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CryptoNews of the Week

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– According to Ki Young Ju, CEO of the analytical platform CryptoQuant, the price of bitcoin needs to exceed $80,000 post-halving to remain profitable for miners. This significant event is scheduled for April 20, 2024. As a result, miners’ block rewards will be halved, while the costs to mine the same amount of coins will conversely increase.
Historically, the price of bitcoin tends to rise after a halving. In 2012, the asset appreciated by nearly 9000% to $1162. In 2016, the cryptocurrency price soared by approximately 4200% to $19800. Following the last halving in May 2020, BTC's value increased by 683% to $69000, while mining costs rose to $30000. Currently, the average cost to mine 1 BTC is $49900, with the asset trading close to $70000. Post-April 20, mining expenses will exceed $80000, hence the asset needs to trade above this level for miners to continue making a profit. However, according to some experts, bitcoin's growth does not start immediately. The industry must endure a difficult period, and small mining companies and individual miners face a wave of bankruptcies.

– In the medium term, halving acts as a bullish catalyst for the crypto market. However, prices may fall both before and after the event, believes Arthur Hayes, former CEO of BitMEX. “The narrative that halving block rewards positively impacts cryptocurrency prices has become entrenched. When most market participants agree on a certain outcome, the opposite usually happens,” stated the expert.
He noted that the market would face a reduction in dollar liquidity in the latter half of April, driven by the tax payment season, the Federal Reserve's policies, and the strengthening of the US Treasury's balance sheet. This factor will be an additional incentive for a "furious sell-off of cryptocurrencies," Hayes believes. "Can the market defy my bearish predispositions and continue to grow? I hope it can. Having been involved in cryptocurrency for a long time, I welcome being proven wrong."
In May-June, the situation should improve: the Fed will begin to ease its monetary policy and the Treasury is likely to inject an additional $1 trillion into the system, which will pump the markets, added Hayes. “The set of tricks from the regulators has only reinforced my decision to refrain from trading bitcoin until early May. Missing a few percentage points of profit but definitely avoiding losses for my portfolio is an acceptable outcome,” he declared.

– Brad Garlinghouse, CEO of Ripple, suggested that the market capitalization of the crypto industry might double by the end of this year, surpassing $5 trillion. In an interview with CNBC, he stated he is "very optimistic" about macroeconomic trends in the crypto industry, such as the introduction of spot bitcoin ETFs (ETFs). According to Garlinghouse, BTC-ETFs have attracted real institutional investments into the industry for the first time. Another macro factor that could lead to market capitalization growth, he noted, is the halving. The Ripple head also expects more clarity in regulation following the US presidential elections. "The United States remains the world’s largest economy and, unfortunately, one of the most hostile markets for cryptocurrencies," Garlinghouse remarked.

– Lucas Kiely, CIO of the financial platform Yield App, stated that the upcoming halving should not be expected to cause a sevenfold increase in bitcoin's price. According to Kiely, during the previous three cycles, halving the miners' rewards heralded a huge increase in volatility levels. After the halving, BTC's price dropped by 30-40% but then soared to unprecedented heights within 480 days. However, this year, he believes, the "cryptocurrency flight to the Moon" will not occur.
Lucas attributes the decrease in volatility to two factors: 1. an increase in the number of bitcoins held by hodlers owning more than 70% of the issued coins, and 2. the creation of BTC-ETFs, whose issuers withdraw an average of 10,000 BTC coins worth about $700 million from circulation daily. As a result, bitcoin is becoming a traditional asset, less risky but also less promising in terms of huge profits. Kiely believes that this factor makes the coin more attractive to institutional investors and older people who prefer to invest in reliable assets and avoid gambling.

– Anthony Scaramucci, CEO of Skybridge, claimed that bitcoin could grow 2.5 times in this cycle but will continue to grow in the longer term. "I'm simply saying that bitcoin's market capitalization could reach half that of gold, which means it could increase six or even eight times from its current figures." Note that bitcoin's current market capitalization stands at $1.35 trillion, while gold is valued at $15.8 trillion. Thus, if BTC reaches half of gold’s capitalization, its price will approximately be $400,000 per coin. Scaramucci described the spot BTC-ETFs launched in January as "selling machines." In the three months since their inception, the capitalization of these 10 ETFs (excluding the Grayscale fund) has exceeded $12 billion. According to the CEO of Skybridge, they will continue to boost demand for the leading cryptocurrency from both retail and institutional investors.

– Two malicious extensions for Google Chrome enabled the theft of $800,000 in cryptocurrency from the wallets of a trader known as Sell When Over, he informed his followers on the social network X. The trader suspected that the extensions named "Sync test BETA (colourful)" and "Simple Game" contained keyloggers, which are tools cybercriminals use to record every keystroke of the victim's computer, thus gaining access to sensitive information.
Sell When Over reported that the issue arose after Google Chrome released an update in March. Following a forced reboot, he discovered that all his extensions were disabled, and their tabs deleted. He had to reinstall the applications and re-enter his data, including seed phrases for access to his crypto wallets. It was after this that he lost $800,000. Initially, the trader was not sure that the malicious extensions were to blame. However, a subsequent investigation confirmed that keyloggers were indeed the culprit.

– Mike Novogratz, founder of Galaxy Digital, admitted in a recent interview that he had invested a significant portion of his capital in bitcoins and altcoins. He highlighted that while housing prices in the US had doubled over the last 12 years, wages had not kept pace. "Cryptocurrency has become a means for many people to lead a normal life," he emphasized, expressing confidence that bitcoin should be a part of every portfolio.
Regarding Ethereum and Solana, the businessman believes the value of their ecosystems will depend on their ability to attract new users. Additionally, Novogratz pointed out the great potential of Dogecoin and Cardano and mentioned that blockchain-based games are becoming increasingly popular.

– In a survey conducted by Deutsche Bank, 15% of respondents said that bitcoin would trade above $40,000 but below $75,000 this year. A third of respondents were confident that the price of bitcoin would fall below $20,000 at the beginning of next year. Meanwhile, 38% believed that the primary cryptocurrency would cease to exist in the market altogether. About 1% of respondents called bitcoin a complete misunderstanding and speculation.
Despite such survey results, Deutsche Bank remains convinced that the price of bitcoin will continue to rise. The market is in a state of anticipation for the upcoming halving, and investments in spot bitcoin ETFs continue to increase from major financial institutions. 

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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Forex and Cryptocurrency Forecast for 15 – 19 April 2024


EUR/USD: The Dollar Soars

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Last week saw two significant events: the first shocked market participants, while the second passed without surprises. Let's examine the details in order.

Since mid-2022, consumer prices in the US have been declining. In July 2022, the Consumer Price Index (CPI) was at 9.1%, but by July 2023, it had fallen to 3.0%. However, in October, the CPI rose to 3.7%, then decreased again, and by February 2024, it had dropped to 3.2%. As a result, there was a general perception that inflation had finally been brought under control. The market consensus was that the Federal Reserve would soon begin to ease its monetary policy and start reducing interest rates in June. Two weeks ago, the likelihood of this move was estimated at 70%. The DXY index began to fall, reaching a local low of 103.94 on 9 April. However, the dollar bears' joy was short-lived, as fresh US inflation data released on Wednesday, 10 April, quickly changed the sentiment.

In annual terms, the Consumer Price Index (CPI) rose to 3.5%, marking the highest level in six months. The main drivers of this inflation increase were the rises in rental costs (5.7%) and transportation expenses (10.7%), which clearly caught the markets by surprise. The chances of a rate cut in June plummeted to zero, and the DXY dollar index soared, reaching a peak of 105.23 on the evening of 10 April. Alongside this, the yield on 10-year US Treasury bonds grew to 4.5%. As is typical in such scenarios, stock indices such as the S&P 500, Dow Jones, and Nasdaq declined, and the EUR/USD pair, after dropping over 150 points, fell to 1.0728.

Austan Goolsbee, President of the Chicago Federal Reserve Bank, stated that although the regulator is confidently moving towards its 2.0% inflation target, the Federal Reserve leadership still has much work to do to reduce inflation. His colleague, John Williams, President of the New York Fed, noted that the latest inflation data were disappointing and added that economic prospects remain uncertain.

As a result of these and other statements, it is now forecasted that the Fed will begin cutting interest rates only in September. Moreover, investors expect there will be only two rate cuts this year, not three. Some believe that there may not be any rate cuts at all in 2024. However, according to US President Joe Biden, the Fed should still lower the rate in the second half of this year. His insistent request is quite understandable on the eve of the presidential elections. Firstly, it would reduce the cost of servicing the country's enormous national debt, and secondly, it would symbolize a victory over inflation, giving Biden several additional points in the battle for the White House.

After the American inflation reaction, markets took a brief pause, awaiting the European Central Bank (ECB) governing council meeting on 11 April. The ECB has held rates steady at 4.50% since September 2023, which was in line with market expectations as forecasted by all 77 economists surveyed by Reuters. Thus, after some fluctuation, EUR/USD returned to its pre-ECB meeting level.

The ECB press release affirmed the council's firm intention to return inflation to a medium-term target of 2.0% and believed that the key rates contribute significantly to the ongoing disinflation process. Future decisions will ensure that the key rates remain at sufficiently restrictive levels as long as necessary.

It's worth noting that inflation in the 20 Eurozone countries was at 2.4% in March, slightly above the target of 2.0%. In February, the rate was 2.6%, and in January it was 2.8%. Economists surveyed by Reuters believe that inflation will continue to decrease in the coming quarters, but it will not reach 2.0% before the second quarter of 2025.

Christine Lagarde, the head of the European Central Bank (ECB), expressed a similar view during a press conference. However, she mentioned that since the Eurozone economy remains weak, to support it, the ECB will not wait for inflation to return to the 2.0% level at every point. Thus, Ms. Lagarde did not rule out that the regulator might start easing its monetary policy significantly before 2025. Strategists from the Italian bank UniCredit forecast that the ECB will cut rates three times this year, by 25 basis points each quarter. The pace of reduction could remain the same next year. Economists from Deutsche Bank also expect that the pan-European regulator will start cutting rates before the Federal Reserve and will do so at a faster pace. Consequently, the widening interest rate differential between the US and the Eurozone will contribute to the weakening of the euro.

This medium-term forecast was confirmed last Friday: EUR/USD continued its decline, reaching a local minimum of 1.0622 and closing the five-day period at 1.0640. The DXY index peaked at 106.04. As for the near-term outlook, as of the evening of 12 April, 40% of experts anticipate an upward correction of the pair, while the majority (60%) hold a neutral position. Among the oscillators on D1, only 15% are coloured green, and 85% are red, although a quarter of them are in the oversold zone. Trend indicators are 100% bearish. The nearest support levels for the pair are located in the zones 1.0600-1.0620, followed by 1.0495-1.0515, 1.0450, 1.0375, 1.0255, 1.0130, and 1.0000. Resistance zones are situated at levels 1.0680-1.0695, 1.0725, 1.0795-1.0800, 1.0865, 1.0895-1.0925, 1.0965-1.0980, 1.1015, 1.1050, 1.1100-1.1140.

Next week, on Monday, 15 April, US retail sales data will be released. On Wednesday, it will become clear what is happening with consumer inflation in the Eurozone. It is likely that the refined data will confirm the preliminary results, and the Consumer Price Index (CPI) for March will be reported at 2.4% year-on-year. On Thursday, we traditionally expect data on the number of initial jobless claims from US residents and the Philadelphia Fed Manufacturing Index.

GBP/USD: The Pound Plummets

On Friday, 12 February, the UK's GDP data indicated that the economy is on the path to recovery. Although production has declined compared to last year, the latest data suggests that exiting the shallow recession is quite likely. GDP has grown for the second consecutive month, with the Office for National Statistics (ONS) reporting a 0.1% increase in February on a monthly basis, with January's figures revised upwards to show a 0.3% growth from an earlier 0.2%.

Despite these figures, GBP/USD fell below the key 1.2500 mark due to crumbling hopes for an imminent Fed rate cut. Not even a statement from Bank of England (BoE) Monetary Policy Committee member Megan Greene, which highlighted that inflation risks in the UK remain significantly higher than in the US and that markets are mistaken in their rate cut forecasts, could change the situation. "Markets have leaned towards the Fed not cutting rates so soon. In my view, the UK will also not see rate cuts anytime soon," she wrote in her Financial Times column.

Following Greene's remarks, traders now expect no more than two rate cuts from the Bank of England this year, each by 25 basis points. However, this revised forecast did little to support the pound against the dollar, with GBP/USD ending the week at 1.2448.

Analysts are split on the short-term behaviour of GBP/USD: 50% voted for a rebound to the north, and 50% abstained from forecasting. Indicator readings on D1 suggest the following: among oscillators, 10% recommend buying, another 10% are neutral, and 80% indicate selling, with 20% of these signalling oversold conditions. All trend indicators are pointing downwards. If the pair continues south, it will encounter support levels at 1.2425, 1.2375-1.2390, 1.2185-1.2210, 1.2110, and 1.2035-1.2070. In the event of an increase, resistance will be found at levels 1.2515, 1.2575-1.2610, 1.2695-1.2710, 1.2755-1.2775, 1.2800-1.2820, 1.2880-1.2900, 1.2940, 1.3000, and 1.3140.

The most significant days for the British currency next week will be Tuesday and Wednesday. Extensive labor market data from the United Kingdom will be released on Tuesday, 16 April, along with a speech from the Governor of the Bank of England, Andrew Bailey. Wednesday, 17 April, could be even more turbulent and volatile as consumer inflation (CPI) data for the country will be published.

USD/JPY: Is 300.00 Just a Matter of Time?

Bears on USD/JPY continue to hope for its reversal southwards, yet the pair does not stop climbing. Our previous review titled "A Break Above 152.00 – A Matter of Time?" proved true within a very short period. Last week, the pair reached a 34-year high of 153.37, propelled by US inflation reports and increases in the DXY index and yields on 10-year US treasuries. (Considering that it traded above 300.00 in 1974, this is still not the limit).

This surge occurred despite another round of verbal interventions from high-ranking Japanese officials. Finance Minister Suzuki Shunichi reiterated his concern over excessive currency movements and did not rule out any options to combat them. Cabinet Secretary Yoshimasa Hayashi echoed these sentiments almost verbatim. However, the national currency no longer pays any attention to such statements. Only real currency interventions and significant steps towards tightening monetary policy by the Bank of Japan (BoJ) could help, but these have yet to occur.

Analysts at Dutch Rabobank believe the Japanese Ministry of Finance will eventually be forced to act to prevent the price from reaching 155.00. "While a breakthrough of the 152.00 level by USD/JPY might not immediately trigger currency interventions, we see a significant likelihood of such a step," they write. "Assuming that the Bank of Japan may announce a second rate hike later this year and considering expectations that the Fed will indeed cut rates in 2024, Rabobank expects USD/JPY to trade around 150.00 on a monthly horizon and 148.00 on a 3-month horizon.".

Last week, the pair closed at 152.26. Regarding its near future, 25% of experts sided with the bears, another 25% remained neutral, and the remaining 50% voted for further strengthening of the US currency and a rise in the pair. Technical analysis tools are apparently unaware of the fears regarding possible currency interventions, so all 100% of trend indicators and oscillators on D1 are pointing north, with a quarter of them now in the overbought zone. The nearest support level is around 152.75, followed by 151.55-151.75, 150.80-151.15, 149.70-150.00, 148.40, 147.30-147.60, and 146.50. Defining resistance levels after the pair updated 34-year highs is challenging. The nearest resistance lies in the zone 153.40-153.50, followed by levels 154.40 and 156.25. According to some analysts, the monthly high of June 1990 at around 155.80 and then the reversal high of April 1990 at 160.30 can also serve as references.

No significant events or publications regarding the state of the Japanese economy are planned for the upcoming week.

CRYPTOCURRENCIES: On the Eve of Hour X

The next halving, when the reward for mining a BTC block will again be halved, is scheduled for Saturday, 20 April. Although this date is approximate and may shift a day or two either way, the closer the Hour X, the hotter the discussions about how the price of the main cryptocurrency will behave before and after this event.

Historically, the value of bitcoin has risen after halvings: it surged by nearly 9000% to $1162 in 2012, by about 4200% to $19800 in 2016, and by 683% to $69000 following the previous halving in May 2020. However, it then crashed to nearly $16,000.

Lucas Kiely, CIO of the financial platform Yield App, believes that we should not expect a seven-fold increase in the price of bitcoin after the upcoming halving. According to Kiely, during the three previous cycles, the halving of miners' rewards heralded a massive increase in volatility levels. After the halving, BTC fell by 30-40% but then soared to unprecedented heights within 480 days. However, this year, he suspects, the cryptocurrency's flight to the Moon will not occur.

Kiely predicts that bitcoin will update its historical maximum reached this March at $73,743. However, the new peak will not exceed the previous one by as much as before, due to the low level of volatility. The specialist attributes the drop in volatility to two factors: 1. an increase in the number of bitcoins in the wallets of hodlers, who own more than 70% of the issued coins, and 2. the creation of spot Bitcoin ETFs, which remove a huge amount of coins from circulation. (In the three months since their inception, the capitalization of 10 such ETFs (excluding the Grayscale fund) has exceeded $12 billion). As a result, bitcoin is becoming a more traditional asset that is less risky but also less likely to yield massive profits. Kiely believes that this factor makes the coin more attractive to institutional investors and older people who prefer to invest in reliable assets and are not interested in gambling.

Ex-CEO of the BitMEX exchange, Arthur Hayes, expects a price drop. In his view, the halving is certainly a bullish catalyst for the crypto market in the medium term. However, prices might fall immediately before and after the event. "The narrative that the halving of block rewards will positively affect cryptocurrency prices has firmly taken root," says the expert. "However, when most market participants agree on a certain outcome, the opposite usually happens."

Hayes noted that the market would face a reduction in US dollar liquidity in the second half of April, driven by tax season, Fed policies, and the strengthening of the US Treasury's balance sheet. This reduction in liquidity will provide additional stimulus for a "furious sell-off of cryptocurrencies," he believes. "Can the market defy my bearish forecasts and continue to grow? I hope so. I have been involved with cryptocurrency for a long time, so I welcome being proven wrong."

The situation before this halving is indeed very different from before. This change is linked to the large influx of institutional investors through the newly launched Bitcoin ETFs in early January. The influence of ETFs on spot trading is clearly reflected in the reduced market activity on weekends and US public holidays when the exchange funds do not operate. The tax season has also significantly impacted the market for risky assets. Over the last two weeks, inflows into these funds have been significantly below the average mark of $203 million, with recent days seeing an outflow of funds from Grayscale and Ark Invest. Other ETFs are also reporting reduced inflows. All this suggests that Arthur Hayes' concerns are well-founded, and a 30% drop from the current price could send bitcoin down to around $50,000.

Miners, who will lose half their income after the halving, while the costs of obtaining the same amount of coins will increase, could also contribute to a market crash. After the halving in May 2020, the costs of mining rose to $30,000. Currently, the average cost of mining one BTC is $49,900, but after 20 April, according to Ki Young Ju, CEO of the analytical platform CryptoQuant, it will exceed $80,000. Therefore, the asset must trade above this level for miners to continue making any profit. However, as previously mentioned, a rapid price surge may not occur. This means that small mining companies and individual miners are facing a wave of bankruptcies and acquisitions.

According to Arthur Hayes, the situation might improve in May-June: the US Treasury will "most likely release an additional $1 trillion of liquidity into the system, which will pump the markets," he says. Anthony Scaramucci, CEO of Skybridge, also holds that spot Bitcoin ETFs, acting as "selling machines," will continue to stimulate demand for the first cryptocurrency from both retail customers and institutional investors. Scaramucci believes that in this cycle, bitcoin's value could increase by 2.5 times, and then continue to rise. "I'm just saying that the capitalization of bitcoin could reach half that of gold, i.e., increase six or even eight times from its current levels," the businessman declared. It's noteworthy that the current capitalization of bitcoin stands at $1.35 trillion, while gold's is at $15.8 trillion. Thus, if BTC reaches half the capitalization of the precious metal, its price would be around $400,000 per coin.

