Consequently, the market participants' sentiment largely depended on the statements made at the World Economic Forum in Davos (WEF). It's worth noting that this event, held annually at a ski resort in Switzerland, gathers representatives of the global elite from over 120 countries. There, amidst the sparkling, crystal-clear snow glistening in the sunlight, the world's power players discuss economic issues and international politics. This year, the 54th edition of the forum took place from January 15 to 19.

Speaking at the World Economic Forum on January 16, the President of the European Central Bank, Christine Lagarde, expressed her confidence that inflation would reach the target level of 2.0%. This statement did not raise any doubts, as the Consumer Price Index (CPI) in the Eurozone shows a steady decline. From a level of 10.6% at the end of 2022, the CPI has now fallen to 2.9%. Isabel Schnabel, a member of the ECB's Executive Board, did not rule out the possibility of a soft landing for the European economy and a return to the target inflation level by the end of 2024.

According to a Reuters survey of leading economists on the future monetary policy of the ECB, the majority expect the regulator to lower interest rates as early as the second quarter, with 45% of respondents believing that this decision will be made at the June meeting.

On the other hand, inflation in the United States has been unable to surpass the 3.0% mark since July 2023. The figures published on January 11th showed that the annual Consumer Price Index (CPI) increased by 3.4%, which was above the consensus forecast of 3.2% and the previous value of 3.1%. In monthly terms, consumer inflation also rose, registering at 0.3% against a forecast of 0.2% and a previous value of 0.1%.

In light of this, and considering that the U.S. economy appears quite stable, the likelihood of the Federal Reserve lowering interest rates in March started to diminish. This shift in sentiment led to a slight strengthening of the dollar, moving EUR/USD from the 1.0900-1.1000 range to the 1.0845-1.0900 zone. Additionally, the weak performance of the Asian stock markets exerted some pressure on the European currency.

According to economists at the Dutch Rabobank, long positions on the euro may face further challenges. This could happen if Donald Trump continues his movement towards a potential second term in the White House. "Although President Biden's Inflation Reduction Act meant that the past four years were not always easy for Europe, Trump's stance on NATO, Ukraine, and possibly climate change could prove costly for Europe and enhance the appeal of the U.S. dollar as a safe asset," the Rabobank experts write. "Based on this, we see a possibility of EUR/USD falling to 1.0500 in a three-month perspective."

EUR/USD closed last week at 1.0897. Currently, the majority of experts predict a rise in the U.S. dollar in the near future. 60% voted in favour of the dollar's strengthening, 20% sided with the euro, and the remaining 20% took a neutral stance. Oscillator readings on the D1 chart confirm the analysts' forecast: 80% are coloured red, indicating a bearish trend, and 20% are in neutral grey. Among the trend indicators, there is a 50/50 split between red (bearish) and green (bullish) signals.

The nearest support levels for the pair are located in the zones of 1.0845-1.0865, followed by 1.0725-1.0740, 1.0620-1.0640, 1.0500-1.0515, and 1.0450. On the upside, the bulls will face resistance at 1.0905-1.0925, 1.0985-1.1015, 1.1110-1.1140, 1.1230-1.1275, 1.1350, and 1.1475.

Unlike the past week, the upcoming week promises to be more eventful. On Tuesday, January 23, we will see the publication of the Eurozone Bank Lending Survey. Wednesday, January 24, will bring a deluge of preliminary statistics on business activity (PPI) in various sectors of the German, Eurozone, and U.S. economies. The main event on Thursday, January 25, will undoubtedly be the European Central Bank's meeting, where a decision on the interest rate will be made. It is expected to remain at the current level of 4.50%. Investors will therefore be paying close attention to what the ECB leaders say at the subsequent press conference. For reference, the FOMC meeting of the Federal Reserve is scheduled for January 31. Additionally, on January 25, we will learn about the GDP and unemployment data in the United States, and the following day, data on personal consumption expenditures of residents of this country will be released.

GBP/USD: High Inflation Leads to High Rates and a Stronger Pound

Unlike the United States and the Eurozone, there was a significant amount of important statistics released last week concerning the state of the British economy. On Wednesday, January 17, traders were focused on the December inflation data. The data revealed that the Consumer Price Index (CPI) in the United Kingdom rose from -0.2% to 0.4% month-on-month (against a consensus forecast of 0.2%) and reached 4.0% year-on-year (compared to the previous value of 3.9% and expectations of 3.8%). The core CPI remained at the previous level of 5.1% year-on-year.

Following the release of the report showing inflation growth, UK Prime Minister Rishi Sunak moved quickly to reassure the markets. He stated that the government's economic plan remains correct and continues to work, having reduced inflation from 11% to 4%. Sunak also noted that wages in the country have been growing faster than prices for five months, suggesting that the trend of weakening inflationary pressure will continue.

Despite this optimistic statement, many market participants believe that the Bank of England (BoE) will postpone the start of easing its monetary policy until the end of the year. "Concerns that the disinflation process might slow down have likely intensified as a result of the latest inflation data," economists at Commerzbank write. "The market will probably bet on the Bank of England responding accordingly and, therefore, being more cautious regarding the first interest rate cut."

Clearly, if the BoE does not rush to ease monetary policy, this will create ideal conditions for the long-term strengthening of the British pound. This prospect already allowed the GBP/USD pair to bounce off the lower boundary of its five-week channel at 1.2596 on January 17th, rising to the channel's midpoint at 1.2714.

It is quite possible that GBP/USD would have continued its upward trajectory, but it was hindered by weak retail sales data in the United Kingdom, which were published at the end of the workweek on Friday, January 19th. The data showed a decline in this indicator by 4.6%, from +1.4% in November to -3.2% in December (against a forecast of -0.5%). If the upcoming Purchasing Managers' Indexes and business activity indicators, due to be released on January 24th, paint a similar picture, it could exert even more pressure on the pound. The Bank of England might fear that a stringent monetary policy could overly decelerate the economy and might consider easing it. According to analysts at ING (Internationale Nederlanden Groep), a reduction in the key interest rate by 100 basis points could lead to GBP/USD falling to the 1.2300 zone over a one to three-month horizon.

ING analysts also believe that the UK budget announcement on March 6 will significantly impact the pound, with tax cuts on the agenda. "Unlike in September 2022," the experts write, "we believe this will be a real tax cut, financed by the reduced cost of debt servicing. This could add 0.2-0.3% to the UK's GDP this year and lead to the Bank of England maintaining higher rates for a longer period."

GBP/USD ended the last week at 1.2703. Looking ahead to the coming days, 65% voted for the pair's decline, 25% were in favour of its rise, and 10% preferred to remain neutral. Contrary to the specialists' opinions, the trend indicators on D1 show a preference for the British currency: 75% indicate a rise in the pair, while 25% point to a decline. Among the oscillators, 25% are in favor of the pound, the same proportion (25%) for the dollar, and 50% hold a neutral position. If the pair moves southward, it will encounter support levels and zones at 1.2650, 1.2595-1.2610, 1.2500-1.2515, 1.2450, 1.2330, 1.2210, 1.2070-1.2085. In case of an upward movement, the pair will meet resistance at 1.2720, 1.2785-1.2820, 1.2940, 1.3000, and 1.3140-1.3150.

No significant events related to the United Kingdom's economy are anticipated for the upcoming week, other than the previously mentioned events. The Bank of England's next meeting is scheduled for Thursday, February 1.

USD/JPY: The 'Moon Mission' Continues

According to data published by the Japanese Statistics Bureau on Friday, January 19, Japan's National Consumer Price Index (CPI) for December was 2.6% year-on-year, compared to 2.8% in November. The National CPI, excluding fresh food, was 2.3% year-on-year in December, down from 2.5% the previous month.

Given that inflation is already decreasing, the question arises: why raise the interest rate? The logical answer: there is no need. This is why the market's consensus forecast suggests that the Bank of Japan (BoJ) will leave the rate unchanged at its meeting on Tuesday, January 23rd, maintaining it at the negative level of -0.1%. (It is worth remembering that the last time the regulator changed the rate was eight years ago, in January 2016, when it was lowered by 200 basis points.).

As usual, Japan's Finance Minister Shunichi Suzuki made another round of verbal interventions on Friday, and as usual, he said nothing new. "We are closely monitoring currency movements," "Forex market movements are determined by various factors," "it's important for the currency to move stably, reflecting fundamental indicators": these are statements that market participants have heard countless times. They no longer believe that the country's financial authorities will move from persuasion to real action. As a result, the yen continued to weaken, and USD/JPY continued its upward movement. (Interestingly, this aligns precisely with the wave analysis we provided two weeks ago.)

The past week's high for USD/JPY was recorded at 148.80, with the week closing near that level at 148.14. In the near future, 50% of experts anticipate further strengthening of the dollar, 30% are siding with the yen, and 20% hold a neutral position. As for the trend indicators and oscillators on D1, all 100% point north, though a quarter of the latter are in the overbought zone. The nearest support level is located in the 147.65 area, followed by 146.90-147.15, 146.00, 145.30, 143.40-143.65, 142.20, 141.50, and 140.25-140.60. Resistance levels are set in the following areas and zones: 148.50-148.80, 149.85-150.00, 150.80, and 151.70-151.90.

In addition to the Bank of Japan's meeting, another significant event related to the Japanese economy to note for the upcoming week is the publication of the Consumer Price Index (CPI) data for the Tokyo region, which is scheduled for Friday, January 26.

CRYPTOCURRENCIES: Numerous Predictions, Uncertain Outcome

Last week, the long-awaited regulatory saga finally concluded: as expected, on January 10th, the U.S. Securities and Exchange Commission (SEC) approved a batch of all 11 applications from investment companies to launch spot exchange-traded funds (ETFs) based on bitcoin. This news initially caused a spike in bitcoin's price to around $49,000. However, the cryptocurrency then depreciated by about 15%, falling to $41,400. Experts cite overbought conditions or what is known as "market overheating" as the main reason for this decline. As Cointelegraph reports, the SEC's positive decision was already factored into the market price. In 2023, bitcoin had grown 2.5 times, with a significant part of this growth occurring in the fall when the approval of the ETFs became almost inevitable. Many traders and investors, especially short-term speculators, decided to lock in profits rather than buy the now more expensive asset. This is a classic example of the market adage, "Buy on rumors (expectations), sell on facts."

It cannot be said that this price collapse was unexpected. In the lead-up to the SEC's decision, some analysts had predicted a downturn. For instance, experts at CryptoQuant talked about a potential drop in prices to $32,000. Other forecasts mentioned support levels at $42,000 and $40,000. "Bitcoin failed to break through the $50,000 level," analysts at Swissblock wrote. "The question arises whether the leading cryptocurrency can regain the momentum it has lost."

Our previous review was titled "D-Day Has Arrived. What Next?". More than a week has passed since the approval of the Bitcoin ETF, but judging by the BTC/USD chart, the market still hasn't decided on an answer to this question. According to Michael Van De Poppe, head of MN Trading Consultancy, the price is stuck between several levels. He believes that resistance lies at $46,000, but bitcoin could test support in the range between $37,000 and $40,000. In reality, for almost the entire past week, the primary cryptocurrency moved in a narrow sideways channel: between $42,000 and $43,500. However, on January 18-19, bitcoin experienced another bear attack, recording a local minimum at $40,280.

Evaluating the impact of the launch of spot bitcoin ETFs will require some time. Suitable data for analysis is expected to accumulate around mid-February. However, as noted by Cointelegraph, these funds have already attracted over $1.25 billion. On the first day alone, the trading volume of these new financial market instruments reached $4.6 billion.

Andrew Peel, Head of Digital Assets at investment bank Morgan Stanley, points out that the weekly inflow of funds into these new products already exceeds billions of dollars. He believes that the launch of spot bitcoin ETFs could significantly accelerate the process of de-dollarization of the global economy. He is quoted as saying, "Although these innovations are still in their infancy, they open up opportunities for challenging the hegemony of the dollar. Macro investors should consider how these digital assets, with their unique characteristics and growing adoption, can change the future dynamics of the dollar." Andrew Peel reminds us that the popularity of BTC has been growing steadily over the last 15 years, with over 106 million people worldwide now owning the first cryptocurrency. Meanwhile, Michael Van De Poppe notes that the events of January 10 will change the lives of many people around the world. However, he warns that "this will be the last 'easy' cycle for bitcoin and cryptocurrencies" and that it "will take longer than before."

The impact of the newly launched bitcoin ETFs on the global order has also been a topic of discussion among many influencers at the top of the power pyramid, underscoring the significance of this event. For instance, Elizabeth Warren, a member of the U.S. Senate Banking Committee, criticized the SEC's decision, expressing concerns that it could harm the existing financial system and investors. In contrast, Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF), holds a different view. She believes that cryptocurrencies are a class of assets, not money, and it's crucial to make this distinction. Therefore, she argues, bitcoin will not be able to replace the U.S. dollar. Additionally, the IMF head disagrees with those who expect that bitcoin ETFs will contribute to the mass adoption of the first cryptocurrency.

Bitcoin's price is projected to reach $100,000 - $150,000 by the end of 2024 and $500,000 within the next five years, according to Tom Lee, co-founder of the analytics firm Fundstrat, in an interview with CNBC. "In the next five years, supply will be limited, but with the approval of spot bitcoin ETFs, we have potentially huge demand, so I think something around $500,000 is quite achievable within five years," the expert stated. He also highlighted the upcoming halving in the spring of 2024 as an additional growth factor.

ARK Invest CEO Cathy Wood, also speaking on CNBC, predicted a bullish scenario where the first cryptocurrency could reach $1.5 million by 2030. Her firm's analysts calculated that even under a bearish scenario, the price of the digital gold would grow to at least $258,500.

Another forecast was given by Anthony Scaramucci, founder of SkyBridge Capital and former White House Communications Director. "If bitcoin is at $45,000 during the halving, then by mid-to-late 2025, it will be worth $170,000. Whatever the price of bitcoin is on the day of the halving in April, multiply it by four, and it will reach that figure within the next 18 months," said the SkyBridge founder in Davos, ahead of the World Economic Forum.

It's interesting to see how different AI chatbots have provided varied predictions for the price of bitcoin by December 31, 2024. Claude Instant from Anthropic predicted $85,000, while Pi from Inflection expects a rise to $75,000. Bard from Gemini forecasts that the price of BTC will exceed $90,000 by that date, though it cautions that unforeseen economic obstacles could limit the peak to around $70,000. ChatGPT-3.5 from OpenAI sees a price range of $75,000 to $85,000 as plausible but not guaranteed. A more conservative estimate from ChatGPT-4 suggests a range of $40,000 to $60,000, factoring in potential market fluctuations and investor caution, but doesn't rule out a rise to $80,000. Lastly, Bing AI from Co-Pilot creative predicts a price around $75,000, based on the information it has gathered.

These diverse predictions from AI systems reflect the inherent uncertainty and complexity in forecasting cryptocurrency prices, highlighting a range of factors that could influence market dynamics over the next few years.

As of the evening of January 19, BTC/USD was trading around $41,625. The total market capitalization of the cryptocurrency market stood at $1.64 trillion, down from $1.70 trillion a week earlier. The Bitcoin Fear & Greed Index, a measure of market sentiment, has dropped from 71 to 51 points over the week, moving from the 'Greed' zone to the 'Neutral' zone. This shift indicates a change in investor sentiment, reflecting a more cautious approach in the cryptocurrency market.

In conclusion regarding the growing market speculation about the imminent launch of spot ETFs on Ethereum, in our previous review, we cited a statement by SEC Chairman Gary Gensler, who clarified that the regulator's positive decision applies exclusively to exchange-traded products based on bitcoin. According to Gensler, this decision "does not signal readiness to approve listing standards for crypto assets that are considered securities." It's important to note that the regulator still classifies only bitcoin as a commodity, while "the vast majority of crypto assets are seen as investment contracts (i.e., securities)."

Now, analysts from the investment bank TD Cowen have confirmed pessimism regarding ETH-ETFs. Based on the information they have; it seems unlikely that the SEC will begin reviewing applications for this investment instrument in the first half of 2024. "Before approving ETH-ETFs, the SEC will want to gain practical experience with similar investment instruments in bitcoin," commented Jaret Seiberg, head of TD Cowen Washington Research Group. TD Cowen believes that the SEC will revisit the discussion of Ethereum ETFs only after the U.S. presidential elections in November 2024.

Nikolaos Panagirtzoglou, a senior analyst at JP Morgan, also does not expect a quick approval of spot ETH-ETFs. He opines that for the SEC to make a decision, it needs to classify Ethereum as a commodity rather than a security. However, JP Morgan considers such a development unlikely in the near future.


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
Stan NordFX
  • Posts: 625
  • Joined: 04/03/2018
CryptoNews of the Week

UserPostedImage


– On January 11, bitcoin reached a peak of $47,787, a height last seen in the spring of 2022. However, instead of the anticipated growth, it plummeted and recorded a local low of $38,520 on January 23. In just 12 days, the leading cryptocurrency lost nearly 20%. According to experts, this is a classic case of the "buy the rumour, sell the news" scenario. Initially, there was an impressive bull rally, fueled by speculation about the launch of bitcoin ETFs on the stock exchange. However, once these funds became operational, market participants began actively taking profits.
The inflow of capital into BTC-ETFs, many of which were launched by major Wall Street players like BlackRock, was not as substantial as expected. Data from CoinShares shows that the 10 new funds launched on January 11 had gathered $4.7 billion by the end of Tuesday. Meanwhile, $3.4 billion flowed out of the Grayscale trust, which was considered the world's largest holder of bitcoin and has now also been transformed into a BTC-ETF. Logic suggests that a significant portion of the money in the 10 new funds likely came from Grayscale investors who switched to competitors with lower fees. If this is the case, then the inflow of new investments into the funds amounts to only $1.3 billion.

– Along with bitcoin, all major altcoins, including Ethereum (ETH), Solana (SOL), Cardano (ADA), Avalanche (AVAX), Dogecoin (DOGE), Binance Coin (BNB), and others, also suffered losses. Analysts believe that digital assets are facing additional pressure due to improvements in the stock markets, with both American and European indices on the rise. Investors are anticipating the recovery of the US economy ahead of the January 25 publication of the country's GDP data for Q4 2023.

– Peter Schiff, President of Euro Pacific Capital, didn't miss the opportunity to gloat over the buyers of bitcoin ETF shares. The share price of these funds fell by 20% or more from their peak. The FBTC shares suffered the most, depreciating by 32%. "I think VanEck should change the ticker of its ETF from HODL to GTFO [from 'hold' to 'get rid of", Schiff commented. This advocate for physical gold didn't limit his criticism to spot BTC-ETFs but also highlighted the ProShares Bitcoin Strategy ETF (BITO), which allows investment in bitcoin futures. Since the launch of this derivative in October 2021, its share price has plummeted by more than half.
Schiff believes that the owners of spot bitcoin ETFs will continue to incur losses. Some experts do not rule out the possibility of the coin's price falling to $30,000 - $35,000, lending some credence to the financier's bleak forecast.

– An analyst operating under the pseudonym Ali illustrated the price patterns of the last two cycles of the first cryptocurrency and suggested a further decline in its value. The expert pointed out that during previous rallies, bitcoin followed a consistent pattern: first reaching the Fibonacci level of 78.6%, followed by a correction to 50%. Hence, according to this model, a drop in the BTC/USD pair to $32,700 (50%) is not ruled out.
Trader Mikeystrades also considered a dip to $31,000 and advised against opening long positions. "Save your money until the market starts showing bullish strength and follows the flow of orders," the expert emphasized.
A crypto trader known as EliZ predicted a fall in bitcoin's value to $30,000. "I anticipate a bearish distribution over the next two to three months, with the second half of 2024 likely to be truly bullish. These pauses are necessary to keep the market in a healthy state," he stated.

– Caroline Mauron, the head of OrBit Markets, told Bloomberg that if bitcoin fails to consolidate above $40,000 soon, we could witness a significant liquidation of positions in the futures market accompanied by a panic withdrawal of capital from the crypto sphere.
Michael Van De Poppe, the founder of MN Trading, has a different view. He emphasized that bitcoin has gathered liquidity and is approaching a local bottom. "Buy at the lows. Bitcoin under $40,000 is an opportunity," the analyst urges.
Yann Allemann, co-founder of blockchain data provider Glassnode, also known as Negentropic, believes that a bullish rally in the bitcoin market will start in the first half of 2024. He predicts that by early July, the coin's value will rise to $120,000. This forecast is based on the asset's past price dynamics after the appearance of a bullish flag on the chart.

– In recent critical remarks about digital gold, Jamie Dimon, CEO of JPMorgan, once again expressed doubts about the asset's finite supply limit of 21 million coins.
In response, Jameson Lopp, co-founder & CTO of Casa, posted a fragment of the bitcoin protocol code that establishes a halving of miners' rewards every 210,000 blocks, or approximately every four years. This mechanism implies that after 33 halvings, the reward will drop to zero from the initial 50 BTC, meaning no new coins will be produced. Lopp asserted that "even Satoshi [Nakamoto] can't force" a change in these five lines of the software.
However, some experts believe that theoretically, modifications to bitcoin's source code, like any other, are possible, and the emission limit of 21 million coins could be lifted. But such a decision would have to be made by a consensus of miners. A historical precedent cited is the "block size war" of 2017, when some developers, crypto companies, and mining pools wanted to increase the block size from the original 1 MB to scale the network. This idea was rejected by the community as it would have led to greater centralization of bitcoin.
In a Bitcointalk forum discussion of Dimon's statement, users noted that increasing the emission would negatively impact trust in the cryptocurrency. "The finite supply of 21 million BTC is an advantage that sets bitcoin apart from other banking products. With an emission limit, the asset becomes more valuable. Any attempt to increase the supply is foolishness by short-sighted people who want to undermine trust in digital gold," comments on the forum read. Most participants in the discussion agreed that the final decision remains with the community, which is unlikely to support a change in emission parameters.

– The crypto exchange BitMEX organized a mission with an ambitious goal: to deliver the main digital asset to the surface of Earth's natural satellite. Aboard the lunar lander was a 43-gram cold crypto wallet containing 1 BTC. The module was inscribed with text from the bitcoin genesis block: a tribute to the creator of the first cryptocurrency, Satoshi Nakamoto.
However, something went wrong. The spacecraft, launched into space ten days ago, struggled to maintain orientation towards the Sun, necessary for charging its onboard batteries. Engineers at Astrobotic detected a fuel leak in the module's engine system, but it was too late. NASA recommended burning the module in the atmosphere. Eventually, it almost completely burned up, with the remnants falling somewhere in the southern part of the Pacific Ocean. Thus, the bitcoin managed to travel only 50,000 km from Earth's surface, instead of the planned 385,000 km.

– Bloomberg exchange analyst James Seyffart believes that the U.S. Securities and Exchange Commission (SEC) may authorize the trading of options on spot bitcoin ETFs. He announced this on his page on X (formerly Twitter). Seyffart notes that the SEC has already taken into consideration applications under form 19b-4 for the possibility of trading such instruments. According to the analyst, approval could occur between February 15 and September 21 of this year.

– Last week, Morgan Stanley published a document titled "Digital (De)Dollarization?" authored by the bank's COO, Andrew Peel. According to the author, there is a clear shift towards reducing reliance on the dollar, which in turn is fuelling interest in digital currencies such as bitcoin, stablecoins, and CBDCs (Central Bank Digital Currencies). Peel writes that the recent surge in interest in these assets could significantly alter the currency landscape. He cites a recent survey by Sygnum Bank, which found that over 80% of institutional investors believe cryptocurrencies play a vital role in the global financial industry.

– Popular analyst Lark Davis has pointed out the significant demand for cryptocurrencies in South Korea. He suggests that if local authorities decide to approve a spot bitcoin ETF, it could potentially generate up to $3 billion per year. Additionally, Davis reminded that organizations in Hong Kong are planning to launch their debut product in Q1 this year. If this happens, the influx could amount to about $6 billion over 12 months.

– The number of cryptocurrency users has reached over half a billion people, which is approximately 6% of the Earth's population. According to recent data, the number of people owning Ethereum has increased from 89 million to 124 million, while the number of Bitcoin owners by the end of the year rose from 222 million to 296 million. Notably, 40% of BTC owners also hold ETH, whereas 42% of cryptocurrency owners do not have these coins in their portfolios.
The increase in user numbers is linked to the prolonged bearish trend in the crypto market, as the authors of the study believe: “The adoption of cryptocurrencies in 2023 grew despite macroeconomic obstacles, namely: tightening of monetary policies by Western central banks in an attempt to curb inflation, military conflicts, and the long-term consequences of the pandemic.” Analysts at Crypto.com noted a particularly sharp demand for bitcoin in Q4 2023, spurred by expectations related to the launch of BTC-ETFs.



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
Stan NordFX
  • Posts: 625
  • Joined: 04/03/2018
Forex and Cryptocurrencies Forecast for January 29 – February 02, 2024



EUR/USD: US Economy Delivers Surprises

The two most significant events last week occurred on Thursday, January 25. On this day, the European Central Bank (ECB) held a meeting, and preliminary GDP data for the US for Q4 2023 was published.

As expected, the ECB left the key interest rate unchanged at 4.50%. The regulator also maintained other critical parameters of its monetary policy. At the press conference following the meeting, ECB President Christine Lagarde refrained from commenting on potential timelines for rate cuts. She reiterated her previous statements, noting that the ECB Governing Council members believe it is premature to discuss policy easing. However, Lagarde highlighted that wage growth is already declining and added that they anticipate further inflation reduction throughout 2024.

Overall, the first event passed without surprises, unlike the second. The preliminary GDP data for Q4 2023 released by the US Bureau of Economic Analysis showed the expected slowdown in American economic growth compared to the extremely high rates of Q3 (4.9%), reaching 3.3% on an annual basis. However, this was significantly above the market consensus forecast, which anticipated a more substantial slowdown to 2.0%. Thus, it turned out that for the entire year of 2023, the country's economy grew by 2.5% (compared to 1.9% in 2022). The data confirmed the national economy's resilience to the most significant interest rate hike cycle since the 1980s – instead of the expected slowdown, it continues to grow at rates above the historical trend (1.8%).

These impressive results were a surprise for market participants. They look particularly 'stellar' compared to the performance of other currency zones. For instance, Japan's GDP continues to crawl back to pre-COVID-19 pandemic levels, and the Eurozone's GDP seems to have been in a state of stagnation for some time. This benefits the dollar, as a stable economy allows the Federal Reserve to delay the start of monetary policy easing and maintain restrictive measures for a while longer. According to CME futures quotes, the probability of an interest rate cut in March is currently 47%, almost half of what was expected a month ago (88%). Many experts believe the Fed will start gradually reducing the cost of federal fund loans no earlier than May or June, waiting for signs confirming the sustainability of the inflation slowdown.

The US Bureau of Labor Statistics also reported on January 25 that the number of initial unemployment claims for the week ending January 20 rose to 214K, exceeding the previous week's figures and forecasts of 200K. Despite the slight increase, the actual value still represents one of the lowest levels since the end of last year.

As mentioned earlier, the economic situation in the Eurozone appears significantly worse, exacerbated by Russia's military actions in Ukraine and the downturn of China's economy, an important partner for Europe. Against this backdrop, the ECB may become the most hasty among the G10 central banks to start reducing interest rates. Such a step would exert strong pressure on the common European currency, placing the euro at a disadvantage in the Carry-trade segment. Additionally, the advantages of the dollar as a safe-haven currency should not be overlooked.

The dollar index DXY found strong support at the 100.00 level at the end of last year, rebounded upwards, and has been consolidating around 103.00 for the past week, seemingly 'sticking' to its 200-day moving average. Market participants are awaiting the Federal Open Market Committee (FOMC) meeting of the US Federal Reserve, scheduled for Wednesday, January 31, amidst strong GDP data and convincing evidence of disinflation. It is likely that, as with the ECB, the interest rate will remain at the current level (5.50%). Moreover, Federal Reserve Chair Jerome Powell's remarks, similar to the ECB's, are expected to be cautious regarding the timelines for rate cuts. However, his more favourable tone regarding inflation reduction may be enough to restore market confidence in the beginning of monetary policy easing as early as March. In this case, DXY could resume its movement towards 100.00. Otherwise, a renewal of the December peak of 104.28 seems quite plausible.

Data on personal consumption expenditures in the US were released at the very end of the workweek, on Friday, January 26. The Core Personal Consumption Expenditures (PCE) Price Index showed a monthly increase from 0.1% to 0.2%, which fully matched forecasts. Year-on-year, the index stood at 2.9%, lower than both the previous value (3.2%) and the forecast (3.0%).

These figures did not significantly impact the exchange rates, and EUR/USD closed the week at 1.0854. Currently, the majority of experts predict the strengthening of the US dollar in the near future. Among them, 80% voted for the dollar's appreciation, 0% sided with the euro, and the remaining 20% held a neutral position. However, in the monthly perspective, the balance of power between bullish (red), bearish (green), and neutral (grey) is evenly distributed: a third for each. Oscillator readings on the D1 timeframe confirm the analysts' forecast: 100% of them are coloured red (15% indicating oversold conditions). Among trend indicators, the balance of power is 65% in favour of the reds and 35% for the greens. The nearest support levels for the pair are located in the zones 1.0800-1.0820, followed by 1.0725-1.0740, 1.0620-1.0640, 1.0500-1.0515, and 1.0450. The bulls will encounter resistance in the areas of 1.0905-1.0925, 1.0985-1.1015, 1.1110-1.1140, 1.1230-1.1275, 1.1350, and 1.1475.

In the upcoming week, in addition to the aforementioned FOMC meeting and subsequent press conference, we are expecting the release of Q4 GDP data for Germany and the Eurozone on Tuesday, January 30. On Wednesday, we will see the retail sales volumes and the Consumer Price Index (CPI) in Germany, as well as the state of employment in the US private sector from ADP. On Thursday, February 1, inflation data (CPI) for the Eurozone and business activity in the US manufacturing sector (PMI) will be published. Additionally, on February 1 and 2, we will traditionally receive a wealth of statistics from the US labor market, including the unemployment rate and the number of new jobs created outside of the agricultural sector (Non-Farm Payrolls, NFP).

GBP/USD: Inflation Continues to Bolster the Pound

UserPostedImage


The retail sales report released on January 19 in the United Kingdom turned out to be disappointing. Retail sales volumes in December decreased by -3.2% following a 1.4% increase in the previous month, while analysts had expected a -0.5% drop. Year-on-year, this indicator declined by -2.4% after increasing by 0.2% a month earlier (forecast was -1.1%). Sales excluding fuel dropped by -3.3% month-on-month and -2.1% year-on-year, against expert forecasts of -0.6% and -1.3%, respectively.

