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Since ancient times, gold has remained a crucial element of global economies. Its unique properties have made it not only valuable as jewellery but also a reliable means of preserving wealth. Today, this metal constitutes a significant part of both investor portfolios and central bank reserves. This review analyses the dynamics and reasons for changes in the price of gold and presents forecasts from leading banks and experts regarding the XAU/USD pair in the medium- and long-term perspectives.



Gold Price: From Ancient Times to the 20th Century

Ancient Times. Gold mining and usage began in the 4th millennium BC. One of the first civilizations to actively use this metal was ancient Egypt, where it was mined from around 2000 BC. The importance of gold in ancient Egypt is hard to overestimate – it was considered "the flesh of the gods" and used in all aspects of life, from religious ceremonies to burial rites, in making vessels and statuettes, jewellery, and home decor, as well as a means of payment. Gold’s resistance to corrosion made it a symbol of immortality and strength.

Exact data on the value of gold in ancient civilizations is hard to find, but it is known to have been one of the most valuable commodities, used not only for trade but also for wealth storage. For example, in Babylon in 1600 BC, one talent of gold (about 30.3 kg) was worth approximately 10 talents of silver (about 303 kg).

In the late 8th century BC, in Asia Minor, gold was first used as coinage. The first pure gold coins with stamped images are attributed to the Lydian King Croesus. They were of irregular shape and often minted only on one side.

Antiquity. In antiquity, gold continued to play a key role in the economy and culture. The Greeks mined gold in various places, including the region of Troy, where, according to myth, the deposit was a gift from the god Zeus. For the ancient Greeks, gold symbolized purity and nobility and was used to create unique artworks and jewellery.

In classical Athens (5th century BC), one gold drachma was worth about 12 silver drachmas. During the time of Alexander the Great (4th century BC) and the subsequent Hellenistic kingdoms, the gold-to-silver ratio varied but generally stayed within the range of 1:10 to 1:12. (Interestingly, this ratio has now grown to about 1:80). Alexander the Great issued gold staters weighing about 8.6 grams, highly valued coins often used for large international transactions.

Middle Ages. In the Middle Ages, gold remained a vital element of the economy. In the Byzantine Empire, the solidus gold coin, weighing 4.5 grams, was used for international trade. In medieval Europe, gold also played a significant role, especially after the discovery of large gold deposits in Africa. In 1252, the gold florin was introduced in Florence and used throughout Europe. In England, the gold sovereign appeared in 1489.

What could one buy with such a coin? In England in the 11th-12th centuries, a sovereign could purchase a small piece of land about one acre or a part of a farm. In the 13th century, a gold coin could buy several heads of cattle, such as two cows or several sheep.

Gold was also used to acquire weapons or armour. For example, a good quality sword might cost about one coin. One gold coin could also pay for a skilled craftsman’s work for several months. For instance, such money could order the construction or repair of a house. Additionally, it could buy a large amount of food, such as a year's supply of bread for a family.

Modern Times. During the Age of Exploration, gold came to the forefront again. After the discovery of America, Spanish conquistadors brought vast quantities of gold to Europe. In the 17th-18th centuries, gold became the basis for the formation of monetary systems in Europe. By 1800, the price of one troy ounce of gold (31.1 grams) in Britain was about £4.25. Therefore, one troy ounce of this metal could buy a small plot of land in some rural areas or pay rent for housing for 8 months. It could also order the tailoring of four men's suits or pay for elementary school education for several years.

19th Century. The 19th century was marked by the Gold Rush, especially in California and Australia. This led to a significant increase in gold production and, consequently, a relative decrease in its price. In 1870, the price of one troy ounce of gold was about $20. Starting in 1879, the US monetary system was based on the so-called "gold standard," which tied the amount of paper money to the country’s gold reserves, and $20 could always be exchanged for a troy ounce of this precious metal. This price level remained until the early 20th century.

20th Century: $20 – $850 – $250

1934. It had been 55 years since the adoption of the "gold standard" when, during the Great Depression, US President Franklin D. Roosevelt enacted the "Gold Reserve Act." According to this document, private ownership of gold was declared illegal, and all precious metals had to be sold to the US Treasury. A year later, after all the gold had been transferred from private ownership to the state, Roosevelt raised its price by 70% to $35 per troy ounce, allowing him to print the corresponding amount of paper money.

For the next four decades, gold prices remained stable at around $35 until 1971, when another US President, Richard Nixon, decided to abandon the "gold standard" altogether, delinking the dollar from gold. This decision can be considered a turning point in the history of the modern world economy. Gold ceased to be money and began to be traded on the open market at a floating exchange rate. This completely freed the US government’s hands, allowing it to print infinite amounts of fiat currency, and the price of precious metals to grow exponentially.

By the end of 1973, the price of precious metals had already reached $97 per ounce and continued to rise amid economic instability and inflation, reaching $161 in 1975 and $307 in 1979. Just a year later, amid high inflation and political instability (including the Soviet invasion of Afghanistan and the Iranian revolution), XAU/USD reached a record level of $850 .

1982. After reaching this peak, there was a rollback to $376 in 1982, linked to rising interest rates in the US and stabilizing economic conditions. Political and economic changes in the world, such as the end of the Cold War and the development of global financial markets, stabilized the gold market, and until the mid-1990s, XAU/USD traded in the range of $350-$400. By 1999, the price had fallen to $252 per ounce, due to rising stock markets, low inflation, and decreased demand for gold as a safe-haven asset.

First Quarter of the 21st Century: From $280 to $2450

2000s. At the beginning of the 2000s, the price of gold was about $280 per troy ounce. However, it began to rise following the dot-com bubble burst and sharply increased during the global financial crisis, reaching $869 in 2008. This growth was driven by economic instability, falling stock markets, declining confidence in the dollar, and increased demand for gold from investors seeking safe-haven assets. By the end of 2010, the gold price continued to rise, reaching $1421. In September 2011, it reached a record level of $1900 per ounce. This rise was due to the European debt crisis and concerns about global economic instability. However, the dollar began to strengthen, inflation expectations fell, and stock markets rose, leading XAU/USD to turn south, falling to $1060 by the end of 2015.

After this, another reversal occurred, and the pair headed north again. In 2020, the price reached a new record level of $2067. The primary driver here was the COVID-19 pandemic, which prompted massive monetary stimulus measures (QE) by governments and central banks, primarily the US Federal Reserve. The historical maximum to date was reached in May 2024 at $2450, aided by geopolitical instability in the Middle East, Russia’s military invasion of Ukraine, and expectations of interest rate cuts by the Federal Reserve, ECB, and other leading central banks.

Why Gold?

Mid-2024. Before moving on to gold price forecasts, let's answer the question: what exactly makes this yellow metal valuable?

Firstly, note its physical and chemical properties. Gold is chemically inert, resistant to corrosion, and does not rust or tarnish over time, making it an ideal asset for value storage. It has an attractive appearance and lustre that does not fade over time, making it popular for making jewellery and luxury items. It is also relatively rare in the Earth’s crust. Limited availability makes it valuable since demand always exceeds supply.

Next, follow the economic factors, which are perhaps more important in the modern world. Gold is traditionally used as a means of preserving capital. We have already mentioned that in times of economic instability and geopolitical tension, investors often turn to gold to protect their savings from depreciation. Naturally, in such a situation, its price is influenced by the level of inflation and related monetary policies of central banks, including interest rate changes and quantitative easing (QE) or tightening (QT) programmes.

Investors use gold to diversify their portfolios and reduce risks. Gold has high liquidity, allowing it to be quickly and easily converted into cash or goods and services worldwide. This makes it attractive not only for investors but also for central banks, which hold significant gold reserves as part of their international reserves. This helps them maintain national currency stability and serves as a guarantee in case of financial crises. For example, the Federal Reserve holds nearly 70% of its foreign reserves in gold.

Forecasts for the Second Half of 2024 and 2025

Gold price forecasts for the end of 2024 and 2025 vary, but most analysts from leading global banks and agencies agree that its price will rise. UBS strategists predict an increase to $2500 per ounce. J.P. Morgan also targets $2500 in the medium term, provided the Federal Reserve cuts rates and economic instability persists.

Goldman Sachs has revised its forecasts and expects the price to reach $2700 per ounce in 2025. Bank of America economists initially forecasted $2400 for 2024 but also revised their forecast upwards to $3000 by 2025. The primary condition for growth, according to the bank, is the start of active rate cuts by the US Federal Reserve, which will attract investors to gold as a safe-haven asset.

Citi specialists agree with this figure. "The most likely scenario in which an ounce of gold rises to $3000," they write in an analytical note, "besides the Federal Reserve rate cut, is the rapid acceleration of the current but slow trend – the de-dollarization of central banks in developing economies, which will undermine confidence in the US dollar."

Rosenberg Research analysts also mention a figure of $3000. The consulting agency Yardeni Research does not rule out that due to a possible new wave of inflation, XAU/USD could rise to $3500 by the end of next year. The super-bullish forecast was given by TheDailyGold Premium magazine editor Jordan Roy-Byrne. Based on the "Cup and Handle" model, he stated that a breakout is coming, and with it a new cyclical bull market. "The current measured target for gold," writes Roy-Byrne, "is $3000, and its logarithmic target is somewhere between $3745 and $4080."

Forecasts to 2050

Most major banks and financial data providers typically offer only short- and medium-term forecasts. The main reason is that markets can be very volatile, and small changes in supply or demand factors and external events can lead to unexpected price fluctuations, casting doubt on prediction accuracy.

Despite this, there are different scenarios and long-term price forecasts for gold for 2030-50. Economist Charlie Morris, in his work "Rational Case for Gold by 2030," forecasts a price of $7000 per ounce. Another specialist, David Harper, predicted that the price of gold could reach $6800 by 2040. This scenario, according to Harper, describes reasonable growth with a return rate of about 7.2% per year.

Regarding a 25-year horizon, Josep Peñuelas, a research professor at the Centre for Ecological Research in Barcelona, warned that by 2050, the world might run out of key metals, including gold. However, other futurist theories are more optimistic. According to renowned investor and writer Robert Kiyosaki, gold has existed since time immemorial and, being "God’s money," is likely to become the primary form of currency in the future. In his book "Fake," Kiyosaki argues that ultimately, gold, along with bitcoins, could destroy paper currencies and become the foundation of the global financial system.


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.

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CryptoNews of the Week



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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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



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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


NordFX Analytical Group


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

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CryptoNews of the Week



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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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



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

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

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

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

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

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

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

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

CRYPTOCURRENCIES: Politics Engages with the Digital Market

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

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

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

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

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

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

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

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

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

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

BITCOIN: Bullish Flag or Bearish Den?

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

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

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

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

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

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

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

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

ETHEREUM: ETH-ETF – Disappointment Instead of Hope

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

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

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

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

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

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

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


NordFX Analytical Group


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

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CryptoNews of the Week



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

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

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

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

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

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

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

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


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

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July Results: Bitcoin Surpasses Gold in NordFX Trader Rankings


The brokerage company NordFX has released the performance results of its clients' trading activities for July 2024. The evaluation also covered the social trading services, PAMM and CopyTrading, as well as the profits earned by the company's IB partners.

● The highest profit in July was achieved by a trader from East Asia, account No.1609XXX, with a profit of 50,792 USD. This solid result was driven by the strengthening of bitcoin (BTC/USD).
– The second position in the ranking of the most successful traders of the month was secured by a client from South Asia, account No.1749XXX, who earned 45,106 USD from trades involving the 'golden' currency pair XAU/USD.
– The third place on the July podium was taken by a compatriot (account No.1771XXX), who achieved a result of 42,461 USD through operations with both the XAU/USD pair and the relatively exotic GBP/NZD pair.

● The following situation unfolded in NordFX's passive investment services:
– In the PAMM service, we continue to observe the account Zenix 786, which has shown a profit of 106% over 131 days. The account Gold24 also attracted attention, with its name suggesting exclusive trading in the XAU/USD pair. The number '24' in the name might refer to 24-carat purity (pure gold without any additives) or perhaps that trading is conducted 24 hours a day. Both interpretations are possible. Regardless, the manager of this account managed to achieve a profit of over 60% in just 62 days. The results of both accounts are impressive; however, the maximum drawdown, while not dramatic, is also not the smallest – 36% and 32%, respectively.
– On the CopyTrading showcase, highly attractive signals, at least at first glance, occasionally appear among the startups, showing astronomical returns. Currently, the signal Bro has surged to the forefront, increasing the initial deposit by 554% in just 6 days! However, the maximum drawdown for the same period has already approached 43%. Therefore, while these super-results are impressive, it's important to understand that they are achieved through super-aggressive trading. When subscribing to such signals, one must consider that the risk of losing invested funds is also extremely high.
Among the more stable and calm signals, NordFXSrilanka and Quiet_trade_USD stand out. While their profits are significantly lower than those of Bro, they still far exceed the interest rates on USD bank deposits. For instance, NordFXSrilanka showed a 47% increase over 205 days with a maximum drawdown of less than 10%, and Quiet_trade_USD yielded a profit of 12% since early March with a drawdown of only around 15%. It is worth noting that the longevity (or lifespan) of signals and PAMM accounts, along with maximum drawdown, are crucial indicators confirming that they won't collapse like a house of cards in the face of the first challenging situation in the financial markets.

● Among NordFX's IB partners, the TOP-3 is as follows:
– The first place was taken by a partner from South Asia, account No.1576XXX, who was rewarded with 16,445 USD in July;
– The next position was secured by another partner from South Asia (account No.1618XXX), who received 13,859 USD;
– Finally, rounding out the top three is a third partner from the same region, account No.1229XXX, who received a reward of 6,610 USD.

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

EUR/USD: What the ECB and Fed Will Do

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


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



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

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

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

CRYPTOCURRENCIES: Donald Trump – "Master" of the Price



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


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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.

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CryptoNews



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

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

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

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

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

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

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

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

EUR/USD: "Black Monday" Following "Grey Friday"

● The past week did not begin on Monday as usual but rather on... Friday. More precisely, the key event that shaped the dynamics of the dollar was the release of US labour market data on Friday, 2 August, which caused turmoil in the markets. The US Bureau of Labour Statistics (BLS) report showed that the number of non-farm payrolls (NFP) increased by only 114K in July, significantly lower than both the June figure of 179K and the forecast of 176K. Additionally, it was revealed that the unemployment rate has been rising for the fourth consecutive month, reaching 4.3%.
These disheartening figures triggered panic among investors, leading to a drop in Treasury yields and a mass sell-off of risky assets. It is worth noting that US stock indices: S&P500, Dow Jones, and Nasdaq Composite, as well as Japan's Nikkei, had already started turning south the day before, reacting to the outcomes of the Federal Reserve and Bank of Japan meetings. The BLS report was the final straw, after which fear took hold of investors, and the stock markets continued their downward spiral.
● It would seem that in such a situation, with global risk appetite declining, the dollar, as a safe-haven currency, should have strengthened. However, this did not happen. The DXY dollar index tumbled downhill along with the stock indices. Why? The markets decided that in order to save the economy from recession, the Federal Reserve would be compelled to take the most decisive steps to ease its monetary policy. Following the release of the BLS report, Bloomberg reported that the probability of a 50 basis point (bps) rate cut in September increased to 90%. As a result, the EUR/USD pair soared to 1.0926, before ending the week at 1.0910.
● But the crisis did not end there. 2 August could be termed a "Grey Friday," while Monday, 5 August, truly became a "Black Monday" for financial markets. Goldman Sachs analysts estimated the probability of a recession in the US economy within the next year at 25%, while JPMorgan went even further, projecting a 50% chance.
Fears of a US recession triggered a series of stock market declines worldwide. Japan's Nikkei 225 index plummeted by 13.47%, and South Korea's Kospi lost 8.77%. Trading on the Istanbul Stock Exchange in Turkey was halted shortly after opening on Monday due to the BIST-100 index dropping by 6.72%. The European stock market also opened lower. The pan-European STOXX 600 index fell by 3.1%, reaching its lowest level since 13 February. London's FTSE 100 index dropped by more than 1.9%, hitting its lowest point since April.
Following the sharp declines in Asian and European markets, US stock indices also plunged. At the start of Monday's trading, the Nasdaq Composite index fell by more than 4.0%, the S&P 500 by more than 3.0%, and the Dow Jones index dropped by approximately 2.6%. As for the dollar, the DXY hit a bottom at 102.16, while the EUR/USD pair recorded a local high at 1.1008.
● The situation gradually began to stabilize in the second half of Monday. Taking advantage of the significant drop in prices, investors started buying up stocks, and the dollar also began to recover. In general, what started with the labour market ended with it as well. Most likely, the problems in this sector were caused by temporary layoffs due to the aftermath of the devastating Hurricane Beryl, which hit, among other places, the US Gulf Coast at the end of June and the beginning of July 2024. Therefore, fresh data showing a sharp decline in unemployment claims in Texas reassured investors. Overall, the figure, published on 8 August, came in at 233K, which is lower than both the previous value of 250K and the forecast of 241K.
It seems that any talk of a recession is now off the table. As a result, the probability of a 50 bps rate cut at the September Federal Reserve meeting dropped from 90% to 56%. Moreover, while on Monday, the market's expectations for rate cuts by the end of 2024 were nearly 150 bps, they later fell below 100 bps.
● In summarising "Grey Friday" and "Black Monday," it should be noted that although the EUR/USD pair responded to the events of these days with increased volatility, its dynamics cannot be described as unique. Initially, the pair surged by 200 points, then retraced almost half of that move, and ended the past week at the 1.0915 level.
As of the evening of 9 August, 50% of surveyed analysts expect that the dollar will continue to recover its positions in the near future, and the pair will head south. 20% of analysts voted for the pair's growth, while the remaining 30% took a neutral stance. In technical analysis, 90% of trend indicators on D1 point north, with 10% pointing south. Among the oscillators, 90% are also coloured green (15% are in the overbought zone), with the remaining 10% in a neutral grey.
The nearest support for the pair is located in the 1.0880-1.0895 zone, followed by 1.0825, 1.0775-1.0805, 1.0725, 1.0665-1.0680, 1.0600-1.0620, 1.0565, 1.0495-1.0515, and 1.0450, with the final support zone at 1.0370. Resistance zones are located around 1.0935-1.0950, 1.0990-1.1010, 1.1100-1.1140, and 1.1240-1.1275.
● The upcoming week will bring a considerable amount of macroeconomic data that could significantly influence market participants' sentiments. On Tuesday, 13 August, the US Producer Price Index (PPI) will be released. Wednesday, 14 August, will bring revised GDP data for the Eurozone. Additionally, high volatility can be expected on this day as the crucial inflation indicator, the US Consumer Price Index (CPI), will be announced. On 15 August, data on retail sales in the US market will be released. Also, Thursday will see the traditional publication of statistics on the number of initial jobless claims in the United States. Given the reasons mentioned above, this figure is likely to draw increased attention from investors. The week will conclude with the release of the University of Michigan's US Consumer Sentiment Index, which will be announced on 16 August.


GBP/USD: Will It Rise to 1.3000?