Brad Garlinghouse, CEO of Ripple, also places his hopes on spot Bitcoin ETFs. According to him, BTC-ETFs have attracted real institutional investments into the industry for the first time, so he is "very optimistic" about the macroeconomic trends in the crypto industry. In this context, Garlinghouse allowed that the market capitalization of digital assets could double by the end of the year, exceeding $5.0 trillion.

As of the evening of Friday, 12 April, BTC/USD is trading at around $66,900. The total capitalization of the crypto market is $2.44 trillion ($2.53 trillion a week ago). The Crypto Fear and Greed Index remains in the Extreme Greed zone at 79 points.

In conclusion, a bit of curious statistics: In anticipation of the halving, Deutsche Bank conducted a survey regarding the future price of bitcoin. 15% of respondents stated that within this year, BTC would trade in the range above $40,000 but below $75,000. A third of respondents were confident that the value of the main cryptocurrency would fall below $20,000 early in the next year. Meanwhile, 38% of those surveyed believed that BTC would cease to exist in the market altogether. And finally, about 1% of respondents called bitcoin a complete misunderstanding and speculation.


NordFX Analytical Group
 

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

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

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CryptoNews of the Week

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– Since 8 April, bitcoin's price has been falling, attempting to break through the support level around $61,500. The weekly decline in BTC is the largest in the last eight months, and in dollar terms, it's the largest since the FTX exchange collapse in November 2022. Following bitcoin, other digital assets have also plummeted, with many major altcoins losing about a third of their value.

– Analysts at CryptoQuant believe this crash is necessary to reset unrealized trader profits to zero – typically a signal of a market bottom in bullish markets. However, Willy Woo, analyst and co-founder of venture firm CMCC Crest, warns that if bitcoin's price falls below the short-term holders' support level at $58,900, the market risks entering a bear phase.
Woo also noted that the market structure has not changed since March, but April is "variable in both directions." The halving will be another catalyst for volatility. He suggested that the current bearish sentiments are a good bullish sign and that the next major level for liquidating short positions will be between $71,000 and $75,000. 
According to Woo, "the longer digital gold consolidates around the ATH, the more coins transition from one investor to another, strengthening their price and creating massive long-term support." Given the bitcoin demand and supply charts, it is only a matter of time before "the ongoing accumulation during this consolidation pushes us beyond the historical maximum," believes the CMCC Crest co-founder. 

– RektCapital, a well-known trader, emphasized that before the halving, the bitcoin price always retreated. He considers this a normal trend. "There's no reason for panic as such a drop has occurred in all cycles. Don't think that this time is different," the expert stressed.

– James Van Straten, an analyst at CryptoSlate, has noted that he studied the situation surrounding long-term (LTH) and short-term (STH) bitcoin holders. In his view, the growth in LTH metrics caused pressure from sellers who disposed of 700,000 BTC coins over four months, not counting GBTC Grayscale stock sellers. The researcher noted that the trend began to change in recent days as short-term holders (STH) actively started purchasing the digital asset, already beginning to outweigh the sellers' pressure.

– Several specialists believe the bitcoin price drop on 13-13 April was exacerbated by the escalation of the conflict in the Middle East and an Iranian attack on Israel. Mike Novogratz, CEO of Galaxy Digital, speculated that bitcoin could reach a new historical maximum if the conflict in this region subsides. He urged world leaders to take control of the situation to prevent exacerbating the fall in prices of all financial assets, including cryptocurrency.

– Michael Saylor, President of MicroStrategy, forecasts bitcoin's price rise despite geopolitical tensions. Saylor succinctly stated that "chaos will benefit bitcoin." His logic is sound since cryptocurrency was created in response to the economic crisis that began in 2008. Consequently, many investors might view bitcoin as an alternative capital preservation medium during upheavals. (It is worth noting that with 205,000 BTC on its balance sheet, MicroStrategy is the largest public company holder of bitcoins. Naturally, Saylor is directly interested in the price increase of this asset). 

– OpenAI's artificial intelligence, ChatGPT, believes that if the crisis between Israel and Iran intensifies, the main cryptocurrency's price will only slightly drop to about $60,000. However, this will be a short-term reaction. More significantly, assets like stocks will suffer. Bitcoin is likely to quickly regain its position. ChatGPT considers it likely that following the initial fall, there will be a bullish rally as investors seek a safe haven. Thanks to this, "digital gold" will jump to $75,000, setting a new historical maximum. 
Should the escalation of conflict in the Middle East become protracted and lead to a series of smaller conflicts, the volatility range of bitcoin, according to ChatGPT, will expand – following an initial drop to $55,000, there could be a rapid rise to $80,000.

– It is noteworthy that BTC/USD fall coincided with a notable strengthening of the American dollar. This is linked not only to the dollar's role as a safe-haven asset amid geopolitical tensions but also to the market's postponed expectations regarding the start date for easing the Federal Reserve's monetary policy. Following the publication of US inflation data on 10 April, market participants concluded that the first interest rate cut would not occur in June but in September. The Dollar Index (DXY) surged, reaching a peak of 106.30. Naturally, the strengthening of one asset in the currency pair caused the weakening of the other.       
 
– Miners are preparing for the "hunt" for the first epic satoshi post-halving on 20 April. The miner who secures this satoshi could earn a substantial amount as the estimated value of this "collectible" digital coin could be several million dollars. Approximately two years ago, Casey Rodarmor, creator of the Ordinals protocol on the bitcoin blockchain, developed a rarity classification system for individual sats. With the launch of "inscriptions," it became possible to number and sell bitcoin fractions similarly to non-fungible tokens (NFTs). Rodarmor's scale ranges from the first in each block "unusual" satoshi to the "mythic" - the very first in blockchain history. An "epic" sat, mined in the first block after each halving, holds one of the highest rarity ratings. Collectors might value such an asset at even $50 million. (Remember, a satoshi is one hundred millionth of a bitcoin (0.00000001), and with the current BTC price of $65,000, the price of a regular, non-collectible sat is merely $0.00065).

– Arkham Intelligence has revealed the cryptocurrency balances of various countries. According to its data, the United States is the largest bitcoin whale among governments, currently holding 212,847 BTC valued at approximately $14.9 billion. Since the start of 2023, the US government has added at least 5,000 BTC to its wallets. Additionally, the country possesses reserves of ETH, USDC, USDT, DAI, and other assets totalling about $200 million. The United Kingdom ranks second with a balance of 61,245 BTC worth $4.5 billion, followed by Germany with 49,858 BTC valued at $3.5 billion. El Salvador, where bitcoin has been a legal payment method since 2021, significantly lags behind other jurisdictions, with only 5,717 BTC worth $405 million stored in government wallets. 
Notably, China, which ranks second according to another firm - Bitcointreasuries, with 190,000 BTC, is absent from the Arkham Intelligence ranking. 

– Nearly one in five voters in the US owns crypto assets, making this investor class a significant factor influencing the outcome of the 2024 presidential race, as per a report from blockchain company Galaxy Digital. "As we approach November 2024, investors are increasingly aware of the implications of the elections for the markets. The crypto industry here may play a more significant role than ever," stated the Galaxy Digital report. The company highlighted that crypto investors are primarily concerned about the government's approach to industry regulation. 
According to data from experts at Paradigm, 19% of US voters own crypto assets, with 11 million people having crypto portfolios exceeding $1,000. Furthermore, the Paradigm study revealed that 48% of digital asset holders in the US would vote for Donald Trump, while only 39% would prefer Joe Biden.

– According to Arkham, the five largest identified crypto whales collectively own digital assets worth about $3.5 billion. However, two of them, Rain Lohmus of Estonia's LHV Bank and former Ripple CTO Stefan Thomas, cannot access their assets due to lost passwords to their crypto wallets. Lohmus reported losing the key to a wallet containing 250,000 ETH earned during a 2014 ICO, now valued at $765 million. Although the founder of the Estonian bank has made no effort to regain access to the funds, he recently expressed willingness to consider proposals from experts who could help him recover his lost wealth. Stefan Thomas received 7,002 BTC in 2011 as payment for a tutorial video he created. But a few months later, he lost access to the funds after forgetting the password to his IronKey hard drive that stored his private keys. In October 2023, cryptocurrency security experts from Unciphered claimed they could bypass IronKey and help Thomas regain access to his bitcoins, now valued at $440 million. However, he declined their offer and enlisted two other teams, which have yet to succeed.

– The Norwegian government is determined to end cryptocurrency mining in the country. According to officials, the goal is to cut off undesirable activities associated with mining, an unregulated industry that also contributes to greenhouse gas emissions. "We need socially beneficial projects necessary for infrastructure," explained the Minister of Petroleum and Energy, Terje Aasland.

– CryptoQuant analysts estimate that bitcoin reserves on cryptocurrency exchanges will last only a few months. Total available exchange reserves have decreased by more than 800,000 BTC and have reached the lowest value in the history of their two-year observations. As of 16 April, they amount to about 2 million BTC. Assuming the daily inflow of bitcoins into spot BTC-ETFs is about $500 million, which at current prices is equivalent to approximately 8,025 coins, it will take just nine months to completely exhaust these reserves. 
Results from the Stock-to-Flow (S2F) model, which shows the ratio of an asset's use to its reserves, indicate: after the halving, bitcoin's S2F coefficient will reach 112 points, nearly twice that of gold (60 points). Thus, by January 2025, bitcoin will become a more scarce commodity than the most popular precious metal.

– Several days ago, CEO of 10x Research, Markus Thielen, stated that both the cryptocurrency market and the US stock market are on the brink of upheavals and significant price corrections. Renowned economist and author Robert Kiyosaki confirmed the forecast by ARK Invest CEO Cathy Wood and also expects bitcoin's growth to $2.3 million by 2030.


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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Forex and Cryptocurrency Forecast for 22 – 26 April 2024


EUR/USD: A Pause After the Rally

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Last week, 60% of analysts adopted a neutral stance in their previous forecast and were proven absolutely correct. EUR/USD had a calm week, even boring at times, moving along the 1.0650 mark within the narrow corridor of 1.0600-1.0690. Market participants were recuperating from the rally of the preceding days, with dollar bulls counting profits and bears licking their wounds. The American currency reached five-month highs against the euro, British pound, Australian, and New Zealand dollars, while USD/JPY once again set a 34-year price record, and the DXY index climbed to 106.42.

The macroeconomic data from the U.S., unmistakably inflationary in nature, started making an impact on March 8 with the employment report. NonFarm Payrolls exceeded expectations at 275K, compared to the previous 229K and the forecast of 198K, propelling the dollar upwards. Another boost came on April 10 with fresh U.S. inflation data showing a year-on-year Consumer Price Index (CPI) increase of 3.5%, the highest in six months, which quashed any expectations of a rate cut in June, sending the Dollar Index soaring.

Last week's macroeconomic figures only reinforced the image of a robust U.S. economy with a tight labour market. The number of unemployment benefit claims stayed at a relatively low level of 212K, and the manufacturing activity indicator hit its highest mark in two years. Retail sales data released on April 15 almost doubled the forecast at 0.4%, actually coming in at 0.7% month-on-month, following a 0.9% increase in February, with a year-on-year increase of 4.0%. These figures indicate that both manufacturers and consumers have well adapted to the high interest rates. Employment and income levels are sufficiently high, increasing the likelihood of price rises.

In this context, there is no reason for the Fed to start a cycle of monetary easing in June, especially since inflation is still far from the 2.0% target. Market participants are now expecting the first rate cut by 25 basis points in September, with another similar cut by the end of the year. These forecasts were confirmed by John Williams, the head of the New York Federal Reserve, who noted that the latest inflation data were disappointing and that there was no urgent need to cut interest rates. Consequently, U.S. Treasury yields and the dollar are rising, while stock indices such as the S&P 500, Dow Jones, and Nasdaq are on the decline.

Attempts by EUR/USD bulls to initiate a rebound were halted on April 18 at the 1.0690 level after Francois Villeroy de Galhau, Vice-President of the ECB and head of the Bank of France, confirmed that the European regulator would likely cut rates in June if there were no significant surprises. Even hawkish figures like Robert Holzmann, head of Austria's central bank, agreed with these dovish forecasts.

The pair closed the five-day period at 1.0656. Fundamental indicators still favour the dollar, and although a correction northward for the pair cannot be ruled out, it is unlikely to be substantial or prolonged. For the immediate future, as of the evening of April 19, 80% of experts anticipate further strengthening of the dollar, with the remaining 20% expecting a bounce upwards. Among trend indicators on D1, 90% are red, and 10% are green. All oscillators are red, though 15% of them are in the oversold zone. The nearest support for the pair is found at 1.0600-1.0620, followed by 1.0560, 1.0495-1.0515, and 1.0450, down to 1.0375, 1.0255, 1.0130, and 1.0000. Resistance zones are at 1.0680-1.0695, 1.0725, 1.0795-1.0800, up to 1.0865, 1.0895-1.0925, 1.0965-1.0980, and 1.1015, reaching up to 1.1050 and 1.1100-1.1140.

The upcoming workweek can be termed a week of preliminary data. On Tuesday, April 23, preliminary business activity data (PMI) will be released for various sectors of the economy in Germany, the Eurozone, and the USA. On Thursday, April 25, preliminary U.S. GDP figures for Q1 2024 will be released. This will be followed by the usual data on initial unemployment claims and, on April 26, data on personal consumption expenditures in the country.

GBP/USD: CPI Disappoints BoE

Last week's macroeconomic statistics from the United Kingdom were less than favourable. Unemployment unexpectedly rose to 4.2% from a forecast of 4.0%. Claims for unemployment benefits surged from 4.1K to 10.9K, although this was notably below the market's expectation of 17.2K.

The bigger surprise came from the inflation indicators released on Wednesday, April 17. General inflation (CPI) decreased from 3.4% to 3.2% year-on-year, and core inflation dropped from 4.5% to 4.2%, against a market expectation of 4.1%. The monthly CPI remained steady at 0.6%. Unexpectedly high food prices and a sharp increase in housing costs at 3.8% month-on-month contributed to the inflation surprise. Volatile items such as books and video games also saw significant price rises; book prices experienced the largest monthly increase ever recorded at 4.9%, while video games prices increased by 2.3%.

"Overall, this is not what the Bank of England (BoE) would have wanted to see," analysts at TD Securities commented. BoE Governor Andrew Bailey quickly reassured the public, stating, "We are virtually at the same inflation level as in February and I expect the data next month to show a significant drop." He also mentioned that the oil price hike had not been as steep as expected, and the impact of the Middle East conflict was less than feared.

Indeed, the price rise in airline tickets, which are significantly influenced by fuel costs, was just 0.1% month-on-month. Given the early Easter this year, this increase seems quite mild. However, BoE Monetary Policy Committee member Megan Greene expressed concerns about how energy prices and other supply shocks might affect inflation expectations in the future.

Recall that a week earlier, Megan Greene, in her column in the Financial Times, stated that inflation risks in the United Kingdom remain much higher than in the USA, and that 'markets are mistaken in their predictions regarding rate cuts [for the pound].' 'Markets have come to believe that the Fed will not start lowering rates so soon. In my view,' she wrote at the time, 'rate cuts in the United Kingdom should also not be expected anytime soon.' Following such remarks, just as with the dollar, markets anticipate no more than two rate cuts from the Bank of England this year, each by 25 basis points.

Last week, GBP/USD opened at 1.2448 and closed at 1.2370, failing to breach the key 1.2500 level. Analysts are divided on the pair's future movement: 80% foresee a further decline, while 20% predict a rebound. All D1 trend indicators and oscillators point downwards, though a third are signalling oversold conditions. If the pair falls further, support lies at 1.2330, 1.2185-1.2210, 1.2110, 1.2035-1.2070, 1.1960, and 1.1840. In case of a rise, resistance will be encountered at 1.2425, 1.2515, 1.2575-1.2610, 1.2695-1.2710, 1.2755-1.2775, 1.2800-1.2820, and 1.2885-1.2900.

The upcoming week will see the release of preliminary business activity data (PMI) for the United Kingdom almost simultaneously with Germany and the Eurozone on Tuesday, April 23. No other significant economic data from the United Kingdom is expected this week.

USD/JPY: Higher and Higher...

Last week, USD/JPY once again reached a 34-year high, peaking at 154.78. This level was last seen in 1990. According to economists at the Singapore-based United Overseas Bank (UOB), the pricing dynamics continue to suggest further strengthening of the dollar. "The upside risks remain as long as the dollar stays above 153.75, our strong support level," they wrote. "Should the price break above 155.00, focus will shift to 155.50." Meanwhile, strategists from the Dutch Rabobank believe that reaching 155.00 could significantly increase the risk of currency interventions by the Japanese Ministry of Finance to protect the yen from further weakening. According to the results of a survey published by Reuters, nearly all respondents (91%) believe that Tokyo will intervene at some point to stop further weakening of the currency. Sixteen out of twenty-one economists expect interventions in the USD/JPY at the level of 155.00. The rest predict similar actions at levels of 156.00 (2 respondents), 157.00 (1), and 158.00 (2).

Strengthening the national currency could involve tightening monetary policy by the Bank of Japan (BoJ), whose next meeting is scheduled for Friday, April 26. At its last meeting on March 19, the Japanese regulator made an unprecedented move by raising the rate from -0.1% to +0.1%, the first increase in 17 years. Asahi Noguchi, a BoJ board member, indicated that any future rate increases would likely occur at a much slower pace compared to recent tightenings by other global central banks. He noted that it would take a significant amount of time for a positive rate cycle to become firmly established, making it uncertain whether there will be another rate increase this year.

A Reuters poll showed that no economists expect a rate hike by the BoJ before the end of June. However, 21 out of 61 respondents believe that rates could be raised in the third quarter, and 17 out of 55 anticipate a fourth-quarter hike. Of a smaller sample of 36 economists, 19% think a July hike is possible, but October is the most likely time for an increase, with approximately 36% expecting it. In contrast, 31% believe the BoJ might take action in 2025 or later.

The pair closed the week at 154.63. Rabobank experts currently see the dollar being supported by demand for safe assets amid escalating Middle East tensions. A de-escalation between Israel and Iran could help temper the rise of the American currency. The median forecast surprisingly aligns with predictions for the two previously mentioned pairs: 80% of analysts expect further weakening (downward movement for this pair indicates a strengthening dollar), while 20% anticipate a rebound. All D1 trend indicators and oscillators point upwards, with 50% in the overbought zone. The nearest support level is around 154.30, with further support at 153.90, 153.50, 152.75, 151.55-151.75, 150.80-151.15, 149.70-150.00, 148.40, 147.30-147.60, and 146.50. Identifying resistance levels remains challenging after the pair's recent peaks, with the nearest resistance at 154.75-155.00, followed by 156.25. Additional benchmarks include the June 1990 monthly high around 155.80 and the April 1990 turnaround peak at 160.30.

Besides the aforementioned BoJ meeting, consumer inflation data for the Tokyo area will also be published on Friday, April 26. No other major events regarding the Japanese economy are expected next week.

CRYPTOCURRENCIES: Will China's BTC-ETF Ignite the Market?

This analysis is prepared just hours before the 'hour X': the scheduled halving on Saturday, April 20. We will detail the market's reaction to this significant event next week. Meanwhile, let's focus on the events leading up to it.

In the days leading up to the halving, the leading cryptocurrency did not bring joy to investors. Starting on April 8, the price of bitcoin was on a downward trajectory. The weekly decline in BTC was the largest in the past eight months, and in dollar terms, it was the steepest since the FTX exchange collapse in November 2022. Following bitcoin, other major altcoins also plummeted, losing about a third of their value. The local minimum for BTC/USD was recorded on April 17 at around $59,640. At that moment, analyst and co-founder of venture company CMCC Crest, Willy Woo, warned that if the price of bitcoin fell below the short-term holders' support level at $58,900, the market might enter a bear phase. However, this did not occur, and the price returned to around $62,000.