However, despite this, GBP/USD not only maintains its position within the six-week lateral channel of 1.2600-1.2800 but is even seeking to consolidate in its upper half. Analysts believe that the British currency continues to be supported by expectations that the Bank of England (BoE) will likely be among the last to lower rates this year.

It's worth recalling that the December inflation data showed the Consumer Price Index (CPI) in the United Kingdom rose month-on-month from -0.2% to 0.4% (consensus forecast was 0.2%), and year-on-year reached 4.0% (compared to the previous value of 3.9% and expectations of 3.8%). The core CPI figure remained at the previous level of 5.1% year-on-year. Following the release of this report, which showed rising inflation, UK Prime Minister Rishi Sunak quickly sought to reassure the markets. He stated that the government's economic plan remains sound and continues to work, having reduced inflation from 11% to 4%. However, despite the Prime Minister's optimistic statement, many market participants are now more convinced that the Bank of England will delay the start of easing its monetary policy until the end of the year. "Concerns that the disinflation process may stall have probably increased," Commerzbank economists wrote at the time. "And the market will likely bet that the Bank of England will respond accordingly and, therefore, be more cautious about the timing of the first interest rate cut."

The British currency was also bolstered by preliminary data on business activity in the country, released on Wednesday, January 24. The Manufacturing PMI rose from 46.2 to 47.3, against a forecast of 46.7. Furthermore, the Services PMI and the Composite PMI firmly established themselves in the growth zone (above 50 points). The Services PMI increased from 53.4 to 53.8 (forecast was 53.2), and the Composite PMI went up from 52.1 to 52.5 (forecast was 52.2). From these figures, the market inferred that the country's economy could withstand high interest rates for an extended period.

GBP/USD concluded the previous week at a level of 1.2701. Regarding the analysts' forecasts for the coming days, the sentiment is similar to that for EUR/USD: 70% voted for the pair's decline, only 10% were in favor of its rise, and 20% preferred to remain neutral. The outlook for the monthly and longer-term horizon is more ambiguous. Among the trend indicators on the D1 timeframe, in contrast to the specialists' opinions, there's a clear preference for the British currency: 80% indicate a rise in the pair, while 20% suggest a decline. Among oscillators, 35% are in favour of the pound, 10% for the dollar, and the remaining 55% maintain a neutral stance. Should the pair move southward, support levels and zones at 1.2595-1.2610, 1.2500-1.2515, 1.2450, 1.2330, 1.2210, 1.2070-1.2085 await it. In case of an upward movement, the pair will encounter resistance at levels 1.2750-1.2765, 1.2785-1.2820, 1.2940, 1.3000, and 1.3140-1.3150.

In addition to the FOMC meeting of the US Federal Reserve, we will also have a meeting of the Bank of England in the upcoming week. It is scheduled for Thursday, February 1st, and according to forecasts, the BoE is also expected to keep the borrowing rate at the current level of 5.25%. Besides this, no other significant events related to the economy of the United Kingdom are anticipated in the near future.

USD/JPY: Does the Drift Towards 150.00 Continue?

The Consumer Price Index (CPI) in the Tokyo region unexpectedly dropped from 2.4% to 1.6% in January, and the figure excluding food and energy prices decreased from 3.5% to 3.1%. Such a significant weakening of inflationary pressure could lead the Bank of Japan (BoJ) to refrain from tightening monetary policy in the foreseeable future.

This forecast is also supported by the monthly economic report of the Japanese government, published on Thursday, January 25. The report states that the consequences of the strong earthquake on the Noto Peninsula in central Honshu, Japan's main island, could reduce the national GDP by 0.5%. These estimates increase the likelihood that the Bank of Japan will maintain its ultra-loose monetary policy at least until mid-2024. Consequently, any speculation about an interest rate hike in April can be disregarded.

The minutes from the Bank of Japan's December meeting reinforce this outlook. It was noted that the Board members agreed that "it is necessary to patiently maintain an accommodative policy." Many members (another quote) "stated that it is necessary to confirm a positive wage-inflation cycle to consider the issue of phasing out negative rates and YCC." "Several members said they do not see the risk of the Central Bank falling behind schedule and can wait for developments at the annual wage negotiations this spring." And so on in the same vein.

Economists at MUFG Bank in Japan believe that the current situation does not hinder the selling of the yen. "Given our view on the strengthening of the US dollar in the near term and the more significant-than-expected drop in inflation data [in Japan]," they write, "we may see an increase in the appetite for Carry-trade positions funded by the yen, which will contribute to the further rise of USD/JPY." MUFG strategists opine that the pair will continue its drift northward, towards 150.00. However, as it approaches this level, the threat of currency interventions by Japanese financial authorities is expected to gradually increase.

In the interest of fairness, it should be noted that there are still those who believe in an imminent shift by the BoJ to a tighter policy. For instance, specialists at the Dutch Rabobank still adhere to a forecast suggesting the regulator could raise rates as early as April. "However," the bank's experts write, "everything will depend on strong wage data from the spring negotiations and evidence of changes in corporate behaviour regarding wages and pricing." "Our forecast, which sees USD/JPY ending the year at 135.00, assumes that the Bank of Japan will raise rates this year," continue the Rabobank economists. However, they add that there is still a possibility of disappointment in the pace of rate hikes.

USD/JPY recorded its peak for the past week at 148.69, finishing slightly lower at 148.11. In the near-term outlook, 30% of experts anticipate further strengthening of the dollar, 30% side with the yen, and 40% hold a neutral position. Regarding the trend indicators and oscillators on the D1 timeframe, all 100% point north, though 10% of them are in the overbought zone. The nearest support level is located in the 146.65-146.85 zone, followed by 146.00, 145.30, 143.40-143.65, 142.20, 141.50, and 140.25-140.60. Resistance levels are positioned at 148.55-148.80, 149.85-150.00, 150.80, and 151.70-151.90.

No significant events related to the Japanese economy are anticipated in the upcoming week.

CRYPTOCURRENCIES: Why Bitcoin Fell

On January 10, the U.S. Securities and Exchange Commission (SEC) approved a batch of all 11 applications from investment companies to launch spot exchange-traded funds (ETFs) based on bitcoin. Against this backdrop, the quotations of the main cryptocurrency momentarily spiked to $47,787, a level last seen in the spring of 2022. However, instead of the expected growth, bitcoin then tumbled and recorded a local minimum of $38,540 on January 23. Thus, in just 12 days, the cryptocurrency lost nearly 20% of its value. According to several specialists, this is a classic case of the "buy the rumour, sell the news" scenario. Initially, there was a significant bull rally fueled by speculations about the launch of bitcoin-based ETFs. Now that these funds are operational, market participants have begun actively taking profits.

However, there are other reasons for the decline, reflected in specific figures. The capital inflow into BTC-ETFs, many of which were launched by major Wall Street players like BlackRock, turned out to be smaller than expected. It appears that investors have become disillusioned with cryptocurrency. According to CoinShares, the 10 new funds had gathered $4.7 billion by the end of Tuesday. Meanwhile, $3.4 billion flowed out of the Grayscale trust, which was considered the world's largest bitcoin holder and has now also been transformed into a BTC-ETF. Logic suggests that a significant portion of the funds likely just shifted from Grayscale investors to the 10 new funds with lower fees. If this is the case, then the net new investment inflow is just $1.3 billion. Moreover, in recent days, this has turned into a net outflow of $25 million.

It's also important to note that since the approval of BTC-ETFs, along with short-term speculators and Grayscale investors, the sell-off has been influenced by the bankruptcy manager of the FTX crypto exchange and especially by miners. Together, they have unloaded $20 billion worth of coins on the market, a large portion of which belongs to the miners. They are particularly concerned about the increasing computational difficulty and the halving in April, which will force many of them out of business. As a result, since January 10, miners have sent a record 355,000 BTC worth $15 billion to crypto exchanges, the highest in six years. In these circumstances, the demand for a spot bitcoin ETF of $4.7 billion (or realistically $1.3 billion) seems modest and unable to compensate for the resulting outflow of funds. Hence, we are witnessing such a significant drop in the price of the main digital asset.

Along with bitcoin, major altcoins, including Ethereum (ETH), Solana (SOL), Cardano (ADA), Avalanche (AVAX), Dogecoin (DOGE), Binance Coin (BNB), and others, also incurred losses. Analysts believe that the improvement in the stock markets has also exerted additional pressure on cryptocurrencies – over the last three weeks, both American and European indices have shown growth.

Peter Schiff, the president of Euro Pacific Capital, did not miss the opportunity to gloat over the buyers of bitcoin ETF shares. He believes that the approval of these funds does not create new demand for cryptocurrency. According to the financier, those investors who previously bought cryptocurrency on the spot market or invested in shares of mining companies and Coinbase are now merely shifting their investments to ETFs. "Shuffling deck chairs won't save the ship from sinking," predicted this advocate of physical gold.

Schiff thinks that the fate of investors in the spot product will be similar to those who invested in the futures ETF BITO, launched in the fall of 2021. Currently, shares of this fund are trading at a 50% discount, implying that bitcoin is also expected to fall to around $25,000. Since January 10, 2024, the share price of BTC-ETFs has already fallen by 20% or more from their peak. The shares of FBTC suffered the most, decreasing in value by 32% in two weeks. "I think VanEck should change the ticker of its ETF from HODL to GTFO [from 'hold' to 'get the heck out']," Schiff sarcastically commented on the situation.

Caroline Mauron, head of OrBit Markets, told Bloomberg that if bitcoin fails to firmly establish itself above $40,000 soon, it could trigger a massive liquidation of positions in the futures market, accompanied by a panic outflow of capital from the crypto sphere.

An analyst using the pseudonym Ali illustrated the price patterns of the last two cycles and, like Caroline Mauron, suggested a further decline in the coin's value. The expert noted that in previous rallies, bitcoin followed a consistent pattern: first reaching the 78.6% Fibonacci level and then correcting to 50%. Thus, according to this model, a drop in the BTC/USD pair to $32,700 (50%) is not ruled out.

Trader Mikeystrades also allowed for a drop to $31,000 and advised against opening long positions. "Save your money until the market begins to demonstrate bullish strength and follows the flow of orders," the expert recommended.

A crypto trader known as EliZ predicted a fall in the bitcoin price to $30,000. "I expect a bearish distribution over the next two to three months, but the second half of 2024 will be truly bullish. These stops are necessary to keep the market in a healthy state," he stated.

Michael Van De Poppe, founder of MN Trading, holds a different view. He emphasized that bitcoin has already collected liquidity and is approaching a local bottom. "Buy at the lows. Bitcoin below $40,000 is an opportunity," the analyst urged. Yann Allemann, co-founder of Glassnode, believes that a bullish rally in the bitcoin market will start in the first half of 2024, with the coin's value increasing to $120,000 by early July. This forecast is based on the dynamics of the asset's value changes in the past after the appearance of a bullish flag pattern on the chart.

Indeed, negative scenarios should not be ignored. However, it's important to consider that current pressures are largely due to temporary factors, while long-term trends continue to favor digital gold. For instance, since the fall of 2021, there has been an increase in the proportion of coins that have remained inactive for over a year. This indicator is now showing a record 70%. An increasing number of people are trusting bitcoin as a tool for inflation protection and savings. The number of cryptocurrency users has reached over half a billion people, about 6% of the Earth's population. According to recent data, the number of Ethereum holders has grown from 89 million to 124 million, while the number of bitcoin owners by the end of the year increased from 222 million to 296 million people.

There is also growing acceptance of this new type of asset among large capital representatives. Last week, Morgan Stanley published a document titled "Digital (De)Dollarization?", authored by the investment bank's COO Andrew Peel. According to the author, there is a clear shift towards reducing dependency on the dollar, simultaneously fuelling interest in digital currencies such as bitcoins, stablecoins, and CBDCs. Peel writes that the recent surge in interest in these assets could significantly alter the currency landscape. According to a recent Sygnum Bank survey, over 80% of institutional investors believe that cryptocurrencies already play an important role in the global financial industry.

As of the evening of January 26, when this review was written, BTC/USD is trading around $42,000. The total market capitalization of the crypto market stands at $1.61 trillion, down from $1.64 trillion a week ago. The Bitcoin Fear & Greed Index remains in the Neutral zone at 49 points, slightly down from 51 a week earlier.


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
Stan NordFX
  • Posts: 625
  • Joined: 04/03/2018
CryptoNews of the Week

UserPostedImage


– Analysts note that the 12-month volatility of the first cryptocurrency has reached its lowest level in 12 years. The indicator has fluctuated significantly over the years, but overall, it has shown a clear downward trend during this period. From 179% in January 2012, it fell to 45% at the beginning of this year. A higher figure indicates significant price variability and signals greater market unpredictability. Lower metric values suggest much more stable trading conditions.
CryptoQuant believes that reduced volatility may indicate a greater number of long-term holders. Meanwhile, the research department at Galaxy Digital predicts that the launch of spot bitcoin ETFs in the USA will further smooth price fluctuations. "A huge amount of BTC will be in the accounts of [investment] advisors. They are not interested in intraday trading," the experts state.

– Analysts at Matrixport have predicted a fall in the price of the first cryptocurrency to $36,000. They believe that bitcoin can then appreciate, but only against the backdrop of favourable macroeconomic conditions and increased liquidity. It's worth recalling that in December, these same analysts forecasted bitcoin to reach $125,000 in 2024.

– Chris Burniske, a partner at the venture firm Placeholder, has forecasted that the price of bitcoin will initially drop to the $30,000-$36,000 range, before potentially reaching a local bottom around $20,000. "We're heading towards a consolidation lower than most people expect, due to too many variables (such as the specifics of the crypto market, macroeconomics, the adoption and development of new products)," the expert warned. However, he believes that testing levels around $20,000 will be a "real step" towards eventually returning to previous highs. "The journey there will be volatile – expect setbacks. And it will take months. As always, your best friend is patience," Burniske emphasized, adding that the fall in other assets will be deeper than that of bitcoin.

– Amazon MGM Studios has launched the production of the feature film "Razzlekhan," which will narrate the story of the 2016 Bitfinex cryptocurrency exchange hack involving 120,000 BTC. The film is based on a 2022 New York Times article about the married couple, Russian Ilya Lichtenstein and American Heather Morgan, who are accused of laundering the stolen funds. The film's title is derived from Morgan's rap pseudonym.
In February 2022, the U.S. authorities arrested the couple and seized bitcoins worth $3.6 billion. That same month, Morgan was released on a $3 million bail, while Lichtenstein remained in custody.

– Peter Schiff, President of Euro Pacific Capital and a well-known opponent of the first cryptocurrency, unexpectedly conceded that by 2031, the price of bitcoin could reach $10 million, albeit under a very hypothetical scenario. According to him, this could occur if the US dollar follows the path of the "German paper mark". This term informally referred to the currency introduced in Germany at the beginning of World War I in 1914, replacing the previous mark, which was backed by gold.
In the early 1920s, the paper mark depreciated due to hyperinflation. During these years, companies paid salaries several times a day so that workers could make purchases before the next price increase. The money supply grew so rapidly that the state couldn't print banknotes fast enough and had to involve private printers. The largest denomination issued was a 100 trillion-mark banknote.

– While Peter Schiff may be sceptical and ironic about the prospect of an economic collapse and the fall of the US dollar, Robert Kiyosaki, the investor and bestselling author of "Rich Dad Poor Dad," harbours no such doubts. He insists that gold, silver, and bitcoin should be part of every investor's portfolio. Kiyosaki, admitting his limited knowledge about the main cryptocurrency, believes in the success of bitcoin due to the "very smart people" involved in it. He is confident that the price of BTC could reach $1 million in the event of a global economic downturn.

– The analyst known as Rekt Capital believes traders have one last opportunity to purchase bitcoin at a low price. His analysis of historical data has led him to several conclusions. 1. If bitcoin's price does not decrease within the next two weeks, it's unlikely to significantly drop before the halving, which is scheduled for April 19. 2. Around 60 days prior to the halving, BTC’s price is expected to increase due to the excitement surrounding the event. 3. Following the halving, there might be a rush by speculators to sell their holdings, potentially causing bitcoin's price to fall for several weeks, possibly by 20-38%. 4. After this period, a phase of accumulation is anticipated, which could last up to 150 days and is characterized by relatively low price volatility for BTC. 5. This accumulation phase is expected to be followed by a phase of parabolic growth in bitcoin's rate, culminating in a new historical high.

– A new study has revealed that the adoption of digital assets continues to grow actively in Europe. The Binance team conducted a survey across several European countries, including France, Italy, Spain, and Sweden, involving over 10,000 participants. The findings from the study showed that 73% of European residents believe in the future of cryptocurrencies. 55% of respondents reported using cryptocurrency for purchases, with 10% doing so on a weekly basis. Additionally, 24% indicated that nearly half of their trading operations involve tokens.
The main factors contributing to the adoption of digital assets in Europe, as identified by survey participants, include high profitability, decentralization, and innovation. Rachel Conlan, Chief Marketing Officer at Binance, noted that such widespread integration of digital assets in Europe is facilitated by a safe and harmonized regulatory framework in the region.

– Analyst DonAlt informed his 56,700 YouTube subscribers that despite the volatility due to the launch of BTC exchange-traded funds (ETFs), bitcoin has managed to avoid a complete price collapse. The digital gold remains strong even after its price fell below $40,000 last week. The expert believes that the absence of major selloffs is a positive sign. "For this reason, I'm no longer in the bear camp; now I'm in the bull camp," he stated. DonAlt also emphasized that bitcoin is consolidating within a strong upward trend and is likely to regain its bullish momentum as soon as it overcomes the resistance level at $44,000.

– According to analysts at Glassnode, the majority of long-term investors are still reluctant to part with their coins. The Glassnode report indicates that the vast majority of BTC holders are adhering to a hodling strategy in anticipation of higher spot prices. K33 Market Research reports that the volume of spot trading in bitcoins has reached "consistently high activity following the approval of ETFs." It's noted that "a significant portion of ETF flows is likely distributed among other over-the-counter orders, not affecting the spot market order books." According to The Block’s Data Dashboard, the monthly volume of on-chain transactions in the bitcoin network in January was at a multi-month high, with trading volume for January exceeding $1.11 trillion.

– Anthony Scaramucci, founder of SkyBridge Capital hedge fund, believes that the price of bitcoin will surge to at least $170,000 following the halving in April. "On the day of the halving, multiply the BTC price by four, and it will reach this level within the next 18 months," he stated. "For instance, if the price is $50,000, then later bitcoin will be worth $200,000," explained the investor. Previously, the head of SkyBridge had claimed that the BTC price post-halving could reach $100,000. He also cited the reduction of the Federal Reserve's interest rate in the USA as an additional reason for the onset of a bullish rally.
Regarding the long-term price, Scaramucci forecasts that bitcoin's market capitalization could reach half of gold's market capitalization, which is $14.5 trillion. Consequently, according to his calculations, the price of the coin could be around $345,000.

– Markus Thielen, Head of Research at 10x Research, utilizes Elliott Wave Theory in his forecasts, which suggests that asset prices move in five waves. According to this theory, the first, third, and fifth waves are "impulse waves," while the others are "corrective waves." The recent decline in bitcoin’s price represents the fourth wave, or a correction, the analyst believes. Currently, the fifth wave is starting, which could drive the price upwards. "Wave analysis has marked this recovery up to $52,671 potentially by the end of Q1 2024," the 10x Research representative announced. In his view, the bitcoin price is influenced by the overall growth of the stock market and the cessation of fund outflows from Grayscale's largest bitcoin exchange-traded fund. The growth of digital assets will also be supported by Google's decision to allow advertising for cryptocurrency ETFs.


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
Stan NordFX
  • Posts: 625
  • Joined: 04/03/2018
January 2024 Results: Gold Regains Value in the New Year


UserPostedImage


NordFX, a brokerage firm, has summarized the trading performance of its clients for January 2024. The effectiveness of social trading services, PAMM and CopyTrading, as well as the profits earned by the company's IB partners, were also evaluated.

- The most successful trader in the first month of the new year was a client from Western Asia, with account number 1740XXX, who achieved a profit of 18,732 USD through transactions with gold (XAU/USD).
- The XAU/USD pair also aided a representative from South Asia, account number 1694XXX, to secure the second step on the podium with a result of 16,355 USD.
- Third place went to a compatriot of the latter, the owner of account number 1595XXX. By trading the same instrument favoured by NordFX traders, gold (XAU/USD), as well as the British pound (GBP/USD), he earned a profit of 12,725 USD.

As for NordFX passive investment services, the situation unfolded as follows:

- In the PAMM service, the Trade and Earn account continues to attract the attention of passive investors. Opened in March 2022, it remained dormant for four months before awakening in November. As a result, during its "active" period, its return exceeded 415%. Unfortunately, at the end of 2023, the account manager made a serious mistake. While for a long time the maximum drawdown did not exceed 17%, in just a few days of December, it approached a dangerous 60%. However, the manager was able to rectify the situation afterwards, leading to a sharp increase in profitability, with the maximum drawdown in January not exceeding 10%.

Among startups, the account Kikos2 is noteworthy, showing a profit of 325% in just 72 days. However, given the aggressive trading strategy, it also experienced a significant maximum drawdown of about 60%. This serves as a reminder that investors should exercise utmost caution when investing their money. Past results do not guarantee future performance, so it is important to assess one's financial capabilities and be prepared for potential setbacks.

- In CopyTrading, we continue to monitor the signal from yahmat-forex, which has shown a return of 335% over 222 days, with a maximum drawdown of 37%. The startup Fund Manage Global 100 also caught our attention, delivering a 160% return in just 83 days with a relatively moderate drawdown of 20%. Additionally, the signal FX NEW SKY cannot be overlooked. In just two weeks, it achieved not just a sky-high, but a cosmic profit of 1820%. However, it also experienced a cosmic maximum drawdown of 77%. After all, as is well known, journeys to the stars are exceptionally risky and fraught with potential crashes and catastrophes.

Among the IB partners of the brokerage firm NordFX, the top 3 are as follows:
- The largest commission reward in January was credited to a partner from East Asia, with account number 1218XXX, amounting to 8,268 USD;
- is was followed by a colleague from West Asia, account number 1645XXX, who earned 5,746 USD for the month;
- nally, completing the top three is a partner from South Asia, account number 1718XXX, who received 3,842 USD in commissions.


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
Stan NordFX
  • Posts: 625
  • Joined: 04/03/2018
Forex and Cryptocurrencies Forecast for February 05 – 09, 2024



EUR/USD: Dollar Strengthening Prospects Increase

UserPostedImage


Throughout January, a series of indicators: GDP, employment, and retail sales, consistently highlighted the strength of the US economy. The threat of recession diminished, and it became evident that the high interest rate did not significantly hinder economic performance. Market participants were keenly awaiting the Federal Open Market Committee (FOMC) meeting of the US Federal Reserve, scheduled for Wednesday, January 31, against the backdrop of these positive economic indicators.

As anticipated, the regulator maintained the key rate at its current level (5.50%) but shifted its rhetoric to indicate that its next move would likely be to ease monetary policy. The question on everyone's mind was: when? During the press conference, Fed Chair Jerome Powell sought to temper expectations. He stated that FOMC members wanted to be 100% certain of victory over inflation and that they would not rush into a dovish pivot until convincing evidence of inflation falling below the 2.0% target was seen. Fortunately, the strong economy permits this cautious approach. However, Powell acknowledged that should there be a sharp cooling in the labour market, the easing of monetary policy could occur quite swiftly.

It should be noted that throughout the latter half of January, Fed officials made concerted efforts to temper expectations of a rate cut starting as early as March. And it must be said, they succeeded. The probability of a policy reversal in March dropped from a peak of 90% to 35.5%, while the likelihood of a rate cut in May increased to 61%.

The market's reaction to the outcome of the FOMC meeting was rather muted. The DXY dollar index failed to reach 104.00, and EUR/USD, having dropped to 1.0800 on February 1, reversed direction and climbed back to 1.0900 by Friday, in anticipation of the release of data on the state of the American labour market.

The data published on February 2 revealed that the number of new jobs in the US non-farm sector (Non-Farm Payrolls) increased by 353,000 in January, far exceeding the expected 180,000. This followed a December increase of 333,000. Unemployment remained stable at 3.7%, while wage inflation rose to 4.5% on an annual basis, significantly surpassing market expectations of 4.1%. Thus, Fed Chair Jerome Powell's concerns about a sharp cooling of the labour market were unfounded, which clearly benefited the American currency.

Let's recall that a week earlier, on January 25, the European Central Bank (ECB) held a meeting where the regulator also left the key interest rate unchanged at 4.50%. During the press conference following the meeting, ECB President Christine Lagarde refrained from commenting on the possible timing of rate cuts. According to her, the Governing Council members believe it is too early to discuss easing monetary policy. However, many market participants think that economic challenges may prompt the ECB to initiate this process first. A comparison of macroeconomic indicators between the Old and the New World is enough to support this view.

The unemployment rate in the Eurozone stands at 6.4% compared to 3.7% in the US. European GDP barely moved from a recessionary negative level of -0.1% to 0% in Q4, while the US saw a growth of +3.3%. Moreover, inflation in the Eurozone is close to the target of 2.0%, currently at 2.9%, compared to 3.4% in the US. All these indicators could prompt the European Central Bank to begin easing monetary policy soon. Furthermore, ECB Vice President Francois Villeroy de Galhau recently stated that the rate could be reduced at any moment. Many market participants interpreted this as a signal that a dovish trend might begin within the next two months.

However, analysts at Commerzbank believe that an initial rate cut in March or April might not occur. They note that one negative factor for the euro persists. The bank's strategists think that there is a significant faction within the ECB Governing Council that is merely biding time, to then seize the first opportunity to advocate for a rate cut. "This may even be too soon," Commerzbank warns.

Economists at another bank, the British HSBC, expect the dollar to strengthen slightly in the medium term, especially against the euro and the pound. This is attributed to the continued outperformance of the US economy compared to many other G10 countries, allowing the Federal Reserve to delay easing its policy. "A less aggressive easing path could lead to a decrease in risk appetite, which would support the US dollar," HSBC specialists write.

EUR/USD closed the week at 1.0787. At present, 30% of experts have voted for the dollar to strengthen in the near future, anticipating further decline in the pair. An equal percentage sided with the euro, believing that the pair will at least remain within the 1.0800-1.0900 channel. The remaining 40% have adopted a neutral stance. Indicator readings on the D1 are more definitive. Oscillators are 100% in the red (though 20% of them signal oversold conditions). Among trend indicators, the balance of power is 85% red to 15% green. The nearest support for the pair is located in the 1.0780 zone, followed by 1.0725-1.0740, 1.0620-1.0640, 1.0500-1.0515, and 1.0450. Bulls will encounter resistance in the areas of 1.0820, 1.0890-1.0925, 1.0985-1.1015, 1.1110-1.1140, and 1.1230-1.1275.

Key events for the upcoming week include the release of data on business activity (PMI) in the US services sector on Monday, February 5. The next day, volumes of retail sales in the Eurozone will be disclosed. Thursday traditionally brings information on the number of initial jobless claims in the United States. And towards the very end of the workweek, on Friday, February 9, data on consumer price inflation (CPI) in Germany, the main engine of the European economy, will be released.

GBP/USD: US Labor Market Delivers Blow to the Pound

Last week, on Thursday, February 1, the Bank of England (BoE), like its counterparts across the Channel and the Atlantic, maintained its key interest rate at 5.25%. The Bank of England made no changes to its policy and did not issue any dovish statements. However, the pound received support as two members of the BoE's Monetary Policy Committee continued to vote for a rate hike of 25 basis points. This argument proved to be relatively weak, especially since another committee member voted for a rate cut, while the overwhelming majority, eight members, supported keeping the rate unchanged.

Analysts continue to believe that expectations are on the side of the British currency, speculating that the BoE might be among the last to cut rates this year. However, according to Scotiabank specialists, for further growth of the GBP/USD pair, a breakthrough of the late December peak at 1.2825 is necessary. Yet, there seems to be no foundation for this at the moment. Moreover, strong data from the US labour market strengthened the dollar and prevented the pair from remaining near the upper boundary of the 1.2600-1.2800 sideways channel, where it has been trading for seven weeks.

GBP/USD concluded the past week at 1.2632. According to economists at Internationale Nederlanden Groep (ING), a strong dollar may keep GBP/USD around the 1.2600-1.2700 range in Q1 2024. Regarding the median forecast of analysts for the coming days, 35% voted for the pair falling below the 1.2600 support level, 50% for its rise, and 15% preferred to maintain neutrality. Unlike the experts, trend indicators on D1 show a slight bias towards the American currency, with 60% indicating a strengthening dollar and further decline of the pair, against 40% suggesting its rise. Among oscillators, 65% lean towards the dollar (with 10% indicating oversold conditions), 10% favour the pound, and the remaining 25% hold a neutral position. Should the pair move south, it will encounter support levels and zones at 1.2595-1.2610, 1.2500-1.2515, 1.2450, 1.2330, 1.2210, and 1.2070-1.2085. In case of an upward movement, resistance will be met at levels 1.2695-1.2725, 1.2785-1.2820, 1.2940, 1.3000, and 1.3140-1.3150.

No release of significant macroeconomic data related to the economy of the United Kingdom is anticipated for the upcoming week.

USD/JPY: BoJ Policy Shift: Dreams or Reality?

Strong U.S. labour market statistics dashed the hopes of bulls not only for the euro and the pound but also for the yen. At the beginning of the past week, the Japanese currency was gaining, and USD/JPY was trending downwards, marking a local minimum at 145.89 on Thursday, February 1. A sharp decline in the yield of U.S. Treasuries helped the yen. Specifically, the yield on 10-year U.S. bonds fell to its lowest level since the end of December: 3.9%. It is worth noting the correlation between U.S. securities and USD/JPY. If the yield on ten-year Treasury notes falls, the yen strengthens, and USD/JPY forms a downward trend. This was exactly the case. However, the end of the workweek was characterized by a clear advantage for the American currency, and the pair soared again, concluding at 148.35.

Many market participants continue to harbour hopes for a tightening of monetary policy by the Bank of Japan (BoJ). For instance, analysts at the Canadian Imperial Bank of Commerce (CIBC) expect the BoJ to move away from negative interest rates in April, with additional changes in its Yield Curve Control (YCC) policy to support the Japanese yen in the second half of the year. "We believe," CIBC strategists write, "that USD/JPY has already reached its peak and should [...] decrease to 144.00 in Q2. Following this, we anticipate that rate cuts by the Federal Reserve and the prospect of gradual adjustments to the BoJ's YCC will lead to a decline in USD/JPY to 140.00 in Q3 and 135.00 in Q4 2024."