● Unlike the EUR/USD pair, and despite the events of 2-5 August, the GBP/USD pair even managed to dip to a five-week low of 1.2664 on 8 August. Over the course of the recent bearish rally, the pound lost nearly 380 points against the dollar. The pair was pushed to its local bottom by the Bank of England's (BoE) decision to cut the interest rate to 5.0%, as well as the US unemployment statistics released on 8 August.
However, the dollar later retreated slightly as risk appetite returned to the financial markets. The major Wall Street indices showed significant growth, with the Nasdaq Composite leading the way, rising by 3%. The pound also found some local support from UK statistics. Retail sales volume, reported by the British Retail Consortium (BRC), grew by 0.3% in July after a -0.5% decline the previous month. Additionally, the UK Construction PMI rose from 52.5 to 55.3 points, marking the fastest growth rate in the past two years.
● According to several experts, much (if not all) of the GBP/USD pair's behaviour will depend on the pace at which the Federal Reserve and the Bank of England (BoE) ease their monetary policies. If the interest rate in the US is reduced aggressively while the Bank of England delays similar measures until the end of 2024, the bulls on the pound may have a strong opportunity to attempt to push the pair towards the 1.3000 level.
● For now, the GBP/USD pair ended the past week at the 1.2757 level. When looking at the forecasts for the coming days, 70% of experts expect the dollar to strengthen and the pair to decline, while the remaining 30% have maintained a neutral stance. As for technical analysis on the D1 timeframe, 50% of trend indicators are coloured green, and the same percentage are red. Among the oscillators, none are in the green, 10% have taken a neutral grey stance, and 90% are in the red, with 15% of them signalling oversold conditions.
In the event of a decline, the pair will encounter support levels and zones at 1.2655-1.2685, followed by 1.2610-1.2620, 1.2500-1.2550, 1.2445-1.2465, 1.2405, and finally, 1.2300-1.2330. If the pair rises, it will face resistance at the levels of 1.2805, then 1.2855-1.2865, 1.2925-1.2940, 1.3000-1.3040, and 1.3100-1.3140.
● Regarding economic statistics from the United Kingdom, the upcoming week will see the release of a comprehensive set of labour market data on Tuesday, 13 August. The following day, consumer inflation (CPI) data will be published. On Thursday, 15 August, the GDP figures will be released, and on Friday, 16 August, statistics on retail sales in the UK consumer market will be announced.

USD/JPY: No Rate Hike for Now

● Reflecting on the events of "Black Monday," it's important to note that the Nikkei, the key index of the Tokyo Stock Exchange representing the stock prices of 225 leading Japanese companies, experienced a record drop on that day, losing 13.47% and falling to a seven-month low. Such a sharp decline hadn't been seen since the "Black Monday" of 1987 and the financial crisis of 2011. The financial sector led the downturn, with Chiba Bank shares plummeting nearly 24%. Shares of Mitsui & Co., Mizuho Financial Group, and Mitsubishi UFJ Financial Group Inc. also dropped sharply, by approximately 19%. The strengthening of the yen against the dollar (by more than 12% over the last four weeks) further pressured the Japanese stock index, as it negatively impacts the foreign exchange earnings of export-oriented companies.
However, life is like a zebra, with a white stripe usually following a black one. Less than a day after "Black Monday," the Nikkei 225 showed a historic rebound, rising by 10.12%, which was a record in the history of the Tokyo Stock Exchange.
The reaction of Japan's Finance Minister Shunichi Suzuki to the events was particularly interesting. On 8 August, he stated that he was "closely monitoring stock volatility but has no intention of taking any action." He also added that "the specifics of monetary policy depend on the Bank of Japan (BoJ)."
● It is relevant to mention the words of Shinichi Uchida, Deputy Governor of the Bank of Japan, who stated on Wednesday, 7 August, that the regulator would not raise interest rates further while financial market volatility remains high. Previously, the Bank of Japan had raised the benchmark interest rate by 0.25% for the first time since 2008. Following this decision, the yen sharply strengthened against the dollar. However, according to economists at Germany's Commerzbank, the BoJ now finds itself in a very challenging situation once again.
"One almost feels sorry for the Japanese yen," they write. After the turbulent events of recent weeks, the USD/JPY pair has stabilized around the 147.00 level. "The calm of the past few days seems more like an unstable equilibrium," Commerzbank notes. "At the moment, the exchange rate appears to have settled, but it is expected that the US will lower its key interest rates about four times by the end of the year. However, our economists still do not anticipate a recession in the US, so they continue to expect only two rate cuts."
"In this case, USD/JPY should gradually rise," conclude the German bank's economists, targeting a level of 150.00.
● The USD/JPY pair ended the past week at the 146.61 level. The expert forecast for the near term is as follows: 40% of analysts voted for the pair to move upwards, 25% expect it to decline, and the remaining 35% took a neutral stance. Among trend indicators and oscillators on the D1 timeframe, 90% indicate further decline, while 10% point to growth.
The nearest support level is located around 144.30, followed by 141.70-142.40, 140.25, 138.40-138.75, 138.05, 137.20, 135.35, 133.75, 130.65, and 129.60. The nearest resistance is in the 147.55-147.90 zone, followed by 154.65-155.20, 157.15-157.50, 158.75-159.00, 160.85, 161.80-162.00, and 162.50.
● On Thursday, 15 August, preliminary GDP data for Japan for Q2 2024 will be released. Additionally, traders should note that Monday, 12 August, is a public holiday in Japan as the country celebrates Mountain Day.

CRYPTOCURRENCIES: "Black Monday" & Bullish Flag for Bitcoin



● Another bearish cycle for bitcoin began on 29 July after the BTC/USD pair reached a high of $70,048. The leading cryptocurrency continues to face pressure from the potential sale of coins returned to creditors of the bankrupt exchange Mt. Gox, as well as assets previously confiscated by law enforcement agencies, including those in the United States.
The decline in bitcoin prices is occurring against the backdrop of investor flight from risk and a broader global stock sell-off, driven by concerns about the outlook for the global economy, particularly in countries like Japan and the United States. Negative sentiments are further exacerbated by tensions in the Middle East, uncertainty regarding the Federal Reserve's monetary policy, and the policies of the new US president, who will be elected in November.
On Friday, 2 August, bitcoin spot ETFs experienced their largest outflow of funds in the past three months. Hayden Hughes, head of cryptocurrency investments at Evergreen Growth, believes that digital assets have become casualties of the unwinding of carry trades using the Japanese yen after the Bank of Japan raised interest rates. However, a more apparent driver of the sell-off was the release of extremely disappointing US labour market data on 2 August.
These data sparked fears of a possible recession in the US, triggered a decline in Treasury yields, induced panic on Wall Street, and led to a sell-off of risk assets, including stocks and cryptocurrencies.
● On "Black Monday," 5 August, bitcoin briefly dropped to $48,945, while Ethereum fell to $2,109. This decline was the sharpest since the collapse of the FTX exchange in 2022. Nearly $1 billion in leveraged long positions were liquidated, and the overall market capitalization of the crypto market plunged by more than $400 billion since Sunday evening. It’s worth noting that the event had a more significant impact on altcoins: of the $1 billion in forced liquidations, less than 50% were attributed to bitcoin, and its market dominance increased by 1% over the week, reaching 57%.
Describing the recent events, it's also crucial to highlight that the panic was mainly confined to short-term holders (STH), who accounted for 97% of the total losses. In contrast, long-term holders (LTH) took advantage of the price drop to replenish their wallets, with their holdings (excluding ETF addresses) growing to a record 404.4K BTC.
● Analysts at Bernstein believe that bitcoin's reaction as a risky asset to broad macroeconomic and political signals is not surprising. "A similar situation occurred earlier during the sudden crash in March 2020. However, we remain calm," they explained at Bernstein. The experts noted that the launch of spot BTC-ETFs prevented the price from dropping to $45,000. This time, they predict the crypto industry's response to external factors will also be restrained. This is supported by the gradual recovery in prices starting from the second half of 5 August. It appears that the same can be said for spot Ethereum-ETFs. Their investors also became more active, taking advantage of the price drop. Over the first two days of the week, the net inflow into these funds totalled $147 million, marking the best performance since their launch.
● Analysts at Bernstein also believe that in the near term, the price of the leading cryptocurrency will be influenced by the "Trump factor." "We expect that bitcoin and cryptocurrency markets will remain in a limited range until the US elections, fluctuating in response to catalysts such as the presidential debates and the final election outcome," Bernstein experts state. However, according to Arthur Hayes, co-founder and former CEO of the cryptocurrency exchange BitMEX, "It doesn't matter who wins the presidential race: both sides will print money to cover expenses. The price of Bitcoin in this cycle will be very high, hundreds of thousands of dollars, possibly even $1 million."
● As mentioned earlier, the primary driver of the 2-5 August market crash was disappointing macroeconomic data from the United States. According to many analysts, this situation should push the Federal Reserve to begin a cycle of economic stimulus and interest rate cuts as early as September. This implies that markets are likely to see new injections of dollar liquidity in the near future. Recent turmoil in traditional markets "increases the likelihood that a less restrictive monetary policy [from the Fed] will arrive sooner rather than later, which is good for cryptocurrency," asserts Sean Farrell, Head of Digital Asset Strategy at Fundstrat Global Advisors.
● The analyst known as Rekt Capital believes that a surge in the price of bitcoin could occur as early as October. He suggests that the current chart is forming a bullish flag, which inspires optimism. "While bitcoin shows the potential for a downward deviation in the near future, the leading cryptocurrency is slowly approaching its historical breakout point around 150-160 days after the halving," notes Rekt Capital. However, he cautions that although a price breakout is expected, it is unlikely that bitcoin will reach a new all-time high, as seen in March, in the medium term. The expert also emphasized that the current state of the crypto market suggests that BTC is unlikely to drop to $42,000, as buyers are showing strong support for the asset.
● Renowned analyst and trader Peter Brandt, head of Factor LLC, has noted that the recent market crash has created a situation similar to what was observed in 2016. Eight years ago, bitcoin dropped by 27% following the halving in July, and this year, the coin's price has fallen by 26%.
After hitting a bottom at $465 in August 2016, bitcoin's price surged by 144% by early January 2017. Drawing a parallel between these trends, Brandt suggests that an upward trend may soon emerge, potentially leading BTC to a new all-time high (ATH) by early October. If digital gold increases by the same magnitude as in 2016, its price would reach $119,682.
However, there are also more pessimistic views. For instance, Benjamin Cowen, founder of the blockchain project ITC Crypto, believes that bitcoin's price dynamics may follow a pattern similar to 2019, where the coin appreciated in the first half of the year and depreciated in the second. In this scenario, the downward trend would continue, and BTC could see new lows.
● If the leading cryptocurrency lost 21% of its value from Saturday to Monday (3-5 August), the main altcoin, Ethereum, dropped by 30%. QCP Group is confident that this was linked to the sale of Ethereum by Jump Trading. According to their information, Jump Trading unlocked 120,000 wETH tokens on Sunday, 4 August. Most of these tokens were sold on 5 August, which negatively impacted the price of Ethereum and other assets. QCP Group speculates that the market maker either needed liquidity urgently due to margin calls in the traditional market or decided to exit the market entirely for reasons related to LUNA tokens.
For reference, on 21 June 2024, the US Commodity Futures Trading Commission (CFTC) began investigating Jump Trading's activities, as the company acquired LUNA tokens at 99.9% below market value, and the subsequent sale of these tokens caused a collapse in the asset's price.
● As of the evening of Friday, 9 August, the BTC/USD pair has recovered a significant portion of its losses and is trading at the $60,650 level. Ethereum, however, has not fared as well, with the pair managing to rise only to the $2,590 zone. The total market capitalization of the crypto market stands at $2.11 trillion (down from $2.22 trillion a week ago). The Crypto Fear & Greed Index initially plummeted from 57 to 20 points, dropping from the Greed zone straight into the Extreme Fear zone, but it has since risen to 48 points, reaching the Neutral 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.

CryptoNews

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

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

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

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

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

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

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

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

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

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

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

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

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

EUR/USD: Wall Street Triumphs Over the Dollar



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


GBP/USD: The British Pound Gains Strength


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

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

USD/JPY: A Very Quiet Week

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


CRYPTOCURRENCIES: Bitcoin's Snake Trend

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

NordFX Analytical Group


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

CryptoNews

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

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

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

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

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

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

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

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

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

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

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

Forex and Cryptocurrency Forecast for August 26 – 30, 2024


EUR/USD: Fed Chair Sinks the Dollar

● On Wednesday, 21 August, the DXY dollar index dropped to an eight-month low, finding support at the 100.92 level. Consequently, the EUR/USD pair recorded a 13-month high, reaching 1.1173. The last time it reached such heights was in July 2023. This dynamic can be attributed to the rise in global investor risk appetite, the narrowing divergence in economic growth between the US and the Eurozone, and, of course, expectations of decisive steps by the Federal Reserve towards monetary policy easing (QE).
A 25 basis point rate cut at the FOMC (Federal Open Market Committee) meeting on 18 September is almost universally expected. Moreover, following the release of updated data on the US labour market, the probability of a 50 basis point cut increased from 30% to 35%. The futures market also anticipates that the total reduction in the cost of dollar borrowing by the end of the year will amount to 95-100 basis points.
As for the euro, expectations are significantly more modest: there is a 40% probability of a 25 basis point rate cut at the ECB meeting on 12 September. Overall, a 50 basis point cut is projected by the end of the year. This divergence in the pace of QE provides a certain advantage to the euro. As a result, according to data from Swiss UBS Group, algorithmic traders alone sold approximately $70-80 billion in August. On the other hand, as noted by analysts at Bank of New York Mellon, financial managers have been actively buying the euro in the last few days of the week.
● In July 2022, inflation in the US stood at 9.1%. Thanks to the tightening of monetary policy (QT), the US central bank managed to bring it down to 3.0%. However, the Consumer Price Index (CPI) then practically plateaued, stubbornly refusing to approach the target of 2.0%. In fact, it occasionally rose to 3.5-3.7%. In August, the CPI was recorded at 2.9%.
On the other hand, raising the interest rate to a 23-year high of 5.50% and maintaining it at this level for the past nine months has led to problems in the US economy. The manufacturing activity index dropped to eight-month lows, while unemployment in the country increased from 3.7% to 4.3%. As a result, the regulator is now faced with a choice: either continue the fight against inflation or support the economy. It is evident that the Fed will choose the latter. Notably, back in July, several FOMC members were ready to vote for a rate cut. However, they refrained, opting instead to wait until September to make a decision based on more up-to-date macroeconomic indicators.
● Unlike the Federal Reserve, the European Central Bank (ECB) may implement its monetary policy easing at a more moderate pace, judging by several factors. Consumer inflation (CPI) is currently at 2.6%, the growth of the average agreed wage in the Eurozone slowed in Q2 from 4.7% to 3.6%, and the interest rate stands at 4.25%, which is 125 basis points lower than the current Fed rate.
According to data released on Thursday, business activity in the Eurozone increased. The composite PMI index, according to preliminary estimates, rose to 51.2 points in August, up from 50.2 the previous month. Markets, on the contrary, had forecasted a decline in the index to 50.1 points. PMI values above 50.0 indicate economic growth, and this trend has slightly dampened expectations of two ECB rate cuts this year. However, some analysts believe this rise in business activity is temporary and driven by the Olympic Games in Paris. This theory is further supported by the fact that Germany's PMI, the engine of the European economy, is declining. The German composite index, which was expected to rise to 49.2, actually fell from 49.1 to 48.5 in August.
● Aside from macroeconomic statistics, the performance of the dollar this week may have been influenced by Federal Reserve Chair Jerome Powell's speech at the Annual Economic Symposium in Jackson Hole, USA, scheduled for the very end of the workweek, on Friday, 23 August. And it did have an impact, though not in the dollar's favour.
The Fed Chair confirmed that the time had come to adjust monetary policy. "Inflation has significantly decreased and is now much closer to the target. My confidence that inflation is on a sustainable path back to 2% has increased," Powell stated, noting that "upside risks to inflation have diminished, while downside risks to employment have increased." According to him, the cooling of the labour market is undeniable, and the Fed will do everything possible to support it. "The current rate level provides ample room to respond to risks, including an undesirable further weakening of the labour market. The timing and pace of rate cuts will depend on incoming data, outlook, and the balance of risks."
Thus, Powell left the door open for a gradual rate cut for the remainder of the year. The market responded to this by dropping the DXY dollar index to 100.60, and the EUR/USD pair surged to 1.1200. The pair ended the five-day period at the 1.1192 level. Before the Fed Chair's speech, 80% of surveyed analysts expected a further downward correction. However, after the speech, the balance of power shifted, and now only 40% expect the dollar to strengthen and the pair to fall to 1.1000 in the near future. An equal number sided with the euro, while the remaining 20% took a neutral stance. In technical analysis, all 100% of trend indicators and oscillators on D1 point north, although 15% of the latter are in the overbought zone. The nearest support for the pair is located in the 1.1170 zone, followed by 1.1095-1.1110, 1.1030-1.1045, 1.0985, 1.0880-1.0910, 1.0825, 1.0775-1.0805, 1.0725, 1.0665-1.0680, and 1.0600-1.0620. Resistance zones are found around 1.1200, then 1.1230-1.1275, 1.1350, and 1.1480-1.1505.
● The economic calendar for the upcoming week is packed with significant events. On Tuesday, 27 August, the GDP figures for Germany for Q2 will be released, and on Thursday, 29 August, the GDP data for the US will follow. Also, on 29 August, preliminary data on consumer inflation (CPI) in Germany will be available. Additionally, the traditional statistics on the number of initial jobless claims in the United States will be published on this day. Friday, 30 August, promises increased volatility due to the release of key inflation indicators such as the Consumer Price Index (CPI) in the Eurozone and the Core Personal Consumption Expenditures (Core PCE) index in the US. Moreover, 30 August is the last business day of the month, and many market participants will be taking steps to improve their balance sheet figures.


GBP/USD: Tortoises Beat Doves


● The slower a central bank reduces interest rates, the better its national currency tends to perform. This race between doves and tortoises has naturally extended to the GBP/USD pair. Investor confidence that the doves at the Federal Reserve will begin easing monetary policy at the upcoming September meeting continues to weigh on the dollar. On the other hand, the likelihood of a rate cut by the Bank of England (BoE) in September is far less certain. It is quite possible that QE in the United Kingdom will proceed at a tortoise-like pace, which has been pushing the GBP/USD pair upwards for the second consecutive week.
According to the latest data from the UK's Office for National Statistics, inflation (CPI) in the country remains relatively low at 2.2% year-on-year. This follows two months during which it was at the target level of 2.0%. The pound's rise accelerated amid strong unemployment figures, which exceeded expectations. On 13 August, it was reported that the unemployment rate fell in June to 4.2%, a significant improvement from May's 4.4%. Considering that the forecast pointed to a rate of 4.5%, this data made a strong impression on the market. Such a decline in unemployment indicates positive changes in the labour market and could be a sign of economic stabilization, which may boost investments.
Favourable reports on the Purchasing Managers' Index (PMI) further strengthened the pound. Data released by the Chartered Institute of Procurement & Supply and S&P Global on Thursday, 22 August, showed that the preliminary PMI in the UK exceeded expectations, jumping to 53.4 in August from 52.8 in the previous month. The manufacturing PMI also rose from 52.1 to 52.5 points, beating the forecast of 52.1. The services PMI increased to 53.3 in August from 52.5 in July, surpassing the consensus forecast of 52.8. Following the release of this positive data, the probability of a Bank of England rate cut in September dropped below 30%.
● Following the dovish speech by Fed Chair Jerome Powell, Friday evening in Jackson Hole also featured a speech by BoE Governor Andrew Bailey, during which the GBP/USD pair reached a high of 1.3230, closing at 1.3216.
The median forecast for the near term is entirely neutral: one-third of experts expect the dollar to strengthen and the pair to decline, another third favour the pound, while the remaining third are undecided. As for technical analysis on the D1 timeframe, similar to the EUR/USD, all 100% of trend indicators and oscillators point north (with 20% of the latter signalling overbought conditions). If the pair declines, it will encounter support levels and zones around 1.3070-1.3125, 1.2980-1.3010, 1.2940, 1.2815-1.2850, 1.2750, 1.2665-1.2675, 1.2610-1.2620, 1.2500-1.2550, 1.2445-1.2465, 1.2405, and 1.2300-1.2330. In case of an upward movement, resistance will be met at levels 1.3230-1.3245, 1.3305, 1.3425, 1.3485-1.3515, 1.3645, 1.3720, 1.3835, 1.4015, and the 30 May 2021 high of 1.4250.
● No significant events or macroeconomic statistics related to the state of the UK economy are scheduled for the upcoming week. Additionally, traders should be aware that Monday, 26 August, is a bank holiday in the UK.

