Daily Market Analysis and News From NordFX

[Stan NordFX]

– Dune Analytics is tracking 295 wallets that, according to the U.S. Federal Bureau of Investigation (FBI) and the Office of Foreign Assets Control (OFAC), belong to the North Korean hacking group Lazarus. According to the latest data, these wallets currently hold digital assets amounting to approximately $47 million, including $42.5 million in BTC, $1.9 million in ETH, $1.1 million in BNB, and $640,000 in stablecoins, primarily Binance USD. It's worth noting that this is the lowest estimated value of Lazarus Group's crypto assets.
Meanwhile, Lazarus' wallets continue to show high activity: the last transaction was recorded on September 20. Interestingly, the hackers do not hold reserves in privacy coins like Monero, Dash, or Zcash, which are much more difficult to trace.

– Michael Saylor, the CEO of MicroStrategy, has compared the rate of fiat currency devaluation to inflation dynamics. He demonstrated that individuals could lose their savings if held in traditional currencies, as funds in U.S. dollars would have lost about 99% of their value over the past 100 years.
Saylor believes that bitcoin mitigates these risks due to its inherent characteristics. According to him, the flagship cryptocurrency represents a revolutionary technology with numerous advantages, including a capped supply of 21 million coins. Consequently, BTC is the best way to preserve your reserves, the billionaire concludes.

– The analyst known as CryptoCon notes that currently, bitcoin may be reflecting a pattern reminiscent of the 2015 market cycle, potentially paving the way for a new all-time high. According to his analysis, bitcoin is most likely to reach such a peak in December 2025 and could trade between $90,000 and $130,000.

– The Shanghai Intermediate People's Court has recognized bitcoin as a unique digital currency, despite the existing ban on trading these assets in China. The court granted bitcoin this status for several reasons: 1. It possesses qualities inherent to money, such as being storable, usable as a means of payment, and a measure of value for goods and services; 2. It enjoys global popularity; 3. It is valuable due to its limited supply of coins.
The court's decision does not impact the circulation of bitcoin in China and does not legalize cryptocurrency trading. However, the recognition of BTC as a digital currency lends the coin legitimacy. It is likely that, moving forward, it will be treated as virtual property in legal proceedings.

– Trader DonAlt believes that Ethereum could experience a significant devaluation before reaching the bottom of its cycle. "The worst is yet to come," he writes. "I would say we are, at best, two weeks away from the bottom." According to DonAlt's calculations, the floor for ETH stands at 0.047 BTC or $1,232.

– Cryptocurrencies have come to the aid of Lebanese residents who have been impoverished due to hyperinflation and governmental missteps. The economic crisis in the country erupted in 2019, leading to a 95% collapse of the national currency against the U.S. dollar. Moreover, in March 2023, the inflation rate almost doubled, ranging from 252% to 269%. According to the United Nations, about 78% of the country's population now falls below the poverty line.
As a result, a shadow crypto economy has emerged. Lebanese citizens are using USDT stablecoins as a means of payment and are earning their wages in bitcoin. Bitcoin mining has become not only incredibly popular but also highly profitable. According to CoinGecko data, Lebanon has the lowest cost of mining 1 bitcoin, at just $266. In comparison, due to higher electricity costs in the United States, this figure reaches $46,280.

– Experts have once again turned to artificial intelligence, this time to forecast the price of the flagship cryptocurrency by Halloween (October 31). CoinCodex's AI posits that by the specified date, the price of bitcoin will rise to $29,703.
Interestingly, the crypto market even has a term called "Uptober." The idea is that every October, bitcoin experiences significant price gains. Considering data from 2021, bitcoin was valued around $61,300 on October 31, marking a more than 344% increase compared to 2020. This phenomenon held true even in the past year of 2022, despite the high-profile crash of the FTX exchange. On October 1, 2022, the asset traded at $19,300, but by October 31, it had reached $21,000.
On the flip side, there are currently no concrete reasons for expecting a serious bull run. The key factor exerting downward pressure on the crypto market continues to be the Federal Reserve's tight monetary policy. As of the end of September, the U.S. regulator chose not to raise the refinancing rate but did not rule out such a move in the near future. Moreover, there is a likelihood that the regulator will maintain its course of tight monetary policy into the next year. It's also unclear how the SEC will act concerning applications for spot bitcoin ETFs.


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

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

 

[Stan NordFX]

September 2023 Results: South Asian Traders Lead at NordFX​

Brokerage firm NordFX has summarized the trading performance of its clients for September 2023. The company also evaluated its social trading services and the profits earned by its IB partners.

Gold, specifically the XAU/USD pair, continues to be one of the most popular trading instruments, helping NordFX traders secure positions in the Top 3. Notably, this time all three podium spots were taken by compatriots from South Asia.

- The highest profit in the first month of autumn was earned by a client from South Asia, account number 1679XXX. Trading exclusively on the XAU/USD pair, the client managed to earn 46,138 USD.

- The second spot on the September podium went to their compatriot, with account number 1599XXX. A result of 21,598 USD was achieved through trading with gold (XAU/USD), as well as with the euro (EUR/USD) and the British pound (GBP/USD).

- The precious metal also assisted another representative from South Asia (account number 1702XXX) in entering the Top 3 for September with a profit of 18,766 USD. In addition to XAU/USD, this trader's portfolio included pairs such as EUR/USD, GBP/USD, GBP/JPY, and many others.

In the PAMM service, the "Trade and Earn" account continues to attract the attention of passive investors. Although it was opened 570 days ago, the account remained dormant until reactivating in November of last year. As a result, over the last 11 months, its yield reached 199% with a relatively small drawdown of less than 17%.

It's important to note that past performance does not guarantee future returns. Therefore, as always, we urge investors to exercise the utmost caution when investing their funds.

The Top 3 IB partners of NordFX for September are as follows:
- The highest commission amount of 14,042 USD was credited to a partner from Western Asia, account number 1645XXX. It's worth noting that this partner has led the Top 3 for five consecutive months. Over this period, they have earned just under 60,000 USD in total;
- Second place went to the holder of account number 1618XXX from South Asia, who received 9,923 USD;
- And finally, rounding out the Top 3 is a partner from Southeast Asia with account number 1361XXX, who received a commission of 7,127 USD.


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

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

 

[Stan NordFX]

Forex and Cryptocurrencies Forecast for October 02 - 06, 2023​

EUR/USD: Correction is Not a Trend Reversal Yet

The dynamics of the EUR/USD pair in the past week were atypical. In a standard scenario, combating inflation against the backdrop of a strong economy and a healthy labour market leads to an increase in the central bank's interest rate. This, in turn, attracts investors and strengthens the national currency. However, this time the situation unfolded quite differently.

U.S. macroeconomic data released on Thursday, September 28, indicated strong GDP growth in Q2 at 2.1%. The number of initial unemployment claims was 204K, slightly higher than the previous figure of 202K, but less than the expected 215K. Meanwhile, the total number of citizens receiving such benefits amounted to 1.67 million, falling short of the 1.675 million forecast.

This data suggests that the U.S. economy and labour market remain relatively stable, which should prompt the U.S. Federal Reserve to increase interest rates by 25 basis points (bps). It's worth noting that Neil Kashkari, President of the Federal Reserve Bank of Minneapolis, recently confirmed his full support for such a move, as combating high inflation remains the central bank's primary objective. Jamie Dimon, CEO of JPMorgan, went even further, stating that he does not rule out the possibility of rate hikes from the current 5.50% to as high as 7.00%.