It's important to note that many experts had anticipated a tightening of the Bank of Japan's (BoJ) monetary policy already in 2023: a topic extensively covered in previous discussions. However, this did not occur. And it might not happen now either.

In January, the Consumer Price Index (CPI) in the Tokyo region unexpectedly fell from 2.4% to 1.6%, and the core CPI, excluding fresh food and energy prices, decreased from 3.5% to 3.1%. Additionally, the growth of industrial production in Japan in December slowed to 1.8%, against a forecast of 2.4%. On a year-over-year basis, industrial production also showed further deceleration: in December, this indicator was -0.7% (year-on-year), an improvement compared to the previous period's -1.4% but still marking a decline.

Such a significant easing of inflationary pressure and a slowdown in economic growth may lead to the BoJ not tightening its policy in the foreseeable future, leaving the interest rate at -0.1%. This forecast was also confirmed by the minutes from the Bank of Japan's December meeting. It was indicated that the Board members agree that "it is necessary to patiently maintain a loose policy."

Regarding the near-term outlook, only 25% of experts expect further strengthening of the dollar and an increase in USD/JPY. In contrast, 75% are siding with the yen, agreeing with CIBC economists that the pair has reached its peak. Trend indicators and oscillators on D1 are all pointing northward, with 100% indicating upward momentum, although 10% of the latter are in the overbought zone. The nearest support level is located in the 147.60 zone, followed by 146.85-147.15, 146.00, 145.30, 143.40-143.65, 142.20, 141.50, and 140.25-140.60. Resistance levels and zones are at 148.55-148.80, 149.85-150.00, 150.80, and 151.70-151.90.

No significant events or statistics related to the Japanese economy are expected in the upcoming week.

CRYPTOCURRENCIES: Halving – Grief or Joy?

Throughout the past week, BTC/USD moved with support at $42,000 without showing any significant results in either direction, drawing special attention to its statistics. Analysts note that the 12-month volatility of the first cryptocurrency has reached its lowest level in 12 years. The indicator has varied significantly over the years but has generally shown a clear downward trend over this period. From 179% in January 2012, it dropped to 45% at the beginning of this year.

A higher volatility figure indicates significant price variability and signals greater market unpredictability. Lower metric values suggest much more stable trading conditions. The decreased volatility could mean a larger number of long-term holders, according to CryptoQuant. The research department at Galaxy Digital predicts that the spot bitcoin ETFs launched in January will further smooth out price fluctuations. "A huge amount of BTC will be held in [investment] advisory accounts. They are not interested in intraday trading," the experts state.

Analysts at Glassnode also spoke about long-term investors. Their report indicates that the overwhelming majority of such BTC holders still do not wish to part with their coins and adhere to a hodling strategy in anticipation of higher spot prices. According to K33 Market Research, the volume of spot trading in bitcoin reached "sustainably high activity following the approval of ETFs." Data from The Block’s Data Dashboard shows that the monthly volume of on-chain transactions in the bitcoin network in January was at a multi-month high, with trading volume for January exceeding $1.11 trillion.

Regarding the Bitcoin ETFs launched in January, the situation has not been as promising as expected. According to several experts, this is a classic case of "buy the rumour, sell the news." Initially, there was an impressive bull rally. Now, however, as these funds have become operational, market participants have begun actively taking profits.

The Grayscale ETF was converted from a trust fund, and by the end of January, it experienced a withdrawal of funds amounting to $2.2 billion. The reason for this is not only the profit-taking by the trust's shareholders in 2023 but also dissatisfaction with high management fees. Grayscale charges a 1.5% fee, whereas other funds have managed to keep their fees between 0.2-0.3%. Among the ETF competitors, BlackRock continues to lead with $2.2 billion, with Fidelity approaching $2 billion. WisdomTree is at the bottom of the ranking with $6.3 million. As for the net inflow of funds since the launch of spot BTC-ETFs, it stands at a modest $760 million.

In addition to profit-taking, another reason putting pressure on the market has been the miners. The halving is scheduled for April 19, leaving roughly 2.5 months. If the price of digital gold does not show significant growth during this period, the majority of miners will face a severe liquidity shortage. Therefore, they have already started to sell off their BTC reserves to replenish liquidity. Since the approval of spot ETFs on January 10, they have sent a record 624,000 BTC to exchanges over the last six years, approximately worth $26 billion. According to estimates, miners still have about 1.8 million BTC left, valued at $76 billion. The sale of these reserves could potentially push bitcoin prices significantly lower.

Analysts at Matrixport have forecasted a drop in BTC/USD to $36,000. They believe that bitcoin might then appreciate in value, but only against a backdrop of favourable macroeconomic conditions and increasing liquidity. (It's worth mentioning that these same analysts had predicted bitcoin would reach $125,000 in 2024 back in December).

Chris Burniske, a partner at the venture firm Placeholder, provided an even more pessimistic forecast. He believes that the price of the leading cryptocurrency will first fall to the $30,000-$36,000 range and then likely reach a local bottom around $20,000. "The consolidation will come lower than most people expect, due to too many variables (e.g., specifics of the crypto market, macroeconomics, adoption, and development of new products)," the expert warned. However, testing the levels around $20,000 will be a "real step" towards reaching previous highs, he believes. "The journey there will be volatile – expect setbacks. And it will take months. As always, your best friend is patience," Burniske emphasized, adding that the decline in other assets will be even deeper than that of bitcoin.

Contrary to Chris Burniske, the forecast by analyst DonAlt appears significantly more optimistic. He cheered his 56,700 YouTube subscribers by noting that bitcoin managed to avoid a total price collapse after the launch of the Bitcoin ETFs. "Digital gold looks strong even after its price dropped below $40,000 last week," he observed. The expert believes that the absence of mass selloffs is a positive sign. "For this reason, I am no longer in the bear camp; now, I am with the bulls," he declared. DonAlt also emphasized that bitcoin is consolidating within a strong upward trend and is likely to regain bullish momentum once it overcomes resistance at the $44,000 level.

Another expert, known by the nickname Rekt Capital, believes traders have one last chance to buy bitcoin at a low price. He analysed historical data and came to the following conclusions:

1. If bitcoin does not become cheaper in the next two weeks, then the coin's price will not significantly fall until the halving. 2. Approximately 60 days before the halving, BTC's price will rise on the wave of hype surrounding the event. 3. After the halving, speculators will rush to sell the cryptocurrency, so bitcoin will depreciate for several weeks, and its value may drop by 20-38%. 4. Then a period of accumulation will begin, lasting up to 150 days, characterized by a relatively low level of BTC price volatility. 5. After this, a phase of parabolic growth in the bitcoin price will start, and its price will reach a new all-time high.

Markus Thielen, Head of Research at 10x Research, is a proponent of Elliott Wave Theory, which suggests that asset prices move in five waves. According to this theory, the first, third, and fifth waves are "impulse waves" that move the asset in the direction of the trend, while the others are corrective "retracement waves." The analyst believes the recent decline in bitcoin's price represents the fourth wave, i.e., a retracement. At present, the fifth wave is beginning, which could push the price upward. "Wave analysis has marked this recovery up to $52,671 potentially by the end of the first quarter of 2024," Thielen announced.

Anthony Scaramucci, the founder of hedge fund SkyBridge Capital, pointed to a similar figure. "Suppose the price [on the day of the halving] is $50,000," he predicts. "Multiply this BTC price by four, and it will reach this level [$200,000] within the next 18 months." Previously, the head of SkyBridge claimed that the BTC rate could reach $100,000 after the halving. As an additional reason for a bullish rally, he cited the reduction of the US Federal Reserve's interest rate.

Regarding the long-term course, Scaramucci forecasts that bitcoin's market capitalization could reach half of gold's, which stands at $14.5 trillion. Therefore, by his calculations, the price per coin would amount to about $345,000.

Peter Schiff, the President of Euro Pacific Capital and a staunch opponent of the first cryptocurrency, made an unexpected long-term forecast. While he typically predicted a complete crash for bitcoin, he has now suggested that by 2031 the price of the coin could reach ... $10 million, albeit under a very hypothetical scenario. According to him, this would only occur if the US dollar were to follow the path of "German paper marks." This term informally referred to the currency introduced in Germany at the start of World War I in 1914 as a replacement for the previous gold-backed mark. In the early 1920s, the paper mark depreciated due to hyperinflation. At that time, companies paid wages several times a day so that workers could make purchases before prices rose again. The money supply grew so rapidly that the state could not print banknotes fast enough and had to enlist private companies for help. The largest denomination issued was a banknote worth 100 trillion marks.

In reality, Peter Schiff does not believe in an economic collapse and the fall of the US dollar. Thus, this forecast of his can be considered mockingly sarcastic towards bitcoin. However, Robert Kiyosaki, the economist and author of the bestseller "Rich Dad Poor Dad," harbours no doubts about such a scenario. He continues to insist that gold, silver, and bitcoin should be part of every investor's portfolio. He is confident that the price of BTC could reach $1 million in the event of a global economic collapse.

As of the evening of February 2, when this review was written, the global economy has not collapsed, BTC/USD has not reached either $1 million or $10 million, and is currently trading around $43,000. The total market capitalization of the crypto market stands at $1.65 trillion (up from $1.61 trillion a week ago). The Crypto Fear & Greed Index has increased to 63 points (from 49 a week ago), moving from the Neutral zone into 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
Stan NordFX
  • Posts: 625
  • Joined: 04/03/2018
CryptoNews of the Week

UserPostedImage


– Nayib Bukele was re-elected as President of El Salvador on February 4, winning by a substantial margin. The leader, who has openly supported bitcoin and made it the country's first legal tender, garnered the support of the majority of the Salvadoran society, securing approximately 85% of the electorate's votes. "This is a record for democratic elections worldwide," Bukele stated.
Shortly before the election, it was announced that should Bukele win the presidency by a large margin, he would expand the use of bitcoin. Specifically, Bukele plans to issue passports to bitcoin entrepreneurs and launch Volcano bonds, which will fund the construction of Bitcoin City, a tax haven for crypto companies.

– Jim Rogers, an investor who co-founded the Quantum Fund with George Soros, believes that bitcoin does not pose a threat as a potential replacement for existing government currencies. According to him, despite bitcoin's growth and current perception, the primary role of the flagship cryptocurrency is to serve as a trading instrument. Rogers emphasized that governments are unlikely to recognize bitcoin as a currency, as they fear potential competition with existing monetary systems. However, the investor suggests that Central Bank Digital Currencies (CBDCs) are likely to be adopted in several countries around the world.

– The former President of the United States, Donald Trump, also commented on the possibility of the country adopting a Central Bank Digital Currency (CBDC). He stated that if he were to be re-elected, he would prevent the introduction of this type of currency in the United States. Trump emphasized that a CBDC infringes upon citizens' rights and freedoms, as it would allow government entities access to detailed information about people's financial activities. "I will never allow the creation of a central bank digital currency that would enable the theft of your money," Trump declared.

– The popular blogger PlanB has stated that following the upcoming bitcoin halving in April, bitcoin will become scarcer than gold and real estate, suggesting that the cryptocurrency could reach a price around $500,000. Based on his Stock-to-Flow model, the expert considered that the digital asset's market capitalization might not surpass that of gold: over $10 trillion. However, approaching this mark and a coin issuance of 20 million could lead to the stated price. PlanB did not specify a timeframe for reaching this price.
The analyst also named the minimum level below which, in his opinion, the primary cryptocurrency will not fall. The 200-week moving average (200WMA) of the BTC price has exceeded $31,000, and according to PlanB, historically, the price has never dropped below this metric.

– Scott Melker, a renowned trader, investor, writer, and host of "The Wolf Of All Streets" podcast, who also holds the title of Binance Influencer of the Year, has shared his perspective on the upcoming bitcoin halving. He believes this event could drive the price of bitcoin up to $240,000. "The bitcoin halving will occur when the number of mined blocks reaches 840,000 in April 2024, at which point the block reward will decrease from 6.25 to 3.125 BTC," Melker explained. "Essentially, this means that the issuance of new coins will be halved. It will become twice as difficult for miners to earn money from bitcoin mining." Following the previous halving, the BTC price soared from $20,000 to $69,000, marking a 250% increase. Therefore, if the situation repeats this time, the next peak after $69,000 could be $240,000. "I know it might seem like an exaggeration... This cycle has worked in the past. And until I see it fail [this time], I'm prepared to bet that bitcoin will exceed $200,000," Melker insists.
It's worth noting that Anthony Scaramucci, the founder of Skybridge Capital, also recently expressed optimism about bitcoin's future. He believes the halving will lift the BTC price to $170,000.

– CryptoQuant has announced that bitcoin miner reserves have dropped to their lowest level since July 2021. The wallets of mining pools are holding the lowest volume of cryptocurrency since the so-called Great Migration of miners from China to other countries in Eurasia and North America. Moreover, last week saw the largest outflow of BTC from miners' autonomous wallets to exchanges.
Analysts at Bitfinex are also observing an influx of bitcoins to exchange addresses associated with mining companies. They believe that a massive coin dump could occur in the coming days. Consequently, pressure will increase again, and the digital currency may fall below $40,000. The Bitfinex report notes that sales are increasing due to the approaching halving. They estimate that, following the miners, short-term investors may join the sell-off. They will start to dispose of the cryptocurrency for fear that its price will fall below the level at which they purchased the coins.

– Michael Van De Poppe, a renowned trader, investor, and founder of MN Trading, believes that the value of bitcoin could reach $500,000. He highlighted several factors that will cause an explosive growth in the flagship coin's rate. Among these factors are the current market state, the launch of BTC-ETFs, inflows from institutional investors, and others. An important factor will be the halving, after which a bullish growth of the cryptocurrency market is expected. The researcher emphasized that the current cycle might be slightly longer than before, due to the entry of institutional players into the market and a change in the overall direction of the industry's development. According to the analyst, liquidity influences, macroeconomic factors, and others could have a greater impact on the market.
Van De Poppe suggests a scenario where the value of bitcoin could rise to $48,000 before the halving, hitting a key resistance level. This would be followed by another correction, resulting in a 20% price drop. After the halving, the BTC value will start to rise again and reach a local peak by the fall.

– Grok, an artificial intelligence developed by Elon Musk's company xAI, has made two predictions: by the end of 2024, the Ethereum rate will range from $4,000 to $5,000; within the year, the value of ETH could peak at $6,500. Grok highly values the prospects of Ethereum due to the development of its ecosystem and the upcoming Dencun update, scheduled for February 8. This upgrade is expected to enhance the scalability of the ETH blockchain and significantly reduce transaction processing costs in second-layer networks through the implementation of proto-danksharding technology, which allows for increased blockchain throughput. The artificial intelligence also identifies spot Ethereum ETFs as catalysts for the coin's price growth, which could be approved by the end of May. Applications for the issuance of these derivatives have been submitted to the U.S. Securities and Exchange Commission (SEC) by six major American companies: Volatility Shares, Bitwise, Grayscale, VanEck, Roundhill, and Proshares.

– Senator Elizabeth Warren asserts that her legislative proposal has already garnered the support of 19 members of the U.S. Senate. She hopes that "common sense will prevail," and her supporters, along with other congressmen, "will achieve effective measures to combat the criminal use of crypto assets."
Should the law come into effect, the anti-money laundering regulations from the traditional finance sector will fully apply to digital asset market players. According to the draft document, Know Your Customer (KYC) rules will affect providers of autonomous wallets, miners, validators, and other independent network participants. All financial institutions in the U.S. will be required to report on measures to prevent money laundering, tax evasion, and other criminal activities. "This bill will close the gaps in our anti-money laundering regulations," Warren stated, referencing a report by the analytics firm Chainalysis, which indicated that from 2022 to 2024, stablecoins accounted for more than 50% of transactions by cybercriminals.

– Cathy Wood, CEO of ARK Invest, asserts that investors have begun shifting from gold to bitcoin following the launch of spot bitcoin exchange-traded funds (ETFs). "Bitcoin is growing relative to gold. The substitution of gold with bitcoin is in full swing. And we believe this will continue now that a less complex access to bitcoin has emerged," she stated.
Cathy Wood anticipates that bitcoin will emerge as a "risk-free asset" when the banking sector shows signs of weakness again. The market witnessed this firsthand in March 2023, during the "regional banking crisis" in the United States, which resulted in a 40% surge in the price of digital gold. (Recent analysis by Fidelity indicates that bitcoin's inverse correlation with banking interest rates disappeared in 2023, despite rising rates worldwide).


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
Stan NordFX
  • Posts: 625
  • Joined: 04/03/2018
Forex and Cryptocurrencies Forecast for February 12 - 16, 2024



EUR/USD: Dollar Dips but Promises a Rebound

Last week saw a scarcity of significant macroeconomic data. In anticipation of new drivers, market participants analysed the state of the US labour market and statements from Federal Reserve officials.

Data released on February 2 revealed that the number of new jobs in the US non-farm sector (Non-Farm Payrolls) increased by 353,000 in January, against the expected 180,000. This figure followed a December increase of 333,000. Unemployment remained stable at 3.7%, although experts had forecast a rise to 3.8%. Meanwhile, wage inflation grew to 4.5% on an annual basis, significantly exceeding market expectations of 4.1%. The report, issued on Thursday, February 8, was also robust, showing that the number of US citizens applying for unemployment benefits was 218K, down from 227K previously.

Thus, Federal Reserve Chair Jerome Powell's concerns proved unfounded. Recall that he recently suggested that if the labour market were to cool sharply, easing of monetary policy could occur quite rapidly. However, no cooling has occurred, so the FOMC members may not rush to a dovish pivot until they see convincing evidence of inflation dropping below the 2.0% target.

Subsequent comments from Fed representatives confirmed the low likelihood of an easing of national monetary policy in the near term. For instance, Susan Collins, President of the Federal Reserve Bank of Boston, stated that due to a strong labour market and economic growth, a rate cut is currently not advisable. Her colleague from the Federal Reserve Bank of Richmond, Thomas Barkin, expressed serious doubts about the sustainability of the inflation reduction pace, as price growth continues in the services and rental sectors. As the figures above indicate, wage inflation is also rising.

Against this backdrop of the regulator's representatives' hawkish stance, the probability of a rate cut in March has decreased, and according to the FedWatch Tool, it currently stands at only 15.5%, with May at 54.1%. In such conditions, bulls on the Dollar Index (DXY) feel significantly more confident than bears.

Regarding the euro, the common European currency has been significantly impacted by recent dovish statements from European Central Bank (ECB) officials. Weak statistics from the Eurozone also support the case for an earlier start to monetary policy easing. A comparison of macroeconomic indicators between the Old and New Worlds suffices to illustrate this. Unemployment in the Eurozone stands at 6.4% compared to 3.7% in the US. European GDP in Q4 barely moved from a recessionary level of -0.1% to 0% (in contrast to the US, which saw a +3.3% increase). The service sector activity index dropped from 48.8 to 48.4 points, while the composite indicator, which includes both services and manufacturing, is at 47.9 points. Hence, both these indicators remain in the stagnation zone (below 50.0). In Germany, exports of goods decreased by 4.6% in December, and imports by 6.7%.

On the other hand, the Consumer Price Index (CPI), a crucial inflation indicator, showed a slight increase in consumer prices in Germany from 0.1% to 0.2% month-on-month, offering the euro some support by giving investors hope that the ECB may not be the first to cut rates. As a result, EUR/USD ended the week at 1.0785.

A number of experts believe that the dollar's weakening last week was a corrective pullback, and the fundamental backdrop continues to favor the American currency. As of the writing of this review, on the evening of Friday, February 9, 70% of experts voted for a strengthening of the dollar in the near future and a further decline of the pair. 15% sided with the euro, and an equal percentage adopted a neutral position. Oscillators on D1 share a similar view: 65% are coloured red, indicating a bearish outlook, 10% green, showing a bullish outlook, and 25% in neutral grey. Among trend indicators, the distribution of forces between red (bearish) and green (bullish) stands at 65% to 35%. The nearest support for the pair is located in the zone of 1.0725-1.0740, followed by 1.0680, 1.0620, 1.0495-1.0515, and 1.0450. Bulls will encounter resistance at levels 1.0800-1.0820, 1.0865, 1.0925, 1.0985-1.1015, 1.1110-1.1140, and 1.1230-1.1275.

The upcoming week's noteworthy events include the publication of the US Consumer Price Index (CPI) data on Tuesday, February 13. Market participants will analyse the latest Eurozone GDP data on February 14, the same day Valentine's Day is celebrated. American statistics on manufacturing activity, unemployment, and retail sales volume will be highlighted on Thursday, February 15. The week will conclude with the release of the US Producer Price Index (PPI) for January on Friday.

GBP/USD: Factors Supporting and Weighing on the Pound

On Friday, February 2, strong data from the US labour market strengthened the dollar and pushed GBP/USD from the upper boundary of the sideways channel at 1.2600-1.2800 to the lower end. The decline continued over the past week, with the pair finding a local bottom at 1.2518 on February 5. It is to the credit of the British currency that it managed to recover its losses and returned to the 1.2600 zone, which shifted from support to resistance.

Analysts believe that the British currency continues to be supported by expectations that the Bank of England (BoE) may be among the last to cut rates this year. It's worth noting that on February 1, the BoE held its meeting and kept the key rate at the previous level of 5.25%. However, the pound received support because two members of the BoE's Monetary Policy Committee continued to vote for a rate hike of 25 basis points (bps). The following day, Catherine Mann explained that she voted for a rate increase because she is not confident that the decline in core inflation will continue in the near term. Another Committee member, Jonathan Haskel, acknowledged that inflationary pressures might be easing but noted that he would need additional evidence of this process before changing his stance on rate hike prospects.

Furthermore, GBP/USD is significantly influenced by market participants' risk appetite, which has been increasing, as evidenced by the quotations of stock indices such as the S&P 500, Dow Jones, and Nasdaq. Consequently, hawkish remarks from Bank of England representatives and improved sentiment regarding risk have helped the pair offset its losses.

Working against the British currency is the fact that inflationary pressures are indeed starting to ease. According to the KPMG and the Recruitment & Employment Confederation's UK Report on Jobs, the wage inflation index decreased from 56.5 points to 55.8 points in January, indicating that wage growth in the country was at its slowest pace since March 2021. Thus, signs of cooling inflation serve as an argument for the Bank of England to begin cutting interest rates. At the regulator's last meeting, as mentioned, two members of the Committee voted for an increase in borrowing costs, eight for keeping the rate unchanged, and only one member voted for a reduction. However, if at the next meeting on March 21, the doves gain not just one but two or three votes, this could trigger active selling of the GBP/USD pair.

The pair concluded the past five-day period at the mark of 1.2630. Regarding the median forecast of analysts for the coming days, 50% voted for the pair's decline, 15% for its rise, and the remaining 35% abstained from commenting. Among the oscillators on D1, 50% indicate a downward direction, the remaining 50% look eastward, with none showing a preference for moving north. The situation with trend indicators is different, where a slight majority favors the British currency – 60% pointing north and the remaining 40% south. Should the pair move southward, it will encounter support levels and zones at 1.2595, 1.2570, 1.2495-1.2515, 1.2450, 1.2330, 1.2210, 1.2070-1.2085. In case of an upward movement, resistance will be met at levels 1.2695-1.2725, 1.2785-1.2820, 1.2940, 1.3000, and 1.3140-1.3150.

Regarding the UK economy, the upcoming week's calendar highlights include a speech by Bank of England Governor Andrew Bailey on Monday, February 12. A significant amount of statistics from the British labour market will be released on Tuesday, February 14. On Wednesday, February 15, the Consumer Price Index (CPI) values will be announced, followed by the country's GDP indicators on February 16. The week's stream of statistics will conclude on Friday, February 16, with the publication of data on retail sales in the UK.

USD/JPY: The Pair's Flight to the Moon Continues

Thanks to the hawkish rhetoric from Federal Reserve representatives, USD/JPY continued to rise last week, coming close to the psychological resistance level of 150.00. It likely would have breached this level, but market participants are exercising caution ahead of the January Consumer Price Index (CPI) data release in the US, which is scheduled for February 13.

The yen continues to be under pressure due to the Bank of Japan's (BoJ) persistent dovish stance. Investors observe that the regulator still has no intention of raising interest rates. On Thursday, February 8, BoJ Deputy Governor Shinichi Uchida stated that "the future course of rates depends on economic and price developments" and that monetary policy conditions in the Japanese economy are on a deeply negative trajectory, with no expectations of aggressive inflation. The following day, BoJ Governor Kazuo Ueda traditionally spoke, stating that "the chances of maintaining accommodative conditions are high even if negative rates are abandoned."

From this, the market concluded that if any changes are to be made to the central bank's monetary policy, they will occur very slowly and it's uncertain when. The investors' reaction is evident in the USD/JPY chart: a local maximum was recorded at 149.57, with the week's final note hitting at 149.25.

Regarding the near-term outlook for USD/JPY, experts' opinions are evenly divided: a third anticipate further growth, another third expect a decline, and the remaining third have chosen to remain neutral. Trend indicators and oscillators on D1 unanimously point north, indicating bullish sentiment, but 25% of the oscillators are in the overbought zone. The nearest support level is located in the zone of 148.25-148.40, followed by 147.65, 146.85-147.15, 145.90-146.10, 144.90-145.30, 143.50, 142.20, and 140.25-140.60. Resistance levels are found at 149.65-150.00, 150.75, and 151.70-151.90.

Among the significant events related to the Japanese economy, the publication of the country's GDP data on Thursday, February 15, stands out. Traders should also be aware that Monday, February 12, is a public holiday in Japan: the country observes National Foundation Day.

CRYPTOCURRENCIES: Why Bitcoin Is Rising

UserPostedImage


"Halving: Grief or Joy?" was the question we posed in the title of our previous review. The debate on this matter does not subside but, on the contrary, becomes more intense as April approaches.

The process of profit-taking after the approval of bitcoin spot ETFs on January 10 has ended. However, a new threat looms over the market now. And this threat is the miners. Scott Melker, a renowned trader, investor, and host of the podcast "The Wolf of All Streets," writes the following: "The bitcoin halving will occur when the number of mined blocks reaches 840,000 in April 2024, at which point the block reward will decrease from 6.25 to 3.125 BTC. Essentially, this means that the issuance of new coins will be halved. It will become twice as hard for miners to earn money from mining bitcoin."

The halving is tentatively scheduled for April 19, meaning there are roughly two months left. If the price of digital gold does not show significant growth in this period, the majority of miners will face a sharp liquidity shortage. Therefore, to replenish their liquidity, they may start actively selling their BTC holdings, which would exert significant pressure on the market.

According to estimates, bitcoin miners still had about 1.8 million BTC worth approximately $85 billion (at current prices). And now, CryptoQuant has announced that the reserves of these companies have fallen to their lowest level since July 2021. Currently, the wallets of mining pools hold the lowest volume of cryptocurrency since the so-called "Great Migration" of miners from China to other countries in Eurasia and North America. Coins have moved from miners' autonomous wallets to exchanges.

Bitfinex also observes an influx of bitcoins to exchange addresses associated with mining companies. Analysts believe that at some point, a large-scale coin dump could occur, which is concerning. However, miners are holding onto their reserves for the time being, despite reduced transaction fee revenues. According to CryptoQuant, their daily sales have dropped and are now less than 300 BTC.

The situation of mining companies is also complicated by the decline in the production volumes of new coins. According to TheMinerMag, BTC mining by U.S. miners dropped to historical lows in January due to a 29-50% increase in electricity tariffs. High electricity costs are expected to persist until the end of Q1 2024. Therefore, if the trend continues, a certain bitcoin supply deficit will be observed before the halving amid growing demand. And the fact that demand is increasing is confirmed by analysts at Santiment, who note a sharp increase in the number of "whales" owning more than 1,000 BTC. Naturally, this pushes BTC/USD upwards.

From February 7 to 9, bitcoin's price showed a sharp surge, reaching a peak of $48,145. In this rally, in addition to the reasons mentioned, the global increase in risk appetites of major investors likely played the most significant role. The inflow of capital into stock markets also benefited the crypto market. According to IntoTheBlock, the correlation between bitcoin and the S&P 500 index was negative at the end of January but has since returned. Another reason some experts cite for the digital gold's price increase is the approach of the New Year according to the Chinese calendar. It is noted that the price of cryptocurrency always rises in anticipation of this date.

Overall, most forecasts for the entirety of 2024 look quite optimistic, with some being very optimistic. Scott Melker, for instance, believes that the halving could lead to a rise in bitcoin's price to $240,000. "After the previous halving, the BTC price updated its maximum from $20,000 to $69,000, which is a 250% increase," he writes. "Thus, if the situation repeats this time, the next maximum after $69,000 will be $240,000." "I know it might seem like an exaggeration," Melker continues. "This cycle has worked in the past. But until I see it fail [this time], I'm willing to bet that bitcoin will exceed $200,000."

According to ARK Invest CEO Cathy Wood, investors have begun shifting from gold to bitcoin following the launch of spot Bitcoin ETFs. "Bitcoin is growing relative to gold. The substitution of gold with bitcoin is in full swing. And we think this will continue...," she stated.

Echoing Cathy Wood's sentiment is the popular blogger and analyst PlanB. "After the upcoming halving, bitcoin will become scarcer than gold and real estate," he writes. "This implies that the cryptocurrency could reach a price of around $500,000." Based on his Stock-to-Flow model, the expert suggested that the market capitalization of the digital asset might not surpass that of gold – over $10 trillion. However, approaching this mark and a supply limit of 20 million coins would lead to the stated price. PlanB did not specify a timeframe for reaching this price, but he did mention a minimum price level that, in his opinion, the primary cryptocurrency will not fall below. According to PlanB, the BTC price has historically never dropped below the 200-week moving average. (At the time of writing the review, the 200WMA is around $32,000). Another analyst, known by the nickname ali_charts, believes that the critical support level is now $42,560.

Renowned trader, investor, and founder of MN Trading, Michael Van De Poppe, like PlanB, believes that the value of bitcoin could reach $500,000. The expert highlighted that there are numerous factors that will cause explosive growth in the flagship coin's rate. Among these are the current state of the market, the launch of BTC ETFs, inflow of funds from institutional investors, among others. The halving is considered a significant factor, after which a bullish growth of the cryptocurrency market is expected. Van De Poppe suggests that the current cycle might be slightly longer than previous ones, due to the entry of institutional players into the market and changes in the overall direction of industry development.

Van De Poppe believes that a scenario where the value of bitcoin soon reaches the key resistance level of $48,000 is quite plausible. This would be followed by another correction, resulting in a 20% price drop to $38,400. After the halving, the value of BTC will begin to rise again and reach a local peak by the autumn.

