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Daily market analysis by NordFX

CryptoNews of the Week

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

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

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

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

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

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

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

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

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

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

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


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

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

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Forex and Cryptocurrencies Forecast for March 25 - 29, 2024


EUR/USD: Switzerland Strengthens the Dollar

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

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

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

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

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

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

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

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

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

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

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

continued below...
 
GBP/USD: BoE Hawks Morph into Doves

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

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

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

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

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

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

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

USD/JPY: How the BoJ Sank the Yen

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

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

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

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

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

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

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

continued below...
 
CRYPTOCURRENCIES: Bitcoin – The Calm Before the Halving

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

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

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

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

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

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

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

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

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

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

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

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

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

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


NordFX Analytical Group


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

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

https://nordfx.com/
 
March 2024: NordFX Traders Yield Maximum Profits from Physical and Digital Gold

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

- The best result in March was achieved by a trader from Western Asia, account number 1654XXX, with a profit of 26,941 USD, achieved through transactions with gold (XAU/USD).

- The gold pair XAU/USD, along with the British pound and Japanese yen (GBP/USD and GBP/JPY), assisted a client from South Asia, account number 1723XXX, in securing the second place on the podium with a result of 24,778 USD.

- Third place went to a trader from across the Pacific, account number 1567XXX. Unlike physical gold, they traded in an asset commonly referred to as "digital gold" – bitcoin (BTC/USD), through which they were able to earn 24,531 USD.

In NordFX's passive investment services, the following situation has emerged:

In the PAMM service, we have previously drawn investors' attention to an account named Kikos2. After 135 days of operation, it has shown a profit of 548%. This is a very impressive result; however, with such aggressive trading, the maximum drawdown is also quite serious: about 60%.

Investors familiar with NordFX's passive investment services are likely aware of the accounts named KennyFXPRO, the oldest of which started over three years ago. This time, we would like to highlight another account from this group called KennyFXPRO - Road 250. Launched 120 days ago, it has shown a profit of more than 20%, with a very moderate maximum drawdown:less than 7%.

In CopyTrading, we continue to monitor the yahmat-forex signal, which has shown a return of 372% over 282 days with a maximum drawdown of 37%. Here, as usual, it's appropriate to remind that aggressive trading, besides high profit, also carries high risks and can lead to partial or total loss of the deposit. Therefore, we urge all traders and investors to exercise maximum caution when operating in financial markets.

Among NordFX's IB partners, representatives from South and West Asia have entered the top 3:
- The highest commission reward of 5,500 USD was awarded to a partner from South Asia with account number 1682XXX;
- Following was a partner from West Asia (account number 1645XXX), who received 5,053 USD;
- And finally, another partner from South Asia (account number 1593XXX) closes the top three leaders, having received a reward of 4,238 USD.

***

Concluding the month's review, it's worth reminding that NordFX clients now have another great opportunity to boost their budget. In the 2024 super lottery, 202+4 cash prizes will be drawn, totalling 100,000 USD. Becoming a participant in the lottery and getting a chance to win one or even several of these prizes is quite straightforward. All details can be found on 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

https://nordfx.com/
 
CryptoNews of the Week

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– FTX exchange founder Sam Bankman-Fried (SBF) regrets the actions that led him to a 25-year prison sentence. He revealed this in an interview with ABC News. "It's a major part of what I think about every day," added the former businessman, now inmate. According to him, FTX's insolvency was the result of several "bad decisions" he made in 2022.
SBF noted that he "heard and saw the desperation and disappointment from thousands of clients" who "deserve full compensation at current prices." In Bankman-Fried's view, had he or another FTX employee remained as CEO, clients would "have long been refunded." SBF also criticized the decision not to relaunch the exchange.
FTX's former CEO's lawyers plan to appeal based on some testimonies at the trial that "significantly distorted what actually happened."

– The rise in bitcoin's value after the halving will become "parabolic" and allow its price to reach $150,000 by year's end. Mark Yusko, CEO of Morgan Creek Capital, gave this forecast on CNBC. "Interest in the asset will increase after the halving – many will enter into FOMO mode. We should see a doubling of the fair value. In the current cycle, it's ~$75,000, with adjustments downwards. […] Thus, we get $150,000," Yusko shared his calculations. He also believes that "historically, about nine months after the event, a price peak will form before the next bear market."
The top manager called the first cryptocurrency a "dominant token" and the "best form of gold." Regarding long-term prospects, the expert stated that bitcoin "could easily" increase tenfold over the next decade. Separately, Yusko noted that his hedge fund likes Ethereum, Solana, and Avalanche, though they fall short of the "king bitcoin."