However, these figures and forecasts failed to make an impression on market participants. Especially since the rhetoric from Fed officials proved to be quite contradictory. For instance, Thomas Barkin, President of the Federal Reserve Bank of Richmond, does not believe that U.S. GDP will continue to grow in Q4. He also pointed out that there's a wide range of opinions regarding future rates and that it's unclear if additional changes in monetary policy are required. Austin Goolsbee, President of the Federal Reserve Bank of Chicago, noted that overconfidence in the trade-off between inflation and unemployment carries the risk of policy mistakes.

Such statements have tempered bullish sentiment on the dollar. Amid this murky and contradictory backdrop, yields on U.S. Treasury bonds, which had been supporting the dollar, fell from multi-year highs. Uncertainty surrounding the U.S. federal budget and the threat of a government shutdown also weighed on the dollar. Furthermore, September 28 and 29 marked the last trading days of Q3, and after 11 weeks of gains, dollar bulls began closing long positions on the DXY index, locking in profits.

As for the Eurozone, inflation has clearly started to wane. Preliminary data indicates that the annual Consumer Price Index (CPI) growth in Germany has slowed from 6.4% to 4.3%, reaching its lowest point since the onset of Russia's military invasion of Ukraine. The overall Eurozone CPI also fell—despite a previous rate of 5.3% and a forecast of 4.8%, it declined to 4.5%.

This reduction in CPI led to a rescheduling of the European Central Bank's (ECB) anticipated dovish policy shift from Q3 2024 to Q2 2024. Moreover, the likelihood of a new interest rate hike has significantly diminished. In theory, this should have weakened the euro. However, concerns over the fate of the dollar proved to be more impactful, and after bouncing off 1.0487, EUR/USD moved upward, reaching a high of 1.0609.

According to analysts at Germany's Commerzbank, some traders were simply very dissatisfied with levels below 1.0500, so neither macro data nor statements from Fed officials could exert any significant influence on this. However, the rebound does not indicate either a trend reversal or the complete end of the dollar rally. Commerzbank analysts believe that since the market has clearly bet on a soft landing for the U.S. economy, the dollar is likely to react particularly harshly to data that does not confirm this viewpoint.

Analysts at MUFG Bank also believe that the 1.0500 zone has finally become a strong level that served as a catalyst for the reversal. However, in the opinion of the bank's economists, the correction is primarily technical in nature and could soon fizzle out.

On Friday, September 29, traders awaited the release of the Personal Consumption Expenditures Index (PCE) in the U.S., which is a key indicator. Year-on-year, it registered at 3.9%, precisely matching forecasts (the previous figure was 4.3%). The market reacted with a minor increase in volatility, after which EUR/USD closed the trading week, month, and quarter at 1.0573. Strategists at Wells Fargo, part of the "big four" U.S. banks, believe that Europe's low metrics compared to the U.S. should exert further downward pressure on the euro. They also believe that the European Central Bank (ECB) has already concluded its current cycle of monetary tightening, as a result of which the pair may drop to the 1.0200 level by early 2024.

Shifting from the medium-term outlook to the near-term, as of the evening of September 29, expert opinions are evenly split into three categories: one-third foresee further dollar strengthening and a decline in EUR/USD; another third expect an upward correction; and the last third take a neutral stance. As for technical analysis, both among trend indicators and oscillators on the D1 chart, the majority, 90%, still favor the U.S. dollar and are coloured red. Only 10% side with the euro. The pair's nearest support levels are around 1.0560, followed by 1.0490-1.0525, 1.0375, 1.0255, 1.0130, and 1.0000. Bulls will encounter resistance in the area of 1.0620-1.0630, then 1.0670-1.0700, followed by 1.0745-1.0770, 1.0800, 1.0865, 1.0895-1.0925, 1.0985, and 1.1045.

Data releases pertaining to the U.S. labour market are anticipated throughout the week spanning from October 3 to October 6. The week will culminate on Friday, October 6, when key indicators, including the unemployment rate and the Non-Farm Payroll (NFP) figures, are set to be disclosed. Earlier in the week, specifically on Monday, October 2, insights into the U.S. manufacturing sector's business activity (PMI) will be unveiled. Federal Reserve Chair Jerome Powell is also scheduled to speak on this day. On Wednesday, October 4, information regarding the business activity in the U.S. services sector as well as Eurozone retail sales will be made public.

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[Stan NordFX]

GBP/USD: No Drivers for Pound Growth

According to the latest data published by the UK's National Statistics Office, the country's Gross Domestic Product (GDP) increased by 0.6% year-over-year in Q2, exceeding expectations of 0.4% and up from 0.5% in the previous quarter. While this positive trend is certainly encouraging, the UK's 0.6% growth rate is 3.5 times lower than the comparable figure in the United States, which stands at 2.1%. Therefore, any commentary on which economy is stronger is unnecessary.

Strategists from ING, the largest banking group in the Netherlands, believe that GBP/USD rose in the second half of the past week solely due to a correction in the U.S. dollar. According to them, there are no tangible catalysts related to the United Kingdom that would justify a sustained increase in the British currency at this stage.

Analysts at UOB Group anticipate that GBP/USD could fluctuate within a fairly broad range of 1.2100-1.2380 over the next 1-3 weeks. However, Wells Fargo strategists expect the pair to continue its decline, reaching the 1.1600 zone in early 2024, where it last traded in November 2022. The likelihood of such a move is corroborated by signals from the Bank of England suggesting that the interest rate on the pound may have peaked.

GBP/USD closed the past week at the 1.2202 mark. Analyst opinions on the pair's near-term future are split, offering no clear direction: 40% are bullish on the pair, another 40% are bearish, and the remaining 20% have adopted a neutral stance. Among trend indicators and oscillators on the daily chart (D1), 90% are painted in red, while 10% are in green. Should the pair move downward, it will encounter support levels and zones at 1.2120-1.2145, 1.2085, 1.1960, and 1.1800. Conversely, if the pair rises, it will face resistance at 1.2270, 1.2330, 1.2440-1.2450, 1.2510, 1.2550-1.2575, 1.2600-1.2615, 1.2690-1.2710, 1.2760, and 1.2800-1.2815.

No significant events related to the United Kingdom's economy are anticipated for the upcoming week.

USD/JPY: Awaiting the Breach of 150.00

"Appropriate measures will be taken against excessive currency movements, not ruling out any options," "We are closely monitoring currency exchange rates." Do these phrases sound familiar? Indeed, they should: these are words from yet another verbal intervention conducted by Japan's Finance Minister Shunichi Suzuki on Friday, September 29. He added that "the government has no specific target level for the Japanese yen that could serve as a trigger for currency intervention."

One can agree with the last statement, especially considering that USD/JPY reached the 149.70 level last week, a height it last achieved in October 2022. Moreover, amid large-scale global bond selloffs, the Bank of Japan (BoJ) took measures to curb the rising yields of 10-year JGBs and announced an unscheduled operation to purchase these bonds on September 29. In such a scenario, if not for the global dollar correction, it's highly likely that this operation could have propelled USD/JPY to break through the 150.00 mark.

As we've already noted above, according to many experts, the dollar's sell-off is most likely related to profit-taking in the final days of the week, month, and quarter. Therefore, this trend may soon dissipate, making the breach of the 150.00 level inevitable.