CRYPTOCURRENCIES: Snake Trend in BTC Nears the Finish Line



● In our previous review, we didn't limit ourselves to the conventional concepts of bearish and bullish trends and introduced our own term for sideways movement within a narrow range: the Snake trend. True to its name, the BTC/USD pair continued to slither in a snake-like manner last week, making attempts to break below the $58,000 support or above the $62,000 resistance. This pattern persisted until the evening of 23 August.
● If we look at the medium-term chart, it becomes clear that after 14 March, when bitcoin reached a new all-time high (ATH) of $73,743, it has been moving within a descending channel, displaying significant volatility. Analysts at CryptoQuant believe that the decline in BTC's price is due to a reduction in purchases by issuers of spot exchange-traded funds (ETFs) in the US. In March, investment firms were buying an average of 12,500 BTC per day on exchanges, whereas from 11 to 17 August, this average dropped to just 1,300 coins: nearly ten times less. The monthly growth rate of crypto assets held by whales has decreased from 6% in March to the current 1%, which has inevitably impacted the price of the leading cryptocurrency. However, in our view, the key takeaway is that despite the slowdown, these holdings are still gradually increasing.
It is also important to note that the number of hodlers continues to grow. According to CryptoQuant, long-term retail holders have continued to accumulate digital gold, with a record-high monthly figure of 391,000 BTC.
Bitwise reports that the share of large institutional investors in the total assets under management (AUM) has risen from 18.74% to 21.15%. The fact that institutional investors maintain their confidence in the leading cryptocurrency is an encouraging sign. Experts highlight that the rate at which spot BTC-ETFs have been filled is the fastest in the history of all exchange-traded funds. Notably, 60% of the top 25 investment firms own bitcoin-based spot ETFs. Additionally, 6 out of the 10 largest hedge funds, including Citadel, Millennium Management, and G.S. Asset Management, are increasingly incorporating bitcoin ETFs into their investment strategies.
● Reports from institutional fund managers and companies for Q2 2024 clearly demonstrate a preference among major players for spot BTC-ETFs over products based on other assets, such as gold. "Large investors have stopped fleeing from the increased volatility of bitcoin, remaining relatively stable and inclined towards hodling," writes Andre Dragosch, Head of Research at ETC Group. According to this expert, the vast majority of investors who purchased shares in spot BTC-ETFs since the beginning of 2024 have increased their positions in the assets. "Of the companies registered in Q1, 44% increased their holdings, 22% maintained them, 21% reduced them, and 13% withdrew their stake in bitcoin-ETFs during Q2," writes Andre Dragosch. He concludes, "When compared to other exchange-traded funds, this performance is indeed impressive."
"When the bullish cycle begins, the number of investors eager to invest in exchange-traded products based on the leading cryptocurrency will increase significantly," predicts Bitwise. "We anticipate that in 2025, the inflow of funds into spot bitcoin-ETFs will exceed that of 2024, and in 2026, it will surpass that of 2025."
● We would like to add a couple of figures to this positive forecast. The first is that, according to data from the cryptocurrency exchange Binance, 50% of investors in Latin America are purchasing cryptocurrency for the long term. The second is that the total market capitalization of stablecoins is on the rise, reaching a new all-time high of $165 billion. Both of these figures indicate not only growing confidence in the future of digital assets but also increasing liquidity, which could serve as a pivotal foundation for the next bull rally. The only remaining question is: when will this rally finally begin?
● A number of experts believe that without the resumption of ETF purchases, overall demand for bitcoin may remain subdued. Considering the current consolidation (Snake trend) and the fact that the leading cryptocurrency closed July in the red, it’s possible that August could also end with losses. Based on this, Artificial Intelligence from PricePredictions has calculated that by 31 August, bitcoin will be trading at around $53,766, and in the last decade of September, it could approach the $48,000 mark.
● The analyst known as Crypto Banter strongly disagrees with the AI's forecast. He points out that the Stochastic RSI momentum indicator is entering the investment zone, signalling a potential opportunity for adding BTC to investor portfolios. Additionally, Crypto Banter highlights the Bitcoin Fear and Greed Index levels as important indicators for identifying potential market bottoms and profitable entry points. According to his observations, the current conditions suggest that now is an optimal time to open long positions on BTC.
● CryptoQuant shares a similar stance. On the Hash Ribbons indicator chart, the 30-day moving average (DMA) has crossed above the 60-day moving average. According to the company's analysts, this crossover often coincides with a low point in BTC's price, offering investors an opportunity to enter the market under more favourable conditions. "The Hash Ribbons indicator suggests that miner capitulation is nearing its end," they write. "The decrease in profitability due to increased computational power and reduced block rewards is pushing companies to invest in more energy-efficient equipment and data processing centres."
CryptoQuant experts believe that miners will continue with their strategy of accumulating bitcoin reserves, anticipating a rise in the cryptocurrency’s value to $70,000 or higher by the end of the year. As for smaller miners, CryptoQuant expects that they will gradually exit the market due to a lack of resources to purchase expensive equipment, leading to the formation of conglomerates dominated by major players in the mining industry.
● Michael Van De Poppe, CEO of MN Trading, is convinced that bitcoin will reach a new peak as early as this autumn, with institutional investors serving as the primary catalyst for its growth. These investors have been actively buying bitcoin during its price dip, and Van De Poppe believes that the recent correction could trigger a powerful rally in September or October this year. The key factor, according to him, is that bitcoin must continue to hold above the $57,000 mark.
Similarly, the analyst known as Rekt Capital has predicted that the bull rally will start around the same time. He suggests that approximately 160 days after the halving, bitcoin will enter a parabolic phase. Based on his calculations, this should occur in late September 2024.
● Matthew Sigel, Head of Digital Assets Research at VanEck, is also optimistic about bitcoin's future. He believes that bitcoin will approach its all-time high shortly after the US presidential elections. "We are observing a typical seasonal pattern where the first cryptocurrency usually faces challenges […] after the halving," he writes. "With the influx of liquidity, bitcoin should soon begin to rise." According to Matthew Sigel, regardless of who becomes the next US president, the market should prepare for four years of "reckless fiscal policy." It is during such a period that the first cryptocurrency will reach its peak values. He predicts that by 2025, influenced by a loosening of monetary policy, BTC will surpass its historical maximum.
● Zach Pandl, Managing Director at Grayscale Investments, agrees with this outlook in principle. He believes that the rise in bitcoin's price is driven not by statements from US presidential candidates but by macroeconomic trends and the weakening of the dollar. Pandl argues that the new administration is unlikely to take any significant steps toward regulating the crypto industry, and everything will likely remain as it is, as authorities are more concerned with the growing national debt. The Grayscale Investments executive noted that bitcoin is increasingly being seen by investors as an attractive tool for protecting against inflation and the devaluation of fiat currency. Pandl predicts that the US dollar will depreciate even further over the next decade, leading to increased investments in the leading crypto asset.
● Recently, the digital asset management company VanEck released a new forecast for bitcoin, outlining three potential price levels for BTC depending on market developments and its adoption as a global reserve asset. According to the base scenario, by 2050, the flagship cryptocurrency could reach $3 million per coin. Under the bearish scenario, the minimum value of BTC would be $130,314. However, if the bullish scenario comes to pass, 1 bitcoin could be worth $52.4 million in 26 years.
Against this backdrop, the forecast by Robert Kiyosaki, author of the bestseller "Rich Dad Poor Dad," seems relatively modest. The writer and economist believes that amid an impending downturn in currency and stock markets, the prices of precious metals will multiply, and the price of digital gold could reach $10 million per BTC.
● As of the time of writing this review, on the evening of Friday, 23 August, the BTC/USD pair is still far from reaching $10 million or $50 million. However, following the dovish speech by Fed Chair Jerome Powell in Jackson Hole, the pair capitalized on the weakening dollar, surged upwards, and reached a height of $63,893. The total market capitalization of the crypto market now stands at $2.24 trillion (up from $2.08 trillion a week ago). The Crypto Fear & Greed Index has risen from 27 to 34 points but remains in the Fear zone.

CRYPTOCURRENCIES: Bulls Poised to Lift ETH and Ripple

● According to data from the cryptocurrency exchange Crypto.com, the number of cryptocurrency holders grew by 6.4% in the first half of 2024, rising from 580 million to the current 617 million. Notably, Ethereum outpaced bitcoin in this regard. The number of ETH holders increased by 9.7%, from 124 million to 136 million, while bitcoin holders grew by 5.9%, reaching 314 million compared to 296 million at the end of December 2023.
Analysts at Crypto.com attribute the broader adoption of Ethereum to the Dencun upgrade in March. This hard fork resulted in some layer-2 protocols on the ETH blockchain reducing transaction fees by 99%. For bitcoin, key factors included the April halving, the launch of the Runes protocol, and the approval of spot BTC-ETFs, which attracted over $14 billion from institutional investors.
● Recently, well-known analyst and trader Peter Brandt, head of Factor LLC, predicted that Ethereum could "signal" a drop to $2,000 per coin or even lower. However, analysts at CryptoQuant disagree with this forecast from the Wall Street legend. In their view, ETH buyers are starting to regain their strength. "In June, when Ethereum's price reached $3,800, the Open Interest (OI) hit a record high, exceeding $13 billion. This indicated a potential market correction, which indeed occurred. On 5 August, the OI dropped to $7 billion, but it is now recovering," the company's analysts reported.
They believe that a significant increase in the price of the leading altcoin will become possible once leveraged players return to the market. "Current data shows that buyers are becoming more active. There is a trend suggesting that a strong bullish rally is on the horizon," CryptoQuant indicated. According to expert forecasts, positive momentum in the cryptocurrency market is already emerging, and it is expected to become more pronounced by the end of Q3.
● The Ripple (XRP) token is also showing a bullish signal. Technical indicators point to an inverted "Head and Shoulders" pattern on the daily chart of the altcoin, with the second shoulder still in the process of forming. Since the court ruling in the SEC (U.S. Securities and Exchange Commission) case against Ripple, XRP has been correlating with major cryptocurrencies like bitcoin, Ethereum, and Solana. Bouncing off the $0.55 support level, it has traded in a narrow sideways trend along with these mentioned assets following a 50% drop after the court decision.
As analysts have observed, Ripple has recently begun forming the second shoulder in this bullish pattern, with a potential risk-to-reward ratio of 1:2. This formation suggests that XRP could be poised for a significant upward move if the pattern completes as expected.




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.

Forex and Cryptocurrency Forecast for September 02 – 06 2024

EUR/USD: Dollar Takes the Offensive

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


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



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

NordFX Analytical Group

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

Forex and Cryptocurrency Forecast for September 09 – 13, 2024

EUR/USD: Markets Await ECB and Fed Meetings



● If the US economy is growing, investors buy up dollars to invest in the US stock market. As a result, the DXY Dollar Index rises. But as soon as the dark shadow of an impending recession falls over the rosy picture, the countdown begins. Moreover, an economic slowdown signals to the Fed that it's time to ease monetary policy (QE) and lower interest rates.
The next Fed meeting is very soon: on 18 September. Back in July, several FOMC (Federal Open Market Committee) members were ready to vote for a rate cut. However, they left it unchanged, deciding to wait until early autumn and make a decision based on more up-to-date macroeconomic indicators. In fact, hardly any market participants doubt that the borrowing cost will be cut by 25 basis points. But what if the decision is postponed again? Or, conversely, the rate is cut by 50 basis points at once? The result will depend, among other things, on the data that Fed officials received last week.
● It seems that the US economy is not facing a deep recession. However, no spectacular surge should be expected either. Data released on 3 and 5 September showed that the Manufacturing PMI stood at 47.2 points, which is higher than the previous figure of 46.8, but below expectations of 47.5. This indicator remains below the key 50.0 threshold, which separates growth from contraction. The services sector, on the other hand, performed significantly better, with activity reaching 55.7 compared to the previous value of 55.0 and the forecast of 55.2.
As for the labour market, the number of initial jobless claims for the week fell from 223K to 227K (forecast 231K).
At the very end of the workweek, on Friday, 6 August, the US Department of Labor's Bureau of Labor Statistics report showed that the number of new jobs created outside the agricultural sector (Non-Farm Payrolls) increased by 142K, below the forecast of 164K but significantly higher than July’s figure of 89K. (It's important to note that the latter figure was revised downwards from 114K to 89K.) Unemployment in the US dropped to 4.2% last month from 4.3% in July.
Average hourly earnings in the private sector increased by 0.4% (m/m) in August compared to the previous month, reaching $35.21 per hour. Wage inflation rose to 3.8% from 3.6% in July.
● These figures did not provide any clear advantage to either bulls or bears. The recently released aggregate GDP data for the 20 Eurozone countries also had little impact on market sentiment. According to Eurostat, the Eurozone economy grew by 0.6% year-on-year in Q2, which was in line with both the forecast and the previous figure. On a quarterly basis, growth was 0.2%, compared to the forecast and the previous value of 0.3%.
● As a result, following the release of the US Department of Labor report on 6 September, the EUR/USD pair first hit a weekly high of 1.1155, then dropped to 1.1065, rose again, dropped once more, and ultimately finished the five-day period at 1.1085. Expert opinions on its short-term performance were divided as follows: 40% of analysts voted for a strengthening of the dollar and a decline in the pair, while 60% predicted its rise.
In technical analysis on D1, the majority of trend indicators favour the bulls, with 85% on the green side and 15% supporting the red. Among oscillators, 40% are painted green, 35% red, and the remaining 25% are neutral-grey.
The nearest support for the pair is located in the 1.1025-1.1040 zone, followed by 1.0880-1.0910, 1.0780-1.0805, 1.0725, 1.0665-1.0680, and 1.0600-1.0620. Resistance zones are found around 1.1120-1.1150, then 1.1180-1.1200, 1.1240-1.1275, 1.1385, 1.1485-1.1505, 1.1670-1.1690, and 1.1875-1.1905.
● As for the economic calendar, the upcoming week promises to be quite eventful. On Tuesday, 10 September, Germany's Consumer Price Index (CPI) data will be released. The inflation theme will continue the following day with the publication of the US CPI figures. On the same day, debates between US presidential candidates Kamala Harris and Donald Trump are scheduled.
On Thursday, 12 September, the European Central Bank (ECB) will hold a meeting to decide on interest rates and the overall direction of its monetary policy. Naturally, the press conference and comments from ECB leaders following the meeting will be of great interest.
Additionally, Thursday will bring the usual release of initial jobless claims figures, along with the US Producer Price Index (PPI). The five-day period will conclude on Friday the 13th with the release of the University of Michigan’s US Consumer Sentiment Index.

CRYPTOCURRENCIES: "Fainting Spell" and "Heat Death" for Bitcoin, "Sewer" for Altcoins

● September has only just begun, but it is already justifying its title as a bear month, one of the worst for investors. Historical data indicates that the average decline in bitcoin's price during this first autumn month was 6.18%. The optimism of chart analysis enthusiasts has thus far not helped the BTC/USD pair. The base of the bullish "flag" continues to sag downward sadly. The formation of the "cup and handle" is also not completing, after which bitcoin was expected to soar to $110,000 by the end of the year. There has been no surge so far, but bearish forecasts are becoming more and more…
● According to Ecoinometrics, bitcoin has lost its lead among high-capitalisation assets in terms of RAROC (Risk-Adjusted Return on Capital). The first cryptocurrency was surpassed by shares of graphics processor developer Nvidia, while gold is now closely trailing behind BTC. Nvidia's shares have risen by 142% since the start of 2024, while bitcoin has only gained 35% during the same period. Ethereum lags even further behind, with an increase of just 5%.
Peter Schiff, President of Euro Pacific Capital and a well-known bitcoin critic, noted that while the first cryptocurrency has risen in price since the beginning of the year, the real growth occurred only in the first two months, driven by the hype surrounding the launch of spot BTC-ETFs in the US. "If you didn’t buy bitcoin at the beginning of January, you have no profit. In fact, the vast majority of people who bought bitcoin this year, either directly or through ETFs, are losing money," stated the "gold bug" Schiff.
He emphasised that physical gold has steadily increased in value throughout 2024, and the hopes of crypto-enthusiasts that BTC would surpass this precious metal or match it in market capitalisation are becoming increasingly elusive. Schiff added that while he is open to new developments, he has yet to encounter any convincing argument that would change his strongly negative stance on bitcoin. The businessman is confident that sooner or later the price of digital gold will collapse to zero, bankrupting all holders of this cryptocurrency.
● The investor known by the pseudonym Nick Crypto Crusade painted an equally bleak picture of the digital asset market. In his publication titled "The Bull Rally is Cancelled, and Altcoin Season Will Never Begin," he noted that ordinary traders are in a state of pessimism, as they don't believe a bull season is coming anytime soon, and sell off their bitcoins whenever the price approaches $70,000. In his view, the current situation resembles the events of 2022, when the market was dominated by a bearish trend, and no one could see light at the end of the tunnel. Nick Crypto Crusade concluded that people are leaning towards the idea that bitcoin will drop to $40,000 or even lower, and that an altcoin season will never start.
A similar forecast was made by former BitMEX CEO Arthur Hayes. He outlined a scenario in which BTC could fall to $50,000, while altcoins could collapse entirely, landing in the "sewer." Hayes attributed this to changes in the Federal Reserve’s balance sheet under the Reverse Repo Program (RRP). A higher RRP balance effectively removes liquidity from the financial system, keeping money inactive on the balance sheet of the US central bank and preventing it from being reinvested or used for borrowing. According to Hayes, "As soon as RRP started to rise to $120 billion, bitcoin fainted."
● Experts from the Outlier Ventures platform have stated that halving has ceased to have an impact on bitcoin. In their view, 2016 was the last year when the reduction in miner rewards had a fundamental effect on the price of the first cryptocurrency. CryptoQuant also looked into the past and noted that the number of active wallets is currently as low as it was in 2021. "We are observing a decrease in overall network activity, with fewer transactions, which may reflect a decline in interest in using the bitcoin blockchain. This sense of disinterest is negatively affecting the price, coinciding with low trading volume figures," summarise the CryptoQuant experts.
● Charles Hoskinson, the founder of Cardano and co-founder of Ethereum, stated that the crypto industry no longer needs bitcoin. According to him, bitcoin has turned into a religious symbol, which dooms its ecosystem. "98% of the changes in the industry are happening outside of the first cryptocurrency," writes Hoskinson. "The hash rate of the digital gold blockchain will decrease, and it will slowly transition to heat death."
As an example, the Cardano founder referred to the situation with the Windows operating system, which stopped innovating, leading users to switch to Android and iOS devices. Hoskinson noted that he had repeatedly urged bitcoin developers to adopt innovations, but the community ignored his initiatives.
● Given the above, one might ask: Is everything really so bad, and are there no more hopes for growth? As the ancient Greek philosopher Diogenes of Sinope once said, hope dies last. Therefore, it's always worth hoping for the best. The aforementioned Arthur Hayes is quite optimistic about the long-term development of the crypto market, as he expects the US Federal Reserve to ease its monetary policy.
Of course, the recent price declines have scared off many small crypto holders and short-term speculators, who have started selling off their reserves. On the other hand, large investors have continued to accumulate. According to the analytics firm Santiment, this category includes wallet holders with between 10 and 10,000 BTC. Due to this redistribution, whales now control nearly 67% of the total circulating supply of coins. The fact that major investors are accumulating digital gold suggests their positive expectations for its future price growth.
● A similar conclusion, based on other metrics, is drawn by Willy Woo, one of the most popular figures in crypto analysis. He pointed out that long-term bitcoin holders currently control over 14 million BTC, or 71% of the circulating supply. In his view, such significant accumulation by HODLers is a positive sign of market stabilization. Willy Woo noted that bears are gradually starting to lose their dominance.
The Fed's interest rate decision on 18 September will, of course, be crucial. However, according to Woo, the first cryptocurrency is likely to remain in a sideways trend throughout September. Unless extraordinary events occur over the next few weeks, significant changes in bitcoin's price can be expected only at the beginning of October. According to Willy Woo, predictions from some experts that BTC could surpass the $65,000 mark in the short term are unlikely to come true. Reaching a new all-time high (ATH) may take a few more months, possibly happening by the end of the year.
● In their report, specialists from the crypto exchange Bitfinex also highlighted the impact of the US Fed's rate decision on bitcoin's price. The exchange's analysts believe that "a 25 basis point cut will likely signal the start of a loosening cycle, which could lead to a long-term increase in bitcoin’s price as liquidity grows and recession fears ease." However, if the rate is cut by 50 basis points, it could trigger an immediate price spike, followed by "a correction as recession fears intensify."
Bitfinex analysts do not rule out that, as a result of increased volatility during this period, the BTC/USD pair could temporarily lose 15-20% of its value.
● At the end of the week, bitcoin and the crypto market as a whole experienced another bearish attack. The crash followed the decline of the S&P 500 stock index, largely driven by bad news related to Nvidia. The US Department of Justice's Antitrust Division is conducting a major investigation into the company, which significantly alarmed investors with stakes in AI.
As of the time of writing, on the evening of Friday, 6 September, the BTC/USD pair is trading around $52,650. The total cryptocurrency market capitalization has fallen below the psychologically important level of $2.0 trillion, now standing at $1.87 trillion (compared to $2.07 trillion a week ago). Bitcoin's Crypto Fear & Greed Index has plummeted from 34 to 22 points, moving from the Fear zone into Extreme Fear territory.