– "Rich Dad Poor Dad" best-selling author and entrepreneur Robert Kiyosaki once again advised not to save "fake fiat dollars" but to buy gold, silver, or bitcoin. He believes the US has gone bankrupt by printing $1 trillion every 90 days just to pay bills. "The entire US dollar is American debt. [I am concerned about] our political, banking, and financial leaders. They are either incompetent, corrupt, or both. Our leaders have no idea how to control the growing national debt and the US bond market, as well as the excessively inflated stock market," Kiyosaki stated.
However, the entrepreneur made an unexpected statement. According to him, bitcoin could crash to zero as it's not excluded that the first cryptocurrency is the same kind of fraud or Ponzi scheme as the US dollar, euro, yen, or any other "fake" fiat currency.

– "Gold bug" and staunch bitcoin opponent Peter Schiff suggested that bitcoin's popularity among young people is mainly due to "ignorance and lack of experience." The third factor is that during the short lifespan of young people, bitcoin has increased in price much more than gold. But by the time they gain the wisdom that comes with age, bitcoin will collapse. According to the economist, bitcoin's success depends exclusively on the activity of its buyers, making it a significantly riskier investment compared to tangible assets such as real estate or gold.

– CoinChapter reported that Tesla and SpaceX CEO Elon Musk declared meme coins Dogecoin (DOGE) the official currency of the colony to be established on Mars. "The brave colonists who will head to the Red Planet will be rough and merciless people. They will not carry gold bars with them. They will need a fast and fun currency that embodies the spirit of space travel. Dogecoin meets all these criteria," Musk stated.
It's important to note that the information above was released on April 1st – April Fool's Day or All Fools' Day. Therefore, it's possible that the entrepreneur was just joking with his fans by assigning DOGE the status of Martian currency.

– Bitcoin Depot CEO Brandon Mintz lamented that in 2023, for the first time in a decade, the number of crypto ATMs installed worldwide significantly decreased. In his opinion, this was related to the bearish trend in the crypto market, which was exacerbated by the collapse of the FTX exchange and the bankruptcy of several other companies. However, in 2024, the situation began to improve: according to CoinATMRadar, 1,469 new crypto ATMs were installed in just the first three months of 2024. In contrast, about 3,000 devices were closed during the same period in 2023.

– Researchers at PeckShield published a new report on hacks in the cryptocurrency space. They noted that in March 2024, there were numerous incidents, with at least one hacking attack occurring every day. As a result, cybercriminals stole more than $187 million this month, of which about $100 million was recovered.

– We have previously told the story of one of the first crypto investors, an IT specialist named James Howells from Newport (Wales, UK). Back in 2013, James's girlfriend decided to clean the house. Into the trash went all the items she deemed unnecessary. Among the trash that was sent to the dump was a hard drive containing the data for a crypto wallet with 8000 BTC.
Since then, Howells has not lost hope of retrieving what was lost. He narrowed his search to a section of the city dump where, under grassy hills, about 100,000 tonnes of trash lie. Howells was ready to dig through this entire mountain of waste to find the disk. However, local authorities rejected his request due to environmental preservation concerns. Now, to deter numerous "treasure hunters," a fence has been erected around the dump, and round-the-clock security with video cameras has been organized, because at the current rate, this small hard drive is worth about $520 million.

– Binance co-founder and former CEO Changpeng Zhao (CZ) ranked 50th in Forbes' new billionaire ranking, with a net worth of $33 billion. Bloomberg's own index attributes Zhao with assets amounting to even more – $45.1 billion. The Forbes list also includes other representatives of the crypto industry. Thus, Coinbase co-founder and CEO Brian Armstrong found himself in 180th place with $11.2 billion. In total, the publication counted 17 entrepreneurs connected with cryptocurrencies with a net worth of over one billion dollars.

– The outflow of institutional capital from the crypto sphere in mid-March triggered a drop in bitcoin and other digital currencies. However, Coinshares believes that the vast majority of investment companies and hedge funds are not interested in a decline in BTC quotes. The whales will try not to allow a collapse below $60,000. As a result, just last week, large investors directed $862 million into digital asset-oriented instruments.


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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World Forex Award Recognizes NordFX as Best Broker in Two Categories

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Experts from one of the leading business awards organisations, the World Forex Award (WFA), have named NordFX as the winner in two categories: The Most Trusted Forex Broker and The Best IB Program 2024.