Could 150.00 be the "magic number" that triggers Japan's financial authorities to commence currency interventions? At the very least, market participants view this level as a potential catalyst for such intervention. This is all the more plausible given the current economic indicators. Industrial production remained unchanged in August compared to July, and core inflation in Japan's capital slowed for the third consecutive month in September. Under these conditions, economists at Mizuho Securities believe that although currency interventions may have limited impact, "the government would lose nothing politically by demonstrating to the Japanese public that it is taking the sharp rise in import prices seriously, caused by the weakening yen.".

The week concluded with USD/JPY trading at the 149.32 mark. A majority of surveyed experts (60%) anticipate a southern correction for the USD/JPY pair, possibly even a sharp yen strengthening due to currency intervention. Meanwhile, 20% predict the pair will confidently continue its northward trajectory, and another 20% have a neutral outlook. On the D1 timeframe, all trend indicators and oscillators are painted in green; however, 10% of the latter are signalling overbought conditions. The nearest support levels are situated at 149.15, followed by 148.45, 147.95-148.05, 146.85-147.25, 145.90-146.10, 145.30, 144.45, 143.75-144.05, 142.20, 140.60-140.75, 138.95-139.05, and 137.25-137.50. The closest resistance stands at 149.70-150.00, followed by 150.40, 151.90 (October 2022 high), and 153.15.

Apart from the release of the Tankan Large Manufacturers Index for Q3 on October 2, no other significant economic data concerning the state of the Japanese economy is scheduled for the upcoming week.

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[Stan NordFX]

CRYPTOCURRENCIES: Hopes on Halving and Halloween

In the first half of the week, BTC/USD trended downward, succumbing to the strengthening U.S. dollar. However, it managed to hold within the $26,000 zone, after which the dynamics shifted: The Dollar Index (DXY) began to weaken, giving the bulls an opportunity to push the pair back to the support/resistance area around $27,000.

It's clear that the stringent monetary policy of the Federal Reserve will continue to exert pressure on bitcoin, as well as the broader cryptocurrency market. While the U.S. regulator opted not to raise the refinancing rate at the end of September, it did not rule out such a move in the future. Adding to the market's uncertainty is the SEC's pending decisions on spot bitcoin ETF applications.

Mark Yusko, CEO of Morgan Creek Capital, believes that a favourable decision by the SEC on these applications could trigger an inflow of $300 billion in investments. In such a scenario, both the market capitalization and the coin's value would significantly increase.

However, the key word here is "if." Anthony Scaramucci, the founder of SkyBridge Capital, acknowledged at the Messari Mainnet Conference in New York the existence of "headwinds" for bitcoin in the form of high interest rates set by the Federal Reserve and the hostility of SEC Chairman Gary Gensler. Nevertheless, this investor and former White House official is confident that bitcoin offers greater prospects than gold. If the bitcoin ETF applications are eventually approved, it would lead to widespread adoption of digital assets. Scaramucci believes that the worst is already behind us in the current bear market. "If you have bitcoin, I wouldn't sell it. You've weathered the winter. [...] The next 10-20 years will be incredibly bullish," he stated. According to the financier, the younger generation will mainstream the first cryptocurrency, just as they did with the internet.

Amid uncertainties surrounding the actions of the Federal Reserve and the SEC, the primary hope for the growth of the crypto market lies in the forthcoming halving event scheduled for April 2024. This event is almost certain to occur. However, even here, opinions vary. A number of experts predict a decline in bitcoin's price before the halving.

An analyst known as Rekt Capital compared the current market situation to the BTC price dynamics in 2020 and speculated that the coin's price could fall within a descending triangle, potentially reaching as low as $19,082.

Well-known trader Bluntz, who accurately predicted the extent of bitcoin's fall during the 2018 bear trend, also foresees a continuing downward trajectory. He doubts that the asset has hit its bottom because the descending triangle pattern forming on the chart appears incomplete. Consequently, Bluntz anticipates that bitcoin could depreciate to around $23,800, thereby completing the third corrective wave.

Benjamin Cowen, another renowned analyst, is also bearish in his outlook. He believes that the BTC price could plummet to the $23,000 level. Cowen bases his prediction on historical patterns, which suggest that the price of the flagship cryptocurrency usually experiences a significant slump before a halving event. According to Cowen, past cycles indicate that BTC and other cryptocurrencies do not exhibit strong performance in the period leading up to this crucial event.

In the event of a downturn in digital asset prices, the upcoming halving could spell financial ruin for many miners, some of whom have already succumbed to the competitive pressures of 2021-2022. Currently, miners are operating on thin margins. At present, block rewards constitute 96% of their income, while transaction fees make up just 4%. The halving will cut the block mining rewards in half, and if this occurs without a corresponding increase in the coin's price, it could lead to financial catastrophe for many operators.

Some companies have started to connect their mining farms directly to nuclear power plants, bypassing distribution networks, while others are looking to renewable energy sources. However, not everyone has such options. According to Glassnode, the industry-average cost to mine one bitcoin currently stands at $24,000, although this varies significantly from country to country. CoinGecko data shows the lowest cost of mining in countries like Lebanon ($266), Iran ($532), and Syria ($1,330). In contrast, due to higher electricity costs, the U.S. sees costs soar to $46,280. If bitcoin's price or network fees do not significantly increase by the time of the halving, a wave of bankruptcies is likely.

Is this a bad or good development? Such bankruptcies would lead to a reduction in the mining of new coins, creating a supply deficit, and ultimately driving up their price. As it is, the crypto exchange reserves have already decreased to 2 million BTC, nearing a six-year low. Market participants are opting to hold their reserves in cold storage, anticipating a future surge in prices.

Research firm Fundstrat has speculated that against the backdrop of the halving, BTC prices could surge by more than 500% from current levels, reaching the $180,000 mark. Financial corporation Standard Chartered projects that the price of the flagship cryptocurrency could rise to $50,000 this year and to $120,000 by the end of 2024. The Bitcoin Rainbow Chart by the Blockchain Center also recommends buying; BTC/USD quotes on their chart are currently in the lower zone, suggesting a rebound is due.

According to Michael Saylor, the CEO of MicroStrategy, the inherent supply limitation of bitcoin capped at 21 million coins makes it the best asset for preserving and growing capital. The billionaire compared the depreciation rate of fiat currencies with the dynamics of inflation. He argued that individuals could see their savings erode if held in traditional currencies, citing that over the past 100 years, funds held in U.S. dollars would have lost about 99% of their value.

As of the time of writing this review, on the evening of Friday, September 29, BTC/USD has neither fallen to $19,000 nor risen to $180,000. It is currently trading at $26,850. The overall market capitalization of the cryptocurrency market stands at $1.075 trillion, up from $1.053 trillion a week ago. The Crypto Fear & Greed Index has increased by 5 points, moving from 43 to 48, transitioning from the 'Fear' zone to the 'Neutral' zone.

In conclusion, a forecast for the upcoming month. Experts have once again turned to artificial intelligence, this time to predict the price of the flagship cryptocurrency by Halloween (October 31). AI from CoinCodex posits that by the specified date, bitcoin will increase in price and reach a mark of $29,703.

Interestingly, there is even a term in the crypto market known as "Uptober." The idea is that every October, bitcoin sees significant price gains. Looking at the 2021 figures, bitcoin was trading near $61,300 on October 31, marking an increase of over 344% compared to 2020. This phenomenon remained relevant even in the past year, 2022, following the high-profile crash of the FTX exchange. On October 1, 2022, the asset was trading at $19,300, but by October 31, the coin had reached a mark of $21,000. Let's see what awaits us this time.