Elon Musk's company xAI developed Artificial Intelligence Grok, which has made two predictions regarding Ethereum, the main competitor to the leading cryptocurrency: 1) by the end of 2024, the price of ETH will range from $4,000 to $5,000; 2) within the year, the value of ETH could peak at $6,500. Grok highly values Ethereum's prospects due to the development of this altcoin's ecosystem and the Dencun update. This upgrade will increase the ETH blockchain's scalability level and significantly reduce transaction processing costs. The Dencun deployment took place in the Goerli test network on January 17th, and in the Sepolia test network on January 30th. The launch of Dencun in the main network is scheduled for March 13th. (It's worth noting that this update has already become one of the reasons why large ETH coin holders have started moving their assets from long-inactive wallets. Recently, such a "whale" moved 492 ETH worth over $1.1 million from a wallet that had been dormant for more than eight years).

Grok also considers the potential approval of spot Ethereum ETFs by the end of May as a catalyst for the altcoin's price growth. Six major American companies have submitted applications for these derivatives to the U.S. Securities and Exchange Commission (SEC).

However, the situation is not so straightforward. We have previously quoted SEC Chairman Gary Gensler's statement that positive decisions regarding spot ETFs exclusively concern bitcoin-based exchange products. According to Gensler, this decision "in no way signals a readiness to approve listing standards for crypto assets that are securities." Recall that the regulator still refers to bitcoin as a commodity, while "the vast majority of crypto assets, in his view, are investment contracts (i.e., securities)."

Last week, it was revealed that the SEC had postponed its decision on applications from Invesco and Galaxy. The agency had previously postponed the review date for other applications. "The only date that matters for spot ETH-ETFs at the moment is May 23. This is the deadline for the VanEck application," Bloomberg notes.

Analysts at investment bank TD Cowen believe it is unlikely that the SEC will make any decision before the second half of 2024. "Before approving an ETH-ETF, the SEC will want to gain practical experience with similar investment instruments in bitcoins," commented Jaret Seiberg, head of the TD Cowen Washington Research Group. TD Cowen believes the SEC will return to the discussion of Ethereum ETFs only after the U.S. presidential elections in November 2024.

Senior JP Morgan analyst Nikolaos Panagirtzoglou also does not expect the prompt approval of spot ETH-ETFs. For the SEC to make a decision, it needs to classify Ethereum as a commodity, not a security. However, JP Morgan considers this event unlikely in the near future.

The cryptocurrency market has shown impressive growth over the past week. As of the evening of February 9, BTC/USD is trading in the $47,500 zone, and ETH/USD at $2,500. The total market capitalization of cryptocurrencies is $1.78 trillion (up from $1.65 trillion a week ago). The Crypto Fear & Greed Index has risen to 72 points (from 63 a week ago) and 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.

#eurusd #gbpusd #usdjpy #btcusd #ethusd #ltcusd #xrpusd #forex #forex_example #signals #cryptocurrencies #bitcoin #stock_market
Stan NordFX
  • Posts: 625
  • Joined: 04/03/2018
CryptoNews of the Week

UserPostedImage


– The price of bitcoin surged past $51,700 on 14 February, reaching a new high since 2021. This bull rally is largely attributed to the commencement of operations by nine leading spot bitcoin ETFs. According to The Block, a month after their launch, their assets exceeded 200,000 BTC (about $10 billion). These new bitcoin ETFs have risen to second place in the ranking of commodity exchange-traded funds in the US by asset volume, becoming a more popular investment instrument than silver ETFs. Observers have highlighted a statement from investment giant BlackRock, noting, "Investor interest in bitcoin remains high, hence the fund is ready to purchase even more BTC."
Documenting Bitcoin reports that Wall Street representatives are currently purchasing 12.5 times more BTC coins daily than the network can produce. Researchers believe this is the key driver behind the increased demand and price for the flagship crypto asset.

– Analysts at CryptoQuant have identified another factor that could lead to an increase in the price of BTC in 2024 and 2025: the upcoming halving. The researchers emphasised that this event significantly reduces the supply of bitcoin approximately every four years. They also agree that the recent approval of spot bitcoin ETFs has been one of the most powerful bullish factors for the growth in value of the leading cryptocurrency.
CryptoQuant also noted a significant increase in the number of active wallets, indicating a long-term upward trend. "Considering the reduction in supply, increased demand, and various economic and social issues, particularly the expected ongoing inflation, bitcoin is likely to strengthen its position as a long-term alternative investment asset with an upward trend," the analysts conclude.

– Anthony Pompliano, co-founder and partner at Morgan Creek Digital, also highlighted the success of the recent launch of spot BTC ETFs. The fact that BlackRock and Fidelity were able to attract $3 billion each in record time marks a historic event for exchange-traded funds.
"Wall Street is not just in love with bitcoin," the financier wrote, "they are in an active love affair. The daily supply of bitcoin to funds is limited to just 900 BTC, which equates to approximately $40-45 million. Meanwhile, the daily net inflow of funds into BTC ETFs already equals $500 million. This is a clear indicator of a BTC shortage and its bullish impact on the price of the cryptocurrency and the market as a whole," Pompliano stated, noting the imbalance between the market supply of bitcoin and the demand from Wall Street companies.
The billionaire is optimistic about the future trajectory of BTC and asserts that with the demand from Wall Street continuing, especially considering the upcoming halving, the top cryptocurrency by market capitalization could significantly surpass its historical highs.

– The appearance of photographs with laser eyes in the personal accounts of US President Joe Biden sparked a wave of discussion within the crypto community. This led to speculation on whether Biden has become a supporter of bitcoin or if this was a strategic move for his 2024 presidential campaign to gain the support of crypto investors. There was also speculation that Biden's account might have been hacked.
It's important to remember that the "laser eyes" phenomenon is typically used as a symbol to demonstrate a bullish outlook on bitcoin. It emerged as part of a social media movement aimed at driving the price of BTC to $100,000 by the end of 2021, a goal that was not achieved. Among the most famous personalities who once featured laser eyes were Paris Hilton and Elon Musk.

– Anthony Scaramucci, founder of SkyBridge Capital and former White House official, believes that some retail investors might think they have missed the opportunity to buy bitcoin. His unequivocal response is, "No, it's not too late." In addition to the launch of spot BTC ETFs and the halving, Scaramucci highlighted the monetary policy of the US Federal Reserve. "The US Consumer Price Index (CPI) data released on Tuesday, 13 February, signalled that inflation may not be as under control as the Fed would like," the investor writes. Based on data published by the US Bureau of Labor Statistics, the consumer price index for January showed an inflation rate of 3.1%. The data also led to speculation that the Fed's reduction of interest rates in March and May is likely off the table.
According to Scaramucci, the delay in rate cuts could lead to turbulent trading in the mainstream market but will act as a boom for the crypto world, as bitcoin is used as a hedge against inflation.

– Glassnode has identified that numerous on-chain indicators are now in what's termed the "risk zone." This assessment leverages a variety of metrics that analyze a comprehensive array of data pertaining to hodlers' behaviour, covering both short-term and long-term investment cycles. Experts have noted that a heightened risk level is typically observed at the beginning stages of a bull market. This phenomenon occurs as hodlers might start securing profits upon reaching a "significant level" of return.
Specifically, the MVRV ratio, which monitors the activity of long-term hodlers, has reached a critical zone. Such a high ratio (2.06) has not been seen since the FTX collapse. Currently, a "high" to "very high" risk status is also attributed to six out of the nine remaining metrics. These metrics highlight a relatively low level of profits being realized, in spite of the recent weeks' active price surge, as explained by the specialists.

– In the first two days of this week, the S&P 500 index fell from 5051 to 4922 points. Robert Kiyosaki, the renowned author of "Rich Dad Poor Dad," financier, and writer, has once again issued a stark warning that this stock index is on the brink of a massive crash, with a potential plunge of up to 70%. He accompanied this statement with his consistent recommendation to invest in solid assets such as gold, silver, and bitcoin.
Kiyosaki argues that financial advisors tend to direct their clients towards traditional investments due to their historical appeal and the significant commissions they earn from these recommendations. However, he emphasizes that historical data actually supports the superiority of solid assets, particularly gold, which has outperformed the S&P 500 index over decades. Kiyosaki firmly believes that diversification and the inclusion of solid assets in investment portfolios can be a wise strategy to mitigate potential losses in market volatility. He has called on investors to reassess their strategies and choose knowledgeable financial advisors.

– A popular analyst on Platform X, known as EGRAG CRYPTO, believes that the market capitalization of bitcoin will reach $2 trillion by September this year. Based on this, the price of the leading cryptocurrency will exceed $100,000. "Prepare for the journey of your life," EGRAG CRYPTO urges his followers. "Hold on tight, as you are witnessing a cryptocurrency revolution. Don't blink, or you might miss this historic moment in financial history!"

– During Q3 2023, the billionaire Peter Thiel's Founders Fund, known as the founder and former CEO of PayPal, invested $200 million in bitcoin and Ethereum. The amount was evenly distributed between the first and second cryptocurrencies, as informed sources told Reuters. According to the agency's information, this move marked the return of some institutional players to digital assets after the collapse of FTX and the subsequent regulatory pressure.
As one of the first venture crypto investors, Founders Fund began aggressively purchasing bitcoin back in 2014 but sold off this asset before the market crash in 2022, securing a profit of approximately $1.8 billion. In 2023, Founders Fund made its first purchases when the digital gold was valued below $30,000. Considering the current price, this operation has resulted in an unrealized profit of over 65%.

– Trader and entrepreneur Andrew Kang believes it's a mistake to attribute the current rise in bitcoin to the start of spot BTC ETF operations. "People seem to forget that there was a huge ongoing demand for bitcoin even before these exchange-traded funds were approved," Kang writes. "Meanwhile, BTC has become an almost trillion-dollar asset and has been consistently growing over the last decade." "Just the assumption that cryptocurrency owners allocate just 1% of their income to BTC annually should lead us to conclude: the potential cash flow into bitcoins could reach at least $52 billion per year, or almost $150 million per day."
Furthermore, Andrew Kang is convinced that his assessment of the situation is quite conservative and likely does not account for business and institutional financial flows. The expert is confident that the market demand for the asset will more than absorb all the volumes from expected sales of bitcoins, both from miners and large holders like the Mt.Gox exchange.

– US Federal Reserve Chairman Jerome Powell has recently asserted that US banks are very strong, a claim met with sarcasm by former BitMEX CEO Arthur Hayes, who noted that New York Community Bancorp (NYCB) might disagree.
Last week, the US banking sector was engulfed in fear as NYCB reported a colossal quarterly loss of $252 million. The bank's total loan losses quintupled to $552 million, fuelled by concerns over commercial real estate. Following this report, NYCB's stock plummeted by 40% in one day, leading to a downturn in the US Regional Banks Index.
Arthur Hayes recalled the bitcoin rally triggered by the banking crisis in March 2023, when three major US banks failed within five days. "Yeah... From solid to bankrupt, that's the future. And then there will be even more money, printers... and BTC at $1 million," he commented on the NYCB failure.

– Popular blogger and analyst Lark Davis believes investors have 692 days to become wealthy. He discussed the importance of market cycles and the timely sale of assets. Davis noted that if traders pay attention, they can make a lot of money in the next two years. According to the expert, 2024 will offer the last chance to buy digital assets, while 2025 will be the best time to sell them. However, he advises against selling everything at once, recommending a gradual profit-taking strategy instead. Lark Davis also warned that a "Great Depression" will begin in the global economy and the cryptocurrency market in 2026. Failing to sell in time could result in significant losses.


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
Stan NordFX
  • Posts: 625
  • Joined: 04/03/2018
Forex and Cryptocurrencies Forecast for February 19 - 23, 2024



EUR/USD: A Week of Mixed Data

UserPostedImage


The macroeconomic statistics released last week were mixed in both the United States and the Eurozone. As a result, EUR/USD failed to break through either the 1.0700 support or the 1.0800 resistance, continuing to move within a narrow sideways channel.

The US dollar received a strong bullish impulse on Tuesday, February 14, following the release of US inflation data. The Dollar Index (DXY) surged by more than 0.5% and nearly reached the 105.00 resistance level. Consequently, EUR/USD moved downward, towards the lower boundary of the specified sideways range. Meanwhile, the S&P 500 stock index fell from 5051 to 4922 points.

It can be said that the US inflation data caught the markets off guard. Some analysts even described them as shocking. It turned out that the final victory over prices is not as close as it seemed before, and that the Federal Reserve is unlikely to start lowering interest rates anytime soon.

In January, the Consumer Price Index (CPI) sharply increased against the backdrop of a significant rise in the cost of rent, food, and healthcare services. On a monthly basis, the overall index accelerated from 0.2% to 0.3%. On an annual basis, the CPI was 3.1%, which is below the previous value of 3.4%, but significantly above the forecast of 2.9%. Excluding the volatile prices of food and energy, inflation in January rose from 0.3% to 0.4% month-on-month, while the annual core CPI remained at the previous level of 3.9%, although analysts had forecast a decrease to 3.8%. Particularly sharp was the increase in so-called "super-core inflation," which also excludes housing costs. In January, on a monthly basis, it reached 0.8%: the highest level since April 2022.

Certainly, the Federal Reserve's achievements in combating inflation are significant. It is worth recalling that in the summer of 2022, the CPI reached a 40-year peak at 9.1%. However, the current inflation rate is still almost twice the target level of 2.0%. Based on this, the market concluded that the Federal Reserve is now unlikely to rush into easing monetary policy and will probably maintain high interest rates for longer than previously anticipated. At the beginning of January, according to the FedWatch Tool, the probability of a 25 basis point (bp) rate cut in May was 54.1%. After the inflation report was released, this figure dropped to 35%. An even lower probability is given by the monitoring tool developed by Investing.com. The possibility of a dovish pivot in March, according to its readings, stands at 5%, and in May – around 30% (just a few weeks ago, it was over 90%). As for the beginning of summer, the probability of a reduction in the cost of borrowing through federal funds in June is estimated at 75%.

The inflation report was a boon for dollar bulls, but their joy was short-lived. The data on industrial production and retail sales in the US released on Thursday, February 16, were weaker than expected. In January, retail sales showed a decline of -0.8% compared to the December increase of 0.4% and the forecast of -0.1%. As a result, the dollar was under pressure, and the EUR/USD pendulum swung in the opposite direction: the pair headed towards the upper boundary of the 1.0700-1.0800 channel.

The dollar received a slight boost at the very end of the workweek. On Friday, February 16, the Producer Price Index (PPI) indicated that industrial inflation in January rose just as consumer inflation did. Against a forecast of 0.1%, the actual increase was 0.3% month-on-month, which is 0.4% higher than December's figure. On an annual basis, the PPI rose by 2.0% (forecast 1.6%, previous value 1.7%). However, this support was soon offset by a drop in the University of Michigan's US Consumer Confidence Index, which, although it increased from 79.0 to 79.6, was below the forecast of 80.0 points.

On the other side of the Atlantic, the news was also rather contradictory, resulting in the European statistics not being able to significantly support its currency. The February Economic Sentiment Index from ZEW in Germany improved more than expected, rising to 19.9 from 15.2 in the previous month. The economic sentiment indicator for the Eurozone as a whole also showed growth, moving from 22.7 points to 25.0. However, the assessment of the current situation fell to -81.7, the lowest level since June 2020.

Preliminary GDP data for Q4 2023, released on Wednesday, February 14, showed that the Eurozone is in a state of stagnation. On a quarterly basis, the figures remained at 0%, and on an annual basis, they were at 0.1%, exactly matching forecasts. This statistic did not add optimism, and markets continued to exercise caution, fearing that the Eurozone economy might slip into recession.

Europe faces a significantly sharper choice between supporting the economy and fighting inflation compared to the United States. Isabel Schnabel, a member of the Executive Board of the ECB and a well-known hawk, stated on Friday, February 16, that the regulator's monetary policy must remain restrictive until the ECB is confident that inflation has sustainably returned to the medium-term target level of 2.0%. Furthermore, Ms. Schnabel believes that persistently low labour productivity growth increases the risk that companies may pass their higher labour costs on to consumers, which could delay the achievement of the inflation target.

However, despite such hawkish statements, according to a ZEW survey, more than two-thirds of business representatives still hope for an easing of the ECB's monetary policy within the next six months. The probability of a rate cut for the euro in April is currently estimated by the markets at about 53%.

After all the fluctuations of EUR/USD, the final note of the past week was struck at the level of 1.0776. At the time of writing this review, on the evening of Friday, February 16, 55% of experts voted for the strengthening of the dollar in the near future and the further fall of the pair. 30% sided with the euro, while 15% took a neutral stance. Among the oscillators on D1, 60% are coloured red, 40% in neutral-grey, and none in green. The ratio among trend indicators is different: 60% red and 40% green. The nearest support for the pair is located in the zone of 1.0725-1.0740, followed by 1.0695, 1.0620, 1.0495-1.0515, 1.0450. Bulls will encounter resistance in the areas of 1.0800-1.0820, 1.0865, 1.0925, 1.0985-1.1015, 1.1110-1.1140, 1.1230-1.1275.

Among the events of the upcoming week, the minutes from the last meeting of the Federal Open Market Committee (FOMC) of the US Federal Reserve, which will be published on Wednesday, February 21, are of great interest. The following day, a powerful flow of data on business activity (PMI) in Germany, the Eurozone, and the US will be released. Moreover, on Thursday, February 22, the January figure for the Consumer Price Index (CPI) in the Eurozone and the number of initial jobless claims in the US will be known. Towards the very end of the workweek, on Friday, February 23, data on Germany's GDP, the main engine of the European economy, will arrive. Additionally, traders should keep in mind that Monday, February 19, is a holiday in the United States: the country observes Presidents' Day.

GBP/USD: What's Happening with the UK Economy?

As is known, following the meeting that concluded on February 1, the Bank of England (BoE) announced the maintenance of the bank rate at the previous level of 5.25%. The accompanying statement mentioned that "more evidence is needed that the Consumer Price Index will fall to 2.0% and remain at that level before considering rate cuts."

On February 15, Catharine Mann, a member of the Monetary Policy Committee (MPC) of the regulator, provided the most comprehensive overview of the state of the British economy, including aspects concerning inflation. The key points of her analysis were as follows: "The latest GDP data confirm that the second half of 2023 was weak. However, GDP data is a rearview mirror. On the other hand, the Purchasing Managers' Index (PMI) and other leading indicators look promising. The unemployment rate in the UK remains relatively low, and the labour market continues to be tight. Wage growth is slowing, but the pace remains problematic for the target Consumer Price Index (CPI) indicator. In the UK, goods prices may become deflationary at some point, but not on a long-term basis. Inflation in the UK's services sector is much more persistent than in the EU or the US." Consequently, Catharine Mann's conclusion was: "Mitigating the sources of inflation will be crucial in decision-making" and "Before making a decision on further actions, the Bank of England needs to receive at least one more inflation report."

Referring to specific figures, the latest data from the Office for National Statistics (ONS), published on February 16, showed that retail sales in the UK in January increased by 3.4% against the expected 1.5% and a decline of -3.3% in December (month-on-month). The core figure (excluding automotive fuel retail sales) rose by 3.2% over the month against a forecast of 1.7% and -3.5% in December. On an annual basis, retail sales also showed growth of 0.7% against the expected decline of -1.4% and a December figure of -2.4%.

Labour market data also supports the pound. The unemployment rate fell to 3.8% from 4.2%, against expectations of 4.0%. The reduction in the number of active job seekers in the labour market intensifies competition among employers, which helps maintain a higher wage growth rate. For the three months to December, wage growth was 5.8%. Such strong labour market statistics, complemented by high inflation (CPI 4.0% year-on-year, core CPI 5.1% year-on-year), are likely to push back the anticipated date for easing the Bank of England's monetary policy. Many analysts do not rule out that ultimately, the BoE may be among the last mega-regulators to cut rates this year.

GBP/USD ended the week at the level of 1.2599. According to economists at Scotiabank, the 1.2500 zone represents strong long-term support for it, and a confident move above 1.2610 will strengthen the pound and set GBP/USD on a growth path towards 1.2700. Regarding the median forecast of analysts for the coming days, 65% voted for the pair's decline, 20% for its rise, and the remaining 15% maintained neutrality. Among the oscillators on D1, 75% point south, the remaining 25% look east, with none willing to move north. The situation is different with trend indicators, where there is a slight bias in favour of the British currency – 60% indicate north, while the remaining 40% point south. If the pair moves south, it will encounter support levels and zones at 1.2570, 1.2500-1.2535, 1.2450, 1.2370, 1.2330, 1.2185, 1.2070-1.2090, 1.2035. In case of an increase, the pair will meet resistance at levels 1.2635, 1.2695-1.2725, 1.2775-1.2820, 1.2880, 1.2940, 1.3000, and 1.3140-1.3150.

Thursday, February 22 stands out in the calendar for the upcoming week. On this day, a batch of data on business activity (PMI) in various sectors of the economy of the United Kingdom will be released. The release of other significant macroeconomic statistics in the coming days is not anticipated.

USD/JPY: The Flight Continues

On Tuesday, February 13, USD/JPY reached another local maximum at 150.88. The Japanese currency retreated again, this time against the backdrop of inflation data in the US. The yen also continues to be under pressure due to the Bank of Japan's (BoJ) consistent dovish stance. On February 8, Deputy Governor Shinichi Uchida expressed doubts that the regulator would start to quickly raise its benchmark rate anytime soon. Last Friday, February 16, BoJ Governor Kazuo Ueda spoke in a similar vein. He stated that the issue of maintaining or changing monetary policy, including the negative interest rate, would only be considered "when there is a chance of sustainable and stable achievement of the price level target." Ueda declined to comment on short-term fluctuations in the exchange rate and the factors behind these movements.

In general, there's nothing new. However, many analysts continue to hope that in 2024 the Bank of Japan will finally decide to tighten its monetary policy. "We believe," write economists at the Swiss financial holding UBS, "that the normalization of the Bank of Japan's policy this year will occur against the backdrop of strong negotiations on wage increases and corporate profitability. We still believe that the Japanese yen is likely at a turning point after significant depreciation from 2021 to 2023. Considering that the yield differential between 10-year U.S. and Japanese bonds will narrow over the year, we believe the current entry point for buying yen is attractive."

A similar position is held at Danske Bank, where they forecast a sustainable decrease in USD/JPY below 140.00 on a 12-month horizon. "This is primarily because we expect limited growth in yields in the US," say strategists at this bank. "Therefore, we expect the yield differential to become a tailwind for the yen throughout the year, as the G10 central banks, with the exception of the Bank of Japan, are likely to start rate-cutting cycles."

Regarding the short-term outlook, specialists at Singapore's United Overseas Bank Limited believe that the dollar still has the potential to test 151.00 before weakening. "The risk of the US dollar rising to 152.00 will remain unchanged as long as it stays above 149.55," UOB states. This position is supported by only 25% of experts, with the majority (60%) already siding with the yen, and the remaining 15% preferring to maintain neutrality. Among the trend indicators and oscillators on D1, all 100% point north, however, 25% of the latter are in the overbought zone. The nearest support level is located in the zone of 149.65, followed by 148.25-148.40, 147.65, 146.65-146.85, 144.90-145.30, 143.40-143.75, 142.20, 140.25-140.60. Resistance levels are located at the following levels and zones - 150.65-150.90, 151.70-152.00.

No significant events related to the Japanese economy are scheduled for the upcoming week. Moreover, it is important to note that Friday, February 23, is a public holiday in Japan: the country observes the Emperor's Birthday.

CRYPTOCURRENCIES: Bitcoin Breaks Records

Last week, the price of bitcoin rose above $52,790, setting a new peak since 2021. According to CoinGecko, the market capitalization of the leading cryptocurrency exceeded $1.0 trillion for the first time in two years, and the total market capitalization of the entire crypto market rose above $2.0 trillion for the first time since April 2022.

Much of this bull rally is attributed to the launch of nine leading spot bitcoin ETFs. According to The Block, a month after their launch, their assets exceeded 200,000 BTC (about $10 billion). The new bitcoin ETFs rose to second place in the ranking of US commodity exchange-traded funds by asset volume, becoming a more popular investment instrument than silver ETFs. Observers note BlackRock's statement that "interest in bitcoin among investors remains high," hence the fund is ready to buy even more BTC.

According to Documenting Bitcoin, the net interest from ETF issuers exceeds 12,000 BTC per day. Thus, Wall Street representatives are currently buying 12.5 times more BTC coins daily than the network can produce. Researchers believe this has been a key driver of the price increase for the flagship crypto asset.

Morgan Creek Digital co-founder and partner Anthony Pompliano also highlighted the success of the newly launched spot BTC-ETFs. According to him, the fact that BlackRock and Fidelity managed to attract $3 billion each in record short times was a historic event for exchange-traded funds. "Wall Street is not just in love with bitcoin," the financier wrote. "They are in an active love affair. The daily supply of bitcoins to funds is limited to just 900 BTC, which corresponds to approximately $40-45 million. Meanwhile, the daily net inflow of funds into BTC-ETFs already equals $500 million (max. $651 million). This is a clear indicator of BTC scarcity and its bullish impact on the cryptocurrency's price and the market as a whole," Pompliano stated, noting the imbalance between the market supply of bitcoin and demand from Wall Street companies. The billionaire is optimistic about BTC's future trajectory and asserts that with continued demand from Wall Street, especially considering the upcoming halving, the top-capitalization cryptocurrency could significantly exceed its historical highs.

CryptoQuant noted that, in addition to the demand from BTC-ETFs, the number of active wallets is also significantly increasing. This too indicates a long-term upward trend. "Given the reduction in supply, increased demand, and various economic and social issues, especially ongoing inflation, bitcoin is likely to strengthen its position as a long-term alternative investment asset with an upward trend," analysts conclude.

SkyBridge Capital founder and former White House senior official Anthony Scaramucci also emphasized inflation. Beyond the launch of spot BTC-ETFs and the halving, Scaramucci pointed to the monetary policy of the US Federal Reserve as a driver for Bitcoin's growth. "The US Consumer Price Index (CPI) data released on Tuesday, February 13, signalled that inflation may not be as under control as the Fed would like," the investor writes. "Based on data published by the US Bureau of Labor Statistics, the consumer price index for January showed inflation at 3.1%. The data also sparked speculation that a Federal Reserve interest rate cut in March and May is likely off the table." Delays in rate cuts can cause turbulent trading in the main market but will serve as a boom for the crypto world, as Bitcoin is used as a hedge against inflation. Therefore, according to Scaramucci, the time to invest profitably in digital gold has not yet passed.

Popular blogger and analyst Lark Davis shared a similar position: he believes investors have about 700 days to get rich. Discussing the importance of market cycles and the timely sale of assets, the specialist noted that if traders are attentive, they can make a lot of money in the next two years. According to the expert, 2024 will be the last chance to buy digital assets, and 2025 will be the best time to sell them. The specialist emphasized the importance of not disposing of everything at once but gradually securing profits. Lark Davis also warned that in 2026, a "Great Depression" will begin in the global economy and the cryptocurrency market. And if not sold in time, investments could be lost.

The onset of the "Great Depression" is also predicted by the famous author of "Rich Dad Poor Dad," financier, and writer Robert Kiyosaki. He believes that the S&P 500 index is on the verge of a monumental crash with a potential collapse of a full 70%. He accompanied this statement with his consistent recommendation to invest in assets such as gold, silver, and bitcoins.

Ex-CEO of the cryptocurrency exchange BitMEX, Arthur Hayes, identified another driver for Bitcoin's growth related to the Federal Reserve's monetary policy. Last week, the US banking sector was gripped by fear as New York Community Bancorp (NYCB) reported a colossal quarterly loss of $252 million. The bank's total loan losses increased fivefold to $552 million, fuelled by concerns over commercial real estate. Following the release of this report, NYCB shares fell 40% in one day, leading to a decline in the US Regional Banks Index.

Arthur Hayes recalled the Bitcoin rally triggered by the banking crisis in March 2023, when three major American banks, Silicon Valley Bank, Signature Bank, and Silvergate Bank, went bankrupt within five days. The crisis was caused by an increase in the Federal Reserve's refinancing rate and, as a consequence, the outflow of deposit accounts. Its biggest victims also included Credit Suisse and First Republic Bank. To prevent the crisis from affecting even more banks, global industry regulators, primarily the Fed, intervened to provide liquidity. "Yeah... From rock to bankruptcy, that's the future. And then there will be even more money, printers... and BTC at $1 million," the ex-CEO of BitMEX commented on the current NYCB failure.

Popular analyst on the X platform known as Egrag Crypto believes that by September this year, Bitcoin's market capitalization will reach $2.0 trillion. Based on this, the price of the leading cryptocurrency at that moment will exceed $100,000. "Get ready for the journey of your life," Egrag Crypto urges his followers. "Hold on tight, as you are witnessing a cryptocurrency revolution. Don't blink, or you might miss this historic moment in financial history!"

As of the evening of February 16, when this review was written, the BTC/USD pair is trading in the $52,000 zone. The total market capitalization of the crypto market stands at $1.95 trillion ($1.78 trillion a week ago). The Crypto Fear & Greed Index remains in the Greed zone at a level of 72 points.

– It's worth noting that the Greed zone corresponds to a situation where traders are actively buying an asset that is increasing in price. However, Glassnode warns that many on-chain indicators have already entered the so-called "risk zone". The analysis is based on a group of indicators that consider a wide range of data regarding investor behaviour. Their combination covers both short-term and long-term cycles. In particular, the MVRV indicator, which tracks long-term investors, has approached the critical zone. Such a high value (2.06) has not been observed since the FTX collapse. A similar "high" and "very high" risk status is currently characteristic of six out of the remaining nine metrics. They record a relatively low level of realized profit considering the active price increase in recent weeks. According to observations by Glassnode specialists, a high risk indicator is usually observed in the early stages of a bull market. This is because, having reached a "significant level" of profitability, hodlers may start to secure profits, which, consequently, could lead to a strong correction downwards.


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
Stan NordFX
  • Posts: 625
  • Joined: 04/03/2018
New Unique Accumulative Margin Call Bonus Will Aid NordFX Traders in Tough Situations


UserPostedImage


Starting from February 20, 2024, NordFX brokerage firm clients have been given the opportunity to participate in the accumulative bonus program, Margin Call Bonus. The purpose of this absolutely unique program is to provide traders with funds to maintain their open positions and continue trading in the event of a Margin Call on their account.

No one is immune to mistakes, and at some point, even the most experienced trader may receive a notification that there might not be enough funds in their account to maintain open trading positions. To avoid a disaster, they need to urgently replenish their deposit, or their positions will be forcibly closed, resulting in losses.