CRYPTOCURRENCIES: "Playful" Solana and Ripple Forecasts

● Former Goldman Sachs executive and now CEO and Co-Founder of Real Vision, Raoul Pal, believes that gaming applications using cryptocurrencies are on the verge of a breakthrough. The transition from Web2 to Web3 will be a major catalyst for change in both the gaming industry and the blockchain space. As a result, we may witness an explosive surge in user interest in such applications in the coming months. According to Raoul Pal, this will trigger a wave of large-scale trading in crypto-assets used in these games. Solana is expected to play a leading role in this development, as a significant number of new tokens are being created on its network.
● Despite Ripple's victory over the SEC (U.S. Securities and Exchange Commission), XRP has been unable to solidify its position above the critical resistance level of $0.60 (currently priced at $0.5069). However, according to some analysts, the altcoin could still end the year with moderate price growth, potentially reaching $0.66 per coin. Experts at CoinCodex suggest a target of $1.10. But even this is not the limit—XRP maximalists do not rule out the possibility of the token reaching $1.50 by the end of the year. Their forecast is based on XRP's "unique position in the financial sector, considering its focus on cross-border payments and partnerships with major financial institutions."

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.

CryptoNews

– The first debate between U.S. presidential candidates Donald Trump and Kamala Harris took place on 10 September. Although cryptocurrencies were not mentioned, the debate outcome had a negative impact on the prices of leading digital assets. Prior to the debate, Trump held a slight lead in prediction markets. For instance, on Polymarket, his chances stood at 53%, compared to Harris’s 46%. However, after the debate, both candidates’ odds equalised at 49%. On another prediction platform, PredictIt, the difference was more pronounced: after the debate, Harris’s chances rose to 56%, while Trump’s dropped to 47%.
Since Trump had positioned himself as a supporter of cryptocurrencies, while Harris had yet to clarify her stance on the matter, this shift in the balance negatively affected the price of bitcoin and other cryptocurrencies. Following the debate, the value of the flagship asset dropped by approximately 3%.

– Analysts at Matrixport have published a forecast regarding the price movement of the leading cryptocurrency following the outcome of the U.S. presidential election. In their view, bitcoin will continue to rise, regardless of the voting results. Matrixport reminded readers that during Donald Trump’s presidency from 2016 to 2020, bitcoin saw a growth of 1,421%. Under Joe Biden's presidency, from 2020 to 2024, BTC's price increased by 313%. “Bitcoin can continue to thrive regardless of who wins the presidential election in November 2024 and takes the White House,” Matrixport analysts wrote. In their opinion, the next president is likely to have a greater impact on the regulation of the cryptocurrency market in the country than on bitcoin’s price itself.

– Experts at Bernstein have outlined a potential scenario for the cryptocurrency market depending on the outcome of the U.S. presidential election. According to their forecast, bitcoin could test a range between $80,000 and $90,000 if Donald Trump wins, and between $30,000 and $40,000 if Kamala Harris becomes the occupant of the White House. “While some leaders in the crypto industry harbour illusions about Harris’s campaign and hope for more constructive policies, we expect a significant difference between the two political outcomes. A Harris victory will likely maintain the challenging regulatory environment that has stifled market growth in recent years,” Bernstein stated.
Analysts also reminded that the rhetoric of the U.S. presidential candidates differs greatly. Trump promises that the U.S. will become the "world capital of bitcoin and cryptocurrencies," whereas Harris’s campaign avoids any mention of digital assets.

– Specialists at Gemini conducted a survey among 6,000 respondents from the U.S., UK, France, and Singapore. The results showed that from 2022 to 2024, the proportion of cryptocurrency ownership among traders and investors in the U.S. and UK remained virtually unchanged, standing at 21% and 18%, respectively. In France, the figure increased from 16% to 18%, while in Singapore, it dropped from 30% to 26%.
Respondents highlighted the issue of cryptocurrency regulation. In the U.S. and UK, 38% admitted that they refrain from acquiring digital assets due to legislative complexities. A similar view was expressed by 32% of those surveyed in France and about 50% in Singapore. Among those who purchased cryptocurrencies, 38% did so to hedge against inflation risks.
The Gemini report also noted that the gender gap among crypto investors has become more pronounced compared to 2022. Currently, 69% of digital asset owners identify as men, while 31% identify as women.

– The U.S. Federal Bureau of Investigation (FBI) has published a report revealing that nearly 70,000 complaints regarding cryptocurrency fraud were registered in 2023. Losses suffered by American citizens increased by 45% compared to 2022, reaching a record $5.6 billion. Victims reported falling into criminal schemes predominantly involving bitcoin, ethereum, and the stablecoin USDT. The most vulnerable demographic group was older Americans aged over 60, who collectively lost around $1.6 billion.
The majority of claims were related to crypto investments, accounting for nearly 71% of the total losses, or approximately $3.96 billion. Around 10% of complaints involved calls from scammers posing as government representatives through call centres. Other common forms of fraud noted by the FBI included schemes involving credit cards, extortion, malware, and romance scams, often conducted via social media and dating apps.

– The Head of Research at Bitcoin platform New York Digital Investment Group, Greg Cipolaro, has urged bitcoin holders to remain patient. In his opinion, September is unlikely to bring any surprises in terms of price growth for the flagship cryptocurrency.
As the main factor influencing the BTC rate, the expert pointed to the upcoming U.S. presidential election on 4 November. According to him, the outcome of this event will be a turning point for the entire crypto market, regardless of who wins. However, Cipolaro refrained from making a prediction about whether Donald Trump or Kamala Harris would emerge victorious. The analyst is also convinced that factors such as employment data, inflation rates, and even changes to the Federal Reserve's interest rate will not have a lasting impact on bitcoin’s price.

– According to Coinglass, 9 September marked the end of the longest capital outflow phase from U.S. spot BTC-ETFs. The capitalisation of these funds began to decline on 26 August, during which they lost $1.2 billion. However, on Monday, 9 September, bitcoin ETFs attracted $28.6 million in capital, finally breaking the streak of losses.
It’s worth noting that this situation is not new. Since the start of BTC-ETF trading in the U.S. on 12 January 2024, the capitalisation of these derivatives has twice experienced seven consecutive days of decline (excluding weekends and holidays). This occurred from 24 April to 2 May and from 13 to 24 June, coinciding with a drop in the price of the leading cryptocurrency. Inflows into the funds have typically been accompanied by a significant rise in the digital asset’s value.

– Experts at 10x Research have noted that a potential 50 basis point interest rate cut, which could be announced following the U.S. Federal Reserve's meeting on 17-18 September, might negatively affect the price of bitcoin and other cryptocurrencies.
“A sharp rate cut is a sign of economic concern, not confidence,” the analysts believe. In their view, reducing borrowing costs by 50 basis points could indicate that the regulator is struggling to combat an impending downturn in the labour market. They also suggest that the community’s expectations of a rise in the price of the leading cryptocurrency may not materialise, as growth catalysts are absent and the Fed is focused on balancing support for the labour market with efforts to curb inflation.

– According to MicroStrategy founder Michael Saylor, bitcoin is set to increase in value by 70 times, reaching $3.85 million. He based his forecast on the technological superiority of the flagship cryptocurrency over other assets and its annual return. Since August 2020, when MicroStrategy began acquiring BTC, the cryptocurrency has delivered an average annual return of 44% to investors. By comparison, over the past four years, the S&P 500 index has grown by approximately 12% annually.
Saylor also claims that the recent capital outflow from Ethereum-based spot ETFs will only increase investor demand for bitcoin. He is confident that the future belongs to hodlers (long-term investors), who will outlast traders focused on short-term price fluctuations.
In the long term, the billionaire predicts that digital gold could rise to $13 million, although this is expected to happen by 2045. By 2050, bitcoin’s market capitalisation could account for 13% of global capital. For reference, it currently stands at around 0.1%.

– The prospects for the approval of a Solana ETF have become even more uncertain in recent months, largely due to the general difficulties facing the crypto market. Bloomberg analyst James Seyffart highlighted the challenges that a potential launch of these funds is facing. Specifically, he pointed out that a major obstacle is the fact that the U.S. Securities and Exchange Commission (SEC) has classified Solana as a security in various legal proceedings.
Sui Chung, CEO of Kraken subsidiary CF Benchmarks, recently stated that a Solana-based ETF may never materialise. The reason, he explained, is that there are currently no significant regulated markets for futures tied to this token. Comparing Solana with existing spot ETFs, Chung emphasised that bitcoin and ethereum were listed on CME, the world’s largest derivatives market, several years before the SEC approved their ETFs. Furthermore, futures for these two cryptocurrencies had no contract violations, making SEC approval almost inevitable.

Forex and Cryptocurrency Forecast for September 16 – 20, 2024

EUR/USD: Storms and Tempests on September 18, 19, and 20



● The past week can be divided into two parts – from September 9 to 11, and from the 12th to the 13th. Initially, the dollar strengthened, then it lost ground. The trend shift occurred after data released on Wednesday, September 11, indicated a slowdown in US inflation and the labour market.
According to the US Department of Labor's report, consumer prices (CPI) in August rose by an average of 2.5% year-on-year, the lowest figure since February 2021. By comparison, the annual inflation rate in July was 2.9%. Thus, in just a month, the rate of consumer price growth slowed by 0.4%. It’s worth noting that the country's annual inflation rate has been declining for several months. For instance, by the end of July, CPI growth had already fallen to its lowest since March 2021. And although 2.9% is not yet the target 2.0%, it’s a far cry from the 9.1% seen two years ago. The light at the end of the tunnel is becoming visible. The same cannot be said for the labour market. Let’s recall that the Bureau of Labor Statistics report on September 6 showed that the number of new jobs created outside the US agricultural sector (Non-Farm Payrolls) was only 142K, compared to the expected 164K. The number of initial unemployment claims, published on September 12, was also somewhat disappointing. With a previous figure of 228K and a forecast of 227K, the number actually rose to 230K. The difference is small, of course, but the trend is still negative.
The market reacted to all this data in a very logical way. Before its release, the probability of a 25 basis point (bps) cut in the federal funds rate at the FOMC (Federal Open Market Committee) meeting of the US Federal Reserve on September 17-18 was 87%. Afterward, it dropped to 55%. Meanwhile, the chances of a 50 bps cut jumped from 13% to 45%. The thinking goes: the economy needs saving, and the fight against inflation can wait. However, we still believe that the Fed will exercise caution and start with a quarter-point cut rather than half a percent.
● On the news mentioned above, the EUR/USD pair was unable to break through the 1.1000 support level. After wavering near it, the pair reversed and moved upwards. While the market's reaction to the US Department of Labor's statistics was logical, the euro's strengthening following the European Central Bank (ECB) meeting is harder to explain.
On Thursday, the ECB resumed its monetary easing cycle (QE), which had been paused in July. The key interest rate was lowered from 4.25% to 3.65%, a cut of 0.6%. Why 0.6% and not a round 0.5% remains a mystery. But this is not the main point. What matters is that such a move should have weakened the euro. Yet, the opposite happened. The reason for this is likely ECB President Christine Lagarde, who, at the post-meeting press conference, did not give the slightest hint that the QE cycle could continue in October.
Despite the possible inflation slowdown in September, a rise is forecast towards the end of the year. The ECB expects inflation to be at 2.5% by the end of 2024, 2.2% in 2025, and only below the target 2.0% at 1.9% by the end of 2026. So why continue cutting rates so drastically when they are already quite low? Christine Lagarde even admitted that while the June cut had been planned in advance, the decision to ease monetary policy at the July meeting was, in fact, deemed hasty.
After Madame Lagarde's speech, the futures market reduced the likelihood of further ECB monetary easing in October from 40% to 20%, which led to the rise in EUR/USD. Derivatives now expect the US Federal Reserve to lower rates by 25 basis points 10 times over the next 12 months, while only 7 similar moves are expected from the ECB. This could lend strength to the bulls on this pair.
● As a result, the EUR/USD closed the past week at 1.1075, almost exactly where it began. Experts’ opinions on its short-term performance are divided as follows: 25% of analysts support a stronger dollar and a decline in the pair, 50% favour its rise, while the remaining 25% maintain a neutral position. However, the medium-term outlook paints a different picture. Here, 70% are in favour of the US dollar, while only 30% are against it.
In technical analysis on D1, the trend indicators show an overwhelming majority supporting the bulls, with 80% in the green camp and 20% siding with the bears. Among oscillators, the picture is more mixed: 25% are green, 40% are red, and the remaining 35% are neutral (grey).
The nearest support for the pair is in the 1.1000-1.1025 zone, followed by 1.0880-1.0910, 1.0780-1.0805, 1.0725, 1.0665-1.0680, and 1.0600-1.0620. Resistance zones are located around 1.1100, then 1.1135-1.1150, 1.1190-1.1200, 1.1240-1.1275, 1.1385, 1.1485-1.1505, 1.1670-1.1690, and 1.1875-1.1905.
● As for the upcoming week, the calendar will be packed with important economic events that will undoubtedly lead to increased volatility. On Tuesday, September 17, US retail sales data will be released. On Wednesday, September 18, key inflation indicators such as the Consumer Price Index (CPI) for the UK and the Eurozone will be made public. On the same day, the US Federal Reserve's FOMC will announce its decision on interest rates. Following the Fed meeting, similar meetings will be held by the Bank of England (BoE) on September 19 and the Bank of Japan (BoJ) on September 20. Naturally, besides the specific decisions, traders and investors will pay close attention to the statements and comments from the heads of these three central banks regarding future monetary policy.

CRYPTOCURRENCIES: Will the New US President Decide BTC's Fate?

● In our mid-week crypto market review, we were pleased to report some positive news from the analytics service Coinglass. According to their data, September 9 marked the end of the longest phase of capital outflows from US spot BTC-ETFs. The capitalisation of these funds had been declining since August 26, resulting in a loss of $1.2 billion. However, on Monday, September 9, bitcoin ETFs managed to attract $28.6 million in capital, breaking the streak of losses. But... the celebration was premature. By Wednesday, US-traded spot bitcoin funds recorded another outflow, ending the brief two-day inflow period, with losses totalling $43.97 million.
And here’s a bit more data: according to CryptoQuant, there has been a notable shift in bitcoin ownership dynamics over recent months. Short-term holders (those owning BTC for 155 days or less) have significantly reduced their positions, especially in July and August. Meanwhile, long-term holders have been increasing their holdings. Due to this redistribution, whales now control nearly 67% of the circulating supply of bitcoin and over 43% of ethereum reserves.
● Is this good or bad? Overall, the statistics seem rather contradictory. "The fact that short-term holders are not accumulating positions may indicate weak demand for bitcoin," notes CryptoQuant. However, they also suggest that the capital flow from weak hands (short-term holders) to strong hands (long-term holders) could set the stage for a potential market recovery, as increased accumulation by HODLers may stabilise prices. Nevertheless, as analysts at Santiment point out, unless whales (the primary target of BTC-ETFs) start buying bitcoin again, a bullish rally is unlikely in the near term.
● Evaluating the current situation, Greg Cipolaro, head of research at Bitcoin New York Digital Investment Group, urged bitcoin holders to be patient. In his view, September is unlikely to bring any surprises in terms of price growth for the leading cryptocurrency. The key factor influencing BTC, according to Cipolaro, will be the upcoming US presidential election on November 4. He believes the outcome of the election will be a pivotal event for the entire crypto market, regardless of who wins. However, Cipolaro declined to predict whether Donald Trump or Kamala Harris would emerge victorious. The analyst is also convinced that factors such as employment data, inflation levels, and even changes in the Fed's interest rate at its September 17-18 meeting will not have a lasting impact on bitcoin’s price.
● Greg Cipolaro's colleagues at 10x Research disagree with him. They believe that a potential 50 basis point rate cut by the Federal Reserve could negatively impact bitcoin and other cryptocurrencies.
"A sharp rate cut is a sign of economic concern, not confidence," say analysts at 10x Research. In their view, a 50 bps reduction in borrowing costs may signal that the regulator is struggling to address an impending downturn in the labour market. They argue that the community's expectations for bitcoin's price increase may go unfulfilled, as there are no clear growth catalysts, and the Fed is focused on balancing its efforts between combating unemployment and inflation.
● With only a few days left until the Federal Reserve meeting, there’s still over a month until the US presidential election. On September 10, the first debate between presidential candidates Donald Trump and Kamala Harris took place. Although cryptocurrencies were not mentioned, the debate outcome negatively impacted the prices of major digital assets. Before the debate, Trump held a slight lead in prediction markets. For example, on Polymarket, his chances of victory were at 53%, compared to Harris's 46%. However, after the debate, both candidates' odds levelled out at 49%. On another prediction platform, PredictIt, the difference was more pronounced: Harris's chances rose to 56%, while Trump's fell to 47%.
Since Trump portrays himself as a supporter of cryptocurrencies, while Harris has not yet taken a clear stance, the shift in balance had a negative effect on bitcoin and other digital assets. After the debate, the price of BTC dropped by about 3%. However, it soon recovered, as verbal sparring is far from the final vote outcome.
● It’s worth noting that the rhetoric of the US presidential candidates is quite different. Trump promises that the US will become the "world capital of bitcoin and cryptocurrencies." In contrast, Harris's programme avoids any mention of virtual assets. Based on this, experts at Bernstein have outlined their forecast for the crypto market. According to their predictions, bitcoin could test the $80,000 to $90,000 range if Donald Trump wins, and the $30,000 to $40,000 range if Kamala Harris becomes the next president. "While some crypto industry leaders harbour hopes for a more constructive policy from Harris, we expect a significant difference between the two outcomes. A Harris victory would maintain the challenging regulatory environment that has stifled market growth in recent years," Bernstein stated.
Analysts at Matrixport have also released a forecast on bitcoin's price following the election results. In their view, bitcoin will continue to rise regardless of the voting outcome. Matrixport noted that during Donald Trump's presidency from 2016 to 2020, bitcoin grew by 1,421%. Under Joe Biden, from 2020 to 2024, BTC’s price increased by 313%. "Bitcoin can continue to thrive regardless of who wins the presidential election in November and takes the White House," Matrixport analysts wrote. They believe the next president is likely to have a greater impact on cryptocurrency market regulation than on bitcoin’s price itself.
● Amidst this uncertain backdrop, a statement from MicroStrategy founder Michael Saylor sounded like a balm for bitcoin enthusiasts. Saylor predicted that bitcoin will soon increase in value by 70 times—reaching a staggering $3.85 million. The billionaire explained his forecast by highlighting the technological superiority of the leading cryptocurrency over other assets and its annual returns. Since MicroStrategy began purchasing BTC in August 2020, the cryptocurrency has delivered an average annual return of 44% to investors. In comparison, the S&P 500 index has grown by around 12% per year over the past four years.
Saylor is also confident that the future belongs to HODLers (long-term investors), who will ultimately outperform traders focused on short-term price fluctuations. In the long term, the billionaire forecasts that bitcoin could reach $13 million, though this would only happen by 2045. By 2050, he predicts that bitcoin’s market capitalisation will account for 13% of the world’s total capital (for reference, it currently stands at just 0.1%).
● As of the evening of Friday, September 13, at the time of writing, the BTC/USD pair surged sharply after a weakening of the US dollar, reaching the $59,900-60,000 zone. The total crypto market capitalisation rose slightly above the psychologically significant $2.0 trillion level, now standing at $2.10 trillion (compared to $1.87 trillion a week ago). Bitcoin's Crypto Fear & Greed Index increased from 22 to 32 points, shifting from the Extreme Fear zone into the Fear zone.
● And in conclusion, since we began our review with statistics, we'll end it with them as well. Specialists from Gemini conducted a survey among 6,000 respondents from the USA, the UK, France, and Singapore and found that among digital asset owners, 69% are men and 31% are women. But that's not all. According to Date Psychology, it turned out that the majority of women (77%) consider cryptocurrency enthusiasts unattractive. They perceive only those who collect Funko figures (toys dedicated to characters from movies, comics, cartoons, etc.) as worse. Perhaps this is because women view digital assets as unserious and project this attitude onto the men who are involved with them.
The most attractive to the female respondents were men who prefer hobbies such as reading, learning foreign languages, and playing musical instruments. However, as other surveys show, women working in the crypto industry achieve great success and often hold higher positions than their male colleagues. Draw your own conclusions, gentlemen!