NordFX Analytical Group


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

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

 

[Stan NordFX]

CryptoNews of the Week

– Bitcoin recorded its first green September since 2016, increasing from $26,012 to $26,992. According to TradingView data, the cryptocurrency market's market capitalization also experienced an uptick. It stood at approximately $1.029 trillion at the beginning of September and rose by 6.1% to $1.092 trillion by month-end.
Ran Neuner, a trader and the founder of Crypto Banter, emphasizes the significance of the positive September closing for the leading cryptocurrency. "The last time bitcoin saw a rise in September in a year preceding a halving, we had another rally of 70% in the final quarter. That was in 2015," he notes.
Analysts at Bitfinex share a similar sentiment. "The cryptocurrency market closed September in the green, which is rare but typically leads to a bullish trend in October," they write.
According to a report by Bitfinex Alpha, futures market indicators also confirm an optimistic outlook for October. The report includes network data, which shows that the current price is supported by dynamics between long-term and short-term holders. Indicators reveal that seasoned long-term investors are resolved to remain holders within the current price range. Bitcoins held for 6-12 months remain largely stagnant, and the supply of BTC that is more than three years old has been inactive since February 2023.

– According to data from network analytics firm Santiment, "whales" (wallets holding between 10 and 10,000 BTC) have been quietly accumulating bitcoin and Tether (USDT) over the past six weeks. Their holdings have now reached a 2023 peak of 13.03 million BTC, indicating a bullish long-term outlook for bitcoin.

– The rise in bitcoin during the early days of October has somewhat offset the negative close of Q3, which saw a 12% decline. However, analysts at QCP Capital have warned that the possibility of retesting the $25,000 level should not be ruled out, despite the positive seasonality often referred to as "Uptober." According to statistics, over the past eight years, bitcoin has only finished October in the red in 2018. In other years, the monthly gain ranged from 5.5% to 48.5%. This time, experts anticipate that the resistance level will be between $29,000 and $30,000.

– On Monday, October 2, bitcoin reached a local peak of around $28,562. However, by the evening of the same day, traders began to take profits, and the coin fell below $27,500. Bloomberg strategist Mike McGlone believes that such a pullback in bitcoin was inevitable. Pressure tends to build when the digital currency gains aggressively in value. Increased volatility is accompanied by heightened activity from sellers looking to profit from the asset's rise.
McGlone doubts that bitcoin will reach $30,000 in the near future. The primary factor hindering further BTC growth is the strict policy of U.S. authorities. Repressive actions by the Securities and Exchange Commission (SEC) are deterring institutional investors from entering the cryptocurrency space. Global recession risks are also dampening risk appetite. In such a scenario, equity markets won't be able to grow, emphasized the Bloomberg strategist, adding that digital currencies will also suffer.

– Donald Trump is considered a staunch opponent of bitcoin. However, former SEC employee John Reed Stark believes that Trump may change his stance on cryptocurrencies during the 2024 presidential elections to garner support from voters who use digital assets. This speculation is supported by two facts. First, last year Trump released and sold a collection of NFT Trump Digital Trading Cards. Second, he still owns $2.8 million worth of Ethereum. Stark suggests that if Trump returns to the presidential office, he will prompt the SEC to approve the issuance of bitcoin ETFs and will also ease regulatory pressure on the crypto industry.

– The SEC has asked the U.S. District Court in New York not to dismiss its lawsuit against Coinbase. In its statement dated October 3, the Commission responded to Coinbase's claims, reiterating its position that certain cryptocurrencies traded on the platform qualify as investment contracts and, therefore, must be registered with the SEC. The regulator noted that Coinbase "has always known" that the cryptocurrencies it offers are securities and claimed that the exchange has already acknowledged this in its documentation.

– Additionally, on October 3, the court rejected the SEC's motion for an interlocutory appeal in its case against Ripple. The agency wanted to appeal the court's decision that the sale of XRP on crypto exchanges does not constitute an investment contract. However, this plan by the officials fell through. Against this backdrop, XRP appreciated by 5% within 24 hours.

– In July, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against the crypto lending platform Celsius. The crux of the accusation is that Celsius attracted billions of dollars through the illegal and unregistered sale of "cryptocurrencies recognized as securities," repeatedly misled investors about its financial condition, and manipulated the price of its own token (CEL). The SEC has also levelled fraud charges against Celsius founder Alex Mashinsky, with a court hearing set for September 17, 2024. The platform plans to partially repay its debt to creditors this year, transferring to them bitcoin, Ethereum, and shares in a new organization, NewCo, totalling $2.03 billion.

– Trader under the alias Bluntz is confident that bitcoin has "officially" entered a bull market and that all predictions of a drop to the $24,000 level are unfounded. In his opinion, the coin's rise above $27,000 confirms that BTC is currently in a bull market. "I think it's time to let go of any bearish bias," wrote Bluntz.

– Last week, we reported that the Artificial Intelligence from CoinCodex predicted the flagship crypto asset's price to be around $29,703 by Halloween (October 31st). This time, another AI, the machine learning algorithm of the forecasting platform PricePredictions, gave a similar result. According to its analysis, the BTC price on October 31st will hover around the psychologically important mark of $30,403. The forecast was made using several key technical indicators, including the Moving Average Convergence Divergence (MACD), the Relative Strength Index (RSI), Bollinger Bands (BB), and others.

– In his forecast, trader, analyst, and founder of venture company Eight, Michael Van De Poppe, is optimistic about not only October but also Q4 of 2023. He attributes his positive outlook to the potential approval of spot bitcoin Exchange-Traded Funds (ETFs) and the halving effect. The expert anticipates that the growth in the last quarter could elevate the price to around $40,000.
It's worth noting that the historical performance of BTC in this period has been quite mixed. For instance, in 2018, the digital asset's value declined by nearly half over three months, but a year earlier it had surged 142.2%.

– The analyst known as dave the wave believes that Ethereum will continue to depreciate against bitcoin at least until the end of 2023. The expert published a chart depicting the price dynamics of ETH relative to BTC, which shows a descending triangle indicating a fall in the altcoin's price.
Dave the wave drew an analogy to the trend observed from 2017 to 2018, suggesting that Ethereum will significantly devalue against bitcoin due to a strong BTC market rally. The chance for ETH to appreciate could come during the "altcoin season," which would begin after BTC reaches its peak value.
The analyst also made a long-term forecast on the price changes of bitcoin using logarithmic growth curves. According to this forecast, over the next 10 years, the cryptocurrency will outperform stocks in terms of investment returns and will become a primary means of wealth accumulation due to a significant increase in value.

– Bestselling author of "Rich Dad Poor Dad" and entrepreneur Robert Kiyosaki urged people to invest in the first cryptocurrency before the launch of the Central Bank Digital Currency (CBDC). "The Fed's CBDC is coming," he wrote. "Privacy is gone. Big Brother will be watching. When the CBDC hits the market, gold, silver, bitcoin, and cash will become invaluable. Start accumulating them now before it's too late." It's worth noting that in February, Kiyosaki predicted that bitcoin would rise to $500,000 by 2025 and called it the best hedge in turbulent times, while also cautioning about the asset's volatility.

– The total value of cryptocurrencies stolen by hackers since the beginning of 2023 has exceeded $1.15 billion, according to calculations by PeckShield. Nearly a third of all losses occurred in September, with damages from 22 crypto project hacks during that month amounting to almost $356 million. In contrast, only $17 million was stolen in the previous month, suggesting that even hackers take a vacation in August.


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

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

 

[Stan NordFX]

Forex and Cryptocurrencies Forecast for October 09 - 13, 2023​

EUR/USD: Will the Pair Reach 1:1 Parity?