Previously, traders faced with this situation had two painful options: either accept the losses or urgently find additional funds. This is why a Margin Call is rightfully considered one of the biggest fears for traders. Now, NordFX clients have a "cure for fear", the Margin Call Bonus: a painless way to navigate out of a difficult situation.

The uniqueness of this bonus lies in the fact that traders earn bonus funds themselves: the more actively they deposit and trade, the larger the bonus they can receive. The bonus amount is automatically calculated based on the trading volume (in lots) executed in their account before a Margin Call occurs.

For detailed information on the Margin Call Bonus program's rules, please visit NordFX site.

Registering for the program and requesting the bonus credit is very straightforward and can be done in the NordFX Trader's Cabinet.

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
Stan NordFX
  • Posts: 625
  • Joined: 04/03/2018
CryptoNews of the Week

UserPostedImage


– Lucas Outumuro, head of research at IntoTheBlock, forecasts an 85% chance that bitcoin will reach a new all-time high within the next six months, potentially surpassing $70,000. He identifies five growth catalysts.
1. The halving in April, marking the fourth reduction of the mining reward from 6.25 BTC to 3.125 BTC per block, which is expected to decrease selling pressure. Outumuro suggests bitcoin could reach a new all-time high (ATH) just a month after the halving.
2. The continued influx of funds into spot exchange-traded funds (ETFs) based on bitcoin could act as a second growth catalyst. While the duration of this strong inflow remains uncertain, its persistence could bolster the cryptocurrency's price through increased demand.
3. IntoTheBlock believes the Federal Reserve's tight stance on interest rates in 2022 laid the groundwork for a bear cycle not only in the crypto market but also across other risk assets. With inflation dropping from 10% to 3% by 2024, many anticipate a policy shift by the Federal Reserve towards cutting interest rates, likely driving the recent rally in both bitcoin and stocks. The expert notes that bitcoin's price movement has been more closely aligned with traditional assets recently, enhancing its correlation with the Nasdaq and S&P 500 to two-month highs.
4. The US presidential election, although current President Joe Biden is generally opposed to digital assets, the election campaigns tend to have a positive impact on the crypto market. IntoTheBlock's report states, "Polymarket currently gives Biden only a 33% chance of re-election, making Donald Trump, who is significantly more crypto-friendly, the most likely victor." However, to boost the incumbent's re-election chances, the Federal Reserve might adopt a more aggressive easing of its monetary policy, encouraging an influx of funds into both the stock and crypto markets.
5. Hedge funds are considered an unexpected growth driver by Outumuro. He recalls that when bitcoin recovered from the COVID-19 pandemic in 2020, traditional financial giants first acknowledged the cryptocurrency's potential. The introduction of spot bitcoin ETFs provided hedge funds with an opportunity to accumulate a new asset class, thus increasing demand from traditional investors and leading to greater adoption and acceptance of digital assets.
However, IntoTheBlock notes that these scenarios could change due to various factors. For instance, if the Federal Reserve does not ease its policy, bitcoin could face a 10% correction. The development of geopolitical conflicts could also negatively impact the price of digital gold. The experts do not rule out unexpected selling pressure in the event of major player bankruptcies.

– Analysts at investment bank Goldman Sachs have revised their forecast for the S&P 500 index after it surpassed 5,000 points. They have set a year-end target for the index at 5,200, indicating a 3.9% increase from its current level. As previously noted by IntoTheBlock observations, the correlation between bitcoin and the S&P 500 is increasing, suggesting that the coin's value will rise alongside the US stock market.

– According to the Financial Times, hackers linked to North Korea are increasingly turning to artificial intelligence to aid their efforts. In 2023, they launched 1.3 million attacks against South Korean companies and government agencies. Previously, their attempts often failed due to poor language skills and a lack of understanding of local social nuances. Now, North Korean hackers are leveraging artificial intelligence to enhance their effectiveness.
Erin Plante, Vice President of Research at Chainalysis, views this as a significant new threat. "North Korean hacking groups are creating trustworthy profiles on professional sites like LinkedIn. Generative neural networks help them communicate, send messages, create images, and new identities: everything needed to build close relationships with their victims," she explained. "They use detailed profiles on LinkedIn and other social networks to develop relationships over weeks and months." Plante described an instance where North Korean hackers deceived a senior engineer at a cryptocurrency exchange by posing as representatives of a Singaporean company. They asked the victim to perform a "technical test" by downloading software that turned out to be phishing malware.
Moreover, AI services like ChatGPT are assisting North Korean criminals in developing more complex and sophisticated forms of malicious software. The era of poorly worded emails with a "click this link" prompt is evolving into a more cunning approach to cybercrime.

– Dennis Liu, also known as Virtual Bacon, shared his bitcoin investment strategy, emphasizing the importance of identifying the optimal moment to sell an asset, which is as crucial as deciding to buy it. He outlined three elements designed to signal that the market might have reached its peak.
1. The first indicator to consider is the achievement of certain price milestones: $200,000 for bitcoin and $15,000 for Ethereum. Liu's assumption is based on historical cycles and diminishing returns. This is a clear, quantifiable indicator that eliminates guesswork when deciding to exit a position.
2. Liu's second benchmark is time-based. Regardless of the price dynamics of the assets, he plans to exit his positions by the end of 2025. This decision relies on the importance of historical patterns and is based on the analysis of halving cycles and the duration of bull markets.
3. The final element of Liu's methodology involves meticulous monitoring of price patterns, specifically the behaviour of BTC relative to its 200-day and 21-week exponential moving averages (EMAs). Falling below these support levels would signal the need to sell bitcoin.

– Analyst Gareth Soloway suggested that bitcoin could potentially retest the $30,000 mark, especially if the stock market undergoes a correction in the range of 20% to 30%. He referred to a new possible support level for bitcoin as the "line in the sand." "My main line in the sand is the level from $30,000 to $32,000. If we drop there, I will start buying quite large volumes of BTC," he stated.

– Investor and founder of MN Trading, Michael Van De Poppe, believes the main question for traders now is how the price of BTC will change in the coming months. The analyst expects a pullback in bitcoin could occur when it reaches the $53,000-$58,000 level. Therefore, investors should wait for a correction of 20-40% before entering the market. However, "if you buy bitcoin with the intention of holding it for two to three years, and if you believe that over this period bitcoin will grow to $150,000, then nothing should stop you from purchasing it at these [current] prices," Van De Poppe wrote.

– Recently, Erik Voorhees, CEO and founder of the cryptocurrency exchange Shapeshift, discreetly urged Apple to purchase several billion dollars' worth of BTC and to adopt the first cryptocurrency as a payment method in Apple Pay. He believes this move could instantly generate substantial profits for the company and contribute to the further spread of cryptocurrency. A similar idea was proposed in 2021 by Michael Saylor, co-founder of MicroStrategy. "If Apple added support for bitcoin to the iPhone and converted its treasury to the bitcoin standard, it would bring its shareholders at least one trillion dollars," he wrote at the time.
Chen Fang, Chief Operating Officer of BitGo, also spoke about Apple, suggesting that integrating BTC into Apple Pay and the new Apple Vision Pro headset would allow the company to dominate payments in the metaverse.
It's worth noting that Apple, the world's second-largest company by market capitalization, has had a complicated relationship with the emerging cryptocurrency sector. In the Apple App Store, applications related to bitcoin and other cryptocurrencies are regularly removed. Over time, apps like MetaMask, Coinbase Wallet, Trust Wallet, and Damus have faced sanctions. Meanwhile, Apple co-founder Steve Wozniak has called bitcoin a sensible investment choice, revealing that he once made significant investments in this digital asset.

– Over the past week, Ethereum has significantly outpaced bitcoin in terms of growth rate. According to Standard Chartered bank, the coin's price could rise to $4,000 in anticipation of the U.S. Securities and Exchange Commission (SEC) approving spot Ethereum ETFs. Bernstein analysts believe the likelihood of this happening is substantial: nearly 50% for a launch by May and almost 100% within the next 12 months. "Ethereum, with its dynamic yield rates, environmentally friendly design, and utility in creating new financial markets, has strong potential for widespread institutional adoption. It is likely the only digital asset alternative to bitcoin that could receive clear ETF approval from the SEC," Bernstein suggests. Analysts believe that officials may be influenced by the fact that participants in the traditional stock market are not only looking to launch spot ETFs on Ethereum similar to bitcoin ETFs but also intend to "build more transparent and open tokenized financial markets on the ETH network, where the utility goes beyond mere asset accumulation."


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
Stan NordFX
  • Posts: 625
  • Joined: 04/03/2018
Forex and Cryptocurrencies Forecast for February 26 - March 01, 2024



EUR/USD: ECB Rhetoric Against the Dollar

Data on consumer inflation (CPI) in the US, published on February 13, exceeded expectations. The Producer Price Index (PPI) also indicated a rise in industrial inflation in the country. However, despite this, the American currency failed to gain additional support. The Dollar Index (DXY) began to decline from February 14, while EUR/USD steadily climbed higher.

The minutes of the latest FOMC (Federal Open Market Committee) meeting of the US Federal Reserve were published on Wednesday, February 21, serving as a reminder that the American regulator might not be in a hurry to lower interest rates. However, market expectations still dominate that the Fed will begin to ease its monetary policy significantly earlier than the ECB. This factor exerts serious pressure on the dollar, especially as such expectations are constantly fuelled by statements from high-ranking European officials. ECB Executive Board member Isabel Schnabel stated that monetary policy must remain restrictive until the regulator is confident that inflation has sustainably returned to the medium-term target level of 2.0%.

A similar stance was taken by Schnabel's ECB colleague, Bundesbank President Joachim Nagel. On Friday, February 23, he stated that "it is still too early to cut rates, even if this step might seem tempting to some." According to Nagel, the price forecast is not clear enough yet, and key data on price pressure will only be received in Q2, which is when it might be appropriate to consider lowering interest rates.

The Bundesbank head believes that the period of rapid inflation decrease has ended, some setbacks are possible ahead, and in the coming months, inflation will remain noticeably above the target level of 2.0%. (According to the latest forecasts by MUFG Bank, CPI in the Eurozone is expected to be 2.7% in 2024).

EUR/USD surged to 1.0887 on Thursday February 22 and then fell to 1.0802, due to uneven business activity (PMI) data across various Eurozone countries. Preliminary estimates showed that France's manufacturing PMI jumped from 43.1 to 46.8 points, exceeding the expected 43.5. The services index rose from 45.4 to 48.0, surpassing the anticipated 45.7. Significantly exceeding expectations, these indicators ignited investor risk appetite, encompassing not only stock indices but also purchases of the common European currency against the dollar.

However, the joy of euro bulls was short-lived, halted by the publication of Germany's PMI. The manufacturing index of this powerhouse of the European economy plummeted from 45.5 to 42.3, against a forecast of 46.1. The Eurozone's manufacturing PMI dropped from 46.6 to 46.1, contrary to the expected rise to 47.0. It's important to note that all these indicators are below the key horizon of 50.0, indicating an economic downturn. Only the services sector reached this significant threshold of 50.0. Overall, the Eurozone's composite PMI increased to 48.9, the highest since June 2023, but it still remains in the negative zone for the seventh consecutive month.

Regarding the situation on the other side of the Atlantic, these indicators suggest economic growth in the US. Preliminary data showed that the business activity indicator in the services sector was 51.3 points, and in the manufacturing sector, 51.5. On Thursday, the traditional number of initial unemployment claims in the United States was also published, decreasing from 213K to 201K over the week (forecast was 217K), indicating a strengthening labour market.

EUR/USD closed the last week at 1.0820. According to some analysts, the recent macroeconomic data suggest that the dollar's weakening is a temporary phenomenon, and the DXY is expected to return to an upward trajectory. Only extraordinary events in the economy or politics could prevent this. As of the writing of this review, on the evening of Friday, February 23, 50% of experts voted for the strengthening of the dollar and the fall of the pair. 30% sided with the euro, while 20% took a neutral position. Among the oscillators on D1, only 10% are coloured red, 15% are in neutral grey, and 75% are green, with 20% of them in the overbought zone. The balance among trend indicators is different: 35% are red, and 65% are green. The nearest support for the pair is located in the 1.0800 zone, followed by 1.0725-1.0740, 1.0695, 1.0620, 1.0495-1.0515, 1.0450. Bulls will encounter resistance in the areas of 1.0840-1.0865, 1.0925, 1.0985-1.1015, 1.1050, 1.1110-1.1140, 1.1230-1.1275.

Key events to highlight for the upcoming week include Tuesday, February 27, when updates on US durable goods orders will be released. Preliminary data on the American GDP volume for Q4 2023 will follow the next day. Data on retail sales and consumer prices (CPI) in Germany will be published on Thursday, along with the Personal Consumption Expenditures Index and labour market statistics in the US. Significant volatility can be expected towards the end of the working week. On the first day of spring, the annual inflation rate (CPI) in the Eurozone and the final figures of the Business Activity Index (PMI) in the United States will be disclosed.

GBP/USD: UK Economy Gains Momentum

Alongside business activity data from the US and the Eurozone, preliminary indicators for the United Kingdom were also released on Thursday, February 22. The UK's manufacturing sector Business Activity Index (PMI), though slightly below the forecast of 47.5, showed a modest increase from 47.0 to 47.1 points. The services sector indicator remained steady at 54.3. However, the composite PMI reached 53.3, surpassing both the forecast and the previous value of 52.9. Values in the green zone above 50.0 clearly indicate an improvement in the outlook for the British economy. It seems that the technical recession experienced in the second half of 2023 has ended or is at least close to ending.

In a previous review, we cited economists from Scotiabank's forecast that, starting from a strong long-term support zone of 1.2500, GBP/USD would begin to rise towards 1.2700. This prediction came true on 22 February, following the publication of the British PMI, as the pair reached a peak of 1.2709, returning to the very centre of the medium-term sideways channel of 1.2600-1.2800.

Favourable data on the UK economy and the recovery of global risk appetites should have a positive impact on the pound. In such a situation, strategists from the Japanese MUFG Bank write, "if the Fed and the ECB delay the timing of the first rate cut, then the Bank of England (BoE) will delay it as well." Recall that at the conclusion of the meeting that ended on February 1, the BoE announced it would keep the bank rate at its current level of 5.25%. The accompanying statement mentioned that "before lowering rates, more evidence is needed that the Consumer Price Index will fall to 2.0% and remain at this level." Market participants expect the first rate cut to occur in August. This expectation is already priced in and prevents GBP/USD from falling.

MUFG believes, "although the pound's correlation with global stocks has begun to weaken, it remains stronger than the dollar's correlation with risk. And if risk appetite persists, this could cause some strengthening of the pound." However, the bank's experts warn that some concerns about the growth of the British economy still remain, and this could restrain the growth of GBP.

GBP/USD closed the past week at 1.2670. As for the median forecast of analysts for the coming days, 65% voted for the pair's decline, while 35% supported its growth. Among the oscillators on D1, only 10% point south, 15% look east, and the remaining 75% point north, of which 10% signal overbought conditions. Trend indicators show a significant bias towards the British currency: 90% point north, with the remaining 10% pointing south. Should the pair move southward, it will encounter support levels and zones at 1.2635-1.2650, 1.2570, 1.2500-1.2535, 1.2450, 1.2370, 1.2330. In case of an increase, resistance will be met at levels 1.2695-1.2710, 1.2755-1.2775, 1.2825, 1.2880, 1.2940, 1.3000, and 1.3140-1.3150.

No significant macroeconomic data releases related to the UK economy are scheduled for the upcoming week.

USD/JPY: To the Moon and Beyond, Mars is Next

The yield on 10-year US Treasury bonds, currently around 4.30%, continues to support the dollar against the yen, with its low yield and negative interest rates. USD/JPY once again rose above 150.00 last week and attempted to storm the 151.00 mark. Again, it was unsuccessful: the local maximum was recorded at 150.76, with the week closing at 150.52.

The caution of bulls on USD/JPY is largely due to the fact that the 150.00-152.00 zone was where the Ministry of Finance of Japan initiated currency interventions in October 2022 and November 2023. However, every trader knows that past results do not guarantee future performance. Thus, it is not certain that the Ministry of Finance and the Bank of Japan (BoJ) will follow the same path this time.

It should be noted that Japan's GDP has fallen for the last two quarters. A weak national currency supports exporters by making Japanese products more attractive and competitive in foreign markets, thereby stimulating the country's economy. This explains the reluctance of Japanese financial regulators to tighten monetary policy. According to Kazuo Ueda, the head of the BoJ, the question of maintaining or changing monetary policy, including the negative interest rate, will only be considered "when there is a chance of sustainable and stable achievement of the target price level."

As mentioned, the likelihood of a reversal in USD/JPY southward from the 151.00-152.00 zone is high, yet it remains less than 100%. Currently, the pair's rate is approximately 14% higher than a year ago. As some experts note, the financial authorities in Japan start to get nervous when this figure approaches 20% year-on-year. For now, they can feel relatively relaxed and comfortable, especially since the country's economy has already adapted to such an exchange rate over the past two years. Therefore, it's not entirely out of the question that instead of falling to 140.00 as expected by Danske Bank, we might see the pair reach heights of 160.00, as was the case 34 years ago in April 1990.

Regarding the near future, specialists at Singapore's United Overseas Bank believe that within one to three weeks, USD/JPY is likely to trade within the range of 148.70 to 150.90. However, UOB does not rule out that a breakthrough above 150.90 could trigger a rise to 152.00. At the time of writing this review, 40% of experts sided with the dollar, while the majority (60%) voted for the strengthening of the yen. Trend indicators and oscillators on D1 all point north, yet 10% of the latter are in the overbought zone. The nearest support level is located in the zone of 149.70-150.00, followed by 148.25-148.40, 147.65, 146.65-146.85, 144.90-145.30, 143.40-143.75, 142.20, 140.25-140.60. Resistance levels and zones are at 150.90, 151.70-152.05, and 153.15.

No significant events related to the Japanese economy are scheduled for the upcoming week.

CRYPTOCURRENCIES: Five Reasons for the End of the Crypto Winter

UserPostedImage


Throughout the past week, there was a lull in the battle between bitcoin bears and bulls. Choosing $51,500 as the Pivot Point, BTC/USD moved sideways in a narrow corridor of $50,500-$52,500. Bulls' attempt to break through resistance on 20 February ended in failure, and the pair returned to its defined boundaries. However, as experience shows, any calm is not everlasting. It is inevitably replaced by thunder rolls, stormy winds, and squally showers, especially true for the highly volatile crypto market. So, what can we expect if the weather changes?

According to Lucas Outumuro, head of research at IntoTheBlock, there's an 85% likelihood that bitcoin will reach a new all-time high within the next six months, potentially surpassing $70,000. The analyst identified five factors that could catalyse this growth.

1. Halving in April: This will be the fourth halving event, reducing the block reward from 6.25 BTC to 3.125 BTC, leading to decreased selling pressure. Outumuro does not rule out the possibility of bitcoin reaching an all-time high (ATH) just a month after the halving.

2. Continued inflow into spot Bitcoin ETFs: While the duration of strong inflows remains uncertain, a stable inflow over time is expected to bolster the price of bitcoin by increasing demand.

3. Federal Reserve's interest rate policy: The Fed's stringent stance on interest rates in 2022 laid the groundwork for a bearish trend in risk assets, including the crypto market. With inflation dropping from 10% to 3% by 2024, many anticipate a policy shift by the Fed and the beginning of a rate-cutting cycle. "This expectation is likely the main driving force behind the recent rallies in both bitcoin and stocks... This time, bitcoin's price movement has been more closely linked with traditional assets, leading to its correlation with the Nasdaq and S&P 500 reaching two-month highs," explains Outumuro.

4. US Presidential Elections: Despite the current President Joe Biden's general opposition to digital assets, election campaigns positively impact the crypto market. "The prediction market Polymarket currently gives Biden just a 33% chance of re-election, making Donald Trump, who is significantly more crypto-friendly, the most likely victor," reports IntoTheBlock. The Fed may begin to ease its monetary policy more aggressively to increase the current US President's re-election chances, benefiting stock and cryptocurrency markets.

5. Hedge Funds: Outumuro points out that when bitcoin recovered after the COVID-19 pandemic in 2020, traditional financial giants first recognized cryptocurrency's potential. With the launch of spot Bitcoin ETFs, hedge funds have the opportunity to accumulate a new asset class, leading to increased adoption and acceptance of digital assets.

However, IntoTheBlock acknowledges that these scenarios could change due to several factors. For instance, if the Fed does not ease policy, bitcoin could face a 10% correction. Geopolitical conflicts also negatively impact digital gold's price. Unexpected selling pressure in the event of major player bankruptcies is not ruled out.

As mentioned (in point 3), the correlation between bitcoin and the S&P 500 is increasing, suggesting BTC could rise alongside the US stock market. Following the S&P 500 surpassing 5,000 points, investment bank Goldman Sachs revised its end-of-year forecast for the index to 5,200, potentially providing additional support for bitcoin.

Every trader knows that determining the optimal moment to sell an asset is just as important as the decision to buy it. Dennis Liu, also known as Virtual Bacon, shared his bitcoin investment methodology a few days ago, identifying three elements designed to signal that the market may have reached its peak.

1. Specific Price Milestones: The first sign to look out for is reaching certain price milestones: $200,000 for bitcoin and $15,000 for Ethereum. Liu's assumption is based on historical cycles and diminishing returns. This is a clear, quantifiable indicator that eliminates guesswork when deciding to exit a position.

2. Time-based Exit Strategy: The second benchmark Liu mentions is time-bound. Regardless of the asset's price dynamics, the trader plans to exit positions by the end of 2025. This decision is grounded in the importance of historical patterns and is based on the analysis of halving cycles and the duration of bull markets.

3. Monitoring Price Patterns: The last element of Liu's methodology involves closely monitoring price patterns, specifically BTC's behaviour relative to its 200-day and 21-week exponential moving averages (EMAs). A fall below these support levels would signal the need to sell bitcoin.

It's clear that $200,000 for bitcoin is a forecast, and moreover, a forecast for the relatively distant future. As for the near future, as we've noted, many on-chain indicators from Glassnode have already entered what's termed the "risk zone." They record a relatively low level of realized profit considering the active price growth in the last four weeks. According to Glassnode specialists' observations, a high risk indicator is usually seen in the early stages of a bull market. This is because, upon reaching a "significant level" of profitability, hodlers may begin to take profits, potentially leading to a sharp correction downwards.

Analyst Gareth Soloway suggested that bitcoin could potentially fall to the $30,000 mark, especially if the stock market undergoes a correction. The expert referred to the new potential support for bitcoin as the "line in the sand." "My main line in the sand is between $30,000 to $32,000. [...]. If we drop there, I'll start buying quite large volumes of BTC," he wrote.

Investor and founder of MN Trading, Michael Van De Poppe, also advises investors to wait for a 20-40% correction before entering the market. The specialist believes that a bitcoin pullback could occur upon reaching the $53,000-$58,000 zone. "However," adds Van De Poppe, "if you're buying bitcoin with the intention to hold it for two to three years, and if you believe it will rise to $150,000 during that period, then nothing should stop you from purchasing it at these [current] prices."

While the leading cryptocurrency has been in a flat trend over the last week (a 4% fluctuation for BTC is definitely considered flat), its main competitor, Ethereum, has been significantly more active. Recovering from the previous year, this altcoin has shown excellent dynamics since the end of January, growing by more than 35% and reaching a significant level of $3,000. This is related to both a revival in the DeFi sector and hopes for the launch of ETH-based ETFs in May this year. Although previous reviews have cited several leading experts' doubts about this, there are also many optimists. For instance, analysts at Bernstein believe that the likelihood of the US Securities and Exchange Commission (SEC) approving an ETH-ETF in May is almost 50%, and there is almost a 100% certainty of approval within the next 12 months.

"Ethereum, with its dynamic yield rates, environmentally friendly design, and utility in creating new financial markets, has good prospects for mass institutional adoption. It's probably the only digital asset alternative to bitcoin that could receive unequivocal ETF approval from the SEC," Bernstein analysts argue. They believe that officials might be influenced by the fact that participants in the traditional stock market not only want to launch spot ETH ETFs similar to bitcoin ETFs but also express the intention "to build more transparent and open tokenized financial markets on the ETH network, where utility goes beyond simple asset accumulation." According to Standard Chartered bank estimates, with the anticipation of ETH-ETF approval, the coin's price could rise to $4,000 in the near future.

As of the evening of February 23 when this review is written, BTC/USD is trading in the $51,000 zone, and ETH/USD is at $2,935. The total market capitalization of the crypto market has remained unchanged over the week, standing at $1.95 trillion. The Crypto Fear & Greed Index has risen to the lower boundary of the Extreme Greed zone at 76 points (up from 72 a week ago).


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
Stan NordFX
  • Posts: 625
  • Joined: 04/03/2018
NordFX Secures Its First 2024 Award as Best Crypto Broker in South East Asia


UserPostedImage


Finance Derivative magazine announced the 2024 Awards, among which brokerage firm NordFX emerged victorious in the "Best Crypto Broker South East Asia 2024" category.

Finance Derivative is a publication and magazine specializing in financial news, analysis, and reports on trends in finance, banking, technology, and investments. The magazine covers a wide range of topics, from macroeconomic issues to specific investment instruments and strategies, making it a valuable resource for professionals in the financial sector.

The Finance Derivative Awards are an annual accolade that recognizes the outstanding achievements of companies leading in banking, insurance, fintech, brokerage services, and other sectors of the finance industry. These awards not only acknowledge the laureates' achievements but also set standards and serve as an important indicator for all industry participants.

"We would like to congratulate you and extend our special recognition for your pursuit of excellence," states the letter from the Finance Derivative editorial team. "Highlighting your outstanding results, we are pleased to announce that NordFX has been named the 2024 winner in the 'Best Crypto Broker South East Asia' category. Commenting on this award, experts note NordFX's innovative approaches, wide range of cryptocurrency pairs, high level of order execution, and the opportunity for margin trading, which allows traders to significantly increase potential profits.


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
Stan NordFX
  • Posts: 625
  • Joined: 04/03/2018
CryptoNews of the Week

UserPostedImage


– Donald Trump, the former (and possibly future) president of the United States and leader of the Republican Party, stated in a conversation with Fox News that the current development of bitcoin will require regulatory intervention from the authorities. He mentioned that bitcoin has "come into its own life," adding, "Many people are accepting it. I see an increasing number of people wanting to pay with bitcoin, which is interesting. Probably, some regulation will be needed. But I think I could coexist with that." However, Trump has not yet leaned towards adopting bitcoin as a means of payment in the US. "I have always liked having one currency... I like the dollar," he said.

– In an interview with CNBC, Tom Lee, co-founder of analytics firm Fundstrat, predicted that the price of bitcoin could reach $150,000 in 2024. He cited several factors bolstering his forecast: ETFs boosting demand, the halving event reducing supply, and the expected relaxation of monetary policy, all of which favour risk assets like bitcoin. Lee also suggested that the crypto market is unlikely to see a correction anytime soon. Looking ahead, he reaffirmed his January prediction that bitcoin could hit $500,000 within the next five years, lauding it as a reliable form of money that has proven its utility. "It's an excellent store of value and a good risky asset, which is also incredibly secure," Lee added, underscoring the cryptocurrency's appeal.

– Contrary to the views of Tom Lee and Donald Trump, experts at the European Central Bank (ECB) maintain that the fair value of bitcoin is still zero, even amidst the approval of spot bitcoin ETFs in the US and the current price rally. In November 2022, ECB experts published an article titled "Bitcoin's Last Stand," in which they described the stabilization of the cryptocurrency's price as an artificially induced final gasp before its journey to ultimate obsolescence. Since then, the price of what's often referred to as digital gold has risen from ~$17,000 to ~$59,000. However, this increase has not swayed the bank's specialists to change their opinion. In a new essay titled "ETF Approval – The Emperor's New Clothes," they stated that their core arguments from over a year ago have proven to be correct. Firstly, bitcoin has failed as a global decentralized digital currency for payments. Secondly, the cryptocurrency has not become a viable investment asset, one that would inevitably appreciate in value.
"Bitcoin remains unsuitable as an investment," the essay reads. "It does not generate any cash flows (like real estate) or dividends (like stocks), cannot be productively used (like commodities), offers no social benefits (like gold jewellery), or subjective value based on exceptional skills (like works of art)," conclude the ECB experts.

– Renowned writer and investor Robert Kiyosaki has announced his intention to accumulate bitcoin and silver amid the escalating banking crisis. "Please be careful," he warned. "The banking crisis is intensifying. Central banks will push for CBDCs, central bank digital currencies, to monitor us." Kiyosaki revealed his strategy, stating, "I plan to acquire more bitcoin and silver coins. I will use them as a means of payment instead of counterfeit US dollars.".

– Nikolaos Panigirtzoglou, a senior analyst at JPMorgan, highlights that the activity of retail investors has been one of the main drivers behind the growth of bitcoin, ethereum, and other popular cryptocurrencies. Despite the recent introduction of spot BTC-ETFs, purchases by retail crypto investors, who often invest relatively small amounts, significantly exceed the cash flows from large corporations. (According to a recent JPMorgan survey, institutional investors have become less confident in the blockchain's potential: their numbers dropped to 7% in 2024).
"An increase in retail investor activity in February reflects the emergence of three key growth catalysts for the crypto market in the coming months: the reduction of BTC mining rewards, a major Ethereum network upgrade – Dencun, and the potential approval of spot ETH-ETFs in May," JPMorgan believes. The bank's analysts think that the first two catalysts are largely priced in, so they are unlikely to have a significant impact on the crypto market's dynamics. As for the approval of Ethereum-based exchange-traded funds, the likelihood is only 50%. Therefore, despite the upcoming positive events, caution is advised.

– ChatGPT-4 was asked to predict the price of bitcoin following the halving in April 2024. The artificial intelligence noted that "looking at historical trends, it's evident that the price of bitcoin usually experiences significant growth within a year after such an event." Based on this observation, the AI suggested that a similar increase could occur this time as well. Consequently, by August 2025, the price of BTC could reach $179,000.
Alongside this prediction, ChatGPT-4 acknowledged the difficulty of making accurate forecasts due to the influence of various economic, regulatory, and technological factors. Therefore, "it's important to bear in mind that these figures are speculative and depend on a wide range of unpredictable factors."

– After breaking through the $56,000 level, legendary trader, analyst, and head of Factor LLC, Peter Brandt, revised his forecast for the price of the leading cryptocurrency in 2025 from $120,000 to $200,000. The expert raised the bar because bitcoin had breached the upper boundary of resistance in a 15-month channel (on the BTC/USD chart, these are trend lines that connect the lows of November 2022 and September 2023, as well as the highs of April 2023 and January 2024). According to Brandt, the current bullish cycle will conclude in August-September 2025, by which time the quotes of digital gold are expected to reach the stated target.
Regarding the point of exiting the position, Brandt, half-jokingly or seriously, stated that he would use laser eyes on the X network as a "contrary indicator," just as in 2021. "So, folks," he urged, "if you want bitcoin to maintain a strong trend, please do not post laser eyes on your social media profile pictures. Too many laser eyes signal a time to sell."