Analysts at CryptoQuant believe that the recent crash was necessary to reset unrealized trader profits to zero—a typical signal of a bottom in bull markets. Willy Woo suggested that "current bearish sentiments are actually a bullish sign," and that the next level where major short liquidations would occur is between $71,000 and $75,000. Renowned trader RektCapital reassured investors, stating that a price drop before the halving is a normal trend. "There is no need to panic, as this drop has occurred in all cycles. Don’t think that it’s different this time," he emphasized.

There were, however, other theories about the recent price drop. According to one, the fall in bitcoin was helped by the escalation of conflict in the Middle East and an attack by Iran on Israel. CEO of Galaxy Digital, Mike Novogratz, speculated that bitcoin could reach a new all-time high if the conflict in that region subsided. In this context, he urged world leaders to take control of the situation to prevent a further decline in prices for all financial assets, including cryptocurrency.

In contrast, Michael Saylor, president of MicroStrategy, believes that geopolitical tension will actually benefit bitcoin, suggesting that "chaos is good for bitcoin." Logically, this makes sense: cryptocurrency was born in response to the economic crisis of 2008, making it an alternative means of capital preservation during upheavals. (Note that MicroStrategy, with 205,000 BTC on its balance sheet, is the largest public holder of bitcoin and naturally interested in its price increase.)

OpenAI's ChatGPT did not overlook the international situation either. This Artificial Intelligence believes that if the crisis between Israel and Iran intensifies, the price of the main cryptocurrency will only slightly decrease, and this will be a short-term reaction. More severe impacts would likely be on assets like stocks. Bitcoin, however, is expected to quickly recover its position. ChatGPT, like Michael Saylor, anticipates that an initial drop will be followed by a bullish rally as investors look for a safe haven, potentially driving "digital gold" to a new historical high of $75,000. If the escalation in the Middle East becomes protracted and leads to a series of smaller conflicts, ChatGPT predicts the volatility range for bitcoin could expand: with an initial fall to $55,000 followed by a surge to $80,000.

It is worth noting that the discussed drop in BTC/USD occurred against the backdrop of a noticeable strengthening of the American currency. This was not only due to the dollar's role as a safe-haven asset amid geopolitical tension but also because of a postponement in market expectations regarding the timing of the Fed's easing of monetary policy. After the inflation data published on April 10, market participants decided that the first rate cut would not happen in June but in September, causing the Dollar Index (DXY) to surge sharply. Naturally, the strengthening of one asset in a currency pair led to the weakening of the other: the principle of leverage is irrefutable.

Now, a few words about what awaits the main cryptocurrency after the halving. This year, 75% of the investment influx has been provided by the newly launched spot bitcoin ETFs in the U.S. Their combined balance now totals $12.5 billion, with the U.S. accounting for over 95% of the global inflow into exchange-traded crypto funds. The interest in ETFs has been so strong that BlackRock's fund became the fastest-growing in history.

According to CryptoQuant analysts, the reserves of bitcoin on exchanges will last only a few months at the current rates. Total available exchange reserves have decreased by more than 800,000 BTC and have reached their lowest level in the history of two-year observations. As of April 16, they stand at about 2 million BTC. Assuming a daily influx into spot BTC-ETFs of about $500 million, which at current prices equates to approximately 8,025 coins, it would take just nine months to completely deplete these reserves.

The results of calculations using the Stock-to-Flow (S2F) model, which demonstrates the relationship between an asset's usage and its reserves, show that after the halving, the bitcoin S2F coefficient will reach 112 points. This is nearly twice the S2F for gold (60 points), indicating that by January 2025, bitcoin will become a more scarce commodity than the most popular precious metal.

In such a scenario, another powerful new driver could emerge. Following the U.S., similar investment inflows into cryptocurrency could be provided by spot ETFs in China. According to insider information from Bloomberg, the SEC of Hong Kong could make a positive decision on launching such funds within the next few days. And perhaps the predictions by ARK Invest's CEO, Cathy Wood, and author Robert Kiyosaki, who expect the price of bitcoin to reach $2.3 million per coin by 2030, are not so far from the truth.

As of the evening of Friday, April 19, BTC/USD is trading around $64,150. The total market capitalization of the crypto market stands at $2.32 trillion, down from $2.44 trillion a week ago. The Crypto Fear & Greed Index has dropped from 79 to 66 points, moving from the Extreme Greed zone to the Greed zone.

Finally, a bit of intriguing information for collectors. As it has been revealed, miners have begun active preparations for the "hunt" for the first "epic" satoshi to be mined after the current halving. Whoever mines it might receive a substantial sum, as the estimated value of this "collectible" digital coin could be several tens of millions of dollars. About two years ago, Casey Rodarmor, creator of the Ordinals protocol on the blockchain of the first cryptocurrency, developed a system for classifying the rarity of individual sats. With the launch of "inscriptions," it became possible to number and sell fractions of bitcoin similar to non-fungible tokens (NFTs). Rodarmor's scale varies from the first "unusual" satoshi in each block to the "mythical" – the very first in the history of the blockchain. One of the highest degrees of rarity is the "epic" sat, mined in the first block after each halving. It is possible that collectors might value such an asset even at $50 million. (Remember that a satoshi is one hundred millionth of a bitcoin (0.00000001), and at the current BTC price, the price of a regular, non-collectible sat is just $0.00064).


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

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- As expected, on April 20, the fourth halving occurred on the bitcoin network at block #840000. The reward for mining a block has been reduced from 6.25 BTC to 3.125 BTC. It's worth reminding that a halving is the event that reduces the reward for mining new blocks in the bitcoin blockchain by half. This event is encoded in the code of the first cryptocurrency and occurs every 210,000 blocks: until the mining of 21 million coins, presumably in 2040, when the cryptocurrency's emission will end. The fourth halving will ensure that about 95% of all bitcoin emission is mined, with approximately 99% of all coins mined by 2033-2036. Following that, the emission will gradually move towards zero.
Economist and author of the cult book "The Bitcoin Standard," Saifedean Ammous, congratulated the crypto community on the halving. "For the first time in history, people have a form of money whose supply increases by less than 1% per year. [...] The harder the money, the slower its supply increases, the better it retains value in the future, and allows for planning and securing the future," he wrote.

- In the days following the halving, there was no increase in volatility. The price of bitcoin slowly and lazily moved upwards, reaching $66,000 at the time of writing this review. It seems that market participants are frozen in anticipation of who will start buying or selling the main cryptocurrency en masse. However, the founder of venture company Pomp Investments, Anthony Pompliano, believes that within 12-18 months, the coin is likely to first undergo a correction and then rise to $100,000 with chances of reaching $150,000-200,000. "At the moment, the probability of a decrease is quite small. [...] I see no reasons for the rate to drop below $50,000. I think we have already crossed this Rubicon," the entrepreneur believes.
Pompliano recommended buying gold to those looking for capital protection from the fall and the first cryptocurrency to those aiming to increase their purchasing power. "After the previous halving, the first cryptocurrency appreciated eightfold despite volatility. Name any other asset that has shown such high returns over a four-year cycle," he stated, revealing that he invested about half of his personal funds in the first cryptocurrency.

- Analysts at QCP Capital believe that bitcoin optimists will need to wait at least two months before assessing the impact of the recent fourth halving. "The spot price has only grown exponentially 50-100 days after each of the previous three halvings. If this pattern repeats, bitcoin bulls still have weeks to build a larger long position," their report states.

- According to Bitfinex experts, the post-halving supply restriction will stabilize the price of the first cryptocurrency and may contribute to its growth. "The decrease in the pace of bitcoin issuance after halving, which will amount to $30-40 million per day, sharply contrasts with the average daily net inflow of $150 million into spot ETFs. This underscores a significant demand and supply imbalance which may contribute to further price growth," the Bitfinex report indicates.

- A sharp increase in transaction fees on the day of the halving gave Euro Pacific Capital president and "gold bug" Peter Schiff another reason to declare the failure of the first cryptocurrency. On April 20, amid the reduction of the block reward, the average size of fees in the network jumped to a record $128.45. Experts largely linked this to the hype associated with the event around the launch of the Runes protocol.
"The cost of completing a transaction now stands at $128, and its processing takes half an hour. This is another reason why bitcoin cannot function as a digital currency. The costs of using it in this capacity are disproportionately high. This is a failure," Schiff declared. (And he was wrong. Shortly thereafter, the rate dropped nearly 73% to $34.86.)
In the comments, users asked the well-known gold advocate how much it would cost to safely deliver a pound of precious metal around the world. An estimate ranging from $800,000 to $2.3 million depending on the method and speed was voiced. "Remind me, how much does it cost to transport a gold bar to the other end of the world in half an hour?" Jameson Lopp, co-founder of Casa, sarcastically remarked about speed. Schiff responded that it didn't matter since people no longer use precious metal as currency.

- Speaking at a pre-election rally in Michigan, Robert Kennedy Jr. announced to the attendees that if he is elected President of the USA, every American will have the opportunity to review any budget item. "I will move the entire US budget to the blockchain, and we will have 300 million observers over it. If someone spends $16,000 on a toilet seat, everyone will find out!" he declared.
The presidential candidate believes that taxpayers have the right to know exactly what their money is being spent on. According to the politician, blockchain and cryptocurrencies should help the USA remain a leader in innovation and maintain the financial freedom of its citizens. Robert Kennedy Jr. had previously supported bitcoin, stating that the first cryptocurrency takes financial control away from the government and the monopolistic banking system.

- The crypto exchange CoinEx has put up for sale the first satoshi mined after the halving. Buyers can place bids in bitcoins on the auction page. A satoshi is one-hundred-millionth of a bitcoin (0.00000001), and the organisers of the auction hoped that collectors would pay several tens of millions of dollars for this "epic" coin. However, at the time of publication, the highest bid is only 2.5 BTC, which is about $165,000, although this price exceeds the value of one ordinary satoshi by 250 million times. The auction will end on April 26. The exchange will notify participants of the results via a message on the website and by email.

- Fidelity Digital Assets, a leading issuer of one of the spot BTC-ETFs, has revised its mid-term forecast for bitcoin from positive to neutral. The reason for the departure from optimistic views is several worrying trends in the crypto market. Fidelity analysts noted the growing interest in selling from long-term bitcoin hodlers. A large percentage of profitable addresses is currently noted in the report. This means that holders may want to lock in profits and start selling BTC. On the other hand, on-chain data also indicate that small investors continue to accumulate the first cryptocurrency. Since the beginning of the year, the number of addresses holding at least $1,000 in BTC has increased by 20% and reached a new all-time high. "This trend may indicate the growing proliferation of bitcoin and its acceptance among 'average' users," Fidelity notes.

- Investments in bitcoin by "new" whales have almost doubled the indicator of "old" major players. These assessments were shared by the CEO of CryptoQuant, Ki Young Ju. The expert attributed to the "whale" addresses not associated with CEX and miners with a balance of over 1000 BTC. The "new" category includes owners of coins "aged" less than 155 days; "old" exceed this term.
Specialists at CryptoQuant examined the dynamics of the 7DMA ratio of the SOPR indicator applied to these categories of investors and made conclusions similar to those of their colleagues from Fidelity. The elevated metric value showed high profitability of "old" hodlers compared to "newcomers," which could lead to the formation of price peaks. Analysis of the current situation also speaks of the need to exercise caution in anticipation of possible corrections and increased volatility.
Recall that earlier, specialists from JPMorgan noted that digital gold is in an overbought state. And CMCC Crest co-founder Willy Woo warned that if bitcoin falls below $59,000, the market risks entering a bear phase.

- Representatives of the initiative group of cryptocurrency supporters want to convince the Swiss Bank board to add bitcoins to the CB's reserves. The meeting on this issue will take place on April 26, where the concept of supporters of digital gold will be presented. In their opinion, such a step will strengthen the independence and neutrality of the state. Including BTC in its reserves, Switzerland would show the world that it has an independent financial policy from the European Central Bank.
Recall that back in 2022, the initiative group recommended the country's central bank to buy bitcoins for 1 billion Swiss francs (about $1.1 billion) instead of German government bonds, but the regulator ignored this proposal. However, now everything may change. Recently, Switzerland has been providing the most favourable conditions for the development of the cryptocurrency industry, which is why the government of El Salvador even opened its office in the country to jointly develop initiatives related to bitcoin.

- Christian Langlois, also known as Bitcoin Sign Guy, made headlines in 2017 when he displayed a notebook page with the message "Buy Bitcoin" behind Federal Reserve Chair Janet Yellen. At that moment, the FRB Chair was testifying about the state of the US economy. This image instantly spread across the network and became one of the symbols of the emerging crypto industry.
For his act, the 22-year-old intern Langlois was disgracefully expelled from the hearings. But after this episode was broadcast on television, enthusiasts sent seven BTC to his crypto wallet to thank the young man for his bold move. Four years ago, Christian sold 21 copies of the notable sheet at an average price of 0.8 BTC each, thus earning an additional 16.8 BTC. As a result, his total earnings reached 23.8 BTC, which is more than $15 million at the current rate.
And just a few weeks ago, Langlois was offered another 5 bitcoins for the original, but he refused to sell the sheet. Nevertheless, Christian liked the idea of further monetizing the self-created object of "artistic and historical heritage," and he decided to sell it at an auction. The winner's name will be announced late in the evening on April 24 at the New York snack bar Pubkey, and the young man plans to direct the proceeds to finance his startup, Tirrel Corp. At the time of writing the review, the sheet is offered for $140,000, but the auction is not yet over.


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

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

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Forex and Cryptocurrency Forecast for April 29 - May 3, 2024


EUR/USD: Inflation Persists, US GDP Growth Slows

The US economy remains the most powerful on the planet. Moreover, its share of global GDP has reached a nearly two-decade high of 26.3%. According to the IMF, from 2018, the European Union's share decreased by 1.4%, Japan's by 2.1%, while the United States increased by 2.3%. China's GDP is 64% of the American figure, down from 67% five years ago. As a result, the dollar remains the undisputed leader among G10 currencies, with no contenders for its throne in the foreseeable future. The strength of the national economy, coupled with a robust labour market, allows the Federal Reserve to focus on combating inflation, aiming to reduce it to the target 2.0%. According to Jerome Powell, head of the US Central Bank, easing monetary policy under current conditions would have far more negative consequences for the economy than maintaining it tight over a long period. Against this backdrop, the likelihood of a dollar interest rate cut at the Fed's June meeting, according to the FedWatch Tool, fell to 15%. Market participants believe that, at best, a decision to change the current policy may be taken in September. Some economists, including analysts from Morgan Stanley and Societe Generale, even suggest that the Fed may delay the first rate cut until early 2025. Such forecasts led to the US currency rising to five-month highs in mid-April against the euro, British pound, Australian, and New Zealand dollars, with USD/JPY once again reaching a 34-year price record and the DXY index climbing to 106.42.

However, that was in mid-April. For the last ten days of the month, the DXY was under bearish pressure, pushing EUR/USD upward. Jerome Powell stated that decisions on rate cuts are not made in advance but depend entirely on macroeconomic statistics. The statistics released in the last few days looked ambiguous, causing doubts that the US economy could maintain its previous positive dynamics. Tuesday's statistics on April 23, regarding US business activity and core durable goods orders, disappointed investors. Preliminary data from S&P Global showed that the Business Activity Index (PMI) in the US services sector unexpectedly fell from 51.7 to 50.9 points. The manufacturing sector's indicators were even worse, where the PMI crossed the threshold, separating progress from regression. In April, this indicator fell from 51.9 to 49.9 (forecast 52.0). These data alone are not as significant as labor market or inflation reports, but two days later, on April 25, they were supplemented by equally disappointing US GDP data. The preliminary estimate showed that US economic growth in Q1 was only 1.6%, lower than the forecast 2.5% and previous 3.4%. Compared to the same quarter in 2023, GDP growth decreased from 3.1% to 3.0%. Against this backdrop, the DXY, and with it EUR/USD, underwent a correction, with the pair rising to 1.0752.  

It should be recalled that the US inflation data released on April 10 showed that the Consumer Price Index (CPI) reached 3.5% year-on-year, the highest in six months. On Friday, April 26, the Bureau of Economic Analysis reported that inflation measured by the change in the Personal Consumption Expenditures (PCE) Price Index in March rose to 2.7% (year-on-year). The core PCE, which excludes volatile food and energy prices, instead of the expected decrease to 2.6%, remained at the previous level of 2.8%. Thus, on the one hand, we see that inflation is resistant and does not want to go down, and on the other hand, we observe a slowdown in GDP growth. According to our forecasts, faced with such a crossroads, the Fed will still not deviate from its previous path and will choose to fight price growth. Moreover, the decrease in GDP in Q1 should not overly alarm the regulator, as the US economy had been expanding at 2% and more for seven consecutive quarters, despite the aggressively tight monetary policy of the Fed. Moreover, recent labor market data looks very positive. The number of initial unemployment claims decreased from 212K to 207K (forecast 214K) – a minimum since February.

On Tuesday, April 23, the same day as in the US, preliminary data on business activity came out from the other side of the Atlantic. In Germany, the Manufacturing PMI rose from 41.9 to 42.2, and in the services sector – from 50.1 to 53.3, the Composite Index – from 47.7 to 50.5. Regarding the Eurozone as a whole, a positive dynamic was also noted. Thus, the Business Activity Index in the services sector rose from 51.5 to 52.9 points, the Composite Index from 50.3 to 51.4. The exception was the Manufacturing PMI (a decrease from 46.1 to 45.6). As for forecasts about the start of easing monetary policy by the European Central Bank, the emphasis is still on June. This was once again confirmed by the president of the German Bundesbank and a member of the ECB's Governing Council, Joachim Nagel, who stated on April 24 that a rate cut in June does not necessarily imply a series of rate cuts. In other words, in June – yes, there will be a cut, what happens next – is still unknown.

All of the above indicates that the fundamental indicators are still on the side of the dollar. The EUR/USD correction is likely to be limited and will not be powerful or prolonged. Last week, the pair closed at 1.0692. According to economists from the Singapore-based United Overseas Bank, it is unlikely to have the strength to break through the resistance at 1.0765. As for the forecast for the near future, as of the evening of April 26, 50% of experts expect the dollar to strengthen, 35% – its weakening, the remaining 15% maintained neutrality. Among the trend indicators on D1, 65% are on the side of the bears, 35% – are coloured green. Among the oscillators, a third are on the side of the bears, a third – on the side of the greens, and a third – are painted in neutral gray. The nearest support for the pair is located in the zone of 1.0680, then 1.0600-1.0620, 1.0560, 1.0495-1.0515, 1.0450, 1.0375, 1.0255, 1.0130, 1.0000. Resistance zones are located in the areas of 1.0710-1.0725, 1.0740-1.0750, 1.0795-1.0805, 1.0865, 1.0895-1.0925, 1.0965-1.0980, 1.1015, 1.1050, 1.1100-1.1140.

 The coming week promises to be quite turbulent and volatile as it is filled with various important events. On Monday, April 29, preliminary data on consumer inflation (CPI) in Germany will be released. The next day, another batch of German statistics will be released, including GDP and retail sales figures. On the same day, we will learn the preliminary volume of GDP and the level of inflation in the Eurozone as a whole. On Wednesday, May 1, Germany and many other EU countries will have a holiday – Labor Day. However, the United States will continue to work on this day. First, the ADP report on employment levels in the private sector of the country and indicators of business activity in the manufacturing sector will be published. The most important event will undoubtedly be the meeting of the FOMC (Federal Open Market Committee) of the US Federal Reserve on Wednesday, May 1, and the subsequent press conference of the management of this regulator. In addition, on Friday, May 3, we traditionally await another batch of very important statistics from the American labor market, including the unemployment rate and the number of new jobs created outside the agricultural sector (NFP), as well as revised data on business activity (PMI) in the US services sector.