The award for The Most Trusted Forex Broker is particularly valuable because trust is a key aspect in the world of finance. When a company is acknowledged as the most reliable broker, it serves as a mark of quality for both potential and existing clients. It helps to strengthen the trust between the client and the broker, which is extremely important in the long term. Winning this award distinguishes the company among competitors and highlights its commitment to high standards of service and security. Victory in this category confirms that NordFX adheres to the best industry practices, ensuring a high level of customer service, transparency, and the protection of their interests.

Before reaching their verdict, WFA experts assessed how open, comprehensive, and timely the information provided by the company to interested parties was, and whether it was presented in a form that was understandable and necessary for making objective decisions. The role played by the fact that over its 16 years operating in financial markets, NordFX has always resolved any disputes that occasionally arose in its interactions with clients openly and, when necessary, with the involvement of independent experts, was also significant.

Equally valuable is NordFX's victory in The Best IB Program category. Since 2016, the company has received such awards repeatedly, year after year, confirming the high quality and efficiency of its partnership program, including excellent conditions for participants that encompass continuous support and impressive commissions. This has helped tens of thousands of program participants dramatically improve their lives. It's worth noting that in the past year, 2023, the actual earnings of NordFX's IB partners in the top 3 totalled USD 272,607, meaning that, on average, each partner earned USD 7,572 per month. In total, more than USD 35,000,000 was paid out in partnership rewards.


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 08 – 12 April 2024


EUR/USD: The Dollar Weakness Puzzle

What transpired with the EUR/USD pair last week? It behaved as expected on Monday, 01 April. However, starting from Tuesday, the situation deviated. Let's delve into the details. On the first day of April, data on business activity in the US industrial sector from the ISM for March showed the economy is on the rise: PMI increased from 47.8 to 50.3 points, crossing the 50-point threshold that separates growth from contraction. This marked the end of a downward trend lasting over 15 months. With this sector accounting for over 10% of the US GDP, the PMI growth is a vital indicator of an economy that easily withstands high interest rates. Thus, logically, this data benefited the dollar, pushing the pair to 1.0730 - its lowest since 15 February. The escalation of tensions in the Middle East also supported the strengthening of the American currency as a safe haven.

On the following day, Tuesday, preliminary data on inflation in Germany was released. The Consumer Price Index (CPI) in this powerhouse of the European economy showed a monthly increase of 0.4%, below the forecast of 0.6%. Year-on-year inflation slowed from 2.5% in February to 2.2% in March – the lowest since May 2021. The Harmonised Index of Consumer Prices (HICP) fell from 2.7% to 2.3%. Such a slowdown in inflation should have fuelled hopes for the ECB to soon start cutting rates, thereby weakening the euro further. However, instead of continuing its downward movement, EUR/USD reversed and moved north.

Wednesday revealed that inflation is declining not just in Germany but across the Eurozone as a whole. Year-on-year, the preliminary Core Consumer Price Index dropped from 3.1% to 2.9%, surpassing the expectations of 3.0%, and the CPI fell from 2.6% to 2.4% (y/y). Despite this, EUR/USD continued its stubborn climb.

The dollar was not aided by another batch of strong data from the US either. Published macroeconomic figures showed that the number of JOLTS job openings rose to 8.756 million in February compared to 8.748 million the previous month, better than the market forecast. Moreover, the volume of manufacturing orders in February increased by 1.4% after a decrease of 3.8% at the beginning of the year.

A trend reversal began to emerge following speeches by US Federal Reserve officials. For instance, Loretta Mester, President of the Cleveland Fed, stated that the central bank sees a significant risk in easing national monetary policy too soon, especially in the context of a strong labour market and steady economic growth. Jerome Powell, Chair of the Federal Reserve, echoed this sentiment in a speech at the Stanford Graduate School of Business, reiterating that there is no rush to cut rates as inflationary risks persist.

The situation returned to a logical path with a new batch of data from the US labour market released on 04 and 05 April. According to the ADP report on employment levels in the private sector, employers hired 184K new workers in March, exceeding the forecast of 148K and the previous figure of 155K. The Bureau of Labor Statistics (BLS) added to the picture with information that non-farm employment (NFP) in the US rose by 303K. This significantly surpassed market expectations of 200K. The BLS report also showed that the unemployment rate in the country dropped to 3.8% from 3.9%.

Given all of the above, it can be expected that the Fed will not rush to ease its monetary policy. The likelihood of a rate cut in June dropped to 61% from 70% a week ago, and according to economists at Commerzbank, it is virtually nil. Naturally, such a shift in expectations should support the strengthening of the national currency. Yet, this has not occurred. EUR/USD has not managed to consolidate below 1.0800, and its last chord was played at 1.0836.