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.

CryptoNews

– The decline in the price of bitcoin and other cryptocurrencies this week is most likely due to investors anticipating the upcoming decision by the US Federal Reserve regarding a rate cut. The announcement will be made following the conclusion of the meeting on 18 September.
However, as some analysts have noted, the timing of the price drop also coincides with reports of another assassination attempt on Donald Trump. It is worth mentioning that this former (and possibly future) US president positions himself as a supporter of cryptocurrencies and has promised to turn the US into the "world capital of bitcoin and cryptocurrencies".

– The stablecoin Tether (USDT) can already be considered one of the key elements of the global financial system. Statistics have shown that in 2023, the volume of transactions and the network’s profitability reached the same levels as Visa. The only difference is that Visa processes transactions through credit cards in traditional currency, while Tether occupies a similar niche in the crypto sphere. Moreover, Tether surpassed BlackRock, the world’s largest asset management company, in profit by $700 million. All of this not only reflects the volume of USDT usage but also the role this stablecoin has come to play in global financial operations.
For reference: According to Token Terminal, over the past two years, USDT's market share has grown by more than 20%. The asset now controls over 75% of the entire stablecoin market. In Q1 2024, Tether earned more than $4.5 billion in profit. In just the last 30 days, Tether made around $400 million.

– According to WeRate co-founder Quinten Francois, current data indicates the imminent start of a bull rally for the leading cryptocurrency. "The average bitcoin cycle begins approximately 170 days after the halving, with the peak forming after 480 days," he writes. Based on this, there is not much time left before the rally starts – according to Francois's calculations, the surge should begin on Tuesday, 8 October.
The analyst believes that it is crucial for the asset to hold its position around the critically important support zone of $59,000. With the US Federal Reserve meeting, the second half of this week will be extremely significant. Francois predicts that there is a possibility BTC could rise above $64,500. If this happens, the coin's price may increase by at least 46% over the course of October-November.

– Michaël van de Poppe, CIO and founder of MN Trading Consultancy, believes that major economies will soon be forced to begin the process of refinancing their debt obligations. As a result, the increase in global liquidity will become a key catalyst for the next bull cycle in the digital market. "Cryptocurrencies and commodities are highly undervalued," van de Poppe writes, "and it is very likely that they will enter a 10-year bull market. I expect significant growth from these two asset classes."
According to the expert, the leading cryptocurrency is already primed for growth after a decline that has lasted more than three months. BTC could rise to $90,000, having tested the key support level of $58,000. Van de Poppe considers the likelihood of the price falling below $55,000 to be almost zero. (It’s worth noting that earlier in September, analysts at the American company ARK Invest identified $52,000 and $46,000 as key support levels for bitcoin).

– According to analyst Vladimir Cohen, liquidity began to exit the altcoin sector in April, which led to a summer marked by fear across this market. However, the trend has now reversed, and reaching a new all-time high in market capitalisation of $1.1 trillion is just a matter of time. A significant influx of liquidity into the sector is expected due to the easing policies of central banks. In Cohen's view, some altcoins will experience growth of thousands of percent, while others will die out completely. He believes that the exit of coins that lack practical value will have a positive impact, making the sector more transparent and liquid.
Cohen also highlighted that the correlation between altcoins and bitcoin has weakened, with altcoins no longer experiencing significant price drops during bitcoin's dumps. This, according to the expert, suggests that investors have shifted into a long-term holding mode and are prepared to weather the dips in asset prices.

– The analyst known as Rekt Capital believes that bitcoin's growing dominance will deal a serious blow to altcoins. On the weekly chart, the market share of the leading cryptocurrency has consolidated above 57.68% for the first time since April 2019. Five years ago, after this threshold was crossed, an upward trend emerged, during which BTC dominance reached 71%, writes Rekt Capital.
This time, bitcoin’s position in the overall cryptocurrency market capitalisation has been strengthening for the past 210 days, despite BTC losing nearly 14% of its value over the past six months. As a result, bitcoin’s share of the total market capitalisation of digital assets has grown at the expense of falling altcoin prices. If this trend continues and BTC dominance rises, the prices of many alternative tokens are likely to drop.
However, the analyst known as Cryptollica has a different view. He believes that bitcoin's dominance will peak at 58% before collapsing to 35% by mid-2025. In this scenario, the market would enter an "altcoin season," characterised by an explosive surge in the prices of these tokens.

– Speaking at the Ethereum Singapore 2024 conference, Vitalik Buterin discussed the risks posed by centralised organisations and highlighted the role of individual network participants. In his view, solo stakers are the primary key to the security of the entire blockchain. Buterin emphasised that although these stakers form a diverse group, which is almost impossible to coordinate, they reduce reliance on centralised entities and add an essential decentralised layer of protection to the Ethereum network.

– MicroStrategy, founded by Michael Saylor, plans to raise an additional $700 million to pay off debts and increase its bitcoin holdings. The funding scheme is not new. MicroStrategy will issue convertible bonds, which will be exchanged for the company's shares in 2028. These securities are likely to be in high demand among investors, as the value of the company’s assets has nearly quadrupled over the past year.
The convertible bonds will be sold exclusively to qualified institutional investors. Of the funds raised, MicroStrategy intends to spend $500 million to repay debt on existing bonds, while the remaining $200 million will be used to increase its BTC holdings. Currently, MicroStrategy leads the ranking of private companies in terms of investments in "digital gold," holding 244,800 coins valued at approximately $14 billion. The average purchase price was $38,781 per 1 BTC.

– In August, the International Monetary Fund (IMF) once again recommended that the government of El Salvador abandon the integration of digital currencies into the country's economy and reconsider its policy towards the flagship cryptocurrency. However, it seems that such pressure has only fuelled El Salvador's leadership's desire for financial independence. Recently, President Nayib Bukele announced that the government plans to combat the budget deficit and its reliance on IMF loans by developing the crypto sector. To create a favourable investment climate, work is already underway to establish a network of private crypto banks, which will provide investors, including international ones, access to bitcoin transactions with fewer restrictions compared to traditional banks.
It is worth recalling that El Salvador became the first country in the world to make bitcoin legal tender on 7 September 2021. As of the end of August, the country’s crypto reserves amounted to 5,870 BTC. Additionally, 474 coins have been mined using geothermal energy.

– Unlike El Salvador, the Central Bank of Russia views cryptocurrencies and stablecoins as one of the main risk factors for the economy. In its financial market development project, the Russian Central Bank states that, due to the lack of global regulation, the use of cryptocurrencies and stablecoins in trade settlements could increase sharply. While some countries are taking steps to reduce the "destabilising role of cryptocurrencies," these efforts are insufficient, given the cross-border nature of digital coins. National economies must take measures to mitigate the risks posed by modern digital monetary substitutes and prevent them from gaining a dominant position over national currencies, according to the Russian Central Bank.

– The Madras High Court in India has prohibited the freezing of bank accounts belonging to crypto investors. The court emphasised that investigative authorities are required to notify account holders and the courts of such actions, though these requirements are often not followed. The Madras Court has been receiving numerous petitions to unfreeze the bank accounts of cryptocurrency owners, indicating law enforcement's inability to adequately explain the reasons for such blockages to account holders.
Earlier, Australian Senator Andrew Bragg described the freezing of bank accounts of companies and individuals using cryptocurrencies as a violation of antitrust laws. According to the senator, this does not resemble an effective approach to combating money laundering and the financing of terrorism through cryptocurrencies.

Forex and Cryptocurrency Forecast for September 23 – 27, 2024

EUR/USD: Rate Drops, Dollar Falls



● The United States Federal Reserve System (Fed) announced its decision on the benchmark interest rate following the two-day meeting held on September 17-18. The intrigue lay in the rate cut step—whether it would be the standard 25 basis points (bps) or twice as much. On the eve of the meeting, according to market expectations, the probability of a 25 bps decrease was 45%, and a 50 bps decrease was 55%. As a result, for the first time in four years, the regulator opted to reduce the rate by half a percent immediately: from the highest in 23 years of 5.50% to 5.00%.
● It should be noted that at the beginning of the easing of monetary policy (QE), such a large rate cut was applied by the Federal Reserve relatively rarely and only in critical situations. For example, in this century, this occurred in 2001 (following the attack on the World Trade Center in New York), in 2007 (the onset of the economic crisis), and in 2020 (the COVID-19 pandemic). However, such a force majeure event is not currently observed, so why did the American central bank take this step?
Several analysts explain this by stating that the Fed was delayed in lowering the rate in July and is now striving to catch up. (Recall that several members of the FOMC [Federal Open Market Committee] were ready to start cutting rates as early as mid-summer.) Fed Chair Jerome Powell did not agree with the version of a delay. On the other hand, he acknowledged that if the labor market data in July had been released before rather than after the FOMC meeting, the decision could have been different.
The current September meeting was also notable because, for the first time since 2005, the Fed's decision was not unanimous. One of the 12 FOMC members, Michelle Bowman, publicly advocated for a 25 bps rate cut instead of 50 bps.
● The Fed's updated macroeconomic forecasts, following the September 17-18 meeting, suggest a faster decline in inflation and higher unemployment rates. Jerome Powell referred to this as a shift in the balance of risks.
According to the new forecast, inflation (PCE index) this year will be 2.3% (June forecast was 2.6%), next year – 2.1% (June was 2.3%), and finally in 2026, inflation will decrease to the target of 2.0% (unchanged). In 2027 and beyond, inflation rates will remain at the target level.
As for the unemployment forecast in the United States, it has been raised for 2024 from 4.0% to 4.4%, in 2025 it is expected to remain at 4.4% (June was 4.2%), and in 2026 to decrease to 4.3% (June was 4.1%). The Fed expects that starting in 2027 and onward, unemployment will hold steady at 4.2%.
The forecast for US GDP growth in 2024 has been lowered from 2.1% to 2.0%, with the same figure planned for 2025-2027, which is overall above the long-term trend of 1.8%.
● The regulator also announced that interest rate cuts will continue. However, due to changes in inflation and labor market forecasts, the rate outlook has been significantly softened. Thus, the Fed plans to see the rate at 4.5% by the end of the year (i.e., possibly two more cuts: in November and December by 25 bps each). In the one-year perspective, the rate is expected to be 3.4%, and then 2.9%.
It is important to understand that these are only forecasts, which can (and will) change depending on the geopolitical situation in the world and the internal situation in the United States. For example, experts expect a serious increase in the budget deficit in the event of Donald Trump coming to the White House. This could seriously slow the pace of QE.
● Regarding the euro, the pan-European currency has recently been supported by statements from high-ranking EU officials. For example, ECB Vice-President Luis de Guindos stated last week that “we have left the door completely open, […] and in December we will have more information than in October.” These words are an obvious hint that the regulator does not intend to make any rate decisions before December. ECB Governing Council member and Governor of the Bank of Lithuania, Gediminas Šimkus, also tempered market expectations by stating on Tuesday, September 17, that “the probability of a rate cut in October is very low.” “In October, we will not have much new data. And the economy is developing according to forecasts,” he added.
Currently, the ECB's key interest rate stands at 3.65%. Thus, if the difference between the Fed's and the ECB's (and other central banks') interest rates narrows by the end of this year and throughout the next year, it will put pressure on the dollar. Meanwhile, the market reaction to the Fed's September decision was quite subdued. Of course, forecasts for further rate cuts helped risk assets. The stock indices S&P 500, Dow Jones, and Nasdaq continued to rise, and leading cryptocurrencies improved their positions. Conversely, the Dollar Index (DXY) fell. The EUR/USD pair, being inversely correlated with it, first rose to 1.1188, then fell to 1.1080, showing maximum weekly volatility of 108 points. Then the fluctuations began to diminish, the waves gradually subsided, and the pair ended the workweek at 1.1162.
● Expert opinions regarding EUR/USD's behaviour in the near term are divided as follows: only 20% of analysts voted for a strengthening dollar and a decline in the pair, 65% for its growth, and another 15% took a neutral position. However, when moving to a medium-term forecast, the picture changes sharply. Here, 65% are on the side of the US currency, predicting the pair to fall below 1.1000. Supporters of the euro in this time horizon are only 20%, while 15% still remain neutral, refusing to make forecasts. In technical analysis on the D1 chart, all 100% of trend indicators and oscillators are colored green, although a quarter of the latter are signalling overbought conditions. The nearest support for the pair is located in the zone 1.1135-1.1150, then 1.1100, 1.1000-1.1025, 1.0880-1.0910, 1.0780-1.0805, 1.0725, 1.0665-1.0680, 1.0600-1.0620. Resistance zones are in the regions of 1.1185-1.1200, 1.1275, 1.1385, 1.1485-1.1505, 1.1670-1.1690, and 1.1875-1.1905.
● This upcoming week, the dynamics of major dollar pairs EUR/USD, GBP/USD, and USD/JPY may be significantly influenced by the following events. On Monday, September 23, preliminary Purchasing Managers' Index (PMI) data will be released for various sectors of the economies of Germany, the Eurozone, the United Kingdom, and the United States. Following a brief pause in the flow of important economic news, on Thursday, September 26, the US GDP data for the second quarter and the number of initial jobless claims in the country will be published. Additionally, scheduled for this day are the hearing of the inflation report in the UK Parliament and a speech by Federal Reserve Chair Jerome Powell. At the very end of the workweek, on Friday, September 27, inflation data for the Tokyo region (Japan) will be released. Moreover, on this day, we will receive another set of inflation statistics from the United States in the form of the Core Personal Consumption Expenditures (PCE) Price Index. Traders dealing with yen pairs should also note that Monday, September 23, is a holiday in Japan, as the country observes the Autumnal Equinox Day.

GBP/USD: Rate Unchanged, Pound Rises

● Last week, two more central bank meetings took place: the Bank of England (BoE) on Thursday, September 19, and the Bank of Japan (BoJ) on Friday, September 20. As a result of the former, the British pound against the US dollar reached its highest level in the last 2.5 years. This occurred against the backdrop of the British regulator's decision to keep the key interest rate at the current level of 5.00% and to refrain from hasty measures to reduce it. Consequently, after the announcement of this decision, the GBP/USD pair rose to $1.3339 for the first time since March 2022.
● Despite the decline in UK government bond yields, markets have quickly adjusted their forecasts regarding further easing of monetary policy by the Bank of England (BoE). Currently, according to the median forecast, a rate reduction of 42 basis points is expected by the end of December, compared to the 50 basis points predicted before the last meeting. (Although, it is clear that this adjustment is minor and quite conditional). Macro strategists from the banking group Mizuho International believe that rate cuts will occur slowly, possibly once per quarter. In their view, against this backdrop, GBP/USD has the potential for further growth and could break the 1.3400 level as early as the beginning of October, with the pair reaching $1.4000 by the end of next year, 2025.
Thus, the pound has become the most successful currency among the G10 countries this year. Investors, although expecting a policy easing by the Bank of England in November, are confident that inflationary pressure in the country will remain sufficiently high, supporting relatively elevated interest rates compared to other economies.

USD/JPY: Rate Unchanged, Yen Falls

● Similarly to the Bank of England, the Bank of Japan (BoJ) decided to keep its key interest rate at the same level during its meeting. This decision was anticipated by market participants. However, while the Fed, ECB, and Bank of England are focused on the pace of rate cuts, markets expect the Japanese regulator to do the opposite – raise rates. Nonetheless, BoJ Governor Kazuo Ueda indicated during the press conference following the meeting that he does not plan to accelerate this process. Rates were already increased in March and July of this year, and now it is time to pause and assess the results achieved. Ueda emphasized that the Bank of Japan will continue to raise rates if economic and inflation indicators meet forecasts. However, the weakening of inflationary pressures due to the yen's softness provides the bank with the opportunity to adopt a more cautious approach to future decisions.
● After this statement, the Japanese yen sharply sold off, with the USD/JPY pair reaching a local high of 144.49. Futures on 10-year Japanese government bonds rose by nearly 30 basis points, and the Topix index, reflecting the state of Japan's stock market, showed a 1% increase.
Analysts around the world shared their opinions on the potential consequences of the BoJ's decisions. Experts from Saxo Markets write that “there is no sense of urgency in further normalization from the Bank of Japan. As long as Ueda maintains the same tone, Japanese stocks will enjoy the situation created by the sharp rate cut by the Fed.” In turn, Sumitomo Mitsui Bank believes that the likelihood of rate hikes in December remains low, as the weak yen supports the stock market, which stimulates wage growth.