GBP/USD: US PCE Hindered the Strengthening of the Pound

The preliminary statistics on business activity in the United Kingdom released on Tuesday, April 23, were mixed. The PMI in the manufacturing sector of the country crossed from above to below the growth/fall boundary, and with a forecast and previous value of 50.3 points, it actually fell to 48.7. In the UK services sector, on the other hand, there was growth in April – the indicator rose from 53.1 to 54.9 (market expectations 53.0). As a result, the Composite PMI reached 54.0 (52.8 a month earlier). However, all these figures did not attract much attention from investors.

On April 22, GBP/USD fell to 1.2300. The bulls on the pair took advantage of the dollar's overbought condition to return it to the lower boundary of the medium-term corridor of 1.2500-1.2800 in which it had been moving since the end of November last year. However, they did not have enough strength to consolidate within the corridor. The two-week maximum was recorded at 1.2540, after which, pushed by US PCE, the pair went down again and ended the five-day period at 1.2492.

According to specialists from United Overseas Bank, as long as the support at 1.2420 is not broken, there is still a possibility of the pound breaking through the 1.2530 mark. The next resistance, according to them, is at 1.2580. The median forecast of analysts regarding the behaviour of GBP/USD in the near future looks maximally uncertain: 20% voted for the movement of the pair to the south, the same amount – to the north, and the majority (60%) simply shrugged their shoulders. As for technical analysis, the trend indicators on D1 point south 65% and 35% look north. Among the oscillators, the picture is mixed: 25% recommend selling, 25% – buying, and 50% are in the neutral zone. In case of further decline of the pair, it will encounter support levels and zones at 1.2450, 1.2400-1.2420, 1.2300-1.2330, 1.2185-1.2210, 1.2110, 1.2035-1.2070, 1.1960, and 1.1840. In case of growth, the pair will encounter resistance at levels 1.2530-1.2540, 1.2575-1.2610, 1.2695-1.2710, 1.2755-1.2775, 1.2800-1.2820, 1.2885-1.2900.

No significant statistics on the state of the UK economy are planned for the week.

USD/JPY: Reached the Moon, Next Target – Mars?

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We called the previous review "Higher and Higher". Now, it is worth asking at what altitude will this flight into space end? When will the Bank of Japan (BoJ) finally decide on a radical change in its monetary policy?

At the meeting on April 26, the members of the Japanese Central Bank unanimously decided to keep the key interest rate at the previous level of 0.0-0.1%. Moreover, the regulator removed from the statement the reference that it is currently buying JGB bonds for about 6 trillion yen per month. The statement after the meeting states that "the prospects for the development of the economy and prices in Japan are extremely uncertain," "if inflation rises, the Bank of Japan will likely change the degree of easing of monetary policy," however, "it is expected that the eased monetary policy will be maintained for some time."

The market predictably reacted to such decisions of the Japanese Central Bank with another Japanese candle on the chart of the USD/JPY pair. The maximum was recorded at 158.35, which corresponds to the peak values of 1990. There were no currency interventions to save the national currency, which many market participants feared. Recall that strategists from the Dutch Rabobank called the level of 155.00 critical for the start of such interventions by the Ministry of Finance of Japan. The same mark was called by 16 out of 21 economists surveyed by Reuters. The rest predicted such actions at levels of 156.00 (2 respondents), 157.00 (1), and 158.00 (2). USD/JPY has long exceeded the levels at which the intervention took place in October 2022 and where the market turned around about a year later. It now seems that 158.00 is not the limit. Perhaps it is worth raising the forecast bar to 160.00? Or immediately to 200.00?

USD/JPY ended the past week at 158.32. The forecast of analysts regarding the near future of the pair looks as follows: fear of currency interventions still prevails over 60% of them, while the remaining 40% are waiting for the continuation of the flight to Mars. Technical analysis tools clearly have no concerns about interventions. Therefore, all 100% of trend indicators and oscillators on D1 point north, although a third of the latter are in the overbought zone. The nearest support level is located in the area of 156.25, then 153.90-154.30, 153.10, 151.00, 149.70-150.00, 148.40, 147.30-147.60, 146.50. And it is practically impossible to determine resistance levels. We only note the reversal maximum of April 1990, 160.30, although this target is quite conditional.

No significant events regarding the state of the Japanese economy are expected in the coming week. Moreover, traders should keep in mind that Monday and Friday in Japan are holidays: April 29, the country celebrates the birthday of Hirohito (Emperor Showa), May 3 – Constitution Day.

CRYPTOCURRENCIES: Where Will Bitcoin Fall?

As expected, the fourth halving took place in the bitcoin network at block #840000 on April 20. The reward for finding a block was reduced from 6.25 BTC to 3.125 BTC. Recall that halving is a halving of the reward size for miners for adding a new block to the bitcoin blockchain. This event is embedded in the code of the first cryptocurrency and occurs every 210,000 blocks – until the moment when the mining of 21 million coins (presumably in 2040) ends the emission of cryptocurrency. It should be noted that the fourth halving will provide for the mining of approximately 95% of the entire bitcoin emission, about 99% of all coins will be mined by 2033-2036. Then, the emission will gradually move towards zero.

In the previous review, we promised to tell how the market would react to this important event. We promised – we report: the market reaction is close to zero. For several days after the halving, there was no growth in volatility. The price of bitcoin slowly and lazily moved first upward, reaching $67,269 on April 23, and then returned to where it began its weekly journey: to the $64,000 zone. It seems that market participants froze in anticipation of who would be the first to start buying or, conversely, selling the main cryptocurrency massively.

According to experts from Bitfinex, the post-halving supply restriction stabilizes the price of the first cryptocurrency and may contribute to its growth. "The reduction in the pace of bitcoin issuance after halving, which will amount to $30-40 million per day, contrasts sharply with the daily net inflow of $150 million into spot ETFs. This emphasizes a significant demand and supply imbalance, which may contribute to further price growth," stated the Bitfinex report.

However, analysts from QCP Capital believe that bitcoin optimists will have to wait at least two months before assessing the effect of the past fourth halving. "The spot price grew exponentially only 50-100 days after each of the three previous halvings. If this pattern repeats this time, bitcoin bulls still have weeks to create a larger long position," their report stated.

Anthony Pompliano, the founder of the venture company Pomp Investments, believes that within 12-18 months, the coin is expected to grow to $100,000, with chances of reaching $150,000-200,000. However, before moving to a bull rally, BTC/USD, in his opinion, is waiting for a correction down. At the same time, Pompliano believes that the price will not fall below $50,000. "I think we have already crossed this Rubicon," – he wrote.

The possible upcoming decline of the main cryptocurrency is probably a topic currently much more discussed than its subsequent growth. Many agree that bitcoin coins will appreciate in the long term. But how will quotes behave in the more foreseeable future? Fidelity Digital Assets, the leading issuer of one of the spot BTC ETFs, has already revised its medium-term forecast for bitcoin from positive to neutral. The reason for abandoning optimistic sentiments is several worrying trends in the crypto market. Fidelity analysts noted the growing interest in selling from long-term hodlers. Among them, there is currently a large percentage of profitable addresses, as noted in the company's report. This means that holders may want to lock in profits and start selling BTC. On the other hand, on-chain data indicates that small investors, on the contrary, continue to accumulate the first cryptocurrency. Since the beginning of the year, the number of addresses on which BTC is stored for at least $1,000 has increased by 20% and reached a new historical maximum. "Such a trend may indicate the growing dissemination of bitcoin and its acceptance among 'average' users," – Fidelity noted.

Specialists from CryptoQuant examined the SOPR indicator readings for these categories of investors and made conclusions similar to those of their colleagues from Fidelity. Investments in Bitcoin by "new" whales (owners of coins "aged" less than 155 days) almost doubled the indicator of "old" large players (more than 155 days). At the same time, the increased value of the metric showed that the profits of the "old" hodlers significantly exceed the indicators of the "newcomers". And if the "old-timers" move to fix profits, this may lead to the formation of price peaks. An analysis of the current picture, according to CEO of CryptoQuant Ki Young Ju, also speaks of the need to exercise caution in anticipation of possible corrections and increased volatility.

Recall that earlier, specialists from JPMorgan noted that digital gold is in a state of overbought. And co-founder of CMCC Crest Willy Woo noted that if the price of the first cryptocurrency falls below the support level of short-term holders at $58,900, the market risks moving into a bearish phase.

As of the evening of Friday, April 26, the BTC/USD pair is trading in the region of $63,950. The total capitalization of the crypto market is $2.36 trillion ($2.32 trillion a week ago). The Bitcoin Fear & Greed Index remained in the Greed zone, although it rose from 66 to 70 points.

Finally, in conclusion of the review, our long-forgotten crypto-life-hacks column. It turns out that in order to become a crypto millionaire, it is enough to have a marker and a piece of paper. The possibility of such a way of enrichment was proven by Christian Langlois, also known as Bitcoin Sign Guy. This guy made headlines in many news outlets after showing a notebook sheet with the inscription "Buy Bitcoin" behind the back of the Chair of the Federal Reserve System Janet Yellen. At that moment, the head of the Fed was giving testimony about the state of the US economy. This image instantly spread across the network and became one of the symbols of the emerging crypto industry.

For his misdemeanour, the 22-year-old intern Langlois was disgracefully expelled from the hearings. But after this episode was shown on television, enthusiasts sent 7 BTC to his crypto wallet to thank the guy for his bold move. Four years ago, Christian sold 21 copies of the "cult" sheet at an average price of 0.8 BTC, earning another 16.8 BTC. Thus, his total earnings reached 23.8 BTC, which is more than $1.5 million at the current exchange rate.

And a few weeks ago, Langlois was offered another 5 bitcoins for the original, but he refused to sell the sheet. Nevertheless, Christian liked the idea of further monetizing the self-created object of "artistic and historical heritage", and he decided to sell it at an auction, directing the proceeds to finance his startup Tirrel Corp. On April 25, 2024, the auction house Scarce.City reported that the lot, which became a popular meme, was sold for 16 BTC (more than $1 million).


NordFX Analytical Group
 

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

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

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April Results: A British Pound Trade Nets NordFX Client Over $25,000 in Profit

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Brokerage firm NordFX has summarized the trading performance of its clients for April 2024. The efficacy of social trading services, PAMM and CopyTrading, as well as the earnings of the company’s IB-partners were also evaluated.

- This month’s highest profit was earned by a client from South Asia, account number 1765XXX, who made $26,757 from trading the GBP/USD pair.
- The second place in the TOP-3 was taken by their compatriot, account number 1751XXX, with earnings of $16,976 from gold trades (XAU/USD).
- The third step of the April podium was claimed by a trader from East Asia, account number 1609XXX, who traded not physical but digital “gold”: bitcoin. It was the BTC/USD pair transactions that enabled them to profit by $14,301.

The passive investment services at NordFX showed the following trends:

- In the PAMM service, we continue to monitor the account named Kikos2. Opened on November 18 last year, now after 162 days of operation, it shows a fantastic profit of 1161%. While this result is impressive, the aggressive trading strategy has also led to a substantial drawdown of 58%. Unrelenting statistics demonstrate that even more conservative trading can lead to a complete loss of funds. Therefore, investors must always exercise utmost caution and only risk the money whose loss will not disrupt their normal life. We will continue to monitor and see what happens with this account in May. 

- In CopyTrading, we have previously highlighted the signal yahmat-forex, which has shown a return of 415% over 312 days with a maximum drawdown of 37%. Another interesting signal called NordFXSrilanka has made a profit of 39% in 113 days, specifically since January 6, 2024. While not as impressive as yahmat-forex, its notable advantage is a very small drawdown: just about 9%.

Among the IB-partners of NordFX, the TOP-3 are as follows:
- The largest commission reward of $22,732 was credited to a partner from Western Asia, account number 1645XXX.
- The next is a partner from South Asia, account number 1682XXX, who received $5,224.
- Finally, rounding out the top three is their compatriot, account number 1565XXX, who was rewarded with $3,614.

***

As we conclude this month, it is important to note that NordFX clients now have yet another excellent opportunity to enhance their financial portfolio. In the 2024 super lottery, 202+4 cash prizes totaling $100,000 will be awarded. Participating in the lottery and securing a chance to win one or even several of these prizes is quite simple. For more details, visit the NordFX website.


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

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

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CryptoNews of the Week

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– Investors may not see a rise in the price of the main cryptocurrency to new historical highs in the coming months. Optimism about the launch of cryptocurrency ETFs in Hong Kong quickly dwindled, and bitcoin began to search for its bottom again. Liquidations of long positions reached $230 million per day, according to CoinGlass monitoring. It seems that bearish sentiments arose because the trading volumes of new ETFs in Hong Kong were significantly lower than expected, which led to a capital outflow from BTC-ETFs on US exchanges.
According to Glassnode analysts, bullish sentiments persist as the market prefers the "buy on the dip" approach. However, they acknowledge that losing support at around $60,000 could lead to a crash in the BTC price to $52,000. Another expert, Alan Santana, believes bitcoin could fall even lower, possibly to $30,000.

– Legendary trader, analyst, and head of Factor LLC, Peter Brandt, has allowed for a 25% probability that bitcoin has already formed another peak (ATH) in the current cycle on March 14 at a high of $73,745. The expert referred to the concept of "exponential decay," which describes a process of decreasing growth by a constant percentage over a specific period. "Historically, bitcoin has traded within approximately four-year cycles often associated with halvings. After the initial bull rally, there were three more, each 80% less powerful than the previous in terms of price growth," the specialist explained. "In my analysis, I estimated the probability [of such a scenario] at 25%. However, I trust the report I published in February more. [...] The 'pre/post-halving' cycle construction suggests that the current bullish trend will reach its peak in the range of $140,000–160,000 somewhere in late summer/early autumn 2025," clarified Peter Brandt.
Giovanni Santostasi, CEO of Quantonomy, questioned the appropriateness of applying the theory of exponential decay in this particular case. "We have three data points if we exclude the period before the [first] halving, and effectively only two when looking at the ratios. This is insufficient for conducting any significant statistical analysis," Santostasi commented on Brandt's assumption. According to his own power-law model, the peak of the fourth cycle is expected around December 2025, at approximately $210,000. It is worth noting that not only Giovanni Santostasi but also many other participants in the crypto market are counting on the continuation of the bull rally and achieving a new ATH. For example, Glassnode analyst James Check hopes that the BTC rate at this stage will reach $250,000. Even Peter Brandt himself mentioned $200,000 as a potential target in the February report he cited.

– The International Monetary Fund (IMF) has examined the first cryptocurrency and its impact on global markets in a new report. The organisation recognises the asset's ability to positively influence the economy. According to the IMF, digital gold is "the key to autonomy" for many countries in difficult financial situations. The report highlights the growing popularity of bitcoin and its acceptance in various jurisdictions, while the tense geopolitical situation has made assets like bitcoin and gold "more relevant."

– According to analysts from Spot On Chain, their forecasting model, developed using an extensive dataset, takes into account halvings, interest rate cycles, ETF factors, venture investor activity, and bitcoin sales by miners. Using the artificial intelligence platform Vertex AI from Google Cloud, Spot On Chain obtained price forecasts for bitcoin for the years 2024-2025. According to calculations, the price of the first cryptocurrency will be in the range of $56,000-70,000 from May to July, characterised by increased volatility. In the second half of 2024, there is a 63% probability that BTC will rise to $100,000. "This forecast signals prevailing bullish sentiments in the market, which will be facilitated by the expected reduction in interest rates [by the US Federal Reserve]. This could increase the demand for risk assets such as stocks and bitcoin," representatives of Spot On Chain explained. According to their data, there is a "convincing probability" – 42% – that in the first half of 2025, digital gold will surpass the $150,000 mark, as the first cryptocurrency typically updates its historical maximum 6-12 months after each halving. If we consider the entire year of 2025, the chances of growth to $150,000 increase to 70%.

– Cathy Wood, CEO of Ark Invest, confirmed her long-term forecast for Ethereum. In her opinion, the main altcoin is capable of catching up with bitcoin. She believes that by 2032, its market capitalization will reach an impressive $20 trillion. Based on current values, the main altcoin should consistently trade above $160,000 by that time. Highlighting her views, Cathy Wood emphasized that technologically, Ethereum is more advanced compared to the flagship cryptocurrency. Moreover, at the moment, it remains the most in-demand platform for deploying smart contracts and decentralized applications of any complexity.
In March, the price of ETH exceeded $4,000, but this was followed by a deep correction coinciding with geopolitical escalation in the Middle East, leading investors to flee from high-risk assets. Instead, they focused on diversification and began investing capital in traditional financial instruments. In light of these events, the key beneficiaries were the dollar and US Treasury bonds, as well as precious metals. 

– Mark Yusko, CEO of Morgan Creek Capital, expects a massive inflow of funds into the cryptocurrency market as wealth estimated at $30 trillion from baby boomers seeks to enter digital assets. According to the businessman, capital flows will most likely come from them – those born between 1946 and 1964 – through pension accounts managed by advisors. (According to the Investment Advisor Association, in 2022, US financial advisors managed assets worth more than $114 trillion). Yusko mentioned that the introduction of BTC-ETFs has significantly changed demand. However, the full effect of this is yet to be felt. "I believe that within 12 months, $300 billion will enter this area – this is 1% of the $30 trillion. In fact, this is more money than has ever been converted into bitcoin in 15 years. We've only been working with ETFs for about three months, and we've received about 10% of what I think comes into this area from registered investment advisors who control all the boomers' money," stated Yusko, adding that the inflow could potentially increase the crypto market's capitalization to $6 trillion.

– American regulators, according to the administrator of Bitcoin.org known as Cobra, are preparing to impose a complete ban on self-custody of cryptocurrency. This means that US citizens will have to involve intermediaries who will store digital assets. "If you think the government won't come for your bitcoins, you simply haven't paid attention to this," Cobra scares readers on the X social network page.
Cobra recently assured subscribers that a split might occur within the Bitcoin community. There are those who want the network to remain unchanged and those who would like to add more features to Bitcoin, expanding the network's capabilities. Cobra is confident that these disagreements could negatively affect the ecosystem of the first cryptocurrency.

– American entrepreneur and investor Chris Dixon criticised the tightening measures taken by regulators regarding cryptocurrencies. The US Securities and Exchange Commission (SEC) is increasingly suing crypto companies, claiming they are trading unregistered securities. This has caused Dixon great concern. "The US has an absurd cryptocurrency regulation regime. [...] Major industry companies developing blockchain-based solutions face constant pressure. Existing rules encourage platforms to host only memecoins, which can be freely traded on markets without any restrictions, rather than other more useful crypto assets," stated Dixon.
Further in his forecasts, the administrator of Bitcoin.org under the nickname Cobra believes that the US authorities are preparing to introduce a complete ban on self-custody of cryptocurrency. This means that citizens of the country will have to involve intermediaries who will store their digital assets. "If you think the government won't come for your bitcoins, you just haven't paid attention to this," Cobra scares readers on the pages of social network X.

– The Federal Court of Seattle (USA) has delivered a verdict in the case of the co-founder and former CEO of the largest crypto exchange, Binance, Changpeng Zhao. It is noted that the businessman was accused of crimes related to money transfers without a license. While the prosecution had requested three years of imprisonment, the defense suggested settling for five months of probation. Representatives of the Justice Department insisted that probation for CZ was inappropriate as "such a decision could encourage others to break the law on the largest possible scale." The defence argued the absence of evidence that the defendant was informed of the illegal activities on the exchange. As a result, one of the wealthiest people in the crypto industry got away with four months of imprisonment.
Addressing his final words, Changpeng Zhao acknowledged that he had failed to properly establish a suitable client verification system at Binance and to counteract money laundering during his tenure.
Recall that in November 2023, Zhao reached a settlement with the US government to end a years-long investigation against Binance. As part of the agreement, he stepped down as CEO and agreed to pay a fine of $50 million. However, as we see, the US authorities found this insufficient, and now, in addition to dismissal and a fine, a prison term has been added.