Throughout 2023, the U.S. economy has effectively withstood aggressive interest rate hikes. The market-anticipated recession has yet to materialize, allowing the Federal Reserve to maintain its hawkish monetary stance. This has led to a sharp increase in Treasury yields and significant strengthening of the U.S. dollar. The yield on 10-year Treasuries plummeted 46% since March 2020, doubling the previous decline witnessed in 1981 amid aggressive monetary tightening by the U.S. central bank. As for the Dollar Index (DXY), it has remained above the critical level of 100.00 throughout the year, while EUR/USD has dropped 6.5% from its July highs.

On Tuesday, March 3, the yield on 10-year U.S. Treasury bonds reached 4.88%. Many market participants believe that a 5.0% yield could be a tipping point for the U.S. economy, forcing the Federal Reserve into a dovish pivot. However, these are merely expectations that may be far from reality. On the same Tuesday, Loretta J. Mester, President of the Federal Reserve Bank of Cleveland, stated that inflation is only expected to reach the target level of 2.0% by the end of 2025. She indicated that there are no immediate plans to lower interest rates and, furthermore, she is likely to support an interest rate increase at the next Federal Open Market Committee (FOMC) meeting if the current economic situation remains stable.

The U.S. macroeconomic data released in the first half of the past week appeared somewhat lacklustre. The ADP report revealed the weakest employment growth in the private sector since January 2021, coming in at a mere 89K, against a forecast of 153K (and down from 180K the previous month). While business activity in the services sector did continue to grow for the ninth consecutive month, it decelerated in September, with the PMI index falling from 54.5 to 53.6. As for the manufacturing sector, business activity remained in contraction territory, with a PMI of 49.0. Although this was an improvement over the previous 47.6, it still fell below the 50.0 threshold, indicating economic contraction. As a result, Treasury yields declined, and stock indices (S&P 500, Dow Jones, and Nasdaq) along with EUR/USD turned upwards. Traders opted to liquidate their short positions on the pair in anticipation of the U.S. September labour market report, traditionally scheduled to be published on the first Friday of the following month, which in this case was October 6. More on this below.

If the latest U.S. statistics appeared unimpressive, the Eurozone's figures were even worse. According to official data from Eurostat published on Wednesday, October 4, retail sales in August contracted by 1.2% month-on-month, compared to a 0.1% decline in July. The market consensus had projected a decrease of only 0.3%. On an annual basis, the volume of retail sales fell by 2.1%, exceeding both July's 1.0% decline and the market forecast of 1.2%. Monthly Producer Price Inflation (PPI) in the Eurozone rose from 0.5% in July to 0.6% in August.

Assessing the inflation outlook in the Eurozone, the European Central Bank (ECB)'s Chief Economist, Philip Lane, cautiously stated that "we will not reach our 2% inflation target as quickly as we would the 4% mark." ECB Governing Council member Peter Kazimir was slightly more optimistic. "Core Eurozone inflation confirms our expectations," the official noted. "We are on a downward trajectory. [However], deflating inflation is taking a bit more time." Kazimir believes that September's 25 basis point rate hike in the Euro was the last one.

We have previously noted that there is no consensus within the ECB's leadership regarding future monetary policy. This was further confirmed by ECB Governing Council member Isabel Schnabel, who countered Peter Kazimir by stating that further rate hikes may eventually be necessary. She added that although the ECB currently does not foresee a deep downturn, "we cannot rule out a recession" going forward.

If the prospect of higher Euro borrowing costs remains uncertain, a rate reduction at this stage is definitely not on the table. This was confirmed on Thursday, October 5th, by ECB Vice-President Luis de Guindos, who stated that discussions about rate cuts are premature. Since the Federal Reserve also has no plans to turn dovish from its hawkish stance, the current interest rate differential of 5.50% for the dollar and 4.50% for the Euro gives a certain advantage to the American currency. The Reuters expert consensus forecast expects EUR/USD to further decline to $1.0400 within October, with 1 out of 20 surveyed specialists anticipating a 1:1 parity. Nonetheless, analysts predict that EUR/USD will rise by approximately 6% over the next year.

The highlight of the past week was the U.S. employment report. Bloomberg experts had anticipated that the number of new non-farm payroll jobs (NFP) created in September would be lower than in August: 70K compared to 187K the previous month. In reality, the figure came in at 336K, almost twice as high as the forecast. Meanwhile, the unemployment rate remained unchanged at 3.8%.

Following the release of this data, which attests to the health of the American job market, EUR/USD initially declined but then quickly regained its footing and even advanced. As a result, the pair closed the trading week at the 1.0585 level. As of the evening of October 6th, when this overview was written, experts are equally divided on its near-term future, just like a week ago: a third are predicting further strengthening of the dollar and a decline in EUR/USD, another third anticipate an upward correction, and the final third are neutral.

As for technical analysis, among the trend indicators on the D1 chart, 65% favour the downside (red), and 35% are bullish (green). Most oscillators (60%) continue to side with the U.S. currency and are coloured red. Just 10% favour the euro, and half of those indicate overbought conditions. The remaining 30% hold a neutral stance.

Immediate support for the pair is found in the 1.0550-1.0560 area, followed by 1.0490, 1.0450, 1.0375, 1.0255, 1.0130, and 1.0000. Resistance for the bulls is situated around 1.0600-1.0615, followed by 1.0670-1.0700, 1.0745-1.0770, 1.0800, 1.0865, and 1.0895-1.0930.

In the upcoming week, on Wednesday, October 11, inflation data for Germany (CPI) and the U.S. (PPI) will be released. On the same day, the minutes from the last FOMC meeting will be published, offering investors insights into the committee members' views on future monetary policy. Thursday, October 12th, is likely to experience increased volatility, as consumer inflation data (CPI) for the United States will be announced. Additionally, the traditional weekly report on initial jobless claims in the U.S. will be released on Thursday. The week will wrap up with the publication of the University of Michigan's Consumer Confidence Index on October 13 Traders should also be aware that Monday, October 9th, is a public holiday in the U.S., in observance of Columbus Day.

GBP/USD: Worst Currency of September

The British pound emerged as the worst performing G10 currency in September. Fuelling speculation about its future, the Bank of England (BoE) released a report on Thursday, October 5, indicating a significant rise in wages in the country. Expectations for wage growth over the next year also increased compared to August.

Certainly, the recent moderation in inflation is a positive development. However, economists at Germany's Commerzbank suggest that the wage growth dynamics indicate that inflation may be more stubborn than the Bank of England anticipates.

Survey results, also released on October 5, suggest that many market participants believe the BoE is not taking sufficient measures to combat rising prices. On the other hand, strategists at Japan's MUFG Bank argue that the "Bank of England has already gone too far in tightening policy." They write, "We see the potential for lower rates compared to other leading developed economies." There are clearly differing opinions, but one thing both camps agree on is that the British currency will continue to remain under pressure. At least until there is compelling evidence of sustainable declines in the inflation rate.

GBP/USD began the past week at a level of 1.2202 and returned almost to the same point ahead of the release of the U.S. employment report on Friday, October 6. The robust Non-Farm Payroll (NFP) data temporarily strengthened the dollar. The week concluded with the European currency gaining the upper hand, closing the pair at 1.2237. However, the chart of the past two weeks still suggests a sideways trend. Analyst opinions on the pair's immediate future are as follows: 40% are bullish, another 40% are bearish, and the remaining 20% hold a neutral stance. Among trend indicators on the D1 chart, 65% are red, while 35% are green. As for the oscillators, 40% point to a decline in the pair, 10% point to an increase (all in the overbought zone), and the remaining 50% are neutral.