– On January 25, malefactors gained control over the MicroStrategy company account on the X network and posted malicious links to a fake "token giveaway" for MSTR tokens. Following the link in the post, users were prompted to connect their wallet and request a bogus AirDrop, enabling hackers to take control over the victims' addresses. It's worth noting that some market participants pointed out the clear deception, as MicroStrategy, a company exclusively focused on bitcoin, would unlikely launch a token on Ethereum. Nevertheless, there were still those who fell for the scammers' tricks. According to on-chain detective ZachXBT, the estimated losses of the victims amounted to about $440,000.

– Investor, Heisenberg Capital founder, and Keiser Report host Max Keiser has likened investing in bitcoin to buying shares of Warren Buffett's Berkshire Hathaway in March 1985, when they were priced at $1,500 each. Since then, the value of these shares has increased to $629,000. According to Keiser, bitcoin could potentially see an increase of more than 41,000%. If the leading cryptocurrency were to experience such explosive growth, each coin would be valued at over $21,000,000. In this scenario, the market capitalization of the digital asset would surpass $450 trillion, greatly exceeding the valuations of the world's largest corporations. For comparison, the current market capitalization of Apple Inc. is $2.82 trillion, positioning it as one of the most valuable companies globally. Following are Microsoft with a valuation of $2.0 trillion, Alphabet with $1.77 trillion, and Amazon with $1.6 trillion.
Additionally, Max Keiser has issued a warning to traders and investors about a potential significant downturn in the US stock market akin to the crash of 1987. He stated, "A crash like in 1987 is coming. bitcoin is the perfect safe haven, with its price possibly soaring above $500,000."
Analysts at investment firm ARK Invest have also ventured a bold prediction that bitcoin's price could escalate to $2.3 million per coin. However, realizing such a scenario would necessitate a significant shift in the redistribution of global assets towards the premier cryptocurrency.


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
Stan NordFX
  • Posts: 625
  • Joined: 04/03/2018
Forex and Cryptocurrencies Forecast for March 04 - 08, 2024


EUR/USD: Weak Bulls vs. Weak Bears

Throughout the past week, EUR/USD has been trading within a narrow channel. News favouring the euro pushed it towards the resistance level at 1.0865, while positive developments for the dollar brought it back to the support level at 1.0800. However, neither the bulls nor the bears had enough strength to break through these defence lines.

The preliminary GDP data for the US in Q4 2023, released on Wednesday, 28 February, put pressure on the American currency as it fell short of both forecasts and the previous figure – 3.2% against 3.3% and 4.9%, respectively. However, the dollar managed to recover its losses the following day. This rebound was related to the Personal Consumption Expenditures (PCE) Index in the US, a measure used by the Federal Reserve to calculate inflation levels and a crucial factor in determining the regulator's future actions.

The US Bureau of Economic Analysis report, released on 29 February, revealed that the Core PCE, which excludes volatile food and energy prices, stood at 2.8% year-on-year in January. This was slightly below the previous value of 2.9% but matched analysts' forecasts precisely. On a monthly basis, the PCE increased from 0.1% to 0.4%. Market participants were immediately reminded of previously published data on consumer (CPI) and producer (PPI) inflation, which were higher than expected. This convinced them that, despite the GDP decline, the regulator might continue to postpone the start of easing its monetary policy. (Currently, the market expects the Fed to begin a rate-cutting cycle in June).

Hawkish comments from Federal Reserve officials, following the PCE publication, supported the American currency. Mary Daly, head of the Federal Reserve Bank of San Francisco, stated that lowering rates too quickly could lead to inflation stagnation. Meanwhile, her colleague, Raphael Bostic, president of the Federal Reserve Bank of Atlanta, suggested that it might be appropriate to start cutting rates in the summer.

The sellers of the single European currency were also influenced by relatively weak statistics from the Eurozone, where the volume of consumer lending in January showed the slowest growth since 2016. This indicator increased by only 0.3%. Experts cite the pressure on consumers from the high interest rates of the European Central Bank (ECB) as the main reason for this trend, which could become an additional argument for lowering them.

Regarding consumer inflation, the figures in Europe were quite mixed. Data published at the beginning of the last week from Spain and France came out stronger than forecasts. Meanwhile, in Germany, the CPI fell from 3.1% to 2.7% year-on-year, aligning with market expectations. The dynamics of EUR/USD could have been influenced by the Eurozone's overall figures, which were published on the first day of spring. The preliminary report from Eurostat showed that the Consumer Price Index (CPI) increased by 2.6% year-on-year in February, lower than the 2.8% growth in January but above the 2.5% forecast. Core inflation for the month decreased to 3.1% year-on-year compared to the previous figure of 3.3%, but it exceeded expectations of 2.9%. While inflation fell on a yearly basis, it sharply rose on a monthly basis, from a negative -0.4% to +0.6%.

At the very end of the working week, the final values of the Manufacturing Sector Purchasing Managers' Index (PMI) in the United States were released, somewhat disappointing market participants. The PMI for February fell from 49.1 to 47.8 points, despite being expected to rise to 49.5. As a result, after rebounding from the support level at 1.0800, EUR/USD once again moved upward, closing the week at 1.0839. As for the near-term forecast, as of the evening of Friday, 1 March, 45% of experts voted for the dollar's strengthening and the pair's decline. 30% sided with the euro, while 25% held a neutral position. Among the oscillators on D1, only 20% are coloured red, another 20% are in neutral grey, and the remaining 60% are green, with 10% of them in the overbought zone. Among the trend indicators: 20% are red, and 80% green. The nearest support levels for the pair are found at 1.0800, followed by 1.0725-1.0740, 1.0680-1.0695, 1.0620, 1.0495-1.0515, and 1.0450. Resistance zones are located at 1.0845-1.0865, 1.0925, 1.0985-1.1015, 1.1050, 1.1110-1.1140, and 1.1230-1.1275.

As for the upcoming week, the value of the Services Sector Purchasing Managers' Index (PMI) in the US will be announced on Tuesday, 5 March. Wednesday and Thursday are set to bring a batch of data from the US labour market, with Federal Reserve Chairman Jerome Powell scheduled to speak in Congress on the same days. The main event of the week will be the European Central Bank (ECB) meeting on Thursday, 7 March. Market participants expect the pan-European regulator to leave the interest rate unchanged at 4.50%, so the subsequent press conference by the central bank's leadership and their comments on future monetary policy will be of particular interest. The end of the week could also prove to be quite volatile. On Friday, 8 March, we will first receive data on the Eurozone's GDP for Q4 2023, followed by a batch of very important statistics from the American labour market, including the unemployment rate, average wage level, and the number of new jobs created outside the agricultural sector (Non-Farm Payrolls, NFP).

GBP/USD: Will the Budget Bolster the Pound?

With the European Central Bank (ECB) meeting just a few days away, the Federal Reserve (Fed) and the Bank of England (BoE) meetings are not due for a while: on 20 and 21 March, respectively. The nearest key event for the sterling pound in the coming week will be the announcement of the budget by the UK Government on Wednesday, 6 March. This budget is pre-election, and therefore, according to strategists at the Dutch Rabobank, it could have a significant impact on the British currency, which in 2024 is the second most successful G10 currency after the US dollar.

It's worth noting that, according to current rules, general elections in the UK must take place no later than 28 January 2025. According to The Guardian, Prime Minister Rishi Sunak is leaning towards holding them in the second half of 2024. However, The Daily Telegraph reports that elections for the lower house of the British Parliament could occur even earlier: as soon as this spring.

Economists at Rabobank anticipate that the pre-election budget will include fiscal incentives, which could serve as a new stimulus for strengthening the pound. This entails a moderate easing of fiscal policy, potentially involving changes more in national insurance than in income tax. Any reforms that could boost incentives to work or changes in regulation that might enhance investment incentives will be of particular interest to the market. An increase in the labour force would contribute to economic growth and, therefore, could be seen as a favourable factor for the British pound.

Both Rabobank and the Japanese MUFG Bank believe that the extent of potential fiscal incentives is unlikely to be sufficient to significantly improve the metrics of the British economy. However, even a small number of such stimuli is likely to reinforce the general view that the Bank of England will not be in a hurry to cut interest rates and will not do so either in May or June.

Let's recall that at its meeting on 1 February, the Bank of England (BoE) maintained the rate at the previous level of 5.25%. The accompanying statement mentioned that "more evidence is needed that the Consumer Price Index will fall to 2.0% and remain at this level before cutting rates." Market participants are anticipating the first rate cut to occur in August. This expectation has already been factored into prices and prevents GBP/USD from declining.

However, if inflation remained unchanged at 4.0% in February and the country's GDP contracted by -0.3%, it seems the Government intends to bolster the economy with new fiscal incentives. Nonetheless, if these measures do not lead to GDP growth, discussions may once again turn towards an imminent rate cut, which would exert pressure on the pound.

GBP/USD concluded the past week at the level of 1.2652, failing to break out of the medium-term sideways channel of 1.2600-1.2800. Regarding the analysts' forecast for the near future, their opinions were evenly divided: a third voted for the pair's decline, a third for its rise, and a third remained neutral. Among the oscillators on D1, 25% point south, 40% look north, and the remaining 35% are pointing east. Trend indicators, as a week ago, show a significant bias towards the British currency – 80% indicating north and 20% south. Should the pair move southward, it will encounter support levels and zones at 1.2575-1.2600, 1.2500-1.2535, 1.2450, 1.2375, and 1.2330. In the event of a rise, it will meet resistance at levels 1.2695-1.2710, 1.2785-1.2815, 1.2880, 1.2940, 1.3000, and 1.3140.

Besides the announcement of the country's budget on 6 March, no significant macroeconomic statistics regarding the economy of the United Kingdom are scheduled for release in the coming week.

USD/JPY: Petal Predictions

There's an ancient method of fortune-telling with a flower. A girl takes a flower in her hand and plucks the petals one by one: the first one means someone will love her, the second means they won't, the third means love, the fourth means no love, and so on until the petals run out. The fate declared by the last petal is believed to come true. This method of fortune-telling can quite aptly be applied to the Bank of Japan (BoJ): will change its monetary policy, won't change, will change, won't change...

Low interest rates make the yen cheap, which in turn stimulates exports, making Japanese goods competitive in foreign markets. However, on the flip side, it creates problems for the national industry as it makes imports more expensive, primarily the import of raw materials and energy resources.

In January, the trade balance was sharply negative. If in December the balance was in favour of imports (+69 billion yen), in January, it collapsed to minus 1758 billion yen. Looking at the balance for the entire year of 2023, imports often lost to exports. Industrial production decreased by -7.5% in January, which is worse than the previous growth of +1.4% and the forecast of -6.7%. Thus, Japanese officials, like with the flower method, wonder what is better and more important – supporting the economy or fighting inflation. Meanwhile, the BoJ does not take any concrete steps but limits itself to vague statements, often very contradictory.

On 29 February, following hawkish comments from Bank of Japan (BoJ) Board member Hajime Takata, the yield on Japanese government bonds rose from 0.68% to 0.71%, and USD/JPY plummeted from 150.14 to 149.20. This high-ranking official stated that the BoJ should consider the possibility of adopting flexible countermeasures, including moving away from monetary easing policies, which investors interpreted as a signal for a rate hike.

However, just a day later, Kazuo Ueda, the head of the Bank of Japan, stated that the country's economy would continue to recover gradually, and the GDP decline in the fourth quarter was somewhat of a correction after the strong growth spurred by the economic restart post-COVID pandemic. According to Ueda, inflation is decreasing at a faster pace than expected, without any rate hikes. Following this, USD/JPY reversed direction, heading north and rising to 150.70.

The main advantage of the yen right now is that while the major G10 central banks are considering easing their policies, the Bank of Japan can only contemplate tightening its policy. It is clear that it will not lower its already negative interest rate of -0.10%. Commerzbank still does not rule out the possibility that the BoJ may decide to take initial steps towards normalizing its monetary policy soon. "However, we expect this to be limited in nature," write the bank's economists. "As in 2000 and 2006, the first interest rate hikes are likely to slow inflation. After that, there will be no further normalization." As a result, Commerzbank forecasts a gradual decline in USD/JPY to 142.00 by December this year, followed by a steady rise to 146.00 by the end of 2025.

Last week concluded at 150.10 for the pair, following the release of weak PMI data in the US manufacturing sector. Looking ahead, the analysts' median forecast positions 60% in favor of the bears for the USD/JPY pair, 20% for the bulls, and 20% remain indecisive. On the D1 oscillators, 65% are green (with 10% in the overbought zone), and the remaining 35% display a neutral-grey color. Similarly, 65% of the trend indicators are green, with 35% red. The nearest support level is at 149.60, followed by 149.20, 148.25-148.40, 147.65, 146.65-146.85, 144.90-145.30, 143.40-143.75, 142.20, and 140.25-140.60. Resistance levels and zones are at 150.90, 151.70-152.05, and 153.15.

In the upcoming week's calendar, Tuesday, 5 March, is notable for the announcement of the Consumer Price Index (CPI) in the Tokyo region. There are no other significant events related to the Japanese economy scheduled for the near future.

CRYPTOCURRENCIES: New Records for the "Naked King"

UserPostedImage


Last week, bitcoin set historical highs against local currencies in many countries. Now, the leading cryptocurrency is aiming to test and possibly surpass its all-time high of $68,917, reached on 10 November 2021. At least, the current dynamics suggest this goal: starting from $50,894 on Monday, 26 February, BTC/USD soared to $63,925 by Wednesday, gaining more than 25% in just three days. At this point, the Bitcoin Fear & Greed Index jumped to 82 points, entering the Extreme Greed zone. As Matt Simpson, a senior market analyst at City Index, wrote, "If this were any other market, it would probably be classified as 'peak overheating – stay away from this bubble.' But bitcoin has entered a parabolic rally phase, and there are no immediate signs of a peak forming.".

Let's recall that on 1 February, BTC was trading at $41,877. Thus, in 29 days, the digital gold gained approximately 50%, making this past February the most successful month for investors in the last three years. We thoroughly examined the five reasons behind the ongoing bull rally in our previous review, ranging from the most to the least important. Large investments in spot Bitcoin ETFs acted as a catalyst for the frenzied demand for bitcoin. However, as noted by JPMorgan, purchases by retail crypto investors with relatively small amounts have even surpassed the cash flows from large companies at this point.

Glassnode analysts believe that the current situation resembles the boom observed in 2020–2021. The dynamics of capital flows, exchange activity, leverage in crypto derivatives, and demand from both institutional and retail speculators all indicate an explosion in investors' risk appetite. Signs of speculative sentiment have also emerged in the derivatives market. The total open interest (OI) in bitcoin futures reached $21 billion and is also approaching the euphoria levels of 2021. Only in 7% of trading days was the OI value higher. The substantial increase in the liquidation of short positions on bitcoin acted as an additional trigger.

Investor, founder of Heisenberg Capital, and host of the Keiser Report, Max Keiser, compared investing in the leading cryptocurrency to buying shares of Warren Buffett's Berkshire Hathaway in March 1985, when they were priced at $1,500 each. Since then, the price of these shares has risen to $629,000. According to Keiser, bitcoin has the potential to increase by more than 41,000%. If the leading cryptocurrency experiences such rapid growth, each coin would be worth over $21,000,000, and the digital asset's market capitalization would exceed $450 trillion. (For comparison, the current market capitalization of Apple Inc. is $2.82 trillion, making it one of the most valuable companies in the world, followed by Microsoft at $2.0 trillion, Alphabet at $1.77 trillion, and Amazon at $1.6 trillion).

Furthermore, Max Keiser warned traders and investors of a potential major crash in the US stock market. He stated, "A crash akin to 1987 is coming. Bitcoin is the perfect safe haven, whose price will soar above $500,000." It should be noted that bitcoin has completely "decoupled" from such risk assets as stocks, and its correlation with stock indices such as the S&P500, Dow Jones, and Nasdaq has virtually dropped to zero.

After BTC/USD broke through the $56,000 level on 27 February, legendary trader, analyst, and head of Factor LLC, Peter Brandt, revised his forecast for the first cryptocurrency's rate in 2025 from $120,000 to $200,000. The expert raised the bar as bitcoin overcame the upper boundary of resistance of a 15-month channel (on the BTC/USD chart, these are the trend lines that connect the lows of November 2022 and September 2023, as well as the highs of April 2023 and January 2024). According to Brandt, the current bullish cycle will conclude in August-September 2025. By that time, the quotes of the digital gold should reach the stated goal.

Regarding the exit point from the position, Brandt, half-jokingly, half-seriously, wrote that he would use laser eyes on the X network as a "contrarian indicator," just as in 2021. "So, folks," he urged, "if you want bitcoin to maintain a strong trend, please do not post laser eyes on your social media profile picture. Too many laser eyes are a sell signal."

A similar figure was mentioned by ChatGPT-4. According to this Artificial Intelligence, by August 2025, the price of BTC could reach $179,000. However, ChatGPT-4 acknowledged the difficulty of precise forecasting and warned that "these calculations are speculative and depend on a wide range of unpredictable economic, regulatory, and technological factors.".

Regarding the current year, 2024, the price of the first cryptocurrency could reach $150,000 in the next 10 months. This opinion was expressed by Tom Lee, co-founder of the analytical firm Fundstrat, in an interview with CNBC. "ETFs increase demand, halving reduces supply, and the expected easing of monetary policy all support risk assets and bitcoin," he explained. At the same time, the expert believes that a correction in the crypto market should not be expected in the near future. In the long-term perspective, Lee reiterated his January forecast of bitcoin reaching $500,000 within five years. "It's sound money, I think it's proving its utility. It's a great store of value, a good risk asset, and also incredibly safe," added the Fundstrat co-founder.

As of the review's writing on the evening of Friday, 1 March, BTC/USD is trading in the vicinity of $62,500. The total market capitalization of the crypto market has surpassed an important threshold of $2 trillion and reached $2.34 trillion (up from $1.95 trillion a week ago). The Crypto Fear & Greed Index has risen from 76 to 80 points and is in the Extreme Greed zone.

And finally, a fly in the ointment amidst the general rejoicing. Contrary to numerous bitcoin enthusiasts, experts at the European Central Bank believe that the fair value of BTC is... zero. And this is despite the approval of spot bitcoin ETFs in the US and the current price rally.

In November 2022, ECB experts published an article titled "Bitcoin's Last Stand". There, they referred to the stabilization of the cryptocurrency's quotes as "an artificially induced last gasp before the road to ultimate irrelevance". Since then, the price of digital gold has risen from ~$17,000 to ~$60,000. However, this has not caused the bank's specialists to change their opinion. In a new essay titled "ETF Approval - New Clothes for the Naked King", they stated that they were right in their main arguments more than a year ago. Firstly, bitcoin has failed as a global decentralized digital currency for payments. Secondly, the cryptocurrency has not become a suitable investment asset whose value will inevitably increase.

"Bitcoin is still not suitable as an investment," the essay states. "It does not generate any cash flows (like real estate) or dividends (like stocks), cannot be productively used (like commodities), does not offer any social benefits (like gold jewellery), or subjective value based on outstanding abilities (like works of art)," believe ECB experts. It would be interesting to see what they would say if, for example, Max Keiser's forecast comes true, and the "naked king" is worth $21 million per coin.


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
Stan NordFX
  • Posts: 625
  • Joined: 04/03/2018
February 2024 Results: NordFX Top 3 Traders and New Unique Bonus


UserPostedImage


NordFX, a brokerage firm, has summarized the trading performance of its clients for February 2024. The effectiveness of social trading services, PAMM and CopyTrading, as well as the profits earned by the company's IB partners, were also evaluated.

- The best result in February was achieved by a trader from Southeast Asia, account number 1745XXX, who made a profit of 70,757 USD through transactions with gold (XAU/USD).
- The gold pair XAU/USD, along with the British pound (GBP/USD), assisted a client from Western Asia, account number 1704XXX, in securing the second spot on the podium with earnings of 45,303 USD.
- Third place went to another trader from Southeast Asia, the owner of account number 1748XXX. Utilising the same instrument, XAU/USD, they managed to gain a profit of 25,570 USD.

The following situation has emerged in the passive investment services of NordFX:

The PAMM service at NordFX continues to attract investors' attention to the "Trade and earn" account, which opened in March 2022. After four months of dormancy, it reactivated in November of the same year. For a long time, its maximum drawdown did not exceed 17%. However, at the end of 2023, the account manager made a significant mistake, and within a few days, the drawdown neared a risky 60%. Fortunately, the manager was able to rectify the situation, resulting in a sharp increase in profitability, exceeding 477% over 16 months of operation.

In our last review, we also highlighted a startup named Kikos2. A month later, it remains showcased in the PAMM service, boasting a profit of 394% within 101 days of its existence, despite a significant maximum drawdown of around 60%. Therefore, in this and all other cases, investors must exercise maximum caution and be prepared for both profits and losses.

Those familiar with NordFX's passive investment services will likely know the accounts named KennyFXPRO, the oldest of which has been operating for over three years. This time, we want to highlight two new accounts created by this manager. The first, KennyFXPRO - The CAD Bank, has shown a profit of 7% in 87 days with a very low maximum drawdown of less than 5%. The profitability of the second, KennyFXPRO - Road to 250, was nearly 15% over 89 days, with a drawdown of less than 7%.

In CopyTrading, we continue to monitor the yahmat-forex signal, which has shown a return of 372% over 251 days, with a maximum drawdown of 37%. Among the startups, it's worth noting the FxBro Tradings account, which has demonstrated a return of 26% in just 23 days, with a maximum drawdown of less than 8%.

Among the IB partners of the brokerage firm NordFX, the top 3 are as follows:
- The largest commission reward in February was credited to a partner from Southeast Asia, account number 1743XXX, amounting to 10,975 USD.
- Following them is their colleague from Western Asia, account number 1645XXX, who earned 6,137 USD for the month.
- Finally, completing the top three leaders is another partner from Southeast Asia, account number 1516XXX, who received a commission of 5,535 USD.

***

Attention! Starting from February 20, clients of the brokerage firm NordFX have been given the opportunity to participate in a new accumulation program called the Margin Call Bonus. The program's uniqueness lies in the fact that traders earn bonus funds for themselves: the more actively they deposit into their account and the more actively they trade, the larger the amount they can receive when a Margin Call occurs.


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
Stan NordFX
  • Posts: 625
  • Joined: 04/03/2018
NordFX's New Mega Super Lottery: 202+4 Prizes in 2024


UserPostedImage


The new mega super lottery by brokerage firm NordFX kicked off on 8 March this year, featuring a multitude of cash prizes ranging from $250 to $5,000, amounting to a total of $100,000.

The Super Lottery with a prize pool of $100,000 has become a tradition, as NordFX has been hosting it for the fourth consecutive year. Over this time, more than 500 clients of this broker have emerged as winners. Unlike traders' contests, the lottery's undeniable advantage is that both experienced professionals and newcomers have completely equal chances of winning. Another benefit is that lottery winners receive their prizes in real money, not bonuses, which they can either use for further trading or withdraw without any restrictions.

There's also a third advantage: becoming a lottery participant and getting a chance to win one or even several prizes is very straightforward. You just need to have a Pro account with NordFX (or register and open a new one), fund it with $200, and simply trade. By making a trade turnover of just 2 lots in Forex currency pairs or gold (or 4 lots in silver), a trader automatically receives a virtual lottery ticket. The number of tickets per participant is unlimited. The more deposits and the higher the turnover, the more lottery tickets a participant will have, and the greater their chances of becoming one of the winners. The Super Lottery from NordFX is an excellent opportunity for traders not only to try their luck in winning cash prizes but also to increase their trading activity and possibly discover new trading strategies.

The slogan of this year's lottery, "Your 202+4 Chances to Win in 2024," makes it clear there will be plenty of prizes. This year, winners will receive 202 prizes (140 of $250, 30 of $500, 20 of $750, and 12 of $1,250) plus an additional 4 super prizes of $5,000 each. The total prize pool of $100,000 is divided into three parts: $20,000 will be played out in both the summer and autumn draws, and the third, New Year's, and most significant draw will have $60,000 in prizes.

For more details, visit NordFX's website. You can become a participant of the Mega Super Lottery 2024 and start receiving lottery tickets right now.


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
Stan NordFX
  • Posts: 625
  • Joined: 04/03/2018
Forex and Cryptocurrencies Forecast for March 11 - 15, 2024



EUR/USD: A Bad Week for the Dollar

UserPostedImage


The past week was dominated by the European Central Bank (ECB)'s meeting on Thursday, 7 March. As anticipated, the pan-European regulator decided to maintain its current monetary policy, leaving the interest rate unchanged at 4.50%. This move reaffirmed its commitment to steering inflation into the desired range. The ECB aims to be absolutely certain that inflation is consistently moving towards its 2.0% target, which currently stands at 2.6%.

According to analysis from ANZ Bank, a reduction in euro rates is expected in Q2. "Our interpretation of current ECB official guidance is that hawks are on the rise and prefer to wait for more detailed wage growth data before initiating a rate cut. We believe a consensus will be reached in June," ANZ economists wrote.

This expectation was echoed by Gediminas Šimkus, a member of the ECB Governing Council and head of Lithuania's central bank, on Friday, 8 March. He stated that "all conditions are set for a transition to a less stringent monetary policy, with a rate cut in June being very likely. While a cut in April cannot be ruled out, the likelihood is low." He added that there is no reason to reduce the rate by more than 25 basis points in one go.

It's important to note that the Federal Reserve usually acts more aggressively than the ECB, changing its rate more frequently and with greater amplitude. To see this, one only needs to look at the statistics from the last 10 years. According to analysts at Commerzbank, this means that if both central banks start their easing cycles at the same time, the dollar rate could very quickly fall below the euro rate, which would support an increase in the EUR/USD exchange rate.

However, what the cycles will look like this time remains unclear. The CME FedWatch Tool estimates a 56% probability of a Federal Reserve rate cut in June. Yet, speaking to the US Congress on 6-7 March, Fed Chair Jerome Powell only vaguely stated that the regulator would ease monetary policy "at some point this year".

A statement by Loretta Mester, president of the Federal Reserve Bank of Cleveland, proved to be more interesting. Speaking at the European Centre for Economics and Finance, she expressed concerns about the continued steady decrease in inflation throughout the year. Therefore, in Mester's view, it would be appropriate to keep the rate at its current level of 5.50%. The head of the Federal Reserve Bank of Cleveland also suggested that if economic conditions align with forecasts, the likelihood of a rate cut towards the end of the year might increase.

Regarding the macroeconomic statistics released last week, Eurostat's final assessment showed that the Eurozone economy grew by 0% in quarterly terms over the last three months of 2023. Year-on-year, GDP increased by 0.1%. Both figures matched preliminary estimates and market expectations, thus having no impact on the exchange rates.

Throughout the week, the dollar was under pressure, and not just due to Jerome Powell's "dull" Congressional testimony. US macroeconomic reports appeared relatively weak. For instance, the ISM Services Sector Business Activity Index for February fell from 53.4 points to 52.6 points. Manufacturing orders in January also dropped by 3.6%, which was worse than the 2.9% forecast. The number of job openings (JOLTS) in the US last month was 8.863 million, down from 8.889 million the previous month, and initial unemployment claims for the week ending on 2 March rose to 217K, exceeding the 215K forecast. All these factors together led to the EUR/USD pair moving out of the narrow range of 1.0800-1.0865, in which it had been trading since 20 February, and rising to the 1.0900 mark.

Labour market statistics released on Friday, 8 March, could have supported the dollar, but this did not happen, even though the market's reaction was somewhat puzzling. On one hand, the number of new jobs created outside of the agricultural sector (NonFarm Payrolls) was 275K, significantly exceeding both the previous figure of 229K and the forecast of 198K. Typically, such indicators would push the EUR/USD pair down. However, this time, it sharply rose instead. This likely relates to the unemployment rate increasing from 3.7% to 3.9% (with a forecast of 3.7%) and the average hourly earnings showing a sharp drop from 0.5% (month-over-month) to 0.1% (against a forecast of 0.2%). It seems the last two indicators outweighed the positive effect from the NFP. Market participants decided that these would be additional arguments in favour of a more imminent interest rate cut, resulting in EUR/USD soaring to 1.0980.

Subsequently, the excitement settled, and EUR/USD closed at 1.0937. As for the short-term outlook, as of the evening of Friday, 8 March, 35% of experts were in favour of the dollar strengthening and the pair falling, while 65% sided with the euro. Trend indicators and oscillators on the D1 chart are 100% coloured in green, with a quarter of the latter in the overbought zone. The nearest support levels for the pair are situated in the 1.0845-1.0865 zone, followed by 1.0800, then 1.0725, 1.0680-1.0695, 1.0620, 1.0495-1.0515, and 1.0450. Resistance zones are located around 1.0970-1.1015, 1.1050, and 1.1100-1.1140, up to 1.1230-1.1275.

The upcoming week is expected to be quite tumultuous. Significant volatility can be anticipated on Tuesday, 12 March, with the release of consumer inflation (CPI) data in Germany and the USA. On Thursday, 14 March, retail sales statistics and the Producer Price Index (PPI) in the United States will be announced. The week will conclude with the publication of the University of Michigan Consumer Sentiment Index on Friday, 15 March.

GBP/USD: A Good Week for the Pound

Starting the week at 1.2652, GBP/USD recorded a local high of 1.2893 on Friday, gaining 241 points and breaking out of the medium-term sideways channel of 1.2600-1.2800. The first reason for such dynamics is the weakness of the dollar, as mentioned earlier. The second reason is the positive economic statistics from the UK: the Construction PMI increased from 48.8 to 49.7. This indicates that the real estate sector is almost overcoming a period of stagnation, which, in turn, will eventually provide significant support to the country's economy.

There's also a third reason. In our last review, we warned that a key event for the pound sterling last week would be the announcement of the UK Government's budget on Wednesday, 6 March. This pre-election budget could significantly impact the British currency, which in 2024 is the second most successful G10 currency after the US dollar.

Finance Minister Jeremy Hunt, presenting the spring government budget, called it a plan for long-term growth. Hunt announced various benefits and subsidies amounting to £1.8 billion, as well as an allocation of £360 million for funding research and development in the biomedical sector, car manufacturing, and aerospace production. The government will also assist British households by partially reducing taxes. Moreover, it will actively stimulate economic growth to ensure the prosperity of the country's citizens. Specifically, the temporary reduction in duties on fuel and alcohol will continue.