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

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

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Forex and Cryptocurrency Forecast for 06 – 10 May 2024


EUR/USD: What's Wrong with the US Soft Landing?

The headline of our last review stated that inflation remains stubborn, and the US GDP is slowing. Newly arrived data have only confirmed these assertions. A crucial inflation measure that the Federal Reserve follows – the Personal Consumption Expenditures Price Index (PCE) – increased from 2.5% to 2.7% in March. The ISM Manufacturing Sector PMI surpassed the critical level of 50.0 points, dropping from 50.3 to 49.2 points. It is important to remember that the 50.0 threshold separates economic growth from contraction. In such circumstances, neither raising nor lowering the interest rate is advisable, which is exactly what the FOMC (Federal Open Market Committee) of the US Federal Reserve decided. At its meeting on Wednesday, 01 May, the committee members unanimously left the rate unchanged at 5.50%, marking the highest rate in 23 years and unchanged for the sixth consecutive meeting.

This decision matched market expectations. Thus, greater interest was on the press conference and comments from the regulator's leadership after the meeting. The head of the Fed, Jerome Powell, stated that inflation in the US is still too high and further progress in reducing it is not guaranteed as it has not shown signs of slowing in recent months. According to him, the Fed is fully committed to returning inflation to the 2.0% target. However, "I don't know how long it will take," Powell admitted.

The outcomes of the FOMC meeting appear neutral except for one "dovish pill." The regulator announced that from June, it would reduce the amount of Treasury securities it redeems from its balance sheet from $60 billion to $25 billion per month. This tightening of the money supply is not yet a shift to quantitative easing (QE) but a definite step towards reducing the scale of quantitative tightening (QT). It must be noted that this did not make a strong impression on market participants.

Besides fighting inflation, the Fed's other main goal is maximum employment. "If inflation remains persistent and the labour market strong, it would be appropriate to delay lowering rates," Powell stated. Following his remarks, the market anticipated the important US Bureau of Labor Statistics (BLS) report, which was to be released on Friday, 03 May. This document disappointed dollar bulls as the number of people employed in the non-agricultural sector (NFP) in the US only grew by 175K in April, significantly lower than both the March figure of 315K and market expectations of 238K. The employment report also showed an increase in unemployment from 3.8% to 3.9%. The only solace for Powell and other Fed officials was the reduction in wage inflation – the annual growth rate of hourly earnings slowed from 4.1% to 3.9%.

European economy. Consumer Price Index (CPI) in Germany increased from 0.4% to 0.5% on a monthly basis. Retail sales also increased, from -2.7% to +0.3% year-on-year. Germany's GDP also moved into positive territory, rising in Q1 from -0.3% to 0.2%, exceeding the forecast of 0.1%. Regarding the Eurozone as a whole, the economy looks quite healthy – it is growing and inflation is falling. Preliminary data for Q1 shows GDP rising from 0.1% to 0.4% year-on-year and from 0.0% to 0.3% quarter-on-quarter. Core inflation (CPI) fell from 1.1% to 0.7% on a monthly basis and from 2.9% to 2.7% year-on-year, not far from the target of 2.0%.

This suggests that the European Central Bank (ECB) may begin to lower interest rates earlier than the Fed. However, it is still too early to make final conclusions. If based on the derivatives market, the probability of the first rate cut for the dollar in September is about 50%. Some economists, including analysts from Morgan Stanley and Societe Generale, even suggest that the Fed might postpone the first rate cut until early 2025.

After the release of the weak employment report in the US, the week's maximum was recorded at 1.0811. However, everything then calmed down a bit and the last point was placed by EUR/USD at 1.0762. As for the forecast for the near future, as of the evening of 03 May, 75% of experts expect the dollar to strengthen, 25% – its weakening. Among the oscillators on D1, the opposite is true: only 25% are on the side of the reds, 60% – are coloured green, 15% – in neutral gray. Among the trend indicators, there is a balance: 50% for the reds, just as much for the greens. The nearest support for the pair is located in the zone 1.0710-1.0725, then 1.0650, 1.0600-1.0620, 1.0560, 1.0495-1.0515, 1.0450, 1.0375, 1.0255, 1.0130, 1.0000. Resistance zones are located in the areas 1.0795-1.0805, 1.0865, 1.0895-1.0925, 1.0965-1.0980, 1.1015, 1.1050, 1.1100-1.1140.

No events as important as those of the past week are anticipated. However, the calendar still highlights Tuesday, 07 May, when revised retail sales data in the Eurozone will be released, and Thursday, 09 May, when the number of unemployment benefit claims in the US is traditionally made known.

GBP/USD: Will the Pair Fall to 1.2000?

Not the pound but the dollar defined the week for GBP/USD. This is evidenced by the fact that the pair completely ignored the forecast of the Organisation for Economic Co-operation and Development according to which the UK will face the slowest economic growth and the highest inflation among the G7 countries, excluding Germany, this and next year. It is expected that the UK's GDP in 2024 will decrease from 0.7% to 0.4% and in 2025 – from 1.2% to 1%.

Commenting on this rather sad forecast, the UK Finance Minister Jeremy Hunt stated that the country's economy continues to fight inflation with high interest rates, which put significant pressure on the pace of economic growth.

Like other central banks, the BoE faces a tough choice – to prioritize fighting inflation or supporting the national economy. It is very difficult to sit on two chairs at once. Economists from the investment bank Morgan Stanley believe that the divergence in monetary policy between the Bank of England and the Fed could put serious pressure on GBP/USD. In their opinion, if markets decide that the Fed will refrain from lowering the rate this year and the BoE begins a softening cycle (by 75 basis points this year), the pound may once again test the 1.2000 level.

The pair ended the week at 1.2546. The median forecast of analysts regarding its behaviour in the near future looks maximally uncertain: a third voted for the pair's movement south, a third – north, and just as many – east. Regarding technical analysis, among trend indicators on D1, 35% point south and 65% look north. Among the oscillators, only 10% recommend selling, the rest 90% – buying, although a quarter of them give signals of the pair's overbought.

The pair will encounter resistance at levels 1.2575-1.2610, 1.2695-1.2710, 1.2755-1.2775, 1.2800-1.2820, 1.2885-1.2900. In case of a fall, it will meet support levels and zones at 1.2500-1.2520, 1.2450, 1.2400-1.2420, 1.2300-1.2330, 1.2185-1.2210, 1.2110, 1.2035-1.2070, 1.1960, and 1.1840.

If last week the dynamics of GBP/USD were mainly determined by news from the US, much will depend on what happens in the UK during the upcoming week. Thus, on Thursday, 09 May, a meeting of the Bank of England will take place, where a decision on further monetary policy, including changes in interest rates and the planned volume of asset purchases, will be made. And at the very end of the working week, on Friday, 10 May, data on the country's GDP for Q1 2024 will be released.

USD/JPY: A Truly Crazy Week

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At its meeting on 26 April, the members of the Bank of Japan (BoJ) Board unanimously decided to leave the key rate and the parameters of the QE program unchanged. There was no harsh commentary expected by many on the future prospects. Such inaction by the central bank intensified pressure on the national currency, sending USD/JPY to new heights.

A significant part of the previous review was devoted to discussing how much the yen would need to weaken before Japanese financial authorities moved from observation and soothing statements to real active measures. USD/JPY had long surpassed levels around 152.00, where intervention occurred in October 2022 and where a reversal happened about a year later. This time, strategists from the Dutch Rabobank called 155.00 a critical level for the start of currency interventions by the Ministry of Finance and the Bank of Japan. The same mark was mentioned by 16 out of 21 economists surveyed by Reuters. Others forecasted similar actions at levels of 156.00 (2 respondents), 157.00 (1), and 158.00 (2). We suggested raising the forecast bar to 160.00, and as a reversal point, we indicated 160.30. And we were right.

Firstly, on Monday, 29 April, when the country celebrated the birth of Hirohito (Emperor Showa), USD/JPY continued its cosmic epic and updated another 34-year high by reaching 160.22. Thus, in just two days, it rose by more than 520 points. The last time such an impressive surge was observed was 10 years ago.

However, the situation did not calm down there. On the same day, a short powerful impulse sent the pair back down by 570 points to 154.50. Then followed a rebound, and late in the evening on 01 May, when the sun was already rising over Japan the next day, another crash occurred – in just one hour, the pair dropped 460 points, stopping its fall near 153.00. This movement occurred after relatively mild decisions by the Fed, but the cause was clearly not this, as other major currencies at that moment strengthened against the dollar much less. For example, the euro by 50 points, the British pound – by 70.

Such sharp movements in favour of the yen were very similar to the currency interventions of the BoJ in 2022. Although there was no official confirmation of intervention by the Japanese authorities, according to estimates by Bloomberg, this time on the intervention on Monday, 29 April, 5.5 trillion yen was spent, and on 01 May, according to calculations by the Itochu Institute, another 5 trillion yen.

And now the question arises: what next? The effect of the autumn interventions of 2022 lasted a couple of months – already at the beginning of January 2023, the yen began to weaken again. So it is quite possible that in a few weeks or months, we will again see USD/JPY around 160.00.

The BoJ's statement following the latest meeting stated that "the prospects for economic and price developments in Japan are extremely uncertain" and "it is expected that relaxed monetary policy will be maintained for some time." There is currently no need to raise the interest rate as core inflation is significantly and sharply decreasing, it has fallen from 2.4% to 1.6%. Especially since tightening monetary policy could harm the country's economy. The growth rate of GDP remains close to zero. Moreover, the public debt is 264% of GDP. (For comparison: the constantly discussed US public debt is half that – 129%). So the mentioned "some time" in the statement of the regulator may stretch for many months.

It is appropriate to recall BoJ board member Asahi Noguchi, who recently stated that the pace of future rate increases is likely to be much slower than global counterparts, and it is impossible to say whether there will be another increase this year. So a new strengthening of the yen is possible only in two cases – thanks to new currency interventions and thanks to the start of easing monetary policy by the Fed.

According to Japanese MUFG Bank economists, interventions will only help buy time, not initiate a long-term reversal. Bloomberg believes that the intervention itself will be effective only if it is coordinated, particularly with the USA. According to forecasts by analysts of this agency, this year USD/JPY may rise to approximately 165.00, although overcoming the mark at 160.00 may take some time.

After all these crazy ups and downs, the past week ended at a level of 152.96. The experts' forecast regarding its nearest future, as in the case with GBP/USD, gives no clear directions: a third are for its rise, a third – for its fall, and a third have taken a neutral position. Technical analysis instruments are also in complete disarray. Among the trend indicators on D1, the distribution of forces is 50% to 50%. Among the oscillators, 50% point south (a third are in the oversold zone), 25% look north, and 25% – east. Traders should keep in mind that due to such volatility; the magnitude of slippage can reach many dozens of points. The nearest support level is located in the area of 150.00-150.80, then follow 146.50-146.90, 143.30-143.75, and 140.25-141.00. Resistance levels are 154.80-155.00, 156.25, 157.80-158.30, 159.40, and 160.00-160.25.

No significant events regarding the state of the Japanese economy are expected next week. Moreover, traders should keep in mind that Monday, 06 May is another holiday in Japan – the country celebrates Children's Day.

CRYPTOCURRENCIES: BTC-2025 Target – $150,000-200,000

In the last review, we wondered where bitcoin would fall. Now we know the answer: on 01 May, it fell to the mark of $56,566. The last time the main cryptocurrency was valued this low was at the end of February 2024.

Bearish sentiments apparently arose because the trading volumes of new ETFs in Hong Kong turned out to be significantly lower than expected. Optimism in this regard has dried up. Against this backdrop, there began a withdrawal of funds from exchange-traded BTC-ETFs in the USA. Analysts from Fidelity Digital Assets, a leading issuer of one of these funds, noted a growing interest in selling and locking in profits from the side of long-term hodlers. For this reason, Fidelity revised its medium-term forecast for bitcoin from positive to neutral. According to CoinGlass monitoring, liquidations of long positions reached $230 million per day. Another negative factor for the market is called the geopolitical escalation in the Middle East, as a result of which investors began to flee from any high-risk assets. Instead, they began to invest capital in traditional financial instruments. In light of these events, the main beneficiaries in March-April were the dollar and US Treasury bonds, as well as precious metals.

Analysts from Glassnode hope that bullish sentiments will still prevail since the market prefers to "buy on the fall." However, they admit that the loss of support in the area of $60,000 may lead to further collapse of the BTC rate. Co-founder of CMCC Crest Willy Woo called support from short-term holders at the mark of $58,900 critical. After its breach, in Woo's opinion, the market risks transitioning to a bearish phase.

So, last week, both these lines of defense of the bulls were broken. What's next? In Glassnode, as a bottom, they call the level of $52,000. The founder of venture company Pomp Investments Anthony Pompliano believes that the price will not fall below $50,000. Another expert – Alan Santana does not exclude a failure to $30,000. All these forecasts indicate that in the coming months, investors may not see new historical maximums of BTC.

For example, legendary trader, analyst, and head of Factor LLC Peter Brandt with a probability of 25% admitted that bitcoin has already formed another maximum (ATH) within the current cycle. This happened on 14 March at the height of $73,745. The expert referred to the concept of "exponential decay." The latter describes the process of decreasing the amount of growth by a constant percentage over a certain period. "Bitcoin has historically traded within approximately a four-year cycle, often associated with halvings. After the initial bullish rally, there were three more, each being 80% less powerful than the previous one in terms of price growth," the specialist explains.

"In my analysis, I estimated the probability [of such a scenario] at 25%. But I trust more the report that I published in February. […] Building a cycle 'before/after halving' suggests that the current bullish trend will reach its peak in the range of $140,000–160,000 somewhere in the late summer/early fall of 2025," Peter Brandt clarified.

CEO of Quantonomy Giovanni Santostasi doubted the correctness of applying the theory of exponential decay in this particular case. "We have three data points if we exclude the period before [the first] halving and actually only two if we consider the ratios. This is not enough for any meaningful statistical analysis," Santostasi commented on the assumption expressed by Brandt. According to his own model of power dependence, the peak of the fourth cycle falls approximately in December 2025 at the level of ~$210,000.

Note that not only Giovanni Santostasi, but also many other participants in the crypto market, are counting on the continuation of the bull rally and reaching a new ATH. For example, the aforementioned Anthony Pompliano believes that within 12-18 months, the coin is waiting for growth to $100,000 with chances to reach $150,000-200,000. Analyst at Glassnode James Check hopes that at this stage, the BTC rate will reach $250,000. And Peter Brand himself in the mentioned February report called $200,000 as a potential landmark. At the same time, economists from QCP Capital believe that it is necessary to wait at least two months before assessing the effect of the past fourth halving. "The spot price grew exponentially only 50-100 days after each of the three previous halvings. If this pattern repeats this time, bitcoin bulls still have weeks to build a larger long position," their report states.

According to CEO of Morgan Creek Capital Mark Yusko, the appearance of exchange-traded BTC-ETFs has led to a significant change in demand. However, the full effect of this is yet to be felt. According to the businessman, the main capital flows will come from baby boomers, i.e., those born between 1946 and 1964, through pension accounts managed by investment consultants. The capital of baby boomers is estimated at $30 trillion. "I believe that within 12 months, $300 billion will flow into the crypto sphere – this is 1% of 30 trillion dollars. In fact, this is more money than has ever been converted into bitcoins in 15 years," Yusko shared his forecast, adding that the inflow could potentially increase the capitalization of the crypto market to $6 trillion.

Another forecast was given by specialists from Spot On Chain. According to their words, the analytical model developed by them is based on an extensive data set. In particular, it takes into account halvings, interest rate cycles, the ETF factor, venture investors' activity, and sales of bitcoins by miners. Using the artificial intelligence platform Vertex AI from Google Cloud, Spot On Chain obtained forecasts for the BTC price for the years 2024-2025.

During May-July, the price of the first cryptocurrency, according to their calculations, will be in the range of $56,000-70,000. This period is characterized by increased volatility. In the second half of 2024, with a probability of 63%, BTC will rise to $100,000. "This forecast signals the prevailing bullish sentiments in the market, which will be facilitated by the expected reduction in interest rates [by the US Federal Reserve]. This may increase the demand for risky assets such as stocks and bitcoin," representatives of Spot On Chain explained.

According to their words, there is a "convincing probability" of 42% that in the first half of 2025, digital gold will overcome the $150,000 mark, as the first cryptocurrency usually updates the historical maximum within 6-12 months after each halving. If we take the whole of 2025, the chances of growth to $150,000 increase to 70%.

Thus, as follows from the forecasts presented above, the main target range for bitcoin in 2025 is at the height of $150,000-200,000. Of course, these are just forecasts and not at all a fact that they will come true, especially if we take into account the opinion of the "funeral team" consisting of Warren Buffett, Charlie Munger, Peter Schiff, and other ardent critics of the first cryptocurrency. Meanwhile, at the time of writing this review, on the evening of Friday, 03 May, BTC/USD, taking advantage of the weakening dollar, grew to $63,000. The total capitalization of the crypto market is $2.33 trillion ($2.36 trillion a week ago). The Bitcoin Fear & Greed Index showed a serious drop – from 70 to 48 points and moved from the Greed zone to 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.

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NordFX Named Best ECN/STP Forex Broker 2024


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NordFX received its first award nearly 15 years ago, back in 2010. Since then, it has been honoured with more than 70 professional prizes and titles for achievements and innovations across various sectors of the financial industry. However, only once before, in 2015, were NordFX's merits in organizing ECN trading specifically recognized. Now, the esteemed international online portal FXDailyInfo has once again acknowledged the company as the Best ECN/STP Forex Broker.

FXDailyInfo is one of the leading resources providing daily news and analysis on the financial markets, including broker reviews, educational materials, and other useful information for traders. The portal also annually recognizes the best representatives of the financial industry with its awards. Winners of the FXDailyinfo Awards are determined through open voting by visitors to the website, which makes these awards particularly valuable as they objectively reflect the opinion of the professional community. This time, the high rating was given for the services NordFX offers its clients on Zero accounts on popular platforms such as MetaTrader 4 and 5.

A key feature here is direct access to interbank liquidity. The Electronic Communication Network (ECN) used on MT4 Zero and MT5 Zero accounts directs trader orders directly to liquidity providers, bypassing any additional intermediation. This reduces order processing time and provides the opportunity to trade at the most favourable prices with minimal commissions and spreads. On most popular pairs such as EUR/USD, GBP/USD, and USD/JPY, typical spreads are 0 pips. In addition to currency pairs, traders can also conduct transactions with cryptocurrencies, stocks, and exchange indexes, as well as oil, gas, and precious metals on these accounts. Notably, the spread for the gold pair XAU/USD is also zero. This pair is particularly favored by traders in NordFX's top three, largely thanks to which they were able to earn an impressive total of nearly $2.5 million USD in the previous year, 2023.


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

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

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CryptoNews of the Week

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– Anthony Pompliano, founder of Pomp Investments, asserts that bitcoin is "stronger than ever." This conclusion is based on the 200-day moving average (200 DMA) reaching its all-time high above $56,000. "In the long term, digital gold continues to appreciate. It is misleading to comfort oneself with the idea of a sideways trend. The long-term thesis is stronger than ever," the expert stated.