In a downward movement, the pair will find support levels and zones at 1.2195-1.2205, 1.2100-1.2115, 1.2140-1.2150, 1.2085, 1.2040, 1.1960, and 1.1800. If the pair rises, it will encounter resistance at levels of 1.2270, 1.2330, 1.2440-1.2450, 1.2510, 1.2550-1.2575, 1.2600-1.2615, 1.2690-1.2710, 1.2760, and 1.2800-1.2815.

Fresh GDP data for the United Kingdom is expected to be released on Thursday, October 12. After experiencing a decline of -0.5% in July, the indicator is anticipated to show a 0.2% growth on a monthly basis for August. No other significant economic events related to the country are expected for the upcoming week.

continued below...

 

[Stan NordFX]

USD/JPY: Was There Really an Intervention?

We suggested in our previous review that the "magic" number of 150.00 would serve as a signal to Japanese financial authorities to initiate currency interventions. Indeed, after USD/JPY slightly crossed this threshold on Tuesday, October 3, reaching a high of 150.15, the long-anticipated event occurred, within a matter of minutes, the pair plummeted nearly 300 points, halting its freefall at 147.28.

The prevailing market sentiment is that the Bank of Japan (BoJ) has finally moved from verbal interventions to actual ones. Interestingly, the country's Finance Minister, Shunichi Suzuki, declined to comment on whether there was indeed a currency intervention. He merely obfuscated the issue by stating that "many factors determine whether movements in the currency market are excessive," and that "no changes have been made in how the government will address these issues." In short, interpret it as you will.

Of course, one cannot rule out the mass triggering of stop-orders upon breaching the key level of 150.00 (such "black swans" have been observed before). However, we believe that the episode was unlikely to have occurred without intervention from Japan's financial authorities.

After the sharp decline, the price has rebounded and is now approaching the ascending trend line from below. Whether the Bank of Japan's intervention (if it indeed occurred) has achieved its goal is difficult to say. Recalling similar scenarios from last autumn, the impact of such actions seemed to be only temporary, with market conditions reverting back to their previous state within a couple of months. However, could this latest move serve as a significant deterrent for USD/JPY bulls and allow the Japanese currency to regroup? The chances are there, particularly if the regulator actively intervenes to prevent the pair from rising back to the 150.00 level or higher.

The pair concluded the trading week at the 149.27 level. All 100% of the surveyed experts, invigorated by the events of October 10, voted for further yen strengthening and a downward movement for the pair. (It is worth noting here that even such unanimity offers no guarantees concerning the accuracy of the forecast.) Trend indicators on the D1 chart hold the opposite view—all 100% are still coloured in green. Among the oscillators, slightly fewer, 90%, remain in the green zone, with 10% having turned red. The nearest support level lies in the 149.15 area, followed by 148.80, 148.30-148.45, 147.95-148.05, 146.85-147.25, 145.90-146.10, 145.30, 144.45, 143.75-144.05, 142.20, 140.60-140.75, 138.95-139.05, and 137.25-137.50. Immediate resistance is at 149.70-150.15, followed by 150.40, 151.90 (the October 2022 high), and 153.15.

No significant economic data related to the state of the Japanese economy is scheduled for release in the upcoming week. Additionally, the country will be observing a public holiday on Monday, October 9, in celebration of National Sports Day.

CRYPTOCURRENCIES: Uptober's Target is $30,000

As Q3 closed on September 30, the BTC/USD trading pair saw a 12% drop. Despite setbacks in July and August, bitcoin experienced its first profitable September since 2016, increasing from $26,012 to $26,992 within the month. TradingView data also highlighted a 6.1% rise in the market capitalization of the cryptocurrency sector, moving from approximately $1.029 trillion at the beginning of September to $1.092 trillion by month's end.

Ran Neuner, the founder of Crypto Banter and a seasoned trader, underscored the importance of bitcoin's positive performance in September. He noted that in a year prior to a halving event, such as in 2015, a profitable September has historically been followed by a 70% surge in Q4. Analysts at Bitfinex echoed this sentiment, suggesting that a green September often presages a bullish trend in October.

The Bitfinex Alpha report further substantiated an optimistic forecast for October, citing futures market indicators. The data revealed that the current price is being maintained by a balance between short-term and long-term holders, implying that experienced long-term investors are steadfast in holding their coins. Furthermore, bitcoins that have been held for 6 to 12 months are predominantly dormant, and the supply of BTC that is over three years old has remained inactive since February 2023.

Santiment, a network analytics firm, reported that larger wallets, known as whales and sharks, holding between 10 and 10,000 BTC, have been quietly stockpiling both bitcoin and Tether (USDT) for the last six weeks. Their collective holdings have now reached a 2023 high of 13.03 million BTC, pointing to a promising long-term outlook for bitcoin.

It's well known that October follows September, and many investors have high hopes for this month. According to statistics, in the last eight years, bitcoin has only ended the month of October in the red once, in 2018. In other years, the monthly gains ranged from 5.5% to 48.5%. If we consider the entire history of the leading cryptocurrency, October has been a profitable month in eight out of ten instances, with an average gain of 22%. This seasonal phenomenon has been dubbed "Uptober."

The early days of October provided hope that the tradition of "Uptober" would continue in 2023. On Monday, October 2, bitcoin reached a local peak of around $28,562. However, disappointment set in later that same day as traders began to lock in profits, causing the coin to drop to the $27,500 zone. Bloomberg strategist Mike McGlone believes that this pullback was inevitable. Pressure tends to build when the digital currency gains value aggressively. Increased volatility is accompanied by heightened seller activity, as they aim to capitalize on the asset's surge.

McGlone is sceptical that bitcoin will reach $30,000 in the near future. The main factor hindering further growth of bitcoin is the strict policies of U.S. authorities. The repressive actions of the Securities and Exchange Commission (SEC) are deterring institutional investors from entering the crypto space. Global recession risks are also dampening risk appetite. In such a scenario, stock markets will not be able to grow, emphasizes the Bloomberg strategist, adding that digital currencies will also suffer as a result.

Analysts at QCP Capital also believe that the resistance level for BTC/USD will be between $29,000 and $30,000. They warn that, despite the positive seasonality, the possibility of retesting the $25,000 level should not be ruled out.

However, not everyone agrees with this view. For example, a trader going by the handle "Bluntz" is confident that bitcoin has "officially" entered bullish territory and that all predictions of a drop to the $24,000 level are unfounded. In his opinion, the coin's rise above $27,000 confirms that bitcoin is currently in a bull market. "I think it's time to shed any bearish biases," wrote Bluntz.

Another well-known trader, analyst, and founder of the venture firm Eight, Michael Van De Poppe, is optimistic not only about October but also about Q4 2023 as a whole. The expert anticipates that growth in the final quarter could push the flagship cryptocurrency up to the $40,000 mark. However, it's worth noting that while historical data overwhelmingly favors October, the quarterly dynamics of bitcoin are not so clear-cut. For instance, the digital asset appreciated by 142.2% in 2017, but the following year it lost almost half its value over three months.

In our previous review, we reported that the Artificial Intelligence from CoinCodex had forecasted the flagship cryptocurrency to reach a value of $29,703 by Halloween (October 31). This time, another AI, the machine learning algorithm from the forecasting platform PricePredictions, has given a similar result. According to its analysis, the price of bitcoin will hover around the psychologically significant mark of $30,403 on October 31. This forecast was made using several key technical indicators, including the Moving Average Convergence Divergence (MACD), the Relative Strength Index (RSI), Bollinger Bands (BB), among others.