CRYPTOCURRENCIES: "Bitcoin – the Best Buy in the World"

● Recently, Arthur Hayes, co-founder and former CEO of the crypto exchange BitMEX, compared the consequences of the Fed's interest rate cut for the US economy to the effect of a "sugar high," which can trigger a wave effect and a short-term upward rally. And the rate was cut, immediately by 50 basis points. Risk assets immediately experienced the promised high. The stock indices S&P 500, Dow Jones, and Nasdaq went up, followed by digital assets. To say it was a surge, a jump, or a rally would be an exaggeration. But, according to Hayes, "this is the calm before the storm." "Usually, it goes like this," he writes, "first there is an initial reaction, and the real reaction comes by the close of traditional financial markets on Friday, after which cryptocurrencies follow them—up or down—over the weekend." However, since this review is being written on Friday, we cannot yet verify the accuracy or inaccuracy of BitMEX's co-founder’s words.
● According to Arthur Hayes, the rate cuts amid the growing issuance of US dollars and increased government spending are a mistake for the global financial system but will allow cryptocurrencies to become more sought after by investors, as their yields will rise.
At BlackRock, the world's largest asset management company, it was noted that although it is difficult for investors to analyze cryptocurrencies compared to traditional assets, Bitcoin has nevertheless become a "safe haven" for many amid rising geopolitical tensions. BlackRock strategists note that the leading cryptocurrency could become an effective tool for protection against the ongoing devaluation of the US dollar and global financial risks. Additionally, according to their forecast, as BTC is adopted "as a global monetary alternative," its correlation with US company stocks and dependence on the Fed's rate will gradually decrease.
● Investment strategist and author of the bestseller "Broken Money," Lyn Alden, believes that the adoption of cryptocurrencies in society is not just fast, but rapid. And if Bitcoin remains the leader among digital assets and is considered a reliable store of value, its price in the next ten to eleven years could reach $1 million per coin.
Alden agreed with Ark Invest CEO Cathie Wood's forecast that the price of digital gold could rise to $1.5 million. However, according to the specialist, the timeframes forecasted by Wood are too aggressive. The head of Ark Invest believes that Bitcoin will reach values with six zeros as early as six years from now, by 2030. Alden, however, cites 2035 as the most likely date.
"Not buying bitcoins at this stage would be a crime," declares the author of Broken Money. According to her, "now bitcoin is the best buy on the global market, as this asset has long-term potential." Lyn Alden is confident that in the future, Bitcoin will surpass physical gold. (For reference: the market capitalization of this precious metal currently amounts to about $17 trillion, Bitcoin – $1.17 trillion, that is, 14.5 times less.)
● Let us recall that recently, Jack Dorsey, co-founder and former CEO of Twitter, made a similar statement, suggesting that BTC would reach $1 million by 2030. However, the most impressive forecast was given by MicroStrategy founder Michael Saylor, who stated that Bitcoin will soon increase in price … by 70 (!) times – to $3.85 million. In the long term, according to this billionaire, digital gold could rise to $13 million. However, this is expected to happen only by 2045. By 2050, Bitcoin's market capitalization will amount to 13% of the entire global capital. (For reference: currently, this figure stands at 0.1%).
● Returning from the year 2050 to 2024, let us highlight the forecast of WeRate co-founder Quinten Francois. His data indicate the imminent start of a bull rally. “The average Bitcoin cycle begins approximately 170 days after the halving, and the peak forms after 480 days,” he writes. Based on this, there is not much time left before the rally begins—the surge, according to Quinten Francois's chart, is expected to start on Tuesday, October 8. The analyst also believes that thanks to the Fed's rate decision, there is a possibility that BTC will quickly rise above $64,500. Consequently, during October-November, the coin's price could increase by at least 46%, reaching $90,000-95,000.
● A similar forecast was given by the CIO and founder of MN Trading Consultancy Michael van de Poppe. According to him, the growth of global liquidity will become the key catalyst for the next bull cycle in the digital market. “Cryptocurrencies and commodities are extremely undervalued,” writes van de Poppe, “and it is quite likely that they will enter a 10-year bull market. I expect significant growth from these two asset classes.” According to the expert, the leading cryptocurrency is already ready to rise to $90,000.
As a key support level for Bitcoin, Michael van de Poppe named $58,000. The probability of the price falling below $55,000, according to him, is practically zero. It is worth noting that earlier in September, ARK Invest analysts identified $52,000 and $46,000 as key levels. Meanwhile, the aforementioned Quinten Francois from WeRate believes that it is important for the asset to maintain positions above the critically important zone of $59,000.
● The easing of monetary policy by the Fed and other central banks should also help altcoins. According to analyst Vladimir Cohen, liquidity began to leave this sector in April, which is why fear reigned during the summer. However, the trend has now reversed, and reaching a historical market capitalization peak of $1.1 trillion is just a matter of time. A large amount of liquidity is expected to flow into this market due to the central banks' policy loosening. Furthermore, according to the specialist, some altcoins will demonstrate growth of thousands of percent, while others will ultimately die out. Cohen believes that removing coins that do not offer practical value will play a positive role, as it will make this segment more transparent and liquid.
● Vladimir Cohen also noted that altcoin holders have currently shifted to a long-term holding strategy, ready to endure temporary declines in value while anticipating a future rally. A similar trend is being observed with bitcoin by analysts at CryptoQuant. The available supply of bitcoin is decreasing as users withdraw coins for long-term holding without intending to sell. "Selling pressure is decreasing as fewer coins are available for trading. Some traders are depositing funds into derivative platforms to open long positions, betting on price growth," write the CryptoQuant analysts. However, they also believe that the BTC price is unlikely to undergo significant changes in the short term.
● As of the time of writing, on the evening of Friday, September 20, following the US Fed meeting, the BTC/USD pair moved upwards and is trading around the $62,840 zone. The total cryptocurrency market capitalization has risen slightly to $2.19 trillion (compared to $2.10 trillion a week ago). The Crypto Fear & Greed Index has also increased from 32 to 54 points, moving from the Fear zone into the Neutral 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.

CryptoNews



– According to Bloomberg, the correlation between the cryptocurrency market and the US stock market has reached near-record levels. This occurred following the Federal Reserve’s decision to lower the key interest rate at its meeting on 17-18 September. The 40-day correlation coefficient between the 100 largest cryptocurrencies and the S&P 500 index stands at approximately 0.67. A higher value (0.72) was reached only once, during Q2 2022.
Following the start of the Federal Reserve’s monetary easing, US stock indices (S&P 500, Dow Jones, and Nasdaq) hit new highs, and on 23 September, bitcoin reached $64,765. Such a high direct correlation indicates that cryptocurrency prices are heavily dependent on macroeconomic indicators and the actions of the Federal Reserve.
Political factors also undoubtedly influence the cryptocurrency market. For instance, the positive trend in bitcoin and leading altcoins in recent days was supported by a statement from Vice President Kamala Harris, who said that, if elected President of the United States, she would promote increased investment in AI technologies and the cryptocurrency sector. Some experts have called Harris’s statement “encouraging” and “an important event for crypto and blockchain technologies.” However, others, such as venture capitalist Nic Carter, expressed the opposite view, claiming that Harris’s words are politically motivated and “mean nothing.”

– Charles Hoskinson, the founder of Cardano and co-founder of Ethereum, believes that none of the US presidential candidates has a sufficient understanding of cryptocurrencies. For this reason, in Hoskinson's view, they will be unable to create favourable conditions for industry companies in the US. Donald Trump’s record-high staff turnover will prevent him from bringing the right people into government to foster the development of digital assets. Meanwhile, if Kamala Harris wins, she will continue Joe Biden’s anti-cryptocurrency policies. Hoskinson believes that local elections are far more important, as crypto companies can work more closely and effectively with senators.

– The Chinese government imposed a total ban on cryptocurrencies back in 2021. Beijing strictly limited the use of digital assets, prohibiting offshore exchanges from offering their services in the country. Authorities also banned all forms of cryptocurrency mining. Despite this, bitcoin miners from China still control a significant share of the global market. According to Ki Young Ju, the founder and CEO of CryptoQuant, over 55% of bitcoin’s hashrate is under the control of Chinese mining pools.
“Chinese mining pools manage 55% of the network, while American pools account for around 40%. US pools mainly serve institutional miners, whereas Chinese pools cater to smaller miners from Asia,” stated Ki Young Ju. Given this situation, the Chinese authorities’ stance on cryptocurrency could become even stricter. In 2025, the government plans to introduce amendments to its anti-money laundering (AML) regulations, extending them to cryptocurrency transactions.

– Analysts at 10x Research have identified two catalysts for a sharp rise in bitcoin. In their view, the trigger for a bull rally will be the US Federal Reserve’s interest rate cuts and the upcoming payments to creditors of the bankrupt cryptocurrency exchange FTX. "The expected inflow of $5-8 billion will encourage investors," the experts believe.
Moreover, they suggest that "there is a chance of a sharp, ‘juicy’ rise in cryptocurrency, as the Federal Reserve appears to have raised the S&P 500 level at which it will intervene to protect investors, signalling the potential for further rate cuts. As a result, many investors are likely to reposition their portfolios into riskier assets by 2025," states the 10x Research report.
The analysts also point out that, historically, bitcoin has shown significant growth from October to March, and a similar trend could repeat, considering the previous market cycles of 2021 and 2017.

– According to Bernstein, there are as many as five reasons behind bitcoin's growth. 1. Federal Reserve rate cuts and inflation hedging. Analysts note that, like gold, bitcoin becomes more attractive during times of fiscal excess, especially when US debt reaches $35 trillion. Since the beginning of the year, bitcoin has risen by 45%, compared to gold's 27% increase. 2. Growing bipartisan support for cryptocurrencies, accompanied by statements from Donald Trump and Kamala Harris. 3. The popularity of exchange-traded bitcoin ETFs. “Over the past 10 days, inflows into bitcoin ETFs have reached $800 million, despite volatile price movements,” Bernstein notes. The company expects that more banks, like Morgan Stanley, will also launch bitcoin ETFs, leading to further capital inflows. 4. Stability among miners after the April halving. According to Bernstein, network hashrate has recovered, indicating miner resilience, which further strengthens bitcoin's foundation. 5. Decreased selling pressure. Large sales of bitcoin by the US and German governments, as well as payments to Mt. Gox clients, have been absorbed by the market. Additionally, MicroStrategy has managed to raise $2.1 billion to purchase the leading cryptocurrency, bringing its holdings to 252,220 BTC, or 1.3% of the total supply.

– Legendary trader, analyst, and head of Factor LLC, Peter Brandt, believes that in 2025, the bitcoin-to-gold ratio could rise by more than 400%. To justify his highly optimistic forecast, Brandt refers to a classic technical model – the "inverse head and shoulders." The pattern forms below resistance, known as the neckline. In theory, when resistance is broken, accompanied by rising trading volumes, the price increases by the maximum distance between the neckline and the deepest point of the head.
Applied to the BTC/GLD chart, the price of 1 bitcoin could reach the price of 123 ounces of gold as early as 2025, which is a 400% increase compared to 24 ounces as of 22 September 2024. This means that if physical gold remains at its current level of $2,630, the price of digital gold, according to Brandt’s theory, could soar to over $323,000. Supporting the idea that bitcoin could outperform the precious metal is its rapid adoption by institutional investors, as well as the launch of exchange-traded BTC ETFs, which have strengthened the asset's presence in their portfolios.

– One of the early bitcoin developers, Jeff Garzik, has created the Hemi Network protocol to connect the Bitcoin and Ethereum blockchains through tunnels. Cross-chain protocols (bridges) already exist and also serve to transfer assets between incompatible networks. However, the Hemi team claims that tunnels create a unique environment, allowing Bitcoin and Ethereum to "coexist" while avoiding the vulnerabilities inherent to bridges. Currently, the Hemi Network test is live, with the mainnet launch scheduled for Q4 of this year.

– Speaking at the TOKEN-2049 conference in Singapore, Jess Houlgrave, CEO of fintech company Reown (formerly WalletConnect), stated that in six years, cryptocurrency wallets will completely disappear and transform into "life centres." According to her, these will become universal digital archives where users can store not only digital assets but also a wide range of documents, from medical records to educational diplomas. The company’s head noted that the security of such archives will become much more reliable in a few years, allowing users to use them without fear of hacking.

– A few days ago, UFC fighter Renato Moicano called on the public to pay more attention to the first cryptocurrency. The Brazilian has repeatedly stated that bitcoin has long-term potential, serves as an alternative to traditional money, and can protect citizens from rising inflation. Given the economic uncertainty, including concerns around the US dollar, digital gold is becoming the best option for preserving savings. "Bitcoin is not just an investment," Renato Moicano said. "It's a way of life." (It’s worth noting that after his victory at UFC 300, the fighter publicly demanded that his reward be paid in BTC.)

– Macroeconomist Raoul Pal believes that everything is aligned for bitcoin's price to soar to $200,000 or more by the beginning of next year. In a video posted on his Real Vision channel, the former Goldman Sachs executive explained that the leading cryptocurrency tends to rise and fall in tandem with global liquidity cycles. He presented a chart of the GMI (Global Macro Investor) index, which shows an increase in global liquidity over the next three months, and analysed how this will impact BTC's price.
Pal also shared another chart showing that BTC is precisely repeating its price movement from January 2023 to March 2024, when the price surged by approximately 350% from $16,500 to $74,000. According to the economist, "Bitcoin is repeating what it did last year, almost exactly. So, we have the macro overlay, the Fed will continue [easing], other central banks will get involved as well. We have seasonality and the global liquidity cycle..." "This has to happen now," Raoul Pal concludes.

Forex and Cryptocurrency Forecast for September 30 – October 04, 2024

EUR/USD: Midpoint of the 'Dull Period'

● In the next part of the review, we will discuss how one crypto analyst used the term "dull period" in relation to the BTC/USD chart. The EUR/USD chart looks even more uneventful. While from 20 August until today, the pair fluctuated within the 1.1000-1.1200 range, last week it narrowed by another 50%, from 200 points to 100, settling in the 1.1100-1.1200 range. It appears the market has already priced in the forecasts for the US Federal Reserve rate cut, the actual moment of the cut on 17-18 September, and expectations regarding future monetary policy from both the US and European Central Banks.
● Of course, the pair's dynamics were influenced by events listed in the economic calendar. On Monday, 23 September, preliminary data on business activity (PMI) across various sectors of the economies of Germany, the Eurozone, and the US were released. On the European side of the Atlantic, PMI figures were uniformly in the red, indicating that business activity in both the manufacturing and services sectors is declining. The data was especially disheartening for Germany’s manufacturing sector, the engine of the European economy. Not only did it fall below the threshold of 50 points, which separates progress from regression, but it also reached a low of 40.3 points. In the US, manufacturing PMI also declined, but not as dramatically as in Germany, dropping from 47.9 to 47.0 points. As for the American services sector, it remained firmly in the green zone, standing confidently at 55.4 points.
● The data released on Thursday, 26 September, also indicated an expansion of the US economy. While GDP growth in Q1 stood at 1.6%, by the end of Q2, this figure had risen to 3.0%. Alongside GDP growth, the labour market showed a degree of stability. Instead of the forecasted rise to 224K, the number of initial jobless claims for the week actually fell from 222K to 218K. On the same day, market participants closely listened to statements by Fed Chair Jerome Powell and his ECB counterpart Christine Lagarde, but nothing new or sensational was announced.
As for inflation, a key indicator such as the Core Personal Consumption Expenditures (PCE) Price Index, which reflects price changes for a fixed basket of consumer goods and services purchased by US residents, increased year-on-year from 2.6% to 2.7%. However, on a monthly basis, it fell from 0.2% to 0.1%. These figures were released on Friday, 27 September.
● Against the backdrop of this PCE decline, the EUR/USD bulls made another attempt to push the pair to 1.1202, but once again, they failed to hold their ground. The final note of the trading week sounded in the middle of the channel at 1.1163.
● Expert opinions on the short-term behaviour of EUR/USD are divided as follows. During this "dull period," 40% of analysts are voting for a stronger dollar and a decline in the pair, while the majority (60%) have taken a neutral stance, and none are predicting growth. However, in the medium term, the number of those expecting the pair to rise increases to 30%. In terms of technical analysis on D1, 80% of trend indicators recommend buying, while 20% suggest selling. The oscillators show a more mixed picture: 25% are green, 25% are red, and the remaining 50% are in a neutral grey zone. The nearest support levels for the pair are around 1.1100, followed by 1.1000-1.1025, 1.0880-1.0910, 1.0780-1.0805, 1.0725, 1.0665-1.0680, and 1.0600-1.0620. Resistance zones are found around 1.1185-1.1210, 1.1275, 1.1385, 1.1485-1.1505, 1.1670-1.1690, and 1.1875-1.1905.
● The upcoming week promises to be quite eventful, interesting, and volatile. On Monday, 30 September, preliminary data on consumer inflation (CPI) in Germany will be released. On the same day, Federal Reserve Chairman Jerome Powell is set to give a speech. The following day, Tuesday, 1 October, the CPI figures for the Eurozone as a whole will be announced. Additionally, on 1 and 3 October, revised data on business activity (PMI) in various sectors of the US economy will be revealed. Furthermore, from 1 to 4 October, a wave of labour market statistics from the United States will flood in. The main focus will be on Friday, 4 October, when key figures such as the unemployment rate and the number of new jobs created outside the agricultural sector (NFP) will be published.

CRYPTOCURRENCIES: Is the 'Dull Period' Coming to an End?