– Willy Woo, analyst and co-founder of CMCC Crest, has highlighted the activity of so-called crypto 'dolphins' and 'sharks.' "There has never been such vigorous coin accumulation by wealthy holders as in the last two months, with prices fluctuating between $60,000 and $70,000. These are individuals who hold between 100 BTC and 1,000 BTC, or approximately $6.5 million to $65 million," he explained. Willy Woo anticipates that bitcoin will continue to penetrate various aspects of daily life, thereby increasing the number of users. "By 2035, we expect the fair value of bitcoin to reach $1 million. This forecast is based on the user growth curve, and I am talking about fair value, not the peak during a bull market frenzy. Bitcoin was not traded until the thousandth user appeared, and only after the launch of the cryptocurrency exchange Bitstamp in 2011 did global platforms for asset valuation emerge. Since 2012, the BTC price has largely matched the growth in user numbers," noted the analyst.

– According to analysts at CryptoQuant, whales holding between 1,000 and 10,000 BTC, unlike dolphins and sharks, behave quite passively. Meanwhile, Michael Van De Poppe, founder of MN Trading, has pointed out the "absence of retail investors." He predicts that in the event of another correction, the coin could drop to around $55,000. "However, this range is quite acceptable as long as bitcoin remains above $60,000. Altcoins are slowly awakening," he added.

– Trader and analyst known as Rekt Capital reported that the first cryptocurrency has exited the post-halving "danger zone" and entered a phase of reaccumulating. According to this expert, in 2016, after the halving, BTC demonstrated a long red candle on the weekly chart, decreasing by 17%. This time, however, the pattern repeated with a correction of just 6%. The price reached a local bottom at around $56,500 but then increased by 15% and re-entered the "reaccumulating range." The analyst warned that technically, the "danger zone" will continue until the end of this week when the third post-halving weekly candle closes. From a price perspective, the "reversal effect" has already occurred.

– Robert Kiyosaki, bestselling author of "Rich Dad Poor Dad" and entrepreneur, has declared a crash in the currency market. "Bad news: the crash has already begun. It will be severe. Good news: a crash is the best time to get rich," he wrote, offering several recommendations on how to act during a crisis. The first recommendation is: "Find an additional source of income. Artificial Intelligence will destroy millions of jobs. Start a small business and become an entrepreneur rather than an employee who fears losing their job." The second advice from Kiyosaki is: "Do not save fake money (US dollars, euros, yen, pesos) which are declining in value. Save gold, silver, and bitcoin – real money whose value increases, especially in market crash conditions."

– Over the last decade, the main cryptocurrency has risen by an astonishing 12,464%, surpassing tech giants such as Amazon, Alphabet, and Netflix. However, according to a study by WuBlockchain, Nvidia shares took the lead, showcasing an even more impressive growth of 17,797%. This was facilitated by the company's cutting-edge graphics processors and semiconductor devices. The fact that bitcoin secured the second place, being a representative of a highly volatile market, is a true achievement. The impressive growth trajectory of BTC over the last decade demonstrates its resilience and potential as a viable investment vehicle. Given that investors are actively diversifying their portfolios and seeking ways to achieve potentially high returns, the analysis conducted by the WuBlockchain team serves as a valuable reference point that highlights the impressive dynamics not only of traditional tech company stocks but also of modern digital assets. 

– According to data from Clark Moody, more than 1 billion transactions have already been processed in the bitcoin network. Comparing network indicators with the international payment system Visa, it is notable that the first cryptocurrency's blockchain reached the billion milestone in just 15 years, while Visa required almost a quarter of a century. The average number of daily transactions in the BTC network, as detailed by The Block, is around 505,000, which is a sign of growing recognition for "digital gold." It should be noted that bitcoin is not the record holder in this indicator: the Ethereum network currently has around 2.4 billion transactions.

– On May 1, bitcoin updated the minimum from April 17-19, which has heightened investor concerns. Amid such fluctuations, Michael Saylor, CEO of MicroStrategy, has become a symbol of bullish optimism. In his latest message, he urged investors to "run with the bulls." It should be noted that with 205,000 BTC on its balance sheet, Saylor must exude optimism to prevent his company from incurring losses. However, analysts note that in reality, the fate of bitcoin depends not only on the sunny calls of the CEO of MicroStrategy. If buyer support weakens, BTC may return to key support levels at $61,000 and $56,000, where significant liquidity is concentrated.

– American and British scientists have published a study titled "The Impact of Cryptocurrency-Generated Wealth on Purchasing and Investment in Private Residences." The researchers examined financial transaction data for more than 60 million residents of the USA conducted from 2010 to 2023 and found that the rise in cryptocurrency prices causes a significant increase in real estate prices. In states such as California, Nevada, and Utah, where many residents became wealthy in 2017 due to the multiple increase in BTC prices, the value of real estate increased by an average of $2,000 annually, and every dollar earned from cryptocurrencies increased property prices by 15 cents.


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

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

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Forex and Cryptocurrency Forecast for 13 – 17 May 2024


EUR/USD: Medium-Term Outlook Favours the Dollar

Throughout the past week, EUR/USD exhibited mixed dynamics, primarily driven by expectations concerning potential interest rate cuts by the US Federal Reserve (Fed) and the European Central Bank (ECB). Statements by officials from both central banks, as well as economic macro-statistics, either heightened or lowered these expectations. 

The EUR/USD bullish rally commenced on 16 April from the 1.0600 mark, reaching a peak of 1.0811 on 3 May, after which growth stalled, starting the past week at 1.0762. On Monday, 6 May, statistics from the Eurozone provided some support to the common European currency. In April, the Services Purchasing Managers' Index (PMI) rose from 52.9 to 53.3, exceeding the forecast of 52.9. The Composite PMI, which includes the manufacturing sector and services, increased from 51.4 to 51.7. Germany's Composite PMI also showed positive dynamics, rising from 50.5 to 50.6. Consequently, business activity in the Eurozone reached its highest level in almost a year. Moreover, retail sales in the region showed significant growth, rising from -0.5% to +0.7% year-on-year.

This news backdrop suggests potential inflation growth, which in theory could deter the ECB from initiating a monetary policy easing. However, ECB Chief Economist Philip Lane stated that the Executive Board of the bank has compelling arguments for a rate cut at the 6 June meeting. Another ECB representative, Lithuanian Central Bank head Gediminas Simkus, indicated that rate cuts should not be limited to June, suggesting it could happen thrice by the end of the year. However, while the likelihood of easing (QE) in June is near 100%, there is some uncertainty regarding further steps. ECB Vice President Luis de Guindos admitted that the regulator is cautiously forecasting any trends beyond June.

In addition to ECB officials' statements supporting easing, statistics released on Tuesday, 7 May, also contributed. They showed that manufacturing orders in Germany, the locomotive of the European economy, decreased by 0.4% in March after a 0.8% decline in February. As a result, the EUR/USD pair's growth halted, pulling back to 1.0723.

The pair made another attempt to break through the strong resistance zone of 1.0790-1.0800 on Thursday, 9 May, when US initial jobless claims data was unexpectedly reported at 231K, much worse than the expected 210K. This coincided with a widespread negative session for US yields along the curve. The situation worsened as the unemployment data confirmed concerning statistics released on 3 May. According to the US Bureau of Labor Statistics (BLS), non-farm payrolls (NFP) rose by just 175K in April, significantly below the March figure of 315K and market expectations of 238K. The employment report also showed an increase in unemployment from 3.8% to 3.9%.

Besides combating inflation, the Fed's other declared main goal is maximum employment. "If inflation remains stable and the labor market strong, it would be appropriate to delay rate cuts," stated Fed Chair Jerome Powell. Now, the strength of the labour market is in question. However, the Fed is likely to focus on fighting inflation, which is still far from the 2.0% target.

A key inflation indicator tracked by the Fed, the Personal Consumption Expenditures (PCE) Price Index, rose from 2.5% to 2.7% in March. However, the ISM Manufacturing PMI fell below the key 50.0 mark, dropping from 50.3 to 49.2 points. Remember, a level of 50.0 separates economic growth from contraction. In such a situation, raising the interest rate is inadvisable, but lowering it is also not an option. This is exactly what the FOMC (Federal Open Market Committee) of the Fed did. At its meeting on Wednesday, 1 May, its members unanimously left the rate unchanged at 5.50%. This is the highest rate in 23 years, and the US central bank has kept it unchanged for six consecutive meetings.

The main scenario foresees the Fed beginning to review the rate towards a decrease no earlier than autumn, likely in September, with another cut by year-end. However, if US inflation does not decline or, worse, continues to rise, the regulator may abandon monetary policy easing until early 2025. Thus, considering the above, many analysts believe the medium-term advantage remains with the dollar, and EUR/USD is still attractive for sales with a horizon of several months.

The final point of the week for EUR/USD was at 1.0770, making the weekly result almost zero. Regarding the forecast for the near term, as of the evening of 10 May, it is maximally neutral: 50% expect dollar strengthening, and 50% expect its weakening. Trend indicators on D1 are equally divided: half are on the side of the reds, and half are on the side of the greens. Among oscillators, only 10% voted for the reds, another 10% remained neutral, and 80% voted for the greens (although a quarter of them are already signalling overbought conditions). The nearest support for the pair is located in the 1.0710-1.0725 zone, followed by 1.0650, 1.0600-1.0620, 1.0560, 1.0495-1.0515, 1.0450, 1.0375, 1.0255, 1.0130, and 1.0000. Resistance zones are in the regions of 1.0795-1.0810, 1.0865, 1.0895-1.0925, 1.0965-1.0980, 1.1015, 1.1050, and 1.1100-1.1140.

In the coming week, on Tuesday, 14 May, consumer inflation data (CPI) in Germany and the Producer Price Index (PPI) in the US will be released. Also scheduled for this day is a speech by Fed Chair Jerome Powell. The next day, Wednesday, 15 May, important indicators such as Consumer Price Index (CPI) and retail sales volumes in the United States will be published. On Thursday, 16 May, the traditional number of initial jobless claims in the US will be announced. And at the very end of the working week, on Friday, 17 May, we will learn the Eurozone CPI as a whole, which may influence the ECB's decision regarding the euro interest rate.

GBP/USD: Pound Remains Under Pressure but Holds On

At its meeting on Thursday, 9 May, the Bank of England’s (BoE) Monetary Policy Committee maintained the interest rate at 5.25%, the highest in 16 years. Economists polled by Reuters mostly expected borrowing costs to remain unchanged, with a committee vote ratio of 8 to 1. However, the vote was 7 to 2. During discussions, two committee members supported a rate cut to 5.0%, which market participants interpreted as a step towards the beginning of a policy easing cycle.

At the post-meeting press conference, BoE Governor Andrew Bailey expressed optimism, stating that the UK economy is moving in the right direction. Bailey also noted that “a rate cut next month is quite possible,” but he intends to wait for data on inflation, activity, and the labour market before making a decision. Chief Economist Huw Pill, although he joined the majority in voting to keep the rate unchanged, also expressed growing confidence that the time for a reduction is approaching. He added that “focusing only on the next Bank of England meeting [20 June] is somewhat unreasonable” and that “medium-term inflation forecasts do not necessarily signal rate movements at the next or subsequent meetings.”

Overall, the movement of the GBP/USD pair last week resembled that of the EUR/USD pair. The chart shows a distinct surge on Thursday, 9 May, triggered by data indicating a cooling US labour market. The pound was also supported by optimistic GDP data for the UK for Q1 2024 and manufacturing sector data for March.

GDP (quarter-on-quarter) rose by +0.6% after a decline of -0.3% in the previous quarter (forecast +0.4%). Additionally, the GDP grew by +0.2% year-on-year, recovering from a fall of -0.2%.

As with the euro, the pound is under pressure from the prospect of earlier monetary policy easing by the BoE compared to the Fed. However, the British currency ended the past week above the key 1.2500 level, at 1.2523. Moreover, 65% of analysts expect the pair not only to hold above this horizon but also to continue its growth. The remaining 35% voted for the pair's movement south. As for technical analysis, trend indicators on D1 are split 50-50. Among oscillators, only 10% recommend selling, 40% took a neutral position, and 50% recommend buying (10% of them signal overbought conditions). If the pair rises, it will encounter resistance at levels 1.2575-1.2610, 1.2695-1.2710, 1.2755-1.2775, 1.2800-1.2820, and 1.2885-1.2900. In case of a fall, it will face support levels and zones at 1.2490-1.2500, 1.2450, 1.2400-1.2410, 1.2300-1.2330, 1.2185-1.2210, and 1.2070-1.2110, 1.2035.

The upcoming week's calendar highlights Tuesday, 14 May, when data from the UK labour market will be released. Also of interest is the Inflation Report hearing scheduled for Wednesday, 15 May.

USD/JPY: $50 Billion Interventions Wasted?

It seems that until the Bank of Japan (BoJ) takes confident and clear steps to tighten its monetary policy, nothing will help the yen. At its meeting on 26 April, the board members of this regulator unanimously decided to leave the key rate and QE program parameters unchanged. Expectedly tough comments on the outlook were also absent. This inaction increased pressure on the national currency, sending the USD/JPY pair to new heights. It continued its cosmic saga, reaching a new 34-year high of 160.22. Following this, Japan's financial authorities finally decided on a double currency intervention. Although there was no official confirmation, experts estimate its total volume at $50 billion.

Did it help? Judging by the USD/JPY chart, not really. The pair headed north again last week. Unlike the euro and the British pound, the yen barely reacted even to weak US labour market data on Thursday, 9 May, only slowing its decline.                 

All this occurs amid endless statements from the Japanese Central Bank and Ministry of Finance about their readiness to take necessary measures to reduce speculative pressure on the national currency. The published minutes of the BoJ meeting show that most board members took a "hawkish" stance, calling for a rate hike. However, many analysts believe that the Bank of Japan will take only one such step in the second half of the year.

The last chord of the past five days sounded at 155.75. Economists at Singapore’s United Overseas Bank Limited (UOB) expect the USD/JPY pair to trade in the 154.00-157.20 range in the next 1-3 weeks. UOB also believes that the chances of it falling to 151.55 have significantly diminished. Overall, most experts (70%) simply shrug their shoulders in uncertainty. The remaining 30% persistently expect the yen to strengthen. As for technical analysis, 100% of trend indicators on D1 look north. Among oscillators, 50% are such, 15% point south, and 35% point east. Regarding support/resistance levels, traders should note that with such volatility, the slippage can reach many tens of points. The nearest support level is around 155.25, followed by 154.70, 153.90, 153.10, 151.85-152.25, 151.00, 150.00, after which come 146.50-146.90, 143.30-143.75, and 140.25-141.00. Resistance levels are 156.25, 157.00, 157.80-158.00, 158.60, 159.40, and 160.00-160.25.

Events of the upcoming week include the release on Thursday, 16 May, of preliminary GDP data for Japan for Q1 2024. No other significant publications regarding the Japanese economy are expected in the coming week.

CRYPTOCURRENCIES: A Week of Reflection and Uncertainty

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What will happen to bitcoin in the foreseeable future? It seems there is no clear answer to this question. Experts and influencers often point in opposite directions: some shoot for the stars, while others keep their eyes on the ground.

For instance, according to the founder of Pomp Investments, Anthony Pompliano, bitcoin is "stronger than ever." He concluded this based on the 200-day moving average (200 DMA) reaching its ATH (All-Time High) of $57,000. Michael Saylor, CEO of MicroStrategy, is also optimistic. In his latest message, he urged investors to "run with the bulls." (It should be noted here that MicroStrategy holds 205,000 BTC on its balance sheet, so Saylor's bullish calls are quite understandable. He simply has to do this for his company to profit rather than incur losses).

However, analysts note that bitcoin's fate depends not only on the rosy calls of the MicroStrategy CEO. And if buyer support weakens, BTC could break through the key support level of $61,000, falling to the $56,000 zone, where significant liquidity is concentrated. MN Trading founder Michael Van De Poppe does not rule out another correction to around $55,000. However, the specialist quickly reassures investors, stating that this is quite acceptable as long as bitcoin holds above $60,000. Anthony Pompliano believes that the price will not fall below $50,000, and another expert, Alan Santana, does not rule out a drop to $30,000.

Trader and analyst Rekt Capital believes that the first cryptocurrency has exited the post-halving "danger zone" and entered the initial phase of re-accumulation. According to this expert, in 2016, BTC demonstrated a long red candle after the halving, falling by 17%. This time, the pattern repeated, with the difference between the post-halving maximum and minimum being 16%. The price reached a local bottom at around $56,566 but then rose to $65,508, on which Rekt Capital concluded that it re-entered the "re-accumulation range." However, there is one "but" - after this, we again observed a drop to $60,175. Overall, it seems that BTC/USD is in a descending channel, which increases investor concern.

In general, the forecasts are quite diverse. Information on the activity of various categories of traders and investors also varies. Analyst and CMCC Crest co-founder Willy Woo noted the activity of so-called crypto dolphins and sharks. "There has never been such a rapid purchase of coins by wealthy holders as in the last two months when the price fluctuated between $60,000-70,000. We are talking about those who hold from 100 BTC to 1000 BTC or approximately $6.5-65 million," he explained. On the other hand, according to CryptoQuant analysts, whales holding from 1000 to 10000 BTC, unlike dolphins and sharks, have behaved quite passively. Michael Van De Poppe, for his part, notes the absence of retail investors.

All this suggests that we may not see new all-time highs for BTC in the coming months. We wrote about this in the previous review, citing, among other things, the opinion of such a Wall Street legend as Factor LLC head Peter Brandt. With a 25% probability, he assumed that bitcoin had already formed another ATH within the current cycle.

As for long-term forecasts, nothing has changed here - most of them predict a powerful bull rally for bitcoin. Anthony Pompliano writes about this. Willy Woo expects bitcoin to continue increasing its penetration into various spheres of everyday life, meaning the number of users will grow. "By 2035, we expect bitcoin's fair value to reach $1 million. This forecast is based on the user growth curve. And I'm talking about fair value, not a peak during a bull market frenzy," the analyst notes.

The author of the bestseller "Rich Dad Poor Dad," entrepreneur Robert Kiyosaki, once again included bitcoin in the TOP-3 ways to save and increase capital. "Bad news: the [currency market] crash has already begun. It will be severe. Good news: a crash is the best time to get rich," he wrote, offering several recommendations on how to act in a crisis. Let's note two of them. The first reads: "Find an additional source of income. Artificial Intelligence will destroy millions of jobs. Start a small business and become an entrepreneur, not an employee afraid of losing a job." "Don't hoard fake money (US dollar, euro, yen, peso) that is losing value. Hoard gold, silver, and bitcoin - real money whose value increases, especially in a market crash," is Kiyosaki's second recommendation.

Regarding bitcoin's growth, Kiyosaki is absolutely right; it's even pointless to argue. According to a study by Colin Wu, better known as WuBlockchain, over the past decade, the price of the leading cryptocurrency has grown by an astonishing 12,464%, outpacing giants like Amazon, Apple, Google, Meta, Tesla, and Netflix. BTC was second only to Nvidia (+17,797%). But the fact that bitcoin took second place, being a representative of a relatively new and volatile market, is a real achievement. BTC's impressive growth trajectory over the past decade demonstrates its resilience and potential as an essential component in investors' portfolios.

At the time of writing this review, on the evening of Friday, 10 May, the BTC/USD pair is trading at $60,470. The total market capitalization of the crypto market is $2.24 trillion ($2.33 trillion a week ago). The Crypto Fear & Greed Index has risen from the Neutral zone (48 points a week ago) to the Greed zone, now standing at 66 points.


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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 of the Week

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– Billionaire Mark Cuban stated that if Joe Biden loses the upcoming presidential election, the crypto community will have a chance to "thank" the SEC (Securities and Exchange Commission) and its head, Gary Gensler. According to Cuban, the conflict between the SEC and the digital industry could negatively impact the support for the current US President. The billionaire remarked, "Gensler has not protected a single investor from fraud." "All he has accomplished is making it nearly impossible for legitimate crypto companies to operate, destroying countless enterprises and bankrupting unknown numbers of entrepreneurs," he added.
Cuban's tweet came in response to an article in Politico. The article mentions that Biden's competitor, Donald Trump, became the first presidential candidate to openly try to attract crypto users to his side. At an event promoting his own NFT collection, Mugshot Edition, he announced the acceptance of donations in digital assets. Additionally, his team, together with Bitcoin Magazine, developed a project to regulate the crypto sphere. Trump promised to protect the industry if elected, emphasizing that the current President "doesn't even know" what cryptocurrency is.