Concerning Ethereum, the primary competitor to bitcoin, an analyst known as Dave the Wave anticipates that Ethereum will sustain its depreciation against bitcoin at least through the end of 2023. Dave the Wave has published a trend chart for ETH/BTC, highlighting a descending triangle indicative of a price drop for the altcoin.

Drawing a comparison with trends from 2017 to 2018, Dave the Wave posits that Ethereum is poised for a significant devaluation relative to bitcoin, particularly due to a robust bitcoin rally. The potential for Ethereum to gain value appears limited to the so-called "altcoin season," which is projected to begin after bitcoin achieves its peak price.

As of the time of writing this review, on the evening of Friday, October 6, BTC/USD is trading in the area of $27,960, ETH/USD at $1,640, and ETH/BTC at 0.0588. The total market capitalization of the cryptocurrency market stands at $1.096 trillion, up from $1.075 trillion a week ago. The Crypto Fear & Greed Index for bitcoin has risen by 2 points over the week and currently sits squarely in the Neutral zone, at a score of 50.


NordFX Analytical Group


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

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

 

[Stan NordFX]

CryptoNews of the Week

– The U.S. Commodity Futures Trading Commission (CFTC) has stated that nearly 200 accounts on the crypto exchange Binance were used by HAMAS militants. The CFTC emphasized that exchange staff were aware that their platform was facilitating potentially illegal activities yet turned a blind eye and even joked about it in internal chats. According to the regulator, as early as February 2019, Binance's former Compliance Director Samuel Lim had received information regarding the use of the exchange by representatives of the movement. However, as Lim explained to a colleague, HAMAS members typically transferred "small amounts" that would unlikely even suffice for purchasing an AK-47.

– Warren Buffett's partner and Vice Chairman of American holding company Berkshire Hathaway, Charlie Munger, stated that most investments in digital assets will ultimately become worthless. "Don't get me started on bitcoin. It's the dumbest investment I've ever seen," the 99-year-old investor expressed during the Zoomtopia online conference.
Munger also shared his views on artificial intelligence, noting that AI has actually been around for quite some time, tracing its roots back to the 1950s. "We've always had artificial intelligence. It's when software generates even more software," he said. However, in his opinion, the technology is "generating hype, probably more than it deserves."

– U.S. presidential candidate Robert F. Kennedy Jr. told Bitcoin Magazine in an interview that he intends to defend bitcoin if elected as the President of the United States. He also expressed scepticism towards Central Bank Digital Currencies (CBDCs). According to Kennedy, national digital currencies could become a tool for governments to control individuals' financial transactions. "The freedom to transact is as important as freedom of speech," the politician stated.

– Sam Altman, the CEO of ChatGPT, described bitcoin as a "super logical step on the technology tree." The artificial intelligence creator appreciates the idea that humanity now has an international currency beyond the control of any single government. The OpenAI leader believes that corruption is a key impediment to societal progress, and that bitcoin is poised to overcome this obstacle.
Altman also expressed disappointment with the U.S. government's stance on the cryptocurrency industry: "I'm disheartened by many of the actions taken by the U.S. government recently. The war on cryptocurrencies seems to be never-ending, and authorities want to take everything under their control." Like Robert F. Kennedy Jr., Altman believes that if the United States launches a Central Bank Digital Currency (CBDC), it will become a state tool for surveillance over citizens.

– Analyst Benjamin Cowen believes that the crypto market is entering "one of its most brutal" phases in its cycle. According to the expert, bitcoin's dominance in the market capitalization of the crypto sector is increasing amidst a decline in the price of altcoins and diminishing investor interest in this asset class.
Using Fibonacci retracement levels, Cowen predicts that BTC dominance will likely peak at 60%, as it did in the previous cycle. The analyst emphasized that this metric is unlikely to rise to 65% or 70%, primarily due to the stablecoin market. (As of October 10, according to CoinMarketCap, bitcoin's share in the overall market capitalization of the crypto market was 49.92%.)

– Former BitMEX CEO Arthur Hayes has stated that the price of the leading cryptocurrency could reach $70,000 next year, and between $750,000 to $1 million by 2026. He justified his prediction based on factors such as the asset's limited supply, the potential approval of spot bitcoin ETFs, and geopolitical uncertainty. "I think this will be the biggest boom in financial markets in the history of mankind. Bitcoin will skyrocket to absurd levels, the Nasdaq will soar to absurd levels, and the S&P 500 will rise to absurd levels," Hayes declared.

– Analyst Nicholas Merten holds a diametrically opposite view. He believes that bitcoin could significantly crash due to actions taken by the Federal Reserve, potentially leading to a prolonged economic downturn in the U.S. If commodities such as oil, natural gas, and uranium begin to stabilize or decline in price, Merten sees this as a sign of an impending short-term recession. In that scenario, he suggests that stocks could fall by approximately 33%, similar to the correction that occurred in October 2022. In turn, bitcoin would react to this situation by dropping to the $15,000-$17,000 range.
Merten is convinced that a sustained bullish trend in the market is unlikely until the Federal Reserve begins to increase liquidity in the economy. "Bitcoin thrives when there's an increase in the money supply in the market and when investors are in a risk-on mood. However, at the moment, neither of these conditions is met," Nicholas Merten explained.

– A bitcoin mining farm called Lava Pool has been launched in El Salvador, utilizing renewable geothermal energy. The project is being developed by Volcano Energy and Luxor Technology, with 23% of the net income being allocated to the country's government. According to Volcano Energy's management, this move validates El Salvador's efforts to integrate bitcoin into its national energy infrastructure, providing rapid income and flexible load management options for the power grid.
The described initiative is part of a more ambitious project by Volcano Energy aimed at establishing a global bitcoin mining station powered by renewable solar and wind energy. Within the framework of this project, plans are underway to construct a renewable energy generation park with a capacity of 241 MW.

– Comparing the current dynamics of bitcoin to what transpired before and after the halvings in 2015 and 2019 indicates that the market is moving in the same direction as it did then. After its summer peak, the current coin price is undergoing a downward correction, but this is not surprising: typically, 200 days before a halving, the leading cryptocurrency could lose up to 60-65% of its value before resuming its growth trajectory.
Many experts are predicting significant price increases for bitcoin in 2024. For instance, analysts at JP Morgan suggest a price of $45,000, while those at Standard Chartered forecast $100,000. Writer and investor Robert Kiyosaki and cryptographer Adam Back also target the $100,000 mark. Fundstrat Research founder Tom Lee envisions BTC at $180,000. Venture capitalist Tim Draper expects $250,000, and billionaire Mike Novogratz, along with ARK Invest CEO Cathy Wood, project the coin to grow to $500,000 and $1 million next year, respectively.
The current optimism among investors can also be attributed to the present price dynamics of the digital gold: despite receding from its summer peak, investments in BTC have yielded a return of more than 60% since the beginning of the year.


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

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

 

[Stan NordFX]

Forex and Cryptocurrencies Forecast for October 16 - 20, 2023​

EUR/USD: Inflation Drives Trends

At the beginning of last week, the Dollar Index (DXY) continued its decline that began on October 3, while global equity markets experienced growth. The dovish stance of Federal Reserve officials and the falling yields on U.S. Treasury bonds were driving factors. In recent days, the regulators have been actively persuading the market of the likelihood of a "soft landing" for the U.S. economy, suggesting a potentially prolonged pause in the cycle of monetary tightening. For instance, on Wednesday, October 11, Christopher Waller, a member of the Federal Reserve Board of Governors, stated that "tightening in financial markets is doing some of our work for us," allowing the central bank to maintain a wait-and-see approach.