● In terms of technical analysis patterns, the launch of BTC-ETFs earlier this year led to the formation of a "flagpole" on the total cryptocurrency market capitalisation chart. Then, starting from 13 March, the flag's "body" began to take shape in the form of a fairly wide descending channel. A nearly identical pattern appeared on the BTC/USD chart. Thus, the market capitalisation peaked on 13 March at $2.77 trillion, while bitcoin recorded its all-time high (ATH) of $73,743. Six and a half months have passed since then, and the current capitalisation stands at $2.32 trillion, with bitcoin’s weekly local high reaching $66,517.
● The research firm Glassnode believes that the market is stuck in a consolidation phase due to a lack of capital. Glassnode notes that short-term speculators, holding cryptocurrency for less than 155 days, are selling more coins than they are buying. On the other hand, CryptoQuant highlights that after the early August low, when the leading cryptocurrency dropped below $49,000, even short-term holders are now "in profit." Analysts point out that the risk of large-scale bitcoin sales is currently at its lowest level since the beginning of 2024. "Over the past six months, the number of people willing to sell bitcoin has dropped to a minimum," they write. "The sell-risk ratio, which sums up all realised profits and losses on the network per day and divides this by bitcoin's realised capitalisation, is now below 20,000. For comparison, during the March peak, this figure reached nearly 80,000."
● It is worth noting that the last time such an extended consolidation period was observed in the digital gold market was four years ago. It occurred after the end of a powerful bull rally in Q2 2019 and lasted until September 2020. Following this, there was a fivefold price increase, with bitcoin reaching a new ATH of $58,783. Drawing a parallel to that period, many market participants are now hoping for a similar surge after the current accumulation phase by buyers concludes.
The analyst known by the pseudonym PlanB has stated that the current consolidation suggests that another explosive price increase is only a matter of time. He also points out that similar "dull" periods occurred not only in 2019 but also earlier. After such phases, in 2013, 2017, and 2020, we witnessed significant price movements. PlanB further emphasised that throughout bitcoin's history, spanning 162 months, only 27 of them (about 16.7%) have shown growth, yet that growth amounted to hundreds of thousands of percent.
● Analysts at 10x Research have identified two catalysts for a sharp rise in bitcoin. In their view, the triggers for a bull rally will be the US Federal Reserve’s interest rate cuts and the upcoming payouts to creditors of the bankrupt crypto exchange FTX. "The expected influx of $5-8 billion will excite investors," the experts suggest.
Moreover, they believe there is "a likelihood of a sharp, 'juicy' rise in cryptocurrency, as the Fed appears to have raised the level of the S&P 500 at which it will intervene to protect investors, signalling the possibility of further rate cuts. As a result, many investors will likely reposition their portfolios into risk assets by 2025," according to the 10x Research report.
● According to Bloomberg, following the Fed's rate cut at the 17-18 September meeting, the correlation between the crypto market and the US stock market neared a record high. The 40-day correlation coefficient between the 100 largest cryptocurrencies and the S&P 500 index reached approximately 0.67. (A higher mark of 0.72 was only achieved once, in Q2 2022). As a result, US stock indices (S&P 500, Dow Jones, and Nasdaq) reached new highs, while bitcoin approached the upper boundary of the "flag body" pattern.
● While 10x Research identified two reasons for bitcoin’s potential growth, Bernstein has counted as many as five. 1. Fed Rate Cuts and Inflation Hedging: Analysts note that bitcoin, like gold, becomes more attractive during times of fiscal excess, especially as US debt approaches $35 trillion. Since the beginning of the year, bitcoin has risen by 45%, compared to gold's 27% increase. 2. Growing Bipartisan Support for Cryptocurrencies: This is highlighted by statements from both Donald Trump and Kamala Harris, reflecting the increasing acceptance of crypto across political lines.
3. Popularity of Bitcoin ETFs: "In the past 10 days, inflows into bitcoin ETFs have reached $800 million, despite volatile price dynamics," Bernstein reports. The firm expects more banks, such as Morgan Stanley, to launch bitcoin ETFs, leading to further capital inflows. 4. Miner Stability After April's Halving: According to Bernstein, the network's hash power has recovered, indicating miner resilience and further strengthening bitcoin's fundamentals. 5. Decreased Selling Pressure: Large bitcoin sales by the US and German governments, as well as payouts to Mt. Gox creditors, have been absorbed by the market. Moreover, MicroStrategy has managed to raise $2.1 billion to purchase more bitcoin, bringing its holdings to 252,220 BTC, or 1.3% of the total supply.
● Bitget Research also highlights MicroStrategy's actions and the increased inflow of funds into bitcoin ETFs following the Fed's rate cuts. "This indicates that institutional players are optimistic about the market's prospects. With steady purchases, bitcoin is likely to break through previous highs," Bitget Research experts note. Additionally, they believe that the regulatory framework in the US is likely to undergo significant changes after the presidential elections in November, creating a favourable environment for investment in the crypto industry. Investor confidence in the market will grow, which will facilitate capital inflow and accumulation.
● Undoubtedly, political factors have a significant impact on the crypto market. Recently, the positive dynamics of bitcoin and leading altcoins were supported by a statement from Vice President Kamala Harris, who said that if she wins the US presidential election, she will promote increased investment in AI technologies and the cryptocurrency sector. Some experts have called Harris’s statement "encouraging" and "an important event for crypto and blockchain technologies." However, others, such as venture capitalist Nic Carter, have expressed the opposite view, claiming that Harris's words are politically motivated and "mean nothing." Charles Hoskinson, founder of Cardano and co-founder of Ethereum, also believes that none of the US presidential candidates will be able to create favourable conditions for the industry, as they lack the necessary knowledge of cryptocurrencies.
● Macroeconomist Raoul Pal expects bitcoin's price to soar to $200,000 or more by the start of next year. He identifies the primary driver for this as the easing of monetary policy by the Federal Reserve and other major central banks. In a video posted on his Real Vision channel, the former Goldman Sachs executive explained that the leading cryptocurrency tends to rise and fall along with global liquidity cycles. He presented a chart of the GMI (Global Macro Investor) index, which reflects an increase in global liquidity over the next three months, and analysed how this would impact BTC's price.
Pal also prepared another chart showing that BTC is exactly replicating its price movement from January 2023 to March 2024, when the price surged by approximately 350%, from $16,500 to nearly $74,000. According to the economist, "bitcoin is repeating what it did last year, almost exactly. So, we have the macro-overlay, the Fed will continue [easing], other central banks will also get involved. We have seasonality and the global liquidity cycle..." "This should happen now," Raoul Pal concludes. (The seasonal factor was also noted by analysts at 10x Research, who pointed out that historically, bitcoin has shown significant growth from October to March, and this trend could repeat, considering previous market cycles).
● Returning from fundamental to technical analysis, let’s recall some of the predictions based on chart patterns that we've previously discussed. About a month ago, the analyst known as Rekt Capital predicted a surge in the value of the leading cryptocurrency in October. His forecast was based on the "bull flag" pattern, which we mentioned at the beginning of this review, where the breakout height equals the height of the flagpole’s base. Another analyst, MetaShackle, relies on the "cup and handle" pattern. This forecast, which we detailed from 2-6 September, is another bullish chart formation that has been developing over the last three years. According to MetaShackle’s calculations, this pattern should lead the BTC/USD pair to rise to $130,870.
Recently, analyst and Factor LLC head Peter Brandt also referred to chart analysis in his forecast. The Wall Street legend believes that in 2025, the bitcoin-to-gold ratio could increase by more than 400%. Justifying his highly optimistic prediction, Brandt points to a classic technical model: the "inverse head and shoulders" pattern. This pattern forms under a resistance level called the neckline. The theory states that when resistance is broken, accompanied by rising trading volumes, the price climbs by the maximum distance between the neckline and the deepest point of the head.
Applied to the BTC/XAU chart, the price of 1 bitcoin could reach the equivalent of 123 ounces of gold by 2025, which is five times higher than the current 24.6 ounces as of 27 September 2024. In other words, assuming physical gold remains at its current level of $2,670, the price of digital gold, according to Brandt’s theory, could soar to over $328,000. Supporting the idea that bitcoin could surpass the precious metal is its rapid adoption by institutional investors, as well as the launch of bitcoin ETFs, which have increased the asset's presence in their portfolios.
● At the time of writing this review, on the evening of Friday, 27 September, the BTC/USD pair is trading in the $65,900 zone. The total cryptocurrency market capitalisation has increased by $220 billion, reaching $2.32 trillion (compared to $2.10 trillion a week ago). The Crypto Fear & Greed Index has risen from 54 to 61 points, moving from the Neutral zone to Greed. This trend supports the words of UFC fighter Renato Moicano, who urged the public to pay more attention to the leading cryptocurrency. "Bitcoin is not just an investment. It's a way of life," said the Brazilian, demanding that his prize for winning UFC 300 be paid in BTC.

CRYPTOCURRENCIES: ETH is No Longer the King of Altcoins. Long Live the New King?

● Despite the "dull period," the last three months have seen significant shifts in trends within the crypto market. Metrics show that among the 15 largest altcoins, Solana (SOL) has recorded the highest inflow of funds and continues to show steady growth. SOL's price has risen to $150, with a market capitalisation of around $69 billion and a trading volume of $2.34 billion. On the other hand, Ethereum has struggled, even with the title of the #1 altcoin. It has been unable to hold above $2,650 or surpass a market capitalisation threshold of $320 billion. The well-known blockchain has ceded its position to newer networks, registering the largest capital outflow since 13 March: more than $165 billion, a 33% decrease.
Solana has also faced losses. After reaching a peak of $203 in March, its value gradually declined, now standing at about $150. However, analysts at the investment firm VanEck foresee a bright future for SOL, predicting growth to $330. They base their forecast on the fact that Solana's blockchain outperforms Ethereum’s network in three key areas: 1. Solana's blockchain can process 31 times more transactions per second; 2. SOL's network is used by 14 times more people daily; 3. The cost of processing transfers on Solana's blockchain is significantly lower.

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.

Top 3 NordFX Traders Earned Over $60,000 in September

The brokerage company NordFX has summarised the trading performance of its clients for September 2024. Additionally, the social trading services and the profits earned by the company’s IB partners were evaluated.

● The highest profit in the first month of autumn was earned by a client from Southeast Asia, account No. 1509XXX. Using the major pair EUR/USD, they managed to make 26,664 USD.
– The second place on the September podium was taken by a trader from East Asia (account No. 1543XXX), who earned 17,477 USD through trading the gold pair XAU/USD.
– Precious metals also benefited a representative from South Asia (account No. 1767XXX), who entered the TOP-3 in September with a profit of 16,603 USD.

● In CopyTrading, we continue to monitor the signal Quiet_trade_USD. It started at the very end of February this year and has been showing steady growth ever since. The profit for this signal is approaching 17%, which is several times higher than the interest rates on bank deposits in USD. Regarding the drawdown, there was a slight "dip" of 15.4% almost at the start, on 3rd April, which the signal's author successfully managed. Since then, the drawdown has not exceeded 5%. Of course, it is important to remind that past performance does not guarantee future results. Therefore, as always, we urge investors to exercise maximum caution when investing their money.

● The TOP-3 IB partners of NordFX in September are as follows:
– The highest commission, 25,113 USD, was awarded to a partner from South Asia, account No. 1678XXX. It is worth noting that this partner periodically ranks among the top three. For example, last month, they secured 2nd place with a result of 27,244 USD.
– Second place was taken by their fellow countryman (account No. 1576XXX), who earned 18,935 USD.
– Finally, closing the TOP-3 is another partner from South Asia (account No. 1593XXX), who received 14,467 USD as a reward.


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.

CryptoNews

– A survey conducted in the US by Harris Poll, with financial support from Grayscale, revealed that over 56% of voters are more likely to vote for a presidential candidate who supports the crypto industry. According to the survey results, almost 40% of voters now pay attention to a candidate’s stance on digital assets (in December 2023, this figure did not exceed 34%). Additionally, nearly 45% of cryptocurrency holders believe that the Democratic Party, represented by presidential candidate Kamala Harris, is more favourable to the industry, while 42% indicated support for the Republicans, with candidate Donald Trump.
Analysts also noted that the growing interest in virtual currencies is linked to the launch of spot BTC-ETF and ETH-ETF trading. Nearly 30% of those surveyed by Harris Poll stated that these new products increased their interest in investing in digital assets. Around 46% expressed a desire to add cryptocurrencies to their investment portfolios.
A similar survey, conducted by the crypto exchange Coinbase and Morning Consult, showed that votes among digital asset holders were evenly split: 47% supporting Kamala Harris and another 47% backing Donald Trump. Despite some discrepancies with the Harris Poll data, the results of both surveys clearly indicate that crypto investors will become an important group capable of influencing the outcome of the US presidential election on 5 November.

– October has historically been associated with a rise in bitcoin’s price. Analysts at QCP Capital have calculated that over the past nine years, the leading cryptocurrency has increased in value eight times during October, with an average growth of 22.9%. If this pattern repeats itself, it could drive BTC above $78,000, marking new all-time highs. Currently, bitcoin is consolidating within the $60,000–$70,000 range, sparking speculation about a potential bullish breakout, possibly influenced by the upcoming US presidential election. Additionally, analysts have noted that the inflow of funds into spot BTC-ETFs has remained consistently positive for the eighth consecutive day, reflecting a similar trend to Q1 of this year. On Monday, 1 October alone, these funds saw inflows exceeding $61 million.

– Markus Thielen, the founder of 10x Research, noted that since the summer, following the release of data on business activity (PMI) in the US manufacturing sector, the crypto market has seen a decline of approximately 10%.
"Manufacturing activity is once again declining," writes the analyst, "and it could decrease further due to the dockworker strikes that began on 30 September at several of the largest ports in the US. This will negatively impact the crypto industry." Thielen added, "Forecast indicators have dropped to levels close to recessionary territory. If the PMI falls below 48.0, it could trigger a further decline in bitcoin, while a higher figure could lead to a rally." Additionally, Thielen pointed out that uncertainty in the crypto market is further exacerbated by the potential increase in the key interest rate by the Bank of Japan as part of its ongoing policy of tightening (QT).

– Financial strategists at one of the world’s largest banks, JPMorgan, have stated that flagship cryptocurrencies such as bitcoin can be useful for diversifying an equity portfolio. In their [controversial] opinion, digital assets have minimal correlation with traditional market assets. Therefore, JPMorgan believes they can provide effective risk hedging. "Reallocating a stock portfolio and adding 1% of total assets to cryptocurrencies could be an effective strategy for improving investment efficiency and overall portfolio returns, adjusted for risk," the bank's strategists commented. By investing such a small portion of assets in BTC, an investor would not suffer significant losses even if the price of the flagship cryptocurrency were to drop sharply. On the other hand, an increase in bitcoin’s market value amidst a decline in commodity and raw materials investment instruments could reduce overall losses. However, JPMorgan economists point out that their recommendations apply specifically to the aforementioned markets and are less effective in the currency markets, for instance, in pairs with the dollar or yen.
Previously, Matt Hougan, Chief Investment Officer at Bitwise, remarked that leading financial advisors are increasingly recommending that their clients invest in cryptocurrencies. Although, in our view, their advice for investors to hold just 1% in bitcoin is hardly a bold or revolutionary move.

– The Chinese authorities have issued the first-ever crypto licence to ZA Bank. This makes the company the first digital bank in Hong Kong, a special administrative and economic region of China, to be permitted to conduct cryptocurrency operations. The decision, which allowed the bank to enter this market, was made following a year-long discussion with mainland Chinese regulators and Hong Kong's Securities and Futures Commission (SFC). Previously, ZA Bank had announced that, upon receiving the licence, it would be ready to serve companies issuing their own stablecoins and to open custody accounts for crypto assets.

– Michael Saylor, the founder of MicroStrategy, the largest private holder of bitcoin, shared a chart illustrating the price changes of his company's stock, BTC, and the S&P 500 index. Since MicroStrategy made its first bitcoin purchase in August 2020, the company’s assets have appreciated by 1,325%. During the same period, bitcoin’s price increased by only 451%, while the S&P 500 rose by "just" 71%.
As a result, MicroStrategy's shares have outperformed the leading cryptocurrency by nearly three times in profitability and have exceeded the performance of companies in the S&P 500 by more than 18 times. Since the start of this year alone, MicroStrategy’s shares have risen by 152%. At the end of September, the company raised an additional $2.1 billion to buy more bitcoin, bringing its holdings to 252,220 BTC, or 1.3% of the total supply.

– According to Ryan Lee, the Chief Analyst at Bitget Research, the price of ETH in October is expected to range between $2,200 and $3,400. Among the key factors influencing the asset's price, the expert highlighted the reduction of the US Federal Reserve's key interest rate. Lee stated that once this rate aligns with Ethereum's staking yield, currently at 3.5% per annum, ETH will once again become an attractive investment tool. Therefore, a decrease in the interest rate will positively affect the coin's value.
Another factor is the release of EigenLayer (EIGEN) tokens and their subsequent listing on exchanges. This could attract additional capital into the ecosystem, potentially enabling ETH to outpace bitcoin and Solana (SOL) in terms of price growth. As a third growth factor, Lee pointed to the resurgence of interest in meme tokens. He noted that there is currently an increase in the number of meme-based digital assets on the Ethereum network, such as Neiro (NEIRO). High demand for these tokens is likely to attract new users and boost the popularity of the ETH network. However, the expert did not rule out the possibility of a sharp decline in the cryptocurrency’s value, potentially dropping to $2,200 (it is currently trading at around $2,550).

– Michael Van De Poppe, an expert and founder of the companies Eight and MN Trading, believes that by the end of 2024, the price of the leading cryptocurrency will reach a record $192,000. He suggests that the BTC market is currently experiencing a "perfect storm." Rising social tensions in many countries, a decline in trust toward traditional financial institutions, and a weakening labour market in the US are pushing investors to turn to assets like bitcoin and other cryptocurrencies.
According to Van De Poppe, as central banks reduce interest rates and increase liquidity to stimulate economic growth, a medium-term rise in the prices of assets such as physical and digital gold is inevitable. The exponentially growing US national debt and further rate cuts by the Federal Reserve will serve as powerful catalysts for the cryptocurrency’s price growth. Van De Poppe predicts that in the next cycle, bitcoin's price could reach between $300,000 and $600,000.


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.

Forex and Cryptocurrency Forecast for October 07 – 11, 2024

EUR/USD: Dollar Breaks Through



● For seven weeks, the EUR/USD pair remained in a sideways trend, lacking strong drivers, confined within the 1.1000-1.1200 range, and on Friday, 4th October, it once again approached the lower boundary of this channel. The main factor influencing this movement was the behaviour of the US Dollar Index (DXY). Calculated by ICE, the DXY rose due to increased demand for safe-haven assets. Concerns over the escalation of the Middle East crisis led to the largest weekly rise in oil prices since 2023, and the US dollar, as a safe-haven currency, became the best-performing G10 currency over a 5-day period. The US currency was also supported by encouraging economic data from the United States. According to the Institute for Supply Management (ISM) report, the country's Services PMI jumped from 51.5 to 54.9 points in September, marking the highest level since February 2023.
● However, the most important event of the week was expected to be the US labour market data, traditionally published on the first Friday of every month. As reported by the Bureau of Labour Statistics (BLS) on 4th October, the number of new jobs in the non-farm sector (NFP) increased by 254K. This figure followed a rise of 159K recorded in August and significantly exceeded market expectations of 140K. The unemployment rate dropped to 4.1% from 4.2% (forecast 4.2%), and instead of the expected decline in annual wage inflation to 3.3%, it actually rose to 4.0% (from 3.9% in the previous month).
● When making decisions on monetary policy, the US Federal Reserve always takes two key indicators into account: the state of the labour market and inflation. The current BLS report showed: 1) the resilience of the economy (since the number of new jobs is increasing and unemployment is falling, the economy is clearly on the rise), and 2) inflation growth. Based on this, market participants concluded that the Fed may not rush with further easing of its policy (QE).
Had the employment data been poor, it would have strengthened market expectations that the FOMC (Federal Open Market Committee) would cut the key interest rate by 50 basis points (bps) at its November meeting. However, now this probability has sharply decreased. Moreover, during his speech at the annual meeting of the National Association for Business Economics (NABE) in Nashville on Monday, 30th October, Fed Chair Jerome Powell noted that the FOMC is "not the kind of committee that rushes to lower rates quickly." "If the economy performs as expected, that would mean two more rate cuts this year, both by a quarter of a point," the head of the US central bank stated.
● Against this backdrop, the US Dollar Index (DXY) surged to 102.69, and the EUR/USD pair, for the first time in many days, broke through the 1.1000 support and found a local bottom at 1.0950. The final note of the week was struck at 1.0974. Expert opinions on the future behaviour of EUR/USD in the near term provided no clear direction. About 20% of analysts supported the strengthening of the dollar and the pair's decline, another 20% predicted its weakening, and the majority (60%) took a neutral stance. In the medium term, the number of votes favouring dollar growth increases to 70%. In technical analysis on D1, all 100% of oscillators are in red, though a quarter of them signal the pair is oversold. Among trend indicators, 65% recommend selling, and 35% suggest buying.
The nearest support for the pair is located in the 1.0950 zone, followed by 1.0890-1.0925, 1.0780-1.0805, 1.0725, 1.0665-1.0680, 1.0600-1.0620, 1.0520-1.0565, and 1.0450-1.0465. Resistance zones are at 1.1000-1.1010, followed by 1.1045, 1.1100, 1.1155, 1.1185-1.1210, 1.1275, 1.1385, 1.1485-1.1505, and 1.1670-1.1690, 1.1875-1.1905.
● In the upcoming week's event calendar, Monday, 7th October stands out with the release of retail sales data from the Eurozone. Wednesday, 9th October is of interest due to the publication of the minutes from the latest FOMC meeting. The second half of the week promises to be more eventful. On Thursday, 10th October, in addition to the usual US unemployment data, we will learn what is happening with consumer inflation (CPI) in the United States. On Friday, Germany's CPI figure will be published first, and by the end of the five-day workweek, we can expect the release of another important inflation indicator – the US Producer Price Index (PPI).