– The analytical platform Arkham Intelligence published a list of well-known personalities with more than 1 million followers on X (formerly Twitter) who have invested in cryptocurrency. The top 3 in the audience size ranking are Canadian singer Justin Bieber, Donald Trump, and Brazilian footballer Neymar. According to the provided data, the former US President and Republican Party candidate owns a crypto portfolio estimated at around $7 million. His wallet was last active in December 2023 when 250 ETH were sent to the Coinbase exchange.

– The current bitcoin lull may continue until early summer, but in Q3–Q4, a return to a growth trajectory is expected. Experts from the crypto exchange Bitfinex stated this. "We expect the market to remain uncertain in the short term, with low volatility until the actual winding down of the US Fed's QT [quantitative tightening programme]," the specialists believe. In their opinion, this will favour risky assets like cryptocurrencies. The fall of the US dollar from a six-month peak after the May Fed meeting and a weak employment report marked a turning point in the trend. The weakening USD could support the next phase of the digital assets rally.

– According to Capriole Investment founder Charles Edwards, bitcoin is in the "bored to death" stage. He stated that the current consolidation period could last from one to six months, during which quotes will remain in a low volatility range. This will happen until traders lose patience.
Sentiments will be most negative just before the sideways movement ends, Edwards believes. "When you get tired of the sideways movement, general symptoms will include thoughts that the halving is already priced in and the bull market is over. [...] Your symptoms and shorts will peak just before the mega rally," predicts the Capriole Investment head.

– By 2030, the first cryptocurrency will reach and surpass $1 million. This forecast was made by Twitter (now X) co-founder and Block head Jack Dorsey. The entrepreneur noted that the most interesting aspect of digital gold is the nature of its ecosystem and how it stimulates collective efforts to improve the network. "Besides the founding story, the most amazing thing about bitcoin is that everyone [...] who makes even the smallest effort to make it better improves the entire ecosystem, causing the price to rise. It's an amazing movement. [...] It has taught me a lot," he explained. 

– One of the crucial questions for investors is choosing between bitcoin and ethereum. The roles of these two cryptocurrencies differ, and this can significantly impact their profitability. Bitcoin is increasingly seen as digital gold, providing stability in times of economic uncertainty. This concept is supported by the post-halving volatility reduction, which is now even lower than many companies in the S&P 500 index (Fidelity data).
Ethereum continues to push the boundaries of the possible through technological innovations, including the recent Dencun update aimed at reducing fees and increasing scalability. However, these changes have made the network inflationary again, nullifying the deflationary trend established after "The Merge" in 2022. Consequently, ETH volatility remains significantly higher than BTC despite the overall market calm.
According to ChatGPT, an artificial intelligence by OpenAI, the choice between these assets largely depends on individual investment strategy and risk tolerance. Bitcoin is generally better suited for investors seeking a relatively safe store of value. It attracts risk-averse individuals or those new to cryptocurrencies. On the other hand, Ethereum is more suitable for those who believe in the future of blockchain technology. The main cryptocurrency offers gradual growth, while the main altcoin offers potentially higher rewards but also higher risk. 

– Investor and Eight founder Michaël van de Poppe has already made his choice. He admitted to selling all his bitcoins to buy altcoins. According to him, capital inflow and outflow in ETFs mainly influence BTC price movement, which depends on the dollar exchange rate and the Fed's policy. Additionally, the problems crypto companies face with US regulators affect bitcoin quotes.
Regarding altcoins, Van de Poppe believes many of them are undervalued. Once ETH quotes start rising, other alternative tokens will also go up. The specialist believes that the altcoins he selected will likely grow earlier and faster than the market flagship, allowing for greater profit than investing in digital gold.

– Former CEO of the largest crypto exchange Binance, Changpeng Zhao, is to serve four months in an American prison by court order. He wrote on social media X that during his upcoming "solitude," he would focus on writing, although he did not specify the nature of his creative work. The hint at writing a book sparked curiosity among Zhao's followers, as he is one of the key figures in the crypto community. There are speculations that Zhao's future book may cover his experience in the crypto business and share insights that would be interesting to both ordinary traders and industry executives.
In April, Changpeng Zhao was sentenced to four months in prison. This punishment followed his resignation as CEO of Binance in November when Zhao pleaded guilty to money laundering charges. Binance agreed to pay a $4.3 billion fine. Despite regulatory issues, Zhao stated that his departure from Binance does not mean he has lost interest in cryptocurrencies, and he will continue to contribute to the industry's development. For instance, in March, the former CEO launched the free educational initiative Giggle Academy to teach finance and blockchain to underprivileged youth. 

– The analyst known as Rekt Capital noted that the threat of a bitcoin price drop after the halving has already passed. Drawing an analogy with the situation six years ago, he suggested that on May 1st, the bitcoin price hit a bottom around $56,000. The asset will remain in the accumulation zone until autumn. During this time, the market will likely stay calm, and the BTC price will fluctuate between $60,000 and $66,500. After that, Rekt Capital forecasts an exponential growth phase, during which the coin's value will reach new heights.

– Galaxy Digital head Mike Novogratz also noted in an interview with Bloomberg that the cryptocurrency market is in a consolidation phase. The market's growth stalled three months after the launch of spot bitcoin ETFs in the US. In his opinion, the first cryptocurrency will trade between $55,000 and $75,000 until new circumstances or events in the market trigger growth.
At the same time, Novogratz noted increased activity in sectors like crypto lending on the blockchain. "Six months ago, this was impossible, and now people are willing to lend us cryptocurrency for the long term without collateral," the businessman said. "The number of counterparties is growing, and overall involvement in the crypto space is at an entirely new level."

– Usually, fraudsters try to withdraw stolen coins through mixers within weeks or months and then transfer them to secret bank accounts or convert them into various currencies. However, there are unique cases. According to crypto security experts from the Cyvers platform, one of the criminals waited seven years before starting to sell stolen virtual assets. Only now has he sent 3,050 ETH to a cryptocurrency mixer.
Cyvers specialists calculated that the hacker still has over 83,000 Ethereum, currently valued at $240 million. At the time of the theft, this cryptocurrency was worth only $33 million. Such long-term patience indicates that the hacker is an experienced market participant and accurately predicts price dynamics in the short, medium, and long term.


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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Forex and Cryptocurrency Forecast for 20 – 24 May 2024


EUR/USD: Weak Inflation = Weak USD

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● The American currency suffered two significant blows last week. Although these were not knockdowns, let alone knockouts, these minor shocks pushed the DXY Dollar Index down from 105.26 to 104.20 points, and EUR/USD up from 1.0766 to 1.0895.

The first blow came on Tuesday, 14 May, from Federal Reserve Chairman Jerome Powell. Surprisingly, after his comments, the dollar should have strengthened, but instead, it faltered. Powell stated that the regulator's monetary policy is currently tight enough to eventually reduce inflation. However, he also mentioned that the Fed is not confident that inflation is rapidly decreasing and that it may take more time to reach the target level of 2.0%. One could conclude from this that the regulator is not planning to either raise or lower the interest rate.

● The dollar's weakening at this moment is even more peculiar because Powell's comments were made against the backdrop of strong data on the US Producer Price Index (PPI), indicating industrial inflation growth. In April, this indicator increased by +0.5% on a monthly basis after falling by -0.1% in March (forecast +0.3%). The core index, excluding food and energy, showed growth from 2.1% to 2.4% (y/y).

We can only explain the dollar's decline in this situation with one reason. Market participants were possibly expecting that the Fed Chairman would at least hint that if inflation rises, they need to consider another rate hike. But since he did not say this, disappointment ensued.

● What happened the next day seemed 100% logical. The report from the US Bureau of Labor Statistics (BLS) on Wednesday, 15 May, showed that the US Consumer Price Index (CPI) fell from 0.4% to 0.3% (m/m) against a forecast of 0.4%. On an annual basis, inflation also dropped from 3.5% to 3.4%. Retail sales showed an even stronger decline, from 0.6% to 0.0% on a monthly basis (forecast 0.4%). These data indicated that although inflation in the country is resisting in some areas, it is generally declining.

As a result, talks about a possible Fed rate cut this year resurfaced. "These are the first weaker CPI data that the central bank [US] needs to lower rates this year," said Jason Pride, Glenmede's Director of Investment Strategy and Analysis. The likelihood that the rate will remain unchanged until the end of 2024 fell from 35% to 25%, according to the CME's FedWatch Tool. As a result, the DXY continued to fall, and the EUR/USD pair rose. Stock markets rallied, with the S&P 500 and Nasdaq reaching record levels. There were 43 new 52-week highs and no new lows in the S&P 500, while the Nasdaq had 153 highs and 25 lows.

● The dollar's weakening was halted by comments from Fed representatives at the end of the week. Minneapolis Federal Reserve Bank (FRB) President Neel Kashkari stated that he is not confident that the current "tight monetary policy is having a dominant effect on inflation, so interest rates need to be maintained." New York FRB President John Williams said that one positive inflation report is not enough to neutralize the negative impact of the previous two, so it's not yet time to expect the Fed to start lowering rates soon.

● As for the common European currency, Reuters writes that it is resisting a fall to parity with the dollar (1:1) due to a favourable economic backdrop and the monetary measures of the European Central Bank (ECB). The six-month low for EUR/USD was recorded on 16 April at 1.0600, against the backdrop of the Eurozone's fragile economy and in sharp contrast with the stable US economy. But gradually, business activity in Europe began to recover, and according to the April report, it grew even faster than on the other side of the Atlantic. This contributed to the positive dynamics of the euro. Reuters experts noted that the gap between economic indicators in Europe and the US is narrowing, providing some support to the euro.

● EUR/USD closed the week at 1.0868. As for the analysts' forecast for the near future, as of the evening of 17 May, the majority (65%) expect the dollar to strengthen, 20% foresee further weakening, and the remaining 15% took a neutral stance. All trend indicators and oscillators on D1 are 100% coloured green, with a quarter of them signalling that the pair is overbought. The nearest support for the pair is located in the zones of 1.0815-1.0835, then 1.0710-1.0725, 1.0665-1.0680, 1.0600-1.0620, 1.0560, 1.0495-1.0515, 1.0450, 1.0375, 1.0255, 1.0130, 1.0000. Resistance zones are found at 1.0880-1.0915, 1.0965-1.0980, 1.1015, 1.1050, and 1.1100-1.1140.

● The schedule of the most important events for next week is as follows. On Tuesday, 21 May, US Treasury Secretary Janet Yellen is scheduled to speak. On Wednesday, 22 May, the publication of the minutes from the last FOMC (Federal Open Market Committee) meeting of the US Fed is of particular interest. The next day, as usual, we will learn about the number of initial jobless claims in the US, as well as receive preliminary data on business activity (PPI) in Germany, the Eurozone, and the United States. At the very end of the workweek, on Friday, 24 May, we will learn the GDP data of Germany for Q1 2024.

CRYPTOCURRENCIES: Weak USD = Strong BTC

● "A week of reflection and uncertainty": this is how we described the previous review. On Wednesday, 15 May, this uncertainty was resolved in favour of the crypto market. As often happens, the reason for this was the Fed's monetary policy. The released inflation data in the US influenced market expectations regarding a rate cut. As a result, the American currency weakened, the DXY index went down, and investors' risk appetites increased. Stock indices reached historical highs, with the daily gain for BTC/USD exceeding 8%. ETH/USD also rose by 4.5%. However, this is not yet the long-awaited Bull Rally, and it is quite possible that once the situation with the dollar calms down, the growth of bitcoin and leading altcoins will cease. At least, this is the scenario many crypto market specialists predict.

● According to Capriole Investment founder Charles Edwards, bitcoin is in a "deathly boring" stage. He believes that the current consolidation period may last from one to six months, during which the quotes will remain in a low-volatility range. This will continue until traders lose patience.

Sentiment will be most negative just before the end of the flat period, Edwards believes. "When you get tired of the sideways movement, common symptoms will include thoughts that the halving is already priced in and the bull market is over. […] Your symptoms and shorts will peak just before the mega-rally," predicts the head of Capriole Investment.

● Galaxy Digital head Mike Novogratz also spoke about the consolidation of the crypto market, whose growth dried up three months after the launch of spot BTC-ETFs. In his opinion, until new circumstances or events lead to growth, the first cryptocurrency will trade in the range of $55,000 to $75,000.

Analyst Rekt Capital expressed a similar point of view. He believes that the threat of a bitcoin price drop after the halving has already passed. Drawing an analogy with the situation six years ago, he suggested that on 01 May, BTC hit a bottom around $56,000, and now calm will likely prevail until autumn, with the asset remaining in the accumulation zone. According to Rekt Capital's forecast, the exponential growth phase will begin in the autumn, during which the coin's value will reach new heights.

● Bitfinex crypto exchange experts are somewhat more optimistic. They believe that the current lull may last only until the beginning of summer, and in Q3–Q4, growth will return. But everything depends on the actions of the US Fed. Bitfinex notes that the decline of the US currency from a six-month peak after the May meeting of the regulator and a weak employment report became a turning point in the trend. Now, the reduction in inflationary pressure in the US has been added. As a result, the weakening of the US currency could stimulate a rally in digital assets.

● Where will this rally lead in the medium and long term? There are many answers to this question. Some predict the complete collapse and oblivion of bitcoin, while others insist on a price of $1 million per coin. Recently, Jack Dorsey, co-founder of Twitter (now X) and head of Block, joined the "millionaires' club" after CMCC Crest co-founder Willy Woo. He also expects bitcoin to surpass the $1 million mark by 2030, after which it will continue to grow, challenging traditional fiat currencies. The entrepreneur noted that a very interesting aspect of digital gold is the nature of its ecosystem and how it stimulates collective efforts to improve the network. "Aside from the founding story, the most amazing thing about bitcoin is that everyone [...] who makes any effort to improve it makes the whole ecosystem better, which drives the price up. This is an incredible movement. [...] It has taught me a lot," he explained.

● Businessman, writer, and founder of Edelman Financial Services Ric Edelman believes that traditional international investors will do everything possible to diversify their portfolios. And if they all invest at least 1% of their funds in the first cryptocurrency, the bitcoin market volume will reach an unprecedented $7.4 trillion, and the asset price will soar to $420,000. The growth of the market capitalization will be facilitated by spot BTC-ETFs. According to Edelman, they cover a much broader investor base than traditional assets. "In addition, crypto ETFs are incredibly cheap. They are 20-25% cheaper than assets on Coinbase or other crypto exchanges. Plus, they are held in brokerage accounts. Bitcoin ETFs allow for traditional investment strategies such as rebalancing and dollar-cost averaging. There are also tax advantages," Edelman lists the advantages of such funds. "I am confident that bitcoin and ethereum ETFs will have a significant impact on the market in the long run," he stated.

● However, this last assertion can be disputed. While BTC-ETFs are a reality, the situation with ETH-ETFs is not so simple. Many expected the SEC (Securities and Exchange Commission) to approve applications for the launch of ethereum funds in May. But this has not happened yet. Moreover, Bloomberg analyst Eric Balchunas and securities lawyer Scott Johnson believe that the chances of approving spot ETH-ETFs are almost zero. In their opinion, the SEC is now considering the possibility of rejecting these funds' launch based on the fact that the applications were submitted with violations, as the fund shares are securities, not exchange-traded commodities.

● The question of choosing between bitcoin and ethereum confronts many investors. The roles of these two cryptocurrencies differ, and this can significantly affect their profitability. Bitcoin is increasingly seen as digital gold, providing stability during times of economic uncertainty. This concept is supported by the observed post-halving volatility decrease, which was even lower than that of many companies in the S&P 500 index (Fidelity data).

Ethereum continues to push the boundaries of what is possible through technological innovations, including the recent Dencun update aimed at reducing fees and increasing scalability. However, these changes have once again made the network inflationary, nullifying the deflationary trend established after The Merge in 2022. As a result, ETH's volatility remains higher than BTC's.

According to ChatGPT, the artificial intelligence from OpenAI, the choice between these assets largely depends on individual investment strategy and risk tolerance. Bitcoin is generally better suited for investors seeking a relatively safe store of value and those new to cryptocurrencies. In contrast, Ethereum is better for those who believe in the future of blockchain technology. The main altcoin potentially offers higher rewards but also higher risks.

● Investor and Eight founder Michaël van de Poppe has already made his choice. He admitted to selling all his bitcoins to buy altcoins. Van de Poppe believes that many of them are undervalued. And as soon as ETH prices start to rise, other alternative tokens will also go up. The expert believes that the altcoins he has chosen are likely to start growing earlier and faster than the market leader, allowing for greater profit than from investments in digital gold.

● At the time of writing this review, the evening of Friday, 17 May, BTC/USD is trading at $66,835, and ETH/USD at $3,095. The total market capitalization of the crypto market is $2.42 trillion ($2.24 trillion a week ago). The Crypto Fear & Greed Index has risen from 66 to 74 points 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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NordFX's New Mega Super Lottery: 202+4 Prizes in 2024


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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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CryptoNews of the Week

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– On 20-21 May, bitcoin surged sharply for the first time since 9 April, approaching $72,000. This rally was triggered by data showing a sharp increase in investments in BTC-ETFs, reaching a nine-week high. According to CoinShares, investments in crypto funds rose by $932 million last week, following an inflow of $130 million the previous week, marking the highest level in nine weeks. Additionally, Grayscale's ETF saw its first-ever inflow of $18 million. Analysts believe this surge in digital asset investments was a response to the May Consumer Price Index (CPI) report in the United States.

– After bitcoin rose above $71,000, its price hit new all-time highs in the local currencies of several Asian and South American countries. According to CoinMarketCap, BTC reached a record level of 11.2 million yen at the start of trading on 21 May in Japan, marking the first time the flagship asset's value exceeded 11 million yen. Bitcoin also hit a peak in Argentina, reaching 63.8 million Argentine pesos, slightly above the 14 March high. In the Philippines, bitcoin briefly climbed to 4.18 million pesos, the highest level since mid-March 2024. BTC prices in several other countries, including the UK, Australia, Canada, Chile, Colombia, Egypt, Israel, Norway, India, South Korea, Taiwan, and Turkey, also matched or were very close to their mid-March peak prices.

– Santiment noted that bitcoin had not shown positive dynamics due to small traders selling off. According to The Block Research, the rate of new BTC wallet openings fell to a six-year low post-halving, reflecting a general decline in enthusiasm after the failed April Bull Rally. However, whales started actively buying BTC from small players, driving the growth at the beginning of the current week.

– Kyle Schneps, Foundry's director, believes that the introduction of a 30% tax on the electricity used by BTC miners could collapse the industry in the US. Darin Feinstein, founder of Core Scientific, shares a similar view. He believes the proposed energy tax legislation by the current White House administration could significantly damage the US economy. Schneps predicts mining companies will seek new regions to continue their operations, with the Middle East becoming a preferred location. In 2023, Russia ranked second in mining volumes after the US. BitRiver's calculations showed Russian miners produced about 54,000 BTC (around $3.5 billion) last year, with an average of 22 GW of mining capacity (compared to 1 GW in 2022). In the US, 143,000 BTC were mined over the same period, using 5.3 GW of power (up from 3-4 GW in 2022).  

– Haseeb Qureshi, managing partner at Dragonfly Capital, expects the Biden administration to soften its policy towards the digital asset industry soon. He believes US authorities do not want to lose the votes of cryptocurrency users in the upcoming presidential elections. While a complete policy reversal is unlikely, some easing of the stance is expected. According to former CFTC chairman Chris Giancarlo, “Donald Trump could reasonably claim the title of the first US cryptocurrency president due to the launch of regulated bitcoin futures in his first year in office”.