On the same day, the minutes of the September meeting of the Federal Open Market Committee (FOMC) were released. The document, if not dovish, was certainly not hawkish. It is worth noting that the Committee left the interest rate unchanged in September. As for future prospects, the minutes indicated that Fed leaders acknowledge "high uncertainty" regarding the future of the U.S. economy and recognize the need to maintain a cautious approach to monetary policy.

Market sentiment began to gradually shift following the publication of the U.S. Producer Price Index (PPI). The Bureau of Labor Statistics reported that the PPI rose by 0.5% in September, exceeding the forecast of 0.3%. The core PPI (MoM) increased by 0.3%, compared to the expected 0.2%. On an annual basis, it reached 2.2%, surpassing the forecast of 1.6% and the previous figure of 2%. This unexpected surge in industrial inflation led to speculation that consumer inflation could also exceed expectations.

This indeed materialized. Data released on Thursday, October 12, showed that inflation in September increased by 0.4%, higher than the 0.3% forecast. On an annual basis, the Consumer Price Index (CPI) also exceeded expectations, coming in at 3.7% against a forecast of 3.6%. Market participants concluded that such inflationary growth could prompt Federal Reserve officials to shift from a dovish to a hawkish stance, potentially raising the interest rate by another 25 basis points (bps) to 5.75% in the upcoming FOMC meeting. Amidst such sentiment, the dollar, along with the yields on U.S. government bonds, sharply increased, while equity markets declined. The DXY reached a new local peak, hitting 106.35. Yields on 10-year Treasuries rose to 4.65%, and 2-year yields reached 5.05%. EUR/USD reversed course, dropping from a high of 1.0639 to 1.0525 in just a few hours.

Germany's CPI was also released on Wednesday, September 11, showing an annual consumer inflation of 4.3% and a monthly figure of 0.3%, both of which were fully in line with forecasts and previous data. Joachim Nagel, a member of the ECB's Governing Council and the head of Bundesbank, stated that inflation in Germany has reached its peak. By 2025, he projects that the tightening of monetary policy will steer inflation in the Eurozone down to 2.7%, according to his opinion. "Until we have defeated high inflation rates, we will not rest," he assured.

The minutes from the ECB's September meeting revealed that a solid majority of the Governing Council members supported a 25 basis point interest rate hike for the euro. In their view, any pause might signal that the tightening cycle has come to an end or that the Governing Council is more concerned about the state of the economy and a possible recession than about excessive inflation. These minutes were published on Thursday, October 12.

Some Council members advocate keeping the key rates at their current level, notably François Villeroy de Galhau, the President of the Bank of France. In his opinion, patience in monetary policy currently holds more importance than activity, stating that it would be much better to achieve the goal through a "soft landing" rather than a "hard one."

With a high degree of probability, the European Central Bank will raise the interest rate to 4.75% at its next meeting on October 26. Even after this increase, the rate will still remain below that of the Federal Reserve. Combined with the apparent weakness of the Eurozone economy, this will continue to exert pressure on the euro. The situation is further complicated by a potential spike in energy prices due to the ongoing military actions in Ukraine and the recent escalation of the Israeli-Palestinian conflict as winter approaches.

EUR/USD closed at a level of 1.0507 last week. As of the evening of October 13, when this review was written, experts were divided on its near-term prospects: 80% favoured a northward correction for the pair, while 20% took a neutral stance. The number of votes in favor of further dollar strengthening stood at 0%.

Regarding technical analysis, among the trend indicators on the D1 chart, 100% sided with the bears. A majority (60%) of oscillators continue to favor the U.S. currency and are coloured in red. 30% sided with the euro, with the remaining 10% taking a neutral stance.

Near-term support for the pair is located around 1.0450, followed by 1.0375, 1.0255, 1.0130, and 1.0000. Bulls will encounter resistance in the area of 1.0600-1.0620, then 1.0670-1.0700, 1.0740-1.0770, 1.0800, 1.0865, and 1.0895-1.0930.

The upcoming week's economic calendar highlights several key events. On Tuesday, October 17, data on U.S. retail sales will be released. The Eurozone's Consumer Price Index (CPI) is scheduled for publication on Wednesday. Thursday, October 19, will feature the release of the Philadelphia Fed Manufacturing Index and the customary data on initial jobless claims in the United States. A speech by Federal Reserve Chairman Jerome Powell is also planned for the evening of that Thursday.

GBP/USD: It Was Tough, and It Will Be Tough

Overall, the GBP/USD chart closely resembled that of EUR/USD: rising until Thursday, followed by a reversal and decline after the release of consumer inflation data in the United States. In addition to the prospect of tighter U.S. monetary policy, the British pound faced additional pressure from UK industrial production data.

According to the latest figures from the Office for National Statistics (ONS), published on Thursday, the country's industrial sector activity declined again in August. Manufacturing output fell by -0.8%, compared to a forecast of -0.4% and a -1.2% decline in July. The overall industrial production dropped by -0.7%, against expected -0.2% and -1.1% in the previous month. On an annual basis, although manufacturing output did increase by 2.8% in August, it fell short of the expected 3.4%. The overall volume of industrial production also missed expectations, increasing only by 1.3% instead of the anticipated 1.7%.

Despite the fact that the UK's GDP, after contracting by -0.6% in July, increased by 0.2% in August, the risks of economic growth deceleration have heightened. This is largely due to developments in Israel – escalating tensions in the Middle East could disrupt the global supply chain, and rising prices for natural energy resources, primarily oil, will increase inflationary pressures.

Moreover, British companies have not only slowed their production growth rate due to weakened demand but have also postponed their plans for capacity expansion due to higher interest rates on loans.

This situation poses a dilemma for officials at the Bank of England (BoE), who are caught between trying to tame inflation and preventing the economy from slipping into a deep recession. Speaking at the annual meeting of the Institute of International Finance in Morocco on Friday, October 13, BoE Governor Andrew Bailey stated that "the last decision was a difficult one" and that "future decisions will also be difficult." It's worth noting that the interest rate was left unchanged at 5.25% in September. The next BoE meeting is scheduled for November 2, and whether the regulator will opt to raise the rate even by a few basis points remains a significant question.

GBP/USD closed the past week at a mark of 1.2143. Analyst opinions on its near-term future were surprisingly unanimous, with 100% forecasting an increase for the pair. (It's appropriate to remind that even such unanimity offers no guarantees regarding the accuracy of the forecast). On the contrary, trend indicators on the D1 chart are entirely bearish: 100% of them point to a decline and are coloured in red. Oscillators indicate a fall for the pair at 50%, an increase at 40%, with the remaining 10% maintaining a neutral stance. Should the pair trend downwards, it will encounter support levels and zones at 1.2100-1.2115, 1.2030-1.2050, 1.1960, and 1.1800. If the pair rises, it will meet resistance at levels of 1.2205-1.2220, 1.2270, 1.2330, 1.2450, 1.2510, 1.2550-1.2575, 1.2690-1.2710, 1.2760, and 1.2800-1.2815.

Notable events for the upcoming week include Tuesday, October 17, when data on the state of the UK labour market will be released. On Wednesday, October 18, consumer price index (CPI) data will be published for both the Eurozone and the United Kingdom. (Particularly high volatility can be expected for EUR/GBP on this day). Also of interest is Friday, October 20, when retail sales data for the United Kingdom will be made available.

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