CRYPTOCURRENCIES: The Mystery of Satoshi Nakamoto to be Revealed on 9th October

● Graphic analysis is somewhat reminiscent of the work of artists – each one sees something different when observing the same subject. A month ago, we shared how an analyst under the nickname Rekt Capital predicted a surge in the price of the first cryptocurrency in October, identifying a "bull flag" pattern on the BTC/USD chart. Another analyst, MetaShackle, based their forecast on the "cup and handle" pattern. This prediction was also described in detail by us. Peter Brandt, head of Factor LLC, recently made a forecast based on graphic analysis as well. This well-known analyst and trader suggested that by 2025, the bitcoin-to-gold ratio could increase by more than 400%. He based his highly optimistic forecast on another classic model – the "inverse head and shoulders."
And now, the same Peter Brandt, a Wall Street legend, has spotted not a head, but... blind mice. And not just one or two, but three, which seems to have deeply unsettled him. "A distinct 'three blind mice' pattern can be seen on the bitcoin chart," Brandt wrote. "It points to a further decline in price, so don't expect a bullish rally in October." According to him, the increase in bitcoin trading volumes alongside falling prices indicates that, amidst rising geopolitical tensions, institutional investors prefer to avoid risk and are quickly exiting the market, shifting to gold (and to the dollar, we might add). Brandt noted that in just one day at the beginning of October, over $240 million was withdrawn from US spot BTC-ETFs, the largest outflow in recent months.
It's worth mentioning that the "three blind mice" pattern also implies the presence of a "piece of cheese" these creatures are aiming for. Unfortunately, Brandt didn’t reveal where this cheese might be hidden. However, one could guess it's somewhere below the $60,000 support level. But as long as this level holds, there’s still a chance the mice will regain their sight and retreat, noticing the "bull flag," the "cup and handle," and the "inverse head and shoulders." Once they retreat, the leading cryptocurrency could take off.
● Analyst and Forbes contributor Jesse Colombo, much like Peter Brandt, has concluded that bitcoin has failed to live up to its reputation as a "safe haven" during times of global turmoil. Colombo points out that amidst escalating international tensions and the conflict between Israel and Iran, bitcoin, unlike gold, has once again disappointed investors who sought to use it as a hedge against risks.
"If bitcoin were truly 'digital gold,' it should have risen during periods of geopolitical upheaval, not declined," Colombo stated. "Bitcoin behaves like a speculative, high-risk asset, similar to shares of 'hot' tech companies, rather than as a safe-haven asset. This is evident from how closely bitcoin's price chart tracks the tech-heavy Nasdaq-100 index. Data from the last five years shows a striking correlation coefficient between the two – 0.88 [close to the maximum of 1.00], confirming their strong connection," the Forbes analyst concluded.
● Of course, the negative forecasts of Brandt and Colombo are well-founded. However, as noted by analysts at QCP Capital, the escalation in the Middle East only caused a moderate correction in the cryptocurrency market – bitcoin fell by just 4%, without breaking through the $60,000 level. QCP Capital does not rule out that further conflict escalation could lead to a decline in the price of "digital gold" to $55,000, but the asset is expected to recover from the drop. According to the specialists, BTC is currently supported by two factors: 1) The policy of the People's Bank of China, which aims to stimulate domestic demand amidst a slowdown in the national economy; 2) The initiation of monetary easing (QE) cycles and interest rate cuts by the central banks of major developed countries, primarily the US Federal Reserve.
According to QCP Capital's forecast, bitcoin is sure to demonstrate a bull rally, although its Dominance Index may dip slightly. Historically, October has been associated with a rise in this cryptocurrency’s price. QCP Capital analysts have calculated that over the last nine years, bitcoin has risen in October eight times, with an average increase of 22.9%. If this happens again, it could push the price above $75,000, marking new all-time highs.
● Another interesting observation was made by Markus Thielen, founder of 10x Research. He noted that since the summer, after the release of data on business activity (PMI) in the US manufacturing sector, the crypto market has experienced a pullback of around 10%. "Now, manufacturing activity is declining again," the analyst wrote, "and it may shrink even further due to the dockworkers' strike that began on 30th September in several of the largest ports in the US. This will negatively affect the crypto sector as well." "Forecast indicators have dropped to a level close to recessionary," Thielen predicted. "If the PMI falls below 48.0, it will trigger another bitcoin decline, while a higher figure could fuel a rally." His forecast was accurate. While the market was expecting a reading of 47.5, the September manufacturing PMI actually dropped to 47.2 points. The data was released on Tuesday, 1st October, and that very day the BTC/USD pair showed a red candle on the chart, declining by approximately 6%. Of course, this could be a coincidence. Or it could be a pattern discovered by the founder of 10x Research.
Additionally, according to him, uncertainty in the crypto market is heightened by the potential for another key interest rate hike by the Bank of Japan as part of its ongoing tightening policy (QT).
● And, of course, a major factor generating a lot of speculation around the crypto market is the US presidential election. A survey conducted in the US by Harris Poll, with financial support from Grayscale, showed that over 56% of voters are more likely to vote for a presidential candidate who supports the crypto industry. According to the survey results, nearly 40% of voters now pay attention to a candidate's stance on digital assets (in December 2023, this figure did not exceed 34%). At the same time, nearly 45% of cryptocurrency holders believe that the Democratic Party is more favourable to the industry (with Kamala Harris as the presidential candidate), while 42% pointed to the Republicans (with Donald Trump as the candidate).
A similar poll conducted by crypto exchange Coinbase and Morning Consult showed that the votes of digital asset holders are split evenly: 47% support Kamala Harris, and another 47% back Donald Trump. Despite some discrepancies with the Harris Poll data, the results of both surveys clearly indicate that crypto investors will be an important group that could influence the outcome of the US presidential election on 5th November.
● Expert and founder of Eight and MN Trading, Michael Van De Poppe, believes that by the end of 2024, the price of the leading cryptocurrency will reach a record high of $192,000. He suggests that the BTC market is currently in a "perfect storm" situation. Rising social tensions in many countries, declining trust in traditional financial institutions, and geopolitical conflicts are driving investors towards assets like bitcoin and other cryptocurrencies.
According to the expert, as central banks lower interest rates and increase liquidity to stimulate economic growth, price increases for assets such as physical and digital gold are inevitable in the medium term. The exponentially growing US national debt and further rate cuts by the Federal Reserve will become strong catalysts for cryptocurrency price growth. Van De Poppe believes that in the next cycle, bitcoin's price could reach anywhere between $300,000 and $600,000.
● As for bitcoin's main competitor, Ethereum, in our previous review titled "ETH Is No Longer the King of Altcoins. Long Live the New King?" we provided statistics showing how Solana (SOL) is surpassing the leading altcoin in terms of capital inflow. We won't claim that our publication was the reason, but the co-founder and former CEO of the crypto exchange BitMEX, Arthur Hayes, refuted it in a recent interview, stating that "Ethereum is the unassailable king of altcoins."
"It seems that Ethereum will never stop," he wrote. "The emergence of Layer 2 solutions has reduced transaction costs and accelerated transaction processing on the network. This increases Ethereum's competitiveness and gives it advantages over other networks. [...] Therefore, no other blockchain will be able to surpass it." The ex-CEO of BitMEX praised the Solana network for its user interface and active community. However, according to him, the SOL coin significantly lags behind Ethereum in market capitalization ($67 billion versus $294.5 billion). Furthermore, Hayes believes that for any blockchain to overtake ETH, developers must introduce new and original technology beyond its network.
● According to Ryan Lee, Chief Analyst at Bitget Research, the price of ETH in October could range between $2,200 and $3,400. Among the key factors influencing the asset’s price, Lee highlighted the Federal Reserve's interest rate cuts. He noted that once this rate aligns with Ethereum's staking yield, currently at 3.5% per annum, ETH will once again become an attractive investment tool. Thus, a reduction in interest rates will positively impact the coin's value.
Another bullish factor is the release of EigenLayer (EIGEN) tokens and their subsequent listing on exchanges. This could trigger an influx of additional capital into the ecosystem, helping ETH outpace bitcoin and Solana (SOL) in price growth. As a third growth factor, Ryan Lee pointed to the renewed excitement around meme tokens. According to him, there is currently an increase in meme-based digital assets on the Ethereum network, such as Neiro (NEIRO). High demand for these coins will attract new users and boost the popularity of the ETH network.
● As of the time of writing this review, on the evening of Friday, 4th October, the BTC/USD pair is trading around $62,400, while the ETH/USD pair is at $2,430. The total cryptocurrency market capitalization has declined to $2.17 trillion (down from $2.32 trillion a week ago). The Crypto Fear & Greed Index has dropped from 61 to 41 points, swiftly moving past the Neutral zone and shifting from the Greed zone directly into the Fear zone.
● And finally, an event that promises to become a global sensation. Next week, on 8th-9th October, the American TV channel HBO will air a documentary in which the creators claim to have identified the real Satoshi Nakamoto! "The revelation could send shockwaves through global financial markets and even impact the US presidential elections, given how the Republican candidate and former president Donald Trump has gained the support of bitcoin enthusiasts," the filmmakers stated.
Well, we'll see. Don't forget to turn on your TV and have some calming pills ready – just in case it turns out to be a real information bomb!


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.

Forex and Cryptocurrency Forecast for October 14 – 18, 2024

EUR/USD: Doves Outplay Hawks, Score 76:24

● Last week, four key events attracted the attention of the markets. The week began on Monday, 7th October, with the release of eurozone retail sales data. According to the statistics, retail sales in August grew by 0.2% month-on-month and by 0.8% year-on-year, which was almost in line with forecasts. Analysts surveyed by Reuters had expected growth of 0.2% (m/m) and 1.0% (y/y).
● The next significant event was the release of the minutes from the September FOMC (Federal Open Market Committee) meeting of the US Federal Reserve on Wednesday, 9th October. This 13-page document provided a detailed assessment of the economic situation and the opinions of Committee members on the prospects for monetary policy. The Fed downgraded its forecast for US economic growth in 2024 from 2.1% to 2.0%, while keeping the 2025 estimate unchanged at 2.0%. The inflation forecast for the current year was lowered from 2.6% to 2.3%, and for the following year, from 2.3% to 2.1%.
According to Fed Chair Jerome Powell's statement, the regulator's baseline scenario assumes further monetary policy easing. However, he noted that the Fed is in no hurry to act. The minutes revealed that Committee members are divided into two camps regarding the expected pace and magnitude of the key interest rate cuts. Some believe that it is essential to avoid a rate reduction that is either too late or insufficient, citing risks to the labour market. Others argue that a rate cut that is too swift or too large could halt the progress made in the fight against inflation or even lead to its resurgence.
● The next meeting of the US regulator will take place on 6-7th November. Market participants expect to see two more rate cuts this year, each by 25 basis points. According to the CME FedWatch tool, there is a 76% probability that the first of these cuts will occur next month, while the probability that the rate will remain unchanged is estimated at around 24%. Against this backdrop, the major US stock indices rallied, with the S&P 500 and Dow Jones reaching record closing levels.
● The third event took place on Thursday, 10th October, with the release of US inflation data. According to the US Department of Labour, while consumer prices in September slightly exceeded forecasts, annual inflation reached its lowest level since February 2021.
The Consumer Price Index (CPI) remained at 0.2% month-on-month, despite forecasts of 0.1%. On an annual basis, the CPI was 2.4% in September, which was higher than the forecast of 2.3% but lower than the previous value of 2.5%. Core inflation (Core CPI), which excludes volatile food and energy prices, rose to 3.3% year-on-year, exceeding both the forecast and expectations of 3.2%.
These figures reinforced investors' expectations that the US Federal Reserve would proceed with another rate cut in November. The EUR/USD pair reacted to the inflation data with volatility, fluctuating within a 50-point range (1.0904-1.0954), but by the start of Friday, it had returned to where it had been at the beginning of Thursday – in the middle of the range around 1.0935.
● It is worth recalling that on 18th September, the Federal Reserve lowered the key interest rate for the first time since the start of the COVID-19 pandemic, and by 50 basis points at once. According to Jerome Powell, this sharp move was necessary to protect the labour market. However, data from the US Bureau of Labour Statistics, released on 4th October, showed the largest increase in new jobs in six months and a decrease in unemployment. The number of new jobs in the non-farm sector (NFP) rose by 254K, following an increase of 159K in August, and far exceeded market expectations of 140K. The unemployment rate dropped to 4.1% from 4.2%. According to analysts, this confirmed the resilience of the economy, and the expectation of a gradual rate cut this year.
● The final event of the week, which had the potential to influence the dynamics of the US Dollar Index (DXY) and consequently EUR/USD quotes, was the release of another important inflation indicator on Friday, 11th October – the US Producer Price Index (PPI). According to the report from the US Bureau of Labour Statistics, the PPI rose by 1.8% year-on-year in September. This followed an increase of 1.9% in August and exceeded market expectations of 1.6%. The core PPI, on a yearly basis, grew by 2.8% (forecast 2.7%). On a monthly basis, the PPI remained unchanged, while the core index rose by 0.2%.
● Despite the fact that producer price inflation exceeded forecasts, the market barely reacted to these figures. As a result, the week's final note was struck at the same level, 1.0935. Most analysts (70%) predict a decline in the EUR/USD pair ahead of the ECB meeting. The remaining 30% have taken a neutral stance. Indicators on D1 mostly align with the analysts’ outlook. All oscillators are in red, though a third of them signal the pair is oversold. Among trend indicators, 75% point south, while 25% point north.
The nearest support for the pair is in the 1.0890-1.0905 zone, followed by 1.0780-1.0805, 1.0725, 1.0665-1.0680, 1.0600-1.0620, 1.0520-1.0565, and 1.0450-1.0465. Resistance zones are located around 1.0990-1.1010, then 1.1045, 1.1100, 1.1155, 1.1185-1.1210, 1.1275, 1.1385, 1.1485-1.1505, 1.1670-1.1690, and 1.1875-1.1905.
● The most interesting day next week is expected to be Thursday, 17th October. On this day, eurozone consumer inflation (CPI) data will be released, followed by a meeting of the European Central Bank. Some experts anticipate that the ECB might opt for another 25 basis point cut in the key interest rate. In addition to this decision, the ECB's leadership comments on monetary policy will undoubtedly attract significant interest. Moreover, on 17th October, data on US retail sales and initial jobless claims will also be released.

CRYPTOCURRENCIES: The Crypto Industry's War with the SEC Enters a 'Hot' Phase



● We will begin our review of the crypto industry by picking up where we left off last time—with the "information bomb" that was expected to explode on 8-9th October. The American television channel HBO had promised to reveal the real identity of Satoshi Nakamoto. And indeed, they did name someone, but few believed it. According to the authors of the documentary Electronic Money: The Mystery of Bitcoin, the pseudonym Nakamoto allegedly belonged to 39-year-old Canadian Peter Todd. Todd was indeed one of the early developers of Bitcoin Core, but he was never among the main suspects thought to be Nakamoto.
The filmmakers presented several arguments, including the use of British/Canadian spelling in Nakamoto's writings and a correlation between the timing of Todd’s educational schedule and Nakamoto's posts. The key "evidence" was a message posted on the Bitcoin forum in 2010, supposedly left by Todd under Nakamoto’s name. However, these arguments failed to convince most viewers. Ki Young Ju, CEO of CryptoQuant, even called the documentary "disgusting" and expressed astonishment at how misguided the conclusions were.
● Another, more tangible, sensation could emerge from the latest round in the ongoing battle between the US Securities and Exchange Commission (SEC) and representatives of the crypto industry. Speaking at New York University’s School of Law, SEC Chair Gary Gensler stated that cryptocurrencies are unlikely to ever be widely used as a payment method and will continue to be viewed primarily as a store of value. Gensler also praised his agency’s approach to enforcing regulations on crypto companies through legal action. "Sometimes we need to take enforcement actions to bring people back to the right side," he said.
Under Gensler’s leadership, the SEC has filed numerous lawsuits against crypto companies for violating securities laws. Defendants include major centralized exchanges such as Coinbase, Binance, and Kraken, as well as the fintech company Ripple, the issuer of the XRP token. The SEC, however, has refused to establish clearer regulatory guidelines or criteria for determining whether a cryptocurrency falls into one of two categories: a security or a commodity. In assessing the future of cryptocurrencies, Gensler struck a blow to the digital industry by citing Gresham's Law: "Bad money drives out good."
● It's certainly disheartening when cryptocurrencies are labelled as "the worst," and crypto advocates are described as being on "the wrong side." However, in the US, it's not only authorities that can file lawsuits against commercial organisations— the reverse is also possible. And they can even call the SEC an "illegal entity." In a bold move, the cryptocurrency exchange Crypto.com has filed a lawsuit against the SEC, accusing the agency of overstepping its authority in regulating the crypto industry. This was announced by the co-founder and CEO of the platform, Kris Marszalek.
"This unprecedented action by our company against a federal agency is a justified response to the SEC's enforcement measures, which have harmed more than 50 million American cryptocurrency holders," he wrote on his social media page. According to Marszalek, the Commission has overreached its legal boundaries and now operates as an unlawful entity, labelling almost all cryptocurrencies as securities. The Crypto.com CEO also promised that the company would use "all available regulatory tools" to bring clarity to the industry and protect the future of the crypto sector in the US through legal means.
● Continuing with the topic of the US Securities and Exchange Commission (SEC), here's another development. Following in the footsteps of Bitwise, the crypto investment firm Canary Capital has filed an application with the SEC to launch a spot XRP-ETF based on Ripple. The idea behind this exchange-traded fund is to give investors access to one of the largest altcoins through a traditional brokerage account, without the risks associated with directly buying and storing cryptocurrency. And this is good news.
The application was submitted using Form S-1, which means there are no specific deadlines by which the regulator must make a decision. And that's the bad news: knowing Gary Gensler’s stance, the review process could range from "just a long time" to "endlessly long." Additionally, a second mandatory step in launching the ETF is the submission of another application—this time by the stock exchange where the new product will be listed. As of now, the SEC has not received such a filing from any exchange.
● The outcome of the US presidential elections could significantly impact the crypto industry. Geoff Kendrick, Head of Crypto Research at Standard Chartered Bank, predicts that if Donald Trump is elected, the price of bitcoin could triple by the end of 2025, and Solana could rise fivefold. Kendrick believes that the Trump administration would be more favourable towards the Solana ecosystem compared to a Harris administration. Therefore, if Kamala Harris becomes the occupant of the White House, bitcoin is expected to outpace Ethereum in growth, while Ethereum would surpass Solana and reach $7,000. Kendrick also suggests that bitcoin could rise to $200,000 by the end of 2025, regardless of the election results on 5th November.
● Currently, both bitcoin and Ethereum are under pressure. Bitcoin, the world's largest cryptocurrency, faces speculation about a potential sale of a large number of tokens held by the US government, although no decision has been made yet. According to analysts at QCP Capital, the rising demand for meme coins is also hindering BTC's growth. As for Ethereum, its price could be negatively impacted by the Chinese authorities, who are reportedly preparing to sell $1.3 billion worth of Ethereum seized from employees of the cryptocurrency company PlusToken.
● At the time of writing this review, on the evening of Friday, 10th October, the BTC/USD pair is trading around $63,080, the ETH/USD pair at $2,460, and SOL/USD at $146.0. The total cryptocurrency market capitalisation has remained relatively unchanged, standing at $2.20 trillion (compared to $2.17 trillion a week ago). The Bitcoin Crypto Fear & Greed Index has dropped from 41 to 32 points, placing it in the Fear zone.
● And finally, an event that could turn into another global sensation. Renowned economist Tyler Cowen has nominated Ethereum co-founder Vitalik Buterin for the Nobel Prize in Economics. This initiative was supported by another prominent expert, Professor Alexander Tabarrok. Both economists praised Buterin for his significant contributions to the monetary economics of cryptocurrencies, emphasising that his work has far surpassed that of any other economist. According to Tyler, Vitalik built the brilliant Ethereum platform and created a digital currency that challenges Mises' Regression Theorem. This theorem asserts that the value of money can be traced back ("regressed") to the value of the goods and services it represents.
Cowen and his colleague also commended Buterin's continued efforts to develop the Ethereum network and highlighted that he would make an excellent speaker at the Nobel Prize ceremony (if he is approved), noting his politeness and good communication skills.
For reference: Vitalik Buterin was born near Moscow in 1994, meaning he is currently 30 years old. At the age of 6, he moved with his parents from Russia to Canada. He is the co-founder and former editor of *Bitcoin Magazine* and the co-founder of the Ethereum project, for which he won the World Technology Award in 2014, beating out Facebook founder Mark Zuckerberg and other contenders. In 2021, Buterin became the youngest cryptocurrency billionaire in the world. American *Forbes* estimated Buterin's net worth at $1.3 billion.


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.