Hunt also stated that inflation could fall to 2.0% by the end of the year, and the UK's GDP this year would grow by 0.8%. Overall, the finance minister's figures and promises, as is customary before elections, were quite impressive, allowing the pound to strongly challenge the dollar.

But will this boost of strength last for the British currency? Economists at HSBC note that the UK still faces a challenging combination of inflation and growth. This limits the Bank of England (BoE)'s ability to maintain a maximally hawkish stance compared to other central banks. As it becomes more dovish, the pound may face significant downward pressure in the coming months.

GBP/USD concluded last week at 1.2858. Analysts' opinions on its near-term behaviour are divided: a majority (60%) predict a decline, 20% anticipate growth, and 20% remain neutral. Among trend indicators and oscillators on the D1 chart, the situation mirrors that of EUR/USD: all point north, although 25% of oscillators signal the pair is overbought. Should the pair move southward, it will encounter support levels and zones at 1.2800-1.2815, 1.2750, 1.2695-1.2710, 1.2575-1.2610, 1.2500-1.2535, 1.2450, 1.2375, and 1.2330. In the event of an upward trend, resistance will be met at levels 1.2880-1.2900, 1.2940, 1.3000, and 1.3140.

On Wednesday, 13 March, the UK's GDP data for January 2024 will be released. The country's economy is expected to show growth of 0.2%, reversing a decline of -0.1% in December, which would confirm Jeremy Hunt's optimism. No other significant macroeconomic statistics regarding the UK economy are scheduled for release next week.

USD/JPY: A Great Week for the Yen

If the past week was very good for the pound, it was simply great for the Japanese yen. USD/JPY reached a local minimum of 146.47 on the evening of Friday, 8 March, meaning the yen reclaimed more than 360 points from the dollar.

In addition to the weakening of the dollar, the yen was bolstered by rumours that the Bank of Japan (BoJ) may soon decide to normalize its monetary policy. Citing informed sources, Reuters reported that "if the results of the spring wage negotiations [on 13 March] are strong, the Bank of Japan may not have to wait until April" to exit its negative interest rate policy, and that the BoJ "is leaning towards ending negative rates as early as March."

Another report by Jiji News mentioned that "the Bank of Japan is considering a new quantitative framework for its monetary policy, which will outline the prospects for future government bond purchases." "The Bank of Japan," Jiji continues, "will review its Yield Curve Control (YCC) as part of considering a new quantitative policy.".

Thus, Wednesday, 13 March, could become a significant day for the Japanese currency, as could 19 March, when the next meeting of the Bank of Japan is scheduled. It's possible the regulator might increase the interest rate on this day for the first time since 2016. However, analysts at the French Natixis Bank believe that if there is an increase, it would be very slight. "In reality, the depreciation of the yen is beneficial for the Japanese economy," the bank's analysts write. "It helps to bring inflation back to the 2% target and stimulates exports. Since Japan has very significant net foreign assets, primarily in dollars and euros, a depreciation of the yen leads to a capital gain in yen value of these external assets." "As a result," Natixis concludes, "one should not expect Japan to move to a tighter monetary policy. At most, a symbolic increase in the base rate can be expected."

Commerzbank holds a similar position, believing that the yen's potential is limited, and a strong appreciation, especially in the medium and long term, should not be expected. According to Commerzbank economists, this is due to the Bank of Japan's lack of capacity for a pronounced normalization of interest rates.

USD/JPY concluded last week at 147.06. As for the near future, it's impossible to come to a consensus: 20% sided with the bears, an equal 20% with the bulls, and 60% remained undecided. Among the oscillators on the D1 chart, only 15% are coloured in green, while the remaining 85% are in red, with 40% indicating an oversold condition. The distribution of strength among trend indicators is exactly the same: 85% to 15% in favour of the reds. The nearest support levels are found at 146.50, 145.90, 144.90-145.30, 143.40-143.75, 142.20, and 140.25-140.60. Resistance levels and zones are located at 147.65, 148.25-148.40, 149.20, 150.00, 150.85, 151.55-152.00, and 153.15.

In the upcoming week's calendar, noteworthy events include the announcement of Japan's Q4 2023 GDP volume on Monday, 11 March. Additionally, as previously mentioned, the wage negotiations on 13 March are of significant interest. No other major events related to the Japanese economy are planned for the near future.

CRYPTOCURRENCIES: Two Historic Records in One Week

In less than 24 hours on 4 March, bitcoin appreciated by approximately 10% and reached the mark of $69,016. This was a new (but not the last) historical record, surpassing the previous one of $68,917 set on 10 November 2021. Most top-10 crypto assets also saw a 10-30% increase in value over the week.

This surge in bitcoin is attributed to purchases by a supposed billionaire from Qatar, who flew in on his private jet to Madeira for the three-day Bitcoin Atlantis conference. Keychainx CEO Robert Rodin wrote that he saw something at Madeira airport that "could forever change bitcoin." BTC maximalist Max Keiser, in turn, shared a video in which the President of El Salvador, Nayib Bukele, greets the Emir of Qatar with the words "It's happening!"

What exactly Rodin and Bukele meant is unknown. However, this was enough to fuel discussions about Qatar adding bitcoins to its balance sheet. The accuracy of such claims is unproven, but social networks are abuzz with speculation on this matter. It's worth noting that rumours about one or two sovereign wealth funds or investment companies from the Middle East secretly buying up bitcoins have been circulating for several months.

Following the update of its historical high, bitcoin then plunged, dropping to $59,107 on 5 March, with forced liquidations on the futures market reaching $1 billion. However, this dip was short-lived as whales bought up much of the supply, not only returning the market to its previous dynamics but also setting a new record: on 8 March, the leading cryptocurrency reached $69,972. This is largely because most market participants anticipate its continued growth, surpassing at least the $100,000 mark.

According to trader Gareth Soloway, the upcoming bitcoin halving in April does not guarantee by itself that the digital gold will reach the mentioned size. Soloway identifies the monetary policy of the US Federal Reserve as the deciding factor. The Fed's reluctance to aggressively cut interest rates could support high inflation, potentially contributing to bitcoin's upward trend. "If we see an increase in liquidity (which will definitely happen), then bitcoin will rise to $100,000 in 2024," writes Soloway. However, on its way to this round figure, the trader does not rule out a short-term bearish correction.

Experts at JPMorgan also discuss the possibility that the halving could trigger a sharp decrease in the price of the first cryptocurrency. The algorithmic reduction of the reward from 6.25 BTC to 3.125 BTC will decrease mining profitability. Based on this, economists at JPMorgan, led by senior analyst Nikolaos Panigirtzoglou, predict that the price will fall to $42,000 after the halving. "The cost of mining bitcoin empirically acts as a floor for its price," their report states. "After the halving, this metric will be $42,000." "This is also the level towards which, in our view, the price will gravitate once the post-halving euphoria subsides in April," note JPMorgan's experts.

According to the well-known Stock-to-Flow (S2F) model, the primary cryptocurrency has transitioned from the accumulation phase to the growth phase. The accumulation phase is characterized by a relatively smooth price increase, low volatility, and moderate corrections, with the maximum drawdown in the concluded cycle not exceeding 22%. The growth phase presents a different picture. Historical data shows that during movements towards new highs, drawdowns ranged from 36% to 71%. JPMorgan has predicted a drop in bitcoin to $42,000. At the current price, this correction would be approximately 36-40%, aligning with the lower end of the specified range. A 70% correction, however, could lead to a significantly deeper fall.

How could this happen? Initially, to stay afloat, miners, whose incomes will be halved, will begin to sell off their stocks. Then, institutional and short-term speculators, looking to lock in profits, will join in. Concurrently, stop orders will start to trigger, leading to an avalanche-like plunge in quotations. And if investors who have put their money into spot BTC-ETFs also join this "crypto-fall", the depth of the drop could be hard to imagine. It's worth noting that in January-February, BTC-ETFs attracted 75% of all investments in the main cryptocurrency, and there are no guarantees that panic sentiment won't affect the depositors of these funds.

However deep the correction might be, bitcoin, in the opinion of many experts, will still remain within the long-term upward trend. "We have entered the era of the bitcoin gold rush. It started in January 2024 and will last approximately until November 2034," believes MicroStrategy's founder Michael Saylor. According to his calculations, by that time, miners will have extracted 99% of all coins, marking the beginning of the "growth phase." (According to BitcoinTreasuries, 93.5% has already been mined as of now).

Saylor believes that currently, only 10-20% of asset managers are interested in spot BTC-ETFs. In the future, as existing barriers are removed, this figure will approach 100%. "When they [managers] can buy BTC through a bank, platform, or prime broker, they'll spend $50 million in an hour," he stated. The founder of MicroStrategy also expressed confidence that "there will come a day when bitcoin will surpass gold and will be traded more than the S&P 500 ETFs."

In the next 15 years, bitcoin could appreciate 64 times to reach $10.63 million. This forecast was made by Professor Giovanni Santostasi based on a power-law model. According to the scientist, this model provides a clear and predictable scenario for the price change of the first cryptocurrency over long periods. However, over shorter spans, which the media primarily focus on, the quotations behave chaotically. Unlike the S2F model by the analyst known as PlanB, the power law is logarithmic, not exponential. In other words, the price of bitcoin is not expected to constantly increase over time. According to Santostasi's calculations, digital gold will peak at $210,000 in January 2026, then drop to $60,000, and after that, it will continue its wave-like growth to $10.63 million.

(For reference: A power-law relationship is a mathematical relationship between two quantities where a relative change in one quantity leads to a proportional relative change in the other, regardless of the initial values of those quantities. The manifestation of this law can be found across a wide range of natural phenomena, from the frequency of earthquakes to the dynamics of stock market changes.).

As of the evening of Friday, 8 March, BTC/USD is trading at around $68,100. The Crypto Fear & Greed Index has slightly risen from 80 to 81 points, entering the Extreme Greed zone. The total market capitalization of cryptocurrencies stands at $2.60 trillion (up from $2.34 trillion a week ago), with the main cryptocurrency's dominance index at nearly 52%, and its capitalization exceeding $1.35 trillion. This surpasses the fiat currency market capitalizations of Malaysia, Indonesia, Vietnam, Thailand, the UAE, Mexico, and many other countries. A few days ago, BTC surpassed the Russian ruble in capitalization, taking the 14th spot in the overall ranking of the largest currencies, with the Swiss franc as its nearest competitor. Amid news that bitcoin exceeded the rouble, jokes flooded the internet suggesting Vladimir Putin is Satoshi Nakamoto. Ethereum ranked 28th, performing better than the Chilean peso but not as well as the Turkish lira.

In the overall ranking of the most capitalized assets, which includes precious metals and companies, bitcoin secured the 10th place. It surpassed Berkshire Hathaway, the company of well-known cryptocurrency critic billionaire Warren Buffett, but did not reach Meta. The top 3 are currently occupied by gold, Microsoft, and Apple.


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
Stan NordFX
  • Posts: 625
  • Joined: 04/03/2018
CryptoNews of the Week

UserPostedImage


– In a CNBC interview, former US President and Republican Party leader Donald Trump highlighted the importance of the American national currency and compared moving away from the dollar standard to a defeat. At the same time, he stated that he does not plan to obstruct the use of bitcoin or other cryptocurrencies if he wins the election in November. "If you think about it, it's an additional form of currency," Trump remarked. "Bitcoin is widely used, and I'm not sure I would want to give it up right now," the politician added. However, when asked by the interviewer if he himself invests in cryptocurrency, the former (and possibly future) president responded negatively.

– Balaji Srinivasan, former CTO of Coinbase and a general partner at a16z, has declared we are in the phase of treasury plunder amidst an empire's collapse. Bitcoin, he asserts, is the only available salvation from inflation and the potential confiscation of assets in the US, which could result from the unsustainable trajectory of government spending. According to his calculations, the US national debt has reached a record $34.5 trillion, having increased by 25% since 2020, and continues to grow by $1 trillion every 90 days. The US government spends $10 billion more daily than it receives. Based on this, Srinivasan did not rule out that, as we approach a "financial reckoning" for such behaviour, the "insatiable state" might consider the confiscation of private assets.
"Private property will not be protected by the state in a bankrupt blue (Democratic) America. Any blockchain under Washington's control is vulnerable. Fortunately, we have digital gold that is independent of the state and cannot be confiscated. Bitcoin maximalism will triumph. It will save us from state budgeting," believes the former CTO of Coinbase. Although he refrained from specifying when the "reckoning" would occur, he reminded that the inevitability of such a scenario had previously been mentioned by Ray Dalio, Elon Musk, Larry Fink, and Stanley Druckenmiller.

– Jamie Dimon, CEO of JPMorgan, has urged the US Federal Reserve to postpone cutting interest rates until June and shared his views on the first cryptocurrency, as reported by CNBC citing the businessman's speech at the Australian Financial Review summit. "I don't know what bitcoin is for, but just as with the right to smoke a cigarette, I'll support your right to buy bitcoin. Personally, however, I would never buy it," he stated, adding that the use of digital assets is often associated with illegal activities, including human trafficking, fraud, and terrorism.

– William Ackman, CEO of Pershing Square Capital, has attributed bitcoin mining as one of the causes for inflation increase and the fall of the US dollar. "The rise in bitcoin prices leads to an increase in mining and energy consumption, raising the latter's cost, thus causing inflation to rise and the dollar to decline. This stimulates demand for bitcoin, its mining, and energy consumption. The cycle continues, bitcoin goes into infinity, energy prices skyrocket, and the economy collapses," the billionaire described his scenario, adding that this relationship "works in reverse as well."
"Wondering if I should buy bitcoin in such a situation?" Ackman pondered, to which another billionaire, MicroStrategy founder Michael Saylor, replied, "You should buy some bitcoin, but not for the reasons mentioned above. Most bitcoin miners actually help to reduce the cost of electricity for other consumers, not the other way around. Let me know if you want to discuss this issue one-on-one," he wrote.

– Michael Saylor believes that bitcoin will "eat" gold in the future, becoming a more valuable asset because it possesses all the advantages of gold while being free from its disadvantages. Saylor pointed out that precious metal cannot be moved quickly, whereas bitcoin can be transferred to a new owner instantly.
The appearance of the first cryptocurrency in various investment products is a sign of the asset's future dominance, according to the MicroStrategy co-founder. The digital asset will also begin to take market share from other risky investment products, with Saylor naming the S&P 500 ETF fund as one of the potential "victims."
It is noteworthy that bitcoin, having risen above $72,000 per coin, surpassed silver in market capitalization on March 11, 2024. The first cryptocurrency moved to the eighth position in the ranking of the largest assets by this indicator, overcoming the $1.4 trillion mark.

– Pierre Rochard, Vice President of Research at his company, evaluated the US budget for 2025 proposed by Joe Biden's team. The researcher's conclusion is that the Democrats anticipate BTC reaching $250,000 within a decade: by 2034-2035. This is inferred from the taxes laid out by the White House in the budget. However, the expert clarified that there are no direct indications of this price in the budget. Conclusions are drawn based on the assessment of potential profits from taxes and the regulation of the cryptocurrency market.
Rochard draws another conclusion from the White House documents. According to his analysis, the mining industry in the US could experience exponential growth. This could be due to the active development of the US market and an excess of electrical energy, leading to a tenfold increase in this industry.

– Following the approval of spot bitcoin ETFs in the US earlier this year, demand for the flagship crypto asset significantly exceeded the daily supply of bitcoin mined by miners, and the halving scheduled for the third decade of April will only intensify this imbalance. As a result, many analysts believe that the price of bitcoin is in the early stages of a super-cycle, fuelled by institutional investors and issues in the global macroeconomy.
At the time of writing this overview, the maximum price of bitcoin was recorded at $73,556. Analysts at Matrixport are optimistic about the coin's global future. However, according to them, a risk-reward analysis suggests that the coin's quotes may soon adjust. "This bull market still has legs," Matrixport believes, "but the divergence between the decreasing RSI and high BTC prices may signal that bitcoin needs to consolidate before it can start increasing in price again."
Investor and founder of MN Trading, Michael Van De Poppe, believes that a market retracement of 20-30% is quite possible in the near future. He also noted that he expects a lot from altcoins, which have not yet reached record levels.

– Raoul Pal, the founder of investment firm Real Vision, has forecasted the targets BTC, ETH, and SOL could reach in the near future. He suggested that the target mark for bitcoin in the near term is $250,000 per coin. Moreover, the first cryptocurrency might exceed this projected level due to the high demand for spot bitcoin ETFs. The upcoming April halving is also expected to boost demand for this cryptocurrency.
Raoul Pal is also bullish on Ethereum, predicting its value could rise to between $17,000 and $20,000, thanks to the utility of smart contracts. Currently, ETH is trading around $4,000, but unlike bitcoin, it has yet to surpass its record: in November 2021, Ethereum reached a level of $4,856. The Real Vision founder believes that the altcoin's growth could be influenced by its strong correlation with bitcoin, anticipation of the launch of spot ETH ETFs, and the Dencun update.
Pal forecasts that the price of Solana could range from $700 to $1,000, as the blockchain's high performance will increase demand for this coin. In early November 2021, SOL reached its peak at $260, indicating the coin still has plenty of growth potential.

– Bernstein analysts believe that shares of mining companies remain the best proxy investments in bitcoin as the cryptocurrency moves towards a target mark of $150,000. In a note to clients, they point out that historically, miners' stock prices have almost always outperformed bitcoin in terms of growth rate during a bull market. As we are in the middle of the current cycle, every "weakness window" for miners of digital gold is, in experts' opinion, an opportunity to buy their shares.
Bernstein asserts that the segment is currently dominated by retail investors, while institutional investors mostly avoid "bitcoin-proxy" investments due to their ongoing scepticism towards cryptocurrencies. However, as the asset grows to new highs, analysts expect this category of investors' interest in miners' stocks to awaken, making them the primary beneficiaries of capital inflow.


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
Stan NordFX
  • Posts: 625
  • Joined: 04/03/2018
Forex and Cryptocurrencies Forecast for March 18 - 22, 2024



EUR/USD: Stubborn Inflation Refuses to Back Down

Market participants last week were keenly focused on inflation data from the US. The FOMC (Federal Open Market Committee) meeting of the Federal Reserve is scheduled for Wednesday, 20 March, and these figures will undoubtedly influence the Committee's decision on interest rates. Federal Reserve Chairman Jerome Powell recently stated that more evidence of a sustainable slowdown in inflation would be necessary to start cutting rates. However, it appears that such evidence is lacking. Data released on Tuesday, 12 March, showed that prices, instead of decreasing, have been on the rise.

The Consumer Price Index (CPI), excluding food and energy, was expected to increase by 0.3% but actually rose by 0.4% month-on-month. Year-on-year, inflation in February increased by 3.8%, slightly above the forecast of 3.7%. The overall CPI showed a monthly increase of 0.4% and an annual rise of 3.2%. Thus, the overall CPI has increased by 4.2% on an annual basis over the last three months, marking the highest level since June of the previous year. Certainly, this surge in inflation is not a cause for panic, but it is too early to declare a complete victory over it, for which the Fed raised rates to the highest level in 40 years.

Additional arguments for the Federal Reserve to refrain from hastily cutting rates emerged on Thursday, 14 March. It was found that industrial inflation, measured by the Producer Price Index (PPI), increased from 0.3% to 0.6% month-on-month, against market expectations of 0.3%. Against this backdrop, the yield on 10-year US Treasury bonds sharply increased, providing support to the dollar.

Beyond CPI and PPI, there's a third argument in favour of maintaining the Federal Reserve's tight monetary policy: the labour market, which remains relatively robust. Despite the highest unemployment rate increase in two years (from 3.7% to 3.9%), the number of new jobs created outside of the agricultural sector (NonFarm Payrolls) reached 275K, significantly exceeding both the previous figure of 229K and the forecast of 198K. Additionally, real wages continued to grow year-on-year in February.

Against the backdrop mentioned above, the euro faced pressure last week. Moderately dovish statements from officials at the European Central Bank (ECB) did not provide any relief. On Thursday, the bank's chief economist, Philip Lane, in an interview with CNBC, stated that wages are moving in the right direction. However, he added, the EU's monetary authorities avoid giving clear forecasts regarding further steps and must make decisions at each specific meeting.

According to Peter Kazimir, a member of the ECB's Governing Council and head of the National Bank of Slovakia, it would be wise to wait until June for the first rate cut. "Rushing this step is unwise and disadvantageous," he said. "Upside risks to inflation are alive and well. More convincing data on inflation prospects are needed. [And] only in June will we reach the threshold of confidence in this matter." "But the discussion on easing should start now," added the head of the National Bank of Slovakia.

Olli Rehn, a member of the ECB's Governing Council and head of the Bank of Finland, spoke similarly. He confirmed the start of discussions on reducing the restrictive aspect of the bank's monetary policy. When asked about the appropriate time to begin rate cuts, he carefully replied, "If inflation continues to decline, it would be possible to gradually start lifting the foot off the monetary policy brake pedal."

The preliminary Michigan Consumer Sentiment Index, published on 15 March, showed a slight decrease to 76.5 from the previous value and forecast of 76.9. Following this, EUR/USD ended the working week at 1.0886. As for the near-term outlook, as of the evening of Friday, 15 March, 75% of experts voted for a strengthening dollar and a decline in the pair, with 15% siding with the euro and 10% taking a neutral stance. Oscillator readings on the D1 are evenly distributed: one-third are coloured green, one-third red, and one-third neutral grey. Trend indicators' force ratio is such: 35% recommend selling the pair, while 65% recommend buying it. The nearest support for the pair is located in the zone of 1.0845-1.0865, followed by 1.0800, then 1.0725, 1.0680-1.0695, 1.0620, 1.0495-1.0515, and 1.0450. Resistance zones are found at 1.0920, 1.0965-1.0980, 1.1015, 1.1050, 1.1100-1.1140, and 1.1230-1.1275.

In the coming week, the Consumer Price Index (CPI) value for the Eurozone will be released on Monday, 18 March. However, as the ECB meeting has already taken place, this indicator is unlikely to provoke a strong market reaction. The main event of the week, as mentioned, will be the Federal Reserve's FOMC meeting on Wednesday, 20 March. It is expected to be the fifth consecutive meeting where the federal funds rate remains unchanged at 5.50%. The greatest interest for economists and investors will likely lie in the subsequent Federal Reserve leadership press conference, where they hope to hear hints about the start date for monetary policy easing. Currently, according to CME FedWatch, there is a 40% chance that the reduction will begin in June.

Apart from these events, a comprehensive package of data on business activity (PMI) across various sectors of the economy in the US, Germany, and the Eurozone, set to be released on Thursday, 21 March, also presents interest. On the same day, traditional data on the number of initial unemployment claims in the US will be published.

GBP/USD: More Negatives than Positives for the Pound

Last week, the dollar was recovering from the losses it suffered in the first ten days of March. On one hand, GBP/USD was pressured by rising inflation in the US, and on the other hand, by weak macroeconomic statistics from the United Kingdom. Data published on Tuesday, 12 March, confirmed the cooling of the country's labour market. In January, employment decreased by 21K (against a forecasted increase of 10K), and the unemployment rate rose from 3.8% to 3.9% (forecasted at 3.8%). Additionally, the number of claims for unemployment benefits sharply increased from 3.1K in January to 16.8K in February. Meanwhile, the wage growth of UK workers slowed down, marking the slowest pace since 2022.

Market participants' pessimism increased on Wednesday, 13 March. It was revealed that although the country's GDP grew by 0.2% in January, industrial production fell from +0.6% to -0.2% month-on-month and from +0.6% to +0.5% year-on-year. The manufacturing sector saw an even sharper decline, from +0.8% to 0.0% month-on-month and from +2.3% to +2.0% year-on-year.

All these data strengthen the likelihood of the Bank of England (BoE) soon shifting to a more dovish monetary policy. Some estimates suggest this could happen as early as May. If data from the United Kingdom continue to worsen, the probability of a pound interest rate cut in the coming months will only increase, pushing GBP/USD further down.

"GBP/USD could fall as the UK continues to stagnate and the Bank of England finally begins to cut rates," analysts at the French bank Societe Generale believe. Economists at the Dutch Rabobank also see potential for significant strengthening of the dollar against the British currency over a 1 to 3-month horizon. However, Rabobank forecasts that the interest rate differential, signs of improvement in the UK's economic outlook, combined with the prospect of uneventful elections in the country and a relatively stable political backdrop, should provide moderate support to the pound. "We believe," the bank's economists write, "that over a 12-month perspective, GBP/USD will recover to the 1.3000 area.".

The pair closed the week at 1.2734. Analyst opinions on its near-term direction were divided as follows: a majority (65%) voted for a decline, 20% for an increase, and 15% remained neutral. Among the D1 oscillators, 40% point north, only 10% south, and 50% east. Trend indicators have 65% looking upwards and 35% in the opposite direction. Should the pair move southward, it will encounter support levels and zones at 1.2695-1.2710, 1.2575-1.2610, 1.2500-1.2535, 1.2450, 1.2375, and 1.2330. In the event of an upward move, resistance will be met at levels 1.2755, 1.2820, 1.2880-1.2900, 1.2940, 1.3000, and 1.3140.

In addition to the Federal Reserve's FOMC meeting, the upcoming week will also feature a meeting of the Bank of England, scheduled for Thursday, 21 March. The day before, we will learn about the inflation situation (CPI) in the United Kingdom, and just before the BoE meeting, preliminary data on business activity (PMI) in the country will be released. The workweek will conclude with the publication of retail sales data in the United Kingdom.

USD/JPY: What to Expect from the Bank of Japan

UserPostedImage


The upcoming week, on Tuesday, 19 March, will also see a meeting of the Bank of Japan (BoJ). Consequently, speculation regarding an imminent shift in the regulator's monetary policy is mounting. Analysts at TD Securities have shifted their forecast for a yen rate hike from April to March. "Following a positive round of wage negotiations, we believe the Bank of Japan has the necessary information to raise the rate at next week's meeting," they write. TD Securities expects that if the rate is increased, such a move away from NIRP could easily push USD/JPY to 145.00. However, if the BoJ does not do so but attempts to sound hawkish, hinting at the possibility of a policy reversal in April, the pair might rise, but only slightly – to 150.00.

Rabobank analysts also discussed the potential tone of the Bank of Japan's statements. "If the Bank of Japan exits its negative interest rate policy on 19 March, it is likely that rates will only be raised by 10 or 15 basis points (bps)," the Rabobank experts believe. "Furthermore, at best, the Bank of Japan's guidance next week will be cautiously optimistic. It is important to note that even after the negative rate is relegated to economic history, Japan's monetary policy settings will likely remain accommodative." Rabobank does not rule out that a very cautious tone from the BoJ regarding further changes may increase the risk of a "sell the fact" reaction post-19 March. "Nevertheless, despite the risk of a short-term increase in the pair, we continue to see the possibility of USD/JPY declining to 146.00 in a three-month perspective," conclude the Rabobank economists.

Strategists at Standard Chartered echo similar sentiments. Like many of their peers, they anticipate that the Bank of Japan will end its ultra-loose policy in March rather than April. However, in their view, the expected policy adjustment is unlikely to signal the start of an aggressive rate-hiking cycle. The abolition of the negative interest rate policy (NIRP) will not alter the negative yield differential with other countries. Nonetheless, the potential cessation of yield curve control (YCC) should ultimately be positive for the yen, especially if the Federal Reserve and the ECB start cutting rates from June. In this scenario, Standard Chartered strategists believe that by the end of Q2 2024, USD/JPY could fall to 145.00.

Economists at ING, the largest banking group in the Netherlands, have repeatedly emphasized that a sustainable rally in the yen is more dependent on cuts in the Federal Reserve's rates than on rate hikes by the Bank of Japan. "We still believe that it will be difficult for the yen to sustainably strengthen beyond the volatility surrounding the rate hike until rates in the US are reduced. This remains our base scenario for this year," they write.

Societe Generale analysts are notably optimistic about the Japanese yen in their forecasts. They believe the yen is the only G7 currency likely to significantly appreciate against the US dollar this year. Even if the Bank of Japan's steps away from negative interest rates and yield curve control on 19 March are fairly symbolic, the yen is still expected to strengthen, as it is currently considered undervalued.

Throughout the past week, USD/JPY, buoyed by a strengthening dollar, rose and concluded at 149.05. Looking ahead, whereas a majority of analysts sided with the dollar in EUR/USD and GBP/USD, the situation here is reversed – in anticipation of a historic move by the Bank of Japan, 65% of experts leaned towards the bearish side for the pair, with 35% remaining undecided. No votes were cast in favour of the American currency. Technical analysis tools seem unaware of the Bank of Japan's meeting, which is why only 35% of D1 oscillators favoured the yen, 25% favoured the dollar, and 40% remained neutral. Trend indicators show a clear advantage for the dollar – 90% are coloured green, and only 10% red. The nearest support levels are located at 148.40, 147.60, 146.50, 145.90, 144.90-145.30, 143.40-143.75, 142.20, 140.25-140.60. Resistance levels and zones are at 150.00, 150.85, 151.55-152.00, 153.15.

Apart from the Bank of Japan meeting, no other significant events related to the Japanese economy are scheduled for the coming days. Traders should also note that Wednesday, 20 March, is a public holiday in Japan: the country observes the Vernal Equinox Day.

CRYPTOCURRENCIES: Riding the Wave of FOMO to New Historical Highs

FOMO (Fear of Missing Out) is currently the dominant sentiment in the market, driving the leading cryptocurrency to new heights. Another record was set on Thursday, 14 March, when BTC/USD reached $73,743.

Following the approval of spot bitcoin ETFs in the US earlier this year, demand for the flagship crypto asset has significantly outstripped the daily supply of bitcoin mined by miners. The halving, scheduled for the third decade of April, will only intensify this imbalance. Despite these two drivers remaining on the agenda, their endless discussion has started to weary market participants. As a result, the focus has shifted towards issues of the global economy, the Federal Reserve's monetary policy, and the upcoming presidential elections in the US.

Starting with the potential Presidents of the United States, specifically what could happen if the White House is won by one of the two main contenders. Former US President and Republican Party leader Donald Trump emphasized the importance of the American national currency in a CNBC interview, comparing a departure from the dollar standard to defeat. At the same time, he stated he would not interfere with the use of bitcoin or other cryptocurrencies if he wins the elections in November. "If you think about it, it's an additional form of currency," Trump said. "[Bitcoin] is widely used, and I'm not sure I'd want to give it up right now," the politician added. However, when asked by the host if he himself invests in cryptocurrency, the former (and potentially future) president answered negatively.