– The leading altcoin surged even more than bitcoin on 20-21 May. Bloomberg analysts reported that the SEC (US Securities and Exchange Commission) had changed its stance on the launch of spot ETFs for Ethereum. The regulator requested expedited updates to applications for such funds, with the first decision (from VanEck) expected on 23 May. Following this news, Ethereum's price soared by over 25%, reaching a peak of $3833. According to Coinglass, the total amount of liquidations and forced closures of short positions on crypto exchanges at that time amounted to $340 million. A total of 78,800 positions were liquidated, with the largest individual liquidation occurring on the HTX exchange, amounting to $3.1 million for the ETH/USDT pair.

– QCP Capital analysts believe that if spot ETH-ETF applications are approved, Ethereum's price could surpass $5,000 by the end of the year. Standard Chartered expects capital inflows into such funds to reach $15-45 billion (2-9 million ETH) in the first year. This influx would drive the asset's price to $8,000 with bitcoin at $150,000. Bold forecasts from the bank's analysts suggest that if market dynamics remain positive, Ethereum could reach $14,000, and bitcoin could rise to $200,000 by 2025.

– Markus Thielen, an analyst at 10x Research, predicted that bitcoin's breakthrough of the $68,300 resistance on 20 May could catalyse a powerful rally. QCP Capital expects the main cryptocurrency to reach $74,000 in the coming months. The company's economists believe that institutional acceptance of cryptocurrency is accelerating, and improving global economic conditions create a favourable environment for capital inflows into risky assets. The approaching US presidential elections also improve investor sentiment.

– The latest version of the GPT-4o artificial intelligence from OpenAI predicts that bitcoin's price on 1 August 2024 will be in the range of $76,348 to $89,108, considering current market factors and historical trends. The Anthropic AI model, Claude 3 Opus, offers an even more optimistic forecast, indicating a range between $105,072 and $167,808 by the specified date.

– Linus Torvalds, creator of the Linux operating system, is highly sceptical of digital assets. He expresses bewilderment and regret over claims of cryptocurrencies' long-term value and the omnipotence of AI technologies. Torvalds believes cryptocurrencies are excellent tools for fraud and are widely used in various Ponzi schemes. "I don't believe in cryptocurrencies and see them as a tool for taking money from naive and impressionable users, just as I don't believe in Santa Claus, the Tooth Fairy, or the Easter Bunny," he stated.

– Peter Schiff, a well-known financier and advocate of physical gold, has once again declared bitcoin a "dead cryptocurrency." Like Linus Torvalds, his negative comments aim to prevent potential investors from making a serious mistake by investing in this "pseudo-asset." However, the "gold bug" Schiff promised that if bitcoin enthusiasts stop comparing the cryptocurrency to gold, he would cease publicly criticising it.

– The court found Craig Wright guilty of perjury. "Dr Wright's attempts to prove he was/is Satoshi Nakamoto represent the most severe abuse of procedure [...]" the court's decision stated. "It is evident that Wright deliberately created fake documents to support false claims and used the courts as a means of fraud." "Wright's testimony was at best unreliable [...] and at worst fabricated," the judge declared, expressing complete confidence that Wright repeatedly lied to the court in his testimony. These perjury facts may now be referred to the British prosecutor's office. However, in a tweet on 20 May, Wright announced his intention to appeal the decision.

– Controversial blogger and former kickboxer Andrew Tate announced his intention to completely abandon fiat and invest over $100 million in bitcoin. He aims to break free from "banks, their money, and other scams." Tate promised to provide evidence of his actions. It is noteworthy that Andrew Tate, a millionaire and former MMA fighter, is also known for his misogynistic statements. All his channels on YouTube, TikTok, and Instagram are blocked. 
It is known that Tate and his brother had been arrested in Romania on charges of human trafficking and rape. According to Romanian police, Andrew and Tristan recruited women for pornography. Romania TV reported in late 2022 that Swedish eco-activist Greta Thunberg might have been involved in their arrest.


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

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

https://nordfx.com/

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Forex and Cryptocurrency Forecast for 27 – 31 May 2024


EUR/USD: The Battle of Europe and US PMIs

Overall, the past week favoured the dollar, but the advantage over the European currency was minimal. If you look at where the EUR/USD pair was on 15 May, it returned to this zone on 24 May, regaining the losses of recent days. Recall that the report from the US Bureau of Labor Statistics (BLS) released on 15 May showed that the Consumer Price Index (CPI) decreased from 0.4% to 0.3% month-on-month (m/m), against a forecast of 0.4%. On an annual basis, inflation also fell from 3.5% to 3.4%. Retail sales volume demonstrated an even more significant decline, from 0.6% to 0.0% month-on-month (forecast 0.4%). These data indicated that inflation in the country, though resistant in certain areas, is still on the decline. At that moment, there were renewed discussions in the market about a possible rate cut by the Fed as early as this autumn. As a result, the Dollar Index (DXY) went down, and EUR/USD went up. Stock indices S&P 500 and Nasdaq reached record highs.

The most volatile day of the past week was Thursday, 23 May. Preliminary business activity data in the Eurozone exceeded expectations, strengthening the euro and lifting the pair to 1.0860. In Germany, the main locomotive of the European economy, the Manufacturing PMI rose from 42.5 to 45.4 points (forecast 43.2). This is still below the 50.0-point threshold separating decline from growth, but the trend is clearly positive. The Services PMI reached its highest level since June last year, hitting 53.9 against a forecast of 53.5 and a previous value of 53.2.

Germany's Composite PMI increased from 50.6 to 52.2 (market expectations were 51.0). Overall, business activity statistics in the Eurozone were also positive. The Composite PMI updated multi-month highs and, with a forecast of 52.0, actually reached 52.3 points (previous value 51.7).

However, the euro bulls' joy was short-lived. Later on Thursday, similar preliminary data on the US economy were released. They showed that business activity in the country's private sector grew at the highest rate in the past two years. The Manufacturing PMI rose from 50.0 to 50.9 points, and the Composite PMI jumped from 51.3 to 54.8 in a month. Market expectations were much lower, at the previous level of 51.3, so such a sharp rise signalled a surge in the DXY to 105.05 and a fall in the EUR/USD pair to 1.0804, as the likelihood of a rate cut in September decreased.

But the bears' joy was also short-lived. The GDP data released on Friday, 24 May, for Q1 2024 in Germany showed that the country's economy is saying goodbye to recession and moving into the growth zone. After a decline of -0.3%, GDP increased by 0.5%, resulting in a net growth of +0.2%.

In the end, after all these fluctuations, EUR/USD returned to the Pivot Point of the past one and a half weeks, closing at 1.0845. As for analysts' forecasts for the near future, as of the evening of 24 May, most (65%) expect the dollar to strengthen, 20% expect it to weaken, and the remaining 15% are neutral. All trend indicators on D1 are green, while 60% of oscillators are also green. Another 15% are red, and 25% are neutral grey. The nearest support for the pair is in the zones of 1.0830-1.0840, 1.0800-1.0810, then 1.0765, 1.0710-1.0725, 1.0665-1.0680, and 1.0600-1.0620. Resistance zones are located at 1.0880-1.0895, 1.0925-1.0940, 1.0980-1.1010, 1.1050, and 1.1100-1.1140.

The following week's calendar highlights Tuesday, 28 May, when the US Consumer Confidence Index will be announced. On the next day, 29 May, data on consumer inflation (CPI) in Germany will be released. On Thursday, 30 May, preliminary US GDP data for Q1 2024 will be published. The last working day of the week and the month might be quite eventful. On Friday, 31 May, Germany's retail sales volumes, preliminary inflation indicators (CPI) in the Eurozone, and the US Core Personal Consumption Expenditure Price Index will be announced. Traders should also note that Monday, 27 May, is a public holiday in the US, as the country observes Memorial Day.

GBP/USD: Uncertain Times for the Pound

The prospects for the British currency, as well as the national economy as a whole, are ambiguous. Additional uncertainty is brought by the fact that early parliamentary elections are scheduled for 4 July. As Prime Minister Rishi Sunak stated, "economic instability is just the beginning. [...] The time has come for Britain to make a choice. [...] Uncertain times require a clear plan and bold actions." However, what these "bold actions" will be remains unknown. 

The macro statistics released last week did not add clarity. The preliminary Services PMI in the UK decreased from 55.0 to 52.9 points in May, against expectations of 54.7. And although in the manufacturing sector, this figure increased from 49.1 to 51.3, the Composite PMI stood at 52.8, below both the previous value of 54.1 and market expectations of 54.0.

As the latest data from the Office for National Statistics (ONS) showed, published on Friday, 24 May, retail sales in the country fell by -2.3% (m/m) in April, against a forecast of -0.4% and a result of -0.2% in March. The annual retail sales volume decreased by -2.7% compared to the previous result of -0.4%, and core retail sales fell by -3.0% (y/y) against 0% a month earlier, with all figures significantly below forecasts.

In such a situation, experts' opinions regarding the timing of the Bank of England's (BoE) rate cut also do not provide clear guidance. Analysts at JP Morgan (JPM) stick to their previous forecast of a rate cut in August but are cautious, citing still high consumer price inflation (CPI). "We adhere to our forecast [...] but believe that the risks have clearly shifted towards a later cut. Now it is a question of whether the Bank of England will be able to ease its policy at all this year." Strategists at Goldman Sachs, Deutsche Bank, and HSBC have also shifted their rate cut forecasts, moving the date from June to August for now. But this is only "for now"...

The maximum of the past week for GBP/USD was recorded at 1.2760. According to economists from Singapore's United Overseas Bank (UOB), the pair's upward momentum has slowed, and the likelihood of the pound rising to 1.2800 is decreasing. UOB believes that in the next 1-3 weeks, the British currency will trade in the range of 1.2685 to 1.2755.

The week ended at 1.2737. The median forecast of analysts for the near future is as follows: 60% voted for the pair's movement to the south, 20% for the northern direction, and 20% preferred neutrality. As for technical analysis, all trend indicators and oscillators on D1 point north, but a third of the latter signal overbought conditions. In case of further decline, the pair will encounter support levels and zones at 1.2695, 1.2635, 1.2575-1.2600, 1.2540, 1.2445-1.2465, 1.2405, 1.2300-1.2330. In case of growth, the pair will meet resistance at levels 1.2760, 1.2800-1.2820, 1.2885-1.2900.

No significant economic data releases for the United Kingdom are scheduled for the coming week. However, it should be noted that Monday, 27 May, is a bank holiday in the UK.

USD/JPY: Calmness, Ladies and Gentlemen, Just Calmness!

For such a super-volatile pair as USD/JPY, the past week was surprisingly calm. There were no currency interventions, and verbal interventions were as usual – lots of words, little action. Thus, Japan's Finance Minister Shunichi Suzuki once again expressed concern about rising prices caused by the weak national currency. According to Suzuki, one of the main goals of monetary authorities is to achieve wage growth exceeding inflation. "On the other hand," the minister added, "if prices remain high, achieving this goal will be difficult." In general, as usual, the government is closely monitoring the situation, understanding that everything is complicated, and therefore ... will continue to monitor.

Based on this contemplative policy, despite the GDP decline in Q1, on Thursday, 23 May, the Bank of Japan (BoJ) announced that it left the issuance volumes of Japanese government bonds (JGB) at the previous level. According to BoJ Governor Kazuo Ueda, "the economic outlook has not changed." The BoJ's view of the global economy has also not changed significantly. In general, calmness, ladies and gentlemen, just calmness!

Against this positive background, USD/JPY pair reacted only to the yield of US Treasury bonds and the dynamics of the Dollar Index (DXY). As a result, starting the five-day period around 155.70, it gradually moved up and ended it at 156.96. Analysts at United Overseas Bank (UOB) believe that given the weak upward pressure, the pair's growth in the next 1-3 weeks will be slow, and the barrier at 157.50 may prove to be a tough nut to crack. In their opinion, a price breakthrough above 157.00 is possible, but the pair is unlikely to consolidate above this level. The next resistance at 157.50 is unlikely to be threatened. UOB estimates that support is at 156.40, followed by 156.10. If USD/JPY falls below 155.60, it will indicate that the slight upward pressure has weakened, write the bank's economists.  

Speaking of the average forecast, only 20% of analysts point south, 40% north, and another 40% east. Technical analysis tools are clearly devoid of such disagreements. Therefore, all 100% of trend indicators and oscillators on D1 point north, with 20% of the latter already in the overbought zone. It should be noted that while the green/north color of indicators regarding the British pound indicates its strengthening, in relation to the yen, it signals its weakening. Therefore, we advise paying attention to the GBP/JPY pair, whose dynamics have been very impressive lately.

The nearest support level is around 156.25, followed by zones and levels of 155.25-155.45, 154.60, 153.60-153.90, 153.00-153.15, 151.85-152.35, 150.80-151.00, 149.70-150.00, 148.40, 147.30-147.60, and 146.50. The nearest resistance is in the zone of 157.20, followed by 157.80-158.00, 158.45, 159.40, and 160.20-160.30.

From the events of the upcoming week, we recommend noting the speech of the Bank of Japan Governor Kazuo Ueda on Monday, 27 May, as well as the publication of consumer inflation (CPI) data in the Tokyo region on Friday, 31 May.

CRYPTOCURRENCIES: A Week Under the Ethereum Flag

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In 2024, the crypto community began gradually forgetting the term "crypto winter." However, there was no talk of a "crypto spring" either. After the halving on 12 April, in the absence of a bull rally, small traders and speculators began selling off their coin reserves. According to The Block Research, the rate of opening new BTC wallets fell to a six-year low. However, the whales buying digital gold for the future prevented a complete collapse in prices.

And finally, at the end of the calendar spring, it seems spring has come to the crypto market. And it was awakened by the Federal Reserve System (Fed) of the USA with its monetary policy. According to analysts, the surge in investments in digital assets was a response to the May consumer inflation (CPI) report in the US, which positively impacted the risk appetites of institutional investors.

According to CoinShares, investments in crypto funds increased by $932 million from 13 to 17 May, after an inflow of $130 million the previous week. For the first time, there was an inflow of $18 million into Grayscale's ETF. This sharp increase in BTC-ETF investments, the highest in the last nine weeks, triggered a sharp rise in bitcoin on 20-21 May, approaching $72,000 for the first time since 09 April.

After bitcoin rose above $71,000, its price updated historical highs in the local currencies of several Asian and South American countries. According to CoinMarketCap, in Japan, BTC reached a record level of 11.2 million yen at the start of trading on 21 May. This is the first case where the flagship asset's price exceeded 11 million yen. Digital gold prices also peaked in Argentina, where the leading cryptocurrency reached 63.8 million Argentine pesos, slightly above the maximum on 14 March.

In the Philippines, one bitcoin briefly rose to 4.18 million pesos, the highest since mid-March 2024. In several other countries, BTC prices also equalled or were very close to mid-March's maximum prices: in the UK, Australia, Canada, Chile, Colombia, Egypt, Israel, Norway, India, South Korea, Taiwan, and Turkey.

However, the Fed and American macro statistics, having awakened the markets, also calmed them. After strong business activity data in the US, BTC/USD returned to the support zone of $67,000. Another (and probably the main) reason why bitcoin could not update its historical high was its main competitor, ethereum, which drew investors' attention. (More on this below).

QCP Capital expects bitcoin to reach $74,000 and update its ATH (All-Time High) in the coming months. According to the company's economists, institutional acceptance of cryptocurrency is accelerating, and improving conditions in the global economy create conditions for capital inflows into risky assets. The US presidential election, scheduled for 5 November 2024, is also starting to have a strong positive impact on the cryptocurrency market.

Cryptocurrency themes continue to strengthen in the pre-election rhetoric of candidates seeking to gain the votes of the crypto community, which, according to NYDIG, numbers more than 46 million citizens in the US, or 22% of the adult population. Haseeb Qureshi, Managing Partner of Dragonfly Capital, believes that in such a situation, the administration of President Joseph Biden will soon be forced to ease its policy regarding the digital asset industry. A complete turnaround is not to be expected, but a softening of the position will still occur, Qureshi said.

CNN has recently reported on upcoming debates between Biden and his competitor, Donald Trump. The incumbent president will have to answer a number of uncomfortable questions about the harsh policy towards the crypto industry, which led to the outflow of cryptocurrency capital, the closure of large companies, and high-profile lawsuits. From Donald Trump, who turned the topic of cryptocurrency into a weapon against his opponent, in addition to attacks for the current state of affairs, loud pre-election promises can be expected, which could lead to significant volatility in the crypto market. Possible participation of Elon Musk, who expressed willingness to become a moderator, and independent candidate Robert Kennedy Jr., should enliven the debates, the first round of which is scheduled for 27 June, and the second for 10 September.

The main beneficiary of the past week was not bitcoin but ethereum. On Monday, 20 May, news reached the media that the US Securities and Exchange Commission (SEC) asked companies to update Form 19b-4 in applications for launching spot Ethereum ETFs in an accelerated manner. After these news, the financial agency Bloomberg immediately raised the chances of such funds being approved from 25% to 75%. Against this background, the leading altcoin quickly outpaced the flagship cryptocurrency in terms of growth rates.

The deadline for the first two applications from VanEck and Grayscale was Thursday, 23 May. Shortly before the X hour, ETH/USD reached $3,947, showing a growth of almost 30% in three days. According to Coinglass, the amount of liquidations and forced closures of short positions on crypto exchanges amounted to $340 million. A total of 78.8 thousand positions were liquidated, and the largest individual liquidation occurred on the HTX exchange for the ETH/USDT pair for $3.1 million.

The SEC did not disappoint expectations and on 23 May approved not two but a total of eight applications for the issuance of spot ETFs based on Ethereum and gave the go-ahead for trading and listing these funds on exchanges. According to Variant Investments Chief Legal Officer Jake Chervinsky, this step signals a "significant shift in US crypto policy, possibly more important than the ETFs themselves." This may also mean that recognizing ethereum as a commodity, the regulator will not categorize many other altcoins as securities. According to Rekt Capital, the market is already on the verge of an altcoin rally, the peak of which is expected in July.

Experts expect significant capital inflows after the listing of ETH-ETFs and believe that billions of dollars will be invested in derivatives in the first week after trading starts. Analysts from QCP Capital believe that the altcoin rate in the short term can rise to $4,000 and exceed $5,000 by the end of the year.

An even bolder forecast is given by Standard Chartered Bank economists. They expect capital inflows into such funds in the first year to range from $15 to $45 billion (2-9 million ETH). In this case, the fund's demand will lead to the asset's rate rising to $8,000 at a bitcoin rate of $150,000. Moreover, if market dynamics are positive, by 2025, the price of Ethereum will reach $14,000, and bitcoin's rate will increase to $200,000.

As of the evening of Friday, 24 May, BTC/USD is trading at $69,900, and ETH/USD at $3,735. The absence of an immediate pump and some drawdown of this pair on 23-24 May can be explained by the fact that everyone who wanted to has already managed to buy ethereums ahead of the SEC's historic decision. The total cryptocurrency market capitalization is $2.55 trillion ($2.42 trillion a week ago). The Bitcoin Fear & Greed Index (Crypto Fear & Greed Index) has not changed and remains in the Greed zone at 74 points.

And in conclusion of the review, forecasts from Artificial Intelligence. The latest version of GPT-4o from OpenAI believes that the price of bitcoin on 1 August 2024 will be in the range of $76,348 to $89,108 "considering current market factors and historical trends." GPT-4o's competitor, the anthropic AI model Claude 3 Opus, has formed an even more optimistic vision, designating the range between $105,072 and $167,808 by the indicated date.


NordFX Analytical Group
 

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

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

https://nordfx.com/ 

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