Regarding the current White House occupant, a study conducted by Pierre Rochard, Vice President of Riot, is of interest. He assessed the US budget for 2025, proposed by Joe Biden's team, and concluded that Democrats are expecting BTC to reach $250,000 over a decade – by 2034-2035. This is suggested by the taxes laid out by the White House in the budget. However, the expert clarified that the document, of course, does not contain direct indications of this price. Conclusions are made based on the assessment of potential profit from taxes and regulation of the cryptocurrency market.

Discussing the US economy, former Coinbase CTO and a16z general partner Balaji Srinivasan writes, "We are in the phase of looting the treasury amidst the collapse of an empire. Bitcoin is the only available salvation from inflation and potential asset confiscation in the US, which could occur due to the unsustainable trajectory of government spending." According to Srinivasan's calculations, the US national debt has reached a record $34.5 trillion, increasing by 25% since 2020, and continues to grow by $1 trillion every 90 days. The US government spends $10 billion more daily than it receives. Given this, the former Coinbase CTO did not rule out that as the "financial reckoning" for such behaviour approaches, the "insatiable state" might consider the possibility of confiscating private assets.

"Private property will not be protected by the state in a bankrupt blue [Democratic] America. Any blockchain under Washington's control is vulnerable. Fortunately, we have digital gold. It is independent of the state and cannot be confiscated. Bitcoin maximalism will win. It will save us from state budgeting," believes the former CTO of Coinbase. He declined to specify when the "reckoning" would occur but reminded that Ray Dalio, Elon Musk, Larry Fink, and Stanley Druckenmiller have previously announced the inevitability of such a scenario.

Analysts at Matrixport, sharing Balaji Srinivasan's optimism about the global future of bitcoin, also suggest that a risk-reward analysis indicates that the coin's quotes may soon undergo a correction. "This bull market still has legs," Matrixport believes, "but the divergence between the decreasing RSI and high BTC prices could signal that bitcoin needs to consolidate before it can start rising in price again."

Investor and founder of MN Trading, Michael Van De Poppe, believes a market pullback of 20-30% is quite possible in the near term. He also noted that he has high expectations for altcoins, which have yet to reach record highs.

Raoul Pal, the founder of the investment company Real Vision, predicted the potential performance of bitcoin, ETH, and SOL. He suggested that the target mark for bitcoin in the foreseeable future is $250,000 per coin. The first cryptocurrency may exceed this projected level due to high demand for spot bitcoin ETFs. The upcoming April halving is also expected to increase demand for this cryptocurrency.

Raoul Pal is also bullish on Ethereum. Thanks to the utility of smart contracts, the value of this altcoin could rise to $17,000-$20,000. Currently, ETH is trading around $4,000, but unlike bitcoin, it has not yet surpassed its record – in November 2021, Ethereum reached a level of $4,856. The Real Vision founder believes that the altcoin's growth could be influenced by a strong correlation with bitcoin, anticipation of the launch of spot ETH ETFs, and the Dencun update.

The specialist forecasts that the price of Solana could range from $700 to $1,000, as the high performance of the blockchain will increase demand for this coin. In early November 2021, SOL reached a peak mark of $260, and the coin still has plenty of growth opportunities.

Last week, much attention was also paid to miners, not just individually, but in conjunction with the American economy. Bill Ackman, CEO of Pershing Square Capital, called bitcoin mining one of the reasons for inflation and the fall of the US dollar. "The rise in bitcoin prices leads to an increase in mining and energy consumption, raising the latter's cost and causing inflation and the dollar's decline. This stimulates demand for bitcoin, its mining, and energy consumption. The cycle continues, bitcoin goes into infinity, energy prices skyrocket, the economy collapses," the billionaire described his scenario, adding that this relationship "works both ways."

Taking an opposite viewpoint was another influencer – the aforementioned Pierre Rochard from Riot. He believes that the mining industry could experience exponential 10-fold growth, thanks to the active development of the US market and the country's surplus of electricity. His scenario does not foresee an economic collapse and sky-high energy prices.

Time will tell which of these experts is correct. However, according to analysts at Bernstein, mining company stocks remain the best proxy investments in bitcoin as the cryptocurrency moves towards the target mark of $150,000. In a note to clients, they point out that historically, miners' quotes have almost always outperformed bitcoin in terms of growth rate during a bull market. Since we are in the middle of the current cycle, every "weakness window" for digital gold miners is, in the experts' opinion, an opportunity to buy their stocks.

Bernstein claims that retail investors currently dominate this segment, while institutional investors largely avoid "bitcoin-proxy" investments, as they remain sceptical about cryptocurrencies. However, as the asset grows to new highs, analysts expect this category of investors' interest in miners' stocks to awaken and grow.

At the beginning of spring, bitcoin surpassed the Russian rouble in market capitalization and occupied the 14th position in the overall ranking of the largest currencies. Just a few days later, on 11 March 2024, bitcoin made another leap – rising above $72,000 per coin, it surpassed silver in market capitalization. The first cryptocurrency moved to the eighth spot in the ranking of the largest assets by this measure, crossing the $1.4 trillion mark.

As of the writing of this review, on the evening of Friday, 15 March, after traders took profits, BTC/USD is trading around $68,200. The total market capitalization of the crypto market stands at $2.58 trillion ($2.60 trillion a week ago). The Crypto Fear & Greed Index has risen from 81 to 83 points and is in the Extreme Greed zone. (It's worth noting that the historical maximum for this index was recorded at 95 points during the Bull Rally at the end of 2020).

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
Stan NordFX
  • Posts: 625
  • Joined: 04/03/2018
CryptoNews of the Week

UserPostedImage


– Roger Ver, introducing his new book "The Hijacking of Bitcoin: The Hidden Story of BTC," announced that bitcoin has been captured by a group of insiders. According to this experienced investor, this development has altered the project's philosophy. Jeffrey Tucker, an economist, and the founder of the Brownstone Institute, who contributed to the book, lamented that the story it tells is tragic because the opportunity to change the world with bitcoin was stolen. Bitcoin could have liberated society, but it failed to do so.
Previously, Roger Ver had stated that he considers Ethereum more valuable, despite its lower market capitalisation, because the ETH project does much more for the widespread adoption of cryptocurrencies than bitcoin.

– According to Bitcointreasuries, a significant portion of the first cryptocurrency is owned by various organisations, including government and private investment companies, governments, exchange and investment funds. Together, they hold approximately 12% of the total volume of bitcoins. Around 10% is stored on centralized cryptocurrency exchanges, and another 8.09% belongs to accounts that have been inactive for many years.
The Grayscale Bitcoin Trust, iShares Bitcoin Trust, and Fidelity Wise Origin Bitcoin Fund lead the cryptocurrency market in terms of bitcoin volume, holding 380,241 BTC, 230,617 BTC, and 132,571 BTC, respectively.
Among public companies, MicroStrategy has emerged as the largest holder of bitcoins, with 205,000 BTC on its balance sheet. Marathon Digital holds the second position with 15,741 BTC, followed by Tesla and Coinbase Global in third and fourth places with 9,720 BTC and 9,480 BTC, respectively.
In the realm of private companies, according to available information, Block.one leads in ownership levels with 164,000 BTC. Following it is the MTGOX exchange with a balance of 141,686 BTC. Stablecoin issuer Tether owns 66,465 BTC. The fourth position is occupied by the BitMEX exchange with 57,672 BTC.
In the ranking of bitcoin ownership among states, the USA leads with 215,000 BTC, followed by China with 190,000 BTC, the UK with 61,000 BTC, and Germany with 50,000 BTC.
Adding these figures to the share of the asset attributed to bitcoin's founder, Satoshi Nakamoto (4.76%), it can be concluded that about 35% of mined BTC is unavailable to other private investors. This, to some extent, confirms the conclusion made by Roger Ver.

– Around 48% of voters who own digital assets plan to vote for Donald Trump in the upcoming U.S. presidential elections, according to a survey by Paradigm. Another 38% prefer the current President, Joe Biden, while 13% are undecided about their candidate choice. Additionally, 69% of respondents are dissatisfied with the current state of the country's financial system. 49% of those surveyed stated they do not trust either of the U.S. parties regarding digital asset issues.
The survey data indicates that 19% of registered American voters own digital assets, 7% of respondents own cryptocurrencies valued at over $1,000, and 1% own more than $10,000 worth of cryptocurrencies.

– A British court has ruled that Craig Wright is not Satoshi Nakamoto. The legal proceedings initiated by the Crypto Open Patent Alliance (COPA) against Wright began in 2021. The organisation filed a lawsuit against the businessman to prevent him from claiming intellectual property rights to bitcoin technology. The court has now delivered its verdict: "Firstly, Dr. Wright is not the author of the bitcoin white paper. Secondly, Wright is not the individual who acted under the pseudonym Satoshi Nakamoto from 2008 to 2011. Thirdly, he is not the person who created the bitcoin system. And fourthly, Wright is not the author of the original versions of the first cryptocurrency's software."
Furthermore, the court has suspended two other cases involving Wright – lawsuits against Coinbase and Block. It is possible that a restraining order will be issued to prevent Wright from ever claiming to be Satoshi Nakamoto, though a final decision on this matter has yet to be made.

– India's Finance Minister, Nirmala Sitharaman, has taken a firm stance on bitcoin and other crypto-assets, stating that they cannot be considered real money. According to her, cryptocurrencies are primarily used for trading, speculation, and profit-making. They do not function as traditional currencies issued by central banks and thus thrive solely due to market manipulations.
Ms. Sitharaman highlighted that cryptocurrencies are still unregulated in India, and this issue has been raised at the G20 forum. The minister believes it is crucial for G20 member countries to establish a unified international regulatory framework for cryptocurrencies, which would help manage their risks.

– The Government Pension Investment Fund (GPIF) of Japan, with assets of approximately $1.5 trillion, will consider portfolio diversification options, including the inclusion of the leading cryptocurrency. This initiative is part of an exploration of innovative investment strategies and is a response to economic and social changes as well as rapid technological developments.
Currently, the GPIF invests in traditional assets such as domestic and foreign stocks and bonds, as well as alternative instruments like real estate.

– Analysts at Standard Chartered have revised their bitcoin price target for the end of 2024 from $100,000 to $150,000, with Ethereum potentially reaching $8,000 by the same date. By the end of 2025, the first and second cryptocurrencies could appreciate to $200,000 and $14,000, respectively.
The change in expectations is driven by the excitement around spot bitcoin ETFs and the sharp increase in the asset's price since January. The analysts justified their forecast based on the dynamics of gold following the approval of ETFs and the optimization of the ratio of the precious metal to its digital counterpart at 80% to 20%.
According to Standard Chartered experts, if inflows into ETFs reach $75 billion, bitcoin could increase in value even more – up to $250,000. Actions by sovereign wealth funds could also accelerate growth rates. "We see a growing likelihood that major reserve managers might announce bitcoin purchases in 2024," the analysts say.

– Dan Tapiero, CEO of the investment company 10T Holdings, has also mentioned a figure of $200,000. "I don't think it's that crazy," he stated. According to the financier's calculations, the potential for a threefold increase from the current price roughly corresponds to the percentage difference between the peaks of 2017 and 2021. Moreover, from the lows of the bear market to the peak of 2021, digital gold increased in value by 20 times. This suggests a $300,000 benchmark as a positive scenario.
"It's hard to set specific points and times in such matters. I think we will reach this [zone] within the next 18-24 months, maybe even sooner," Tapiero believes. "A reduction in supply during a rapid increase in demand for ETFs, along with the halving, indicates a significant growth potential. I think the first cryptocurrency will pull everything else up with it."
The CEO of 10T Holdings also noted "good chances" of approval for exchange-traded funds based on Ethereum. However, he found it difficult to say whether these ETFs would be registered in May or if it would happen later.

– After reaching a new all-time high of $73,743 on March 14th, bitcoin experienced a sharp decline, losing about 13%. Some experts do not rule out further temporary decreases. For instance, Kris Marszalek, CEO of Crypto.com, believes that the current volatility of BTC is actually low compared to previous cycles, mainly due to the options market. Michael Novogratz, CEO of Galaxy Digital, is confident that the bottom line is at $50,000, and the coin's price will never fall below it unless a dramatic event occurs. According to him, bitcoin's growth is mainly supported by investors' insatiable appetite for the token, rather than macroeconomic factors such as the policies of the US Federal Reserve. JPMorgan analysts have more cautious feelings towards BTC, stating that the halving is unlikely to be a bullish catalyst for the coin. According to their forecast, bitcoin could fall by 33% after this event.

– The artificial intelligence of OpenAI's ChatGPT, when asked whether the BTC price could reach $100,000 on the eve of the halving, acknowledged this target as plausible. According to the AI's calculations, the current correction in no way affects the growth prospects and only confirms the inaccuracy of short-term forecasts. ChatGPT estimated the probability of reaching $100,000 at 40%, while the probability of hitting the $85,000 mark was assessed at 60%.

– BeInCrypto's editorial team discovered the origin of rumours claiming Vladimir Putin is Satoshi Nakamoto. It appears that Daniel Peña, also known as the "Trillion Dollar Man," an American businessman and founder of Quantum Leap Advantage, initiated them. His first statements linking the Russian President to cryptocurrency date back to 2019. Since then, the entrepreneur has repeatedly supported his theory. Peña believes that Putin benefits from the creation of bitcoin, as the cryptocurrency could undermine the position of the US dollar in the financial market and destabilize the American economy. Despite the lack of evidence for these claims, this theory has taken root and has become a meme over the years.


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
Stan NordFX
  • Posts: 625
  • Joined: 04/03/2018
Forex and Cryptocurrencies Forecast for March 25 - 29, 2024



EUR/USD: Switzerland Strengthens the Dollar

The key event of the past week was undoubtedly the FOMC (Federal Open Market Committee) meeting of the US Federal Reserve on March 20. As expected, the American Central Bank unanimously decided to maintain the key interest rate at its highest level in 23 years, 5.50%, for the fifth consecutive meeting. Since the rate was anticipated, market participants were significantly more interested in the comments and forecasts of the Fed's leadership. The most important statement came from the head of the regulator, Jerome Powell, who mentioned the consideration of three stages of borrowing cost reduction this year, totalling 75 basis points (bps). The long-term rate forecast was raised from 2.50% to 2.60%.

In comments following the meeting, solid growth in the United States economy was noted. The GDP forecast for this year was increased from 1.4% to 2.1%, and for 2025 from 1.8% to 2.0%. The labour market also appears to be in good health, with unemployment at a low level. According to the new forecast, it could reach 4.0%, compared to the previously expected 4.1%. The number of new jobs created outside of the agriculture sector (NonFarm Payrolls) in February was 275K, significantly exceeding both the previous figure of 229K and the forecast of 198K.

Regarding inflation, while it has eased, it remains "elevated," as noted in the statement. Consumer Price Index (CPI) figures for February showed a 3.2% increase on a year-over-year basis. Inflation is anticipated to settle at 2.4% by the end of 2024, with the core Personal Consumption Expenditures (PCE) index expected to be at 2.6%. Previously, both figures were forecasted to be 2.4% in December.

The comments emphasized that the long-term objective is to bring inflation down to 2.0% while achieving maximum employment. Thus, the Federal Reserve will remain vigilant about inflationary risks. Adjustments to monetary policy parameters may be made if factors emerge that obstruct its objectives. These factors include, but are not limited to, the labor market situation, economic growth, inflation in the US, the state of the global economy, and international events.

As already mentioned, the principal scenario for 2024 includes three rate reductions of 25 basis points each. Nonetheless, members of the FOMC have not discounted the possibility of there being just two or even one reduction. A survey by Reuters found that 72 out of 108 economists, or two-thirds, anticipate the first rate cut to occur in June, with the subsequent ones expected in the fall of this year.

The stock market responded positively to the outcomes of the Federal Reserve's meeting. The S&P 500, Dow Jones, and Nasdaq indices all moved higher, a reaction not mirrored by the Dollar Index (DXY), as news of the beginning of monetary policy easing did not please investors. As a result, EUR/USD surged sharply. However, on March 21, the American currency recouped its losses after the Swiss National Bank (SNB) unexpectedly reduced its key interest rate by 25 basis points to 1.5% at its quarterly meeting, contrary to market expectations of maintaining the rate at 1.75%.

"The easing of monetary policy was made possible thanks to the effective combat against inflation over the last two and a half years," the SNB stated. "Inflation has been below 2% for several months and is within the range that corresponds to the definition of price stability. According to the latest forecast, inflation is expected to remain within this range in the coming years."

Thus, the SNB became the first major central bank to start easing its policy after a long cycle of rate increases due to the COVID-19 pandemic. Consequently, traders "forgot" about the Fed's rate cut signals and began buying dollars, as they currently remain the only high-yield currency with a low risk level.

Support for the dollar towards the end of the working week was also provided by the business activity data in the US published on March 21. The S&P Global Composite PMI index increased to 52.5 from 52.2, and while the PMI index for the services sector decreased from 52.3 to 51.7, it remained above the 50.0 threshold that separates economic growth from contraction. Meanwhile, the Philadelphia manufacturing sector business activity index exceeded forecasts, reaching 3.2, and the number of initial jobless claims in the US for the week fell from 215K to 210K.

EUR/USD concluded the past five-day week at a mark of 1.0808. Regarding the forecast for the near future, as of the writing of this review on the evening of Friday, March 22, 50% of experts voted for the strengthening of the dollar and further decline of the pair. 20% sided with the euro, and 30% took a neutral stance. Among the oscillators on D1, only 15% are coloured green, 85% are coloured red, with a quarter of them indicating the pair is oversold. For trend indicators, the greens have 10%, while the reds hold an absolute majority of 90%. The nearest support for the pair is located in the zone of 1.0795-1.0800, followed by 1.0725, 1.0680-1.0695, 1.0620, 1.0495-1.0515, and 1.0450. Resistance zones are found in the areas of 1.0835-1.0865, 1.0900-1.0920, 1.0965-1.0980, 1.1015, 1.1050, and 1.1100-1.1140.

The upcoming trading week will be shorter than usual due to Good Friday in Catholic countries, where banks and stock exchanges will be closed. It will also be the last week of the month and the first quarter. Market participants will be summarizing the quarter, and there will be few important statistical releases. Nevertheless, notable in the calendar is Thursday, March 28, when data on retail sales in Germany will be released, as well as revised annual data on the US GDP and the volume of jobless claims. On Friday, March 29, despite the holiday, statistics on the consumer market in the United States will be released, and Federal Reserve Chair Jerome Powell is scheduled to speak.

GBP/USD: BoE Hawks Morph into Doves

Data on consumer inflation in the UK, released on Wednesday, March 20, a day ahead of the Bank of England (BoE) meeting, indicated a slight deceleration and fell a bit below expectations. The year-on-year CPI slowed from 4.0% to 3.4%, against the anticipated 3.5%. February's core CPI, on an annual basis, dropped to 4.5% after three months of stability at 5.1%. Conversely, the CPI saw a month-on-month increase of 0.6% following a decline of the same magnitude in January, yet this increase still fell short of the market's 0.7% expectation. February saw producer purchase prices decrease by 0.4%, with a year-on-year loss of 2.7%, returning to levels seen in May 2022 due to decreases in energy, metals, and some agricultural product prices.

Just a few hours before the regulator's meeting, preliminary business activity data were also released, showing positive but mixed results. The Manufacturing PMI rose to 49.9, closely approaching the critical 50.0 mark (with a forecast of 47.8 and a previous value of 47.5). The services sector index, in contrast, dropped from 53.8 to 53.4, despite expectations that it would hold steady. Consequently, the Composite PMI edged down from 53.0 to 52.9, remaining within the growth zone of the economy.

Regarding the Bank of England's meeting on Thursday, March 21, as expected, the regulator kept the key interest rate for the pound unchanged at 5.25% for the fifth consecutive meeting. The Governor, Andrew Bailey, stated that the economy has not yet reached the stage where rates can be lowered but added that everything is moving in the "right direction."

The surprise came when two members of the BoE's Monetary Policy Committee, who had previously voted for a rate increase, reversed their position, leading to renewed selling of the pound. According to economists at Japan's MUFG Bank, the voting outcome "justifies an increased likelihood of an earlier rate cut than we had anticipated. [...] Whether the Bank of England makes the final decision in June or August remains an open question. We maintain our view that there will be a rate cut of 100 basis points this year." "The pound could suffer further in the short term if the market's conviction in a June rate cut strengthens, along with the potential magnitude of rate cuts for this year," the MUFG specialists added.

"Indeed, the Bank of England has taken another step towards reducing interest rates," echo their colleagues at Germany's Commerzbank. "But whether this will happen sooner than expected, simply because none of the policymakers voted for a rate increase, is not entirely clear yet." Commerzbank believes that "against the backdrop of the overall dovish sentiment triggered by the SNB's unexpected rate cut, the pound ended up on the losing side and became the second-worst currency. Also, depending on market sentiments, it has the chance to become one of the most vulnerable currencies."

Starting the past week at a level of 1.2734, GBP/USD concluded it at 1.2599. Analyst opinions on its near-term direction were split: half (50%) voted for the pair's decline, 25% for its rise, and 25% maintained neutrality. The indicator readings on D1 are exactly the same as for EUR/USD. Among oscillators, only 15% look north, 85% south, with a quarter of them signalling the pair is oversold. For trend indicators, 10% recommend buying, and 90% selling. Should the pair move southward, it will encounter support levels and zones at 1.2575, 1.2500-1.2535, 1.2450, 1.2375, 1.2330, 1.2085-1.2210, 1.2110, 1.2035-1.2070. In the event of an upward movement, resistance will be met at levels 1.2635, 1.2730-1.2755, 1.2800-1.2820, 1.2880-1.2900, 1.2940, 1.3000, and 1.3140.

No significant events related to the economy of the United Kingdom are scheduled for the upcoming week. Traders should also bear in mind that March 29 is a public holiday in the country due to Good Friday.

USD/JPY: How the BoJ Sank the Yen

In theory, if the interest rate rises, the currency strengthens. But that's just in theory. Reality can differ significantly, as demonstrated by the Bank of Japan's (BoJ) meeting on Tuesday, March 19.

Until that point, the BoJ had been the only central bank in the world to maintain a negative interest rate level of -0.1% since February 2016. Now, for the first time in 17 years, the regulator raised it to a range of 0.0-0.1% per annum. It also abandoned control over the yield of ten-year government bonds (YCC). As media reports, this move "represents a departure from the most aggressive and unconventional monetary easing policy we have seen in modern history." Yet, following this momentous decision, instead of appreciating, the yen ... plummeted, and USD/JPY reached a high of 151.85. Analysts believe this happened because each of these central bank actions met market expectations and had already been priced in.

Data on inflation in Japan for February, published towards the end of the workweek, offered some support to the Japanese currency. The country's Statistical Bureau reported that the annual national Consumer Price Index (CPI) rose by 2.8%, up from 2.2% previously. As a result, investors concluded that the persistence of price pressure above the target level of 2.0% would allow the Bank of Japan to maintain interest rates at a positive level.

However, maintaining rates does not mean increasing them. And as economists from ING, the largest banking group in the Netherlands, wrote, the yen's position depends more on the Federal Reserve's rate cuts than on a rate hike by the BoJ. They stated: "It will be difficult for the yen to sustainably strengthen beyond volatility around the rate hike until rates in the US are lowered."

The yen received another, but very weak, support from growing speculations about possible intervention by the Japanese government in the currency sphere, in simpler terms, about currency interventions. Japan's Finance Minister, Shunichi Suzuki, did declare that currency movements should be stable and that he is closely monitoring exchange rate fluctuations. However, these were merely words, not concrete actions, thus they didn't significantly aid the national currency. As a result, the week concluded with the pair marking the final note at 151.43.

Regarding the near future of USD/JPY, the bearish camp for the pair comprises 50% of experts, 40% remain undecided, and 10% voted for further strengthening of the US currency. Technical analysis tools seem to be unaware of rumours about possible currency interventions. Consequently, all 100% of trend indicators and oscillators on D1 are pointing upwards, with 20% of the latter in the overbought zone. The nearest support levels are found at 150.85, 149.70, 148.40, 147.30-147.60, 146.50, 145.90, 144.90-145.30, 143.40-143.75, 142.20, and 140.25-140.60. Resistance levels and zones are located at 151.85-152.00, 153.15, and 156.25.

On Friday, March 29, the Consumer Price Index (CPI) values for the Tokyo region will be published. Besides this, no other significant events related to the Japanese economy are scheduled for the coming days.

CRYPTOCURRENCIES: Bitcoin – The Calm Before the Halving

UserPostedImage


After bitcoin reached a new all-time high of $73,743 on March 14, a wave of selloffs and profit-taking by short-term speculators followed. BTC/USD sharply retreated, losing approximately 17.5%. A local minimum was recorded at $60,778, after which the leading cryptocurrency, in anticipation of the halving, began to gain momentum again.

It's worth recalling that a halving is an event that occurs approximately every four years, after another 210,000 blocks have been mined, and results in the mining reward for a new block in the bitcoin blockchain being cut in half. This naturally raises the question: why is this done? The halving is designed as a mechanism to combat inflation. As miners' rewards decrease, fewer new coins are produced with each round. This is intended to maintain a scarcity of bitcoin in the market and positively impact the token's price from a supply and demand perspective.

The total issuance of bitcoin is capped at 21 million coins. As of December 2023, miners have already extracted 19.5 million coins, which is nearly 93% of the total volume. Halvings will continue until the last bitcoin is mined, which is forecasted to occur sometime between 2040 and 2048. In 2040 (the 8th halving), miners' rewards will be 0.1953125 BTC, and in 2048 (the 10th halving) – 0.048828125 BTC. After this, miners will earn income solely from transaction fees. The upcoming, fourth halving is most likely to take place on April 20 this year, with the reward for mined blocks decreasing from 6.25 BTC to 3.125 BTC.

Thanks to the hype surrounding spot bitcoin ETFs and the FOMO (Fear of Missing Out) effect in anticipation of the halving, a certain scarcity of the main cryptocurrency is already observable. According to Bitcointreasuries, a significant portion of BTC is owned by state and private investment companies, governments, exchange and investment funds. In total, they hold approximately 12% of the total volume of bitcoins. About 10% is stored on centralized cryptocurrency exchanges, and another 8.09% belongs to accounts that have been inactive for many years. Adding to these figures the share of the asset attributed to bitcoin's founder, Satoshi Nakamoto (4.76%), it can be concluded that about 35% of mined coins are already unavailable to other private investors.

Grayscale Bitcoin Trust, iShares Bitcoin Trust, and Fidelity Wise Origin Bitcoin Fund lead in terms of bitcoin ownership volumes with 380,241 BTC, 230,617 BTC, and 132,571 BTC, respectively. MicroStrategy has become the largest holder of bitcoins among public companies with 205,000 BTC on its balance sheet. Marathon Digital holds the second position with 15,741 BTC, while Tesla and Coinbase Global share the third and fourth places with 9,720 BTC and 9,480 BTC, respectively. Among other, non-public, private companies, Block.one leads in ownership level with 164,000 BTC, according to available information. It is followed by the MTGOX exchange with a balance of 141,686 BTC. Stablecoin issuer Tether owns 66,465 BTC. The fourth position is taken by the BitMEX exchange with 57,672 BTC.

In the ranking of bitcoin ownership among countries, the USA leads with 215,000 BTC, followed by China with 190,000 BTC, the UK with 61,000 BTC, and Germany with 50,000 BTC.

Analysts at Standard Chartered Bank have revised their bitcoin price target for the end of 2024 from $100,000 to $150,000, with ethereum potentially reaching $8,000 by the same period. By the end of 2025, the first and second cryptocurrencies could appreciate to $200,000 and $14,000, respectively. The specialists justify their forecast by the dynamics of gold following the approval of bitcoin ETFs and the optimization of the precious metal to its digital counterpart in an 80% to 20% ratio.

According to Standard Chartered experts, bitcoin could appreciate further – up to $250,000 – if inflows into ETFs reach $75 billion. Sovereign investment funds' actions could also accelerate growth rates. "We see an increasing likelihood that major reserve managers might announce bitcoin purchases in 2024," say the bank's analysts.

Dan Tapiero, CEO of investment firm 10T Holdings, mentioned a similar figure – $200,000. "I don't think it's that crazy," he stated. According to the financier's calculations, the potential to triple from the current price roughly corresponds to the percentage difference between the peaks of 2017 and 2021. Furthermore, from the bear market lows to the 2021 peak, digital gold increased in value 20 times. This suggests a $300,000 target as a positive scenario.

"It's hard to pinpoint exact markers and timing in these matters. I think we will reach that [zone] within the next 18-24 months, perhaps even sooner," Tapiero believes. "The supply cut during the rapid increase in demand for ETFs along with the halving indicate a significant growth potential. I think the first cryptocurrency will pull the rest along with it." The CEO of 10T Holdings also noted "good chances" for the approval of ETFs based on Ethereum. However, he hesitated to say whether these ETFs would be registered in May or if it would happen later.

OpenAI's ChatGPT, when asked whether the BTC price could reach the $100,000 mark before the halving, deemed this target plausible. According to the AI's calculations, the recent correction does not affect growth prospects and only confirms the inaccuracy of short-term forecasts. ChatGPT estimated the probability of reaching $100,000 at 40%, while the likelihood of hitting the $85,000 mark was assessed at 60%.

As of the writing of this review, on the evening of Friday, March 22, BTC/USD is trading around $63,000. The total market capitalization of cryptocurrencies has decreased to $2.39 trillion (from $2.58 trillion a week ago). The Crypto Fear & Greed Index has dropped from 83 to 75 points, moving from the Extreme Greed zone to the Greed zone.

Despite the recent halt in bitcoin's decline, some experts do not rule out the possibility that BTC/USD could take another dip southward. For instance, Kris Marszalek, CEO of Crypto.com, believes that the current volatility of BTC is still low compared to previous cycles. This implies that with an increase in volatility, not only new highs but also new lows could be set.

Analysts at JPMorgan believe that bitcoin could fall by 33% after the halving. Meanwhile, Mike Novogratz, CEO of Galaxy Digital, is confident that the floor is at $50,000, and the price of the coin will never fall below that level unless some dramatic event occurs. According to him, bitcoin's growth is primarily driven by investors' insatiable appetite for the token, rather than macroeconomic factors such as the policy of the US Federal Reserve. This was evidenced by the fact that the price of bitcoin hardly noticed the Federal Reserve's meeting on March 20.


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
Users browsing this topic
    Forum Jump  
    • You cannot post new topics in this forum.
    • You cannot reply to topics in this forum.
    • You cannot delete your posts in this forum.
    • You cannot edit your posts in this forum.
    • You cannot create polls in this forum.
    • You cannot vote in polls in this forum.