As for the short-term forecast, as of the writing of this review on the evening of Friday, 05 April, 50% of experts voted for the strengthening of the dollar and further decline of the pair. 10% sided with the euro, and 40% took a neutral stance. Among the oscillators on D1, only 15% are coloured green, 35% red, with the majority in a state of indecision, coloured neutral grey. The trend indicators have a 60:40 ratio in favour of the greens. The nearest support for the pair is located in the 1.0795-1.0800 zone, followed by 1.0725, 1.0680-1.0695, 1.0620, 1.0495-1.0515, and 1.0450. Resistance zones are at 1.0865, 1.0895-1.0925, 1.0965-1.0980, 1.1015, 1.1050, and 1.1100-1.1140.

This upcoming week, on Wednesday, 10 April, a whole set of data on consumer inflation (CPI) in the United States will be released. That same day, the Minutes of the last FOMC (Federal Open Market Committee) meeting of the US Federal Reserve will be published. The key day of the week will undoubtedly be Thursday, 11 April, when the European Central Bank (ECB) meeting is scheduled. Market participants' attention will be focused not only on the regulator's decisions on the interest rate but also on subsequent comments by its leadership. That day, the Producer Price Index (PPI) and the number of initial jobless claims from US residents will also be published. The working week will conclude with the publication on 12 April of the revised German CPI and the University of Michigan's US Consumer Sentiment Index.

GBP/USD: A Result Close to Zero

Last week, final data on the Business Activity Index in the UK for March were revised downwards. The Services PMI was reduced from 53.8 to 53.1, the lowest figure since November of the previous year. A survey of financiers who make decisions at the Bank of England (BoE) showed a slight decrease in inflation expectations to 3.2% (y/y) and an anticipated reduction in wage sizes over the next year. It is noteworthy that these forecast indicators have decreased for the first time in seven months. However, this did not significantly affect GBP/USD dynamics; the tone of its quotes was set by the Dollar Index (DXY).

Starting the past week at 1.2635, the pair finished it at 1.2637. Thus, the result of the week can be considered zero. Analysts' opinions on the behaviour of GBP/USD in the near future are divided as follows: the majority (60%) voted for the pair's fall, 40% remained neutral, and no one wished to side with the bulls. The indicators on D1 are as follows: among the oscillators, 50% recommend selling, 10% suggest buying, and the remaining 40% are in the neutral zone. Trend indicators point south by 60%, north by 40%. If the pair moves south, it will encounter levels and support zones at 1.2575, 1.2500-1.2535, 1.2450, 1.2375, 1.2330, 1.2085-1.2210, 1.2110, and 1.2035-1.2070. In case of an increase, it will face resistance at levels 1.2695, 1.2755-1.2775, 1.2800-1.2820, 1.2880-1.2900, 1.2940, 1.3000, and 1.3140.

The calendar for the upcoming week highlights Friday, 12 April, when GDP statistics for the United Kingdom will be released. No other significant events affecting the country's economy are scheduled for the coming days.

continued below...
 
USD/JPY: A Break Above 152.00 – A Matter of Time?

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For two and a half weeks, USD/JPY has been moving in a sideways channel, unsuccessfully attempting to rise above 152.00. Fear of possible currency interventions by the Japanese Ministry of Finance prevents the bulls from breaking this resistance. While actual interventions have not yet occurred, there has been plenty of verbal intervention from high-ranking Japanese officials. For example, Finance Minister Shunichi Suzuki once again stated that the authorities are closely monitoring the situation and do not exclude any options to combat excessive currency movements.

Despite such statements, the yen remains under pressure, increasing the likelihood of the pair's bullish trend continuing. According to strategists at the American bank Brown Brothers Harriman (BBH), the continuation of the upward rally is just a matter of time. They write that a very gradual tightening of the Bank of Japan's policy, coupled with a softer than previously anticipated Federal Reserve easing cycle, serves as a fundamental catalyst.

The market sentiment, according to several analysts, does not contradict BBH's forecast. Currently, according to statistics, most traders (up to 80%) are in sell positions for USD/JPY, which increases the chances of the market moving against the crowd.

The pair finished last week at 151.61. As for its near future, 80% of experts (i.e., the same percentage as the traders) sided with the bears for the pair, voting for further strengthening of the American currency, while the remaining 20% voted otherwise. Technical analysis tools are clearly unaware of fears regarding possible currency interventions. Therefore, all 100% of trend indicators and 85% of oscillators on D1 point north, with only 15% of the latter looking south. The nearest support level is located in the zone of 150.85, 149.70-150.00, 148.40, 147.30-147.60, 146.50, 145.90, 144.90-145.30, 143.40-143.75, 142.20, and 140.25-140.60. Resistances are placed at the following levels and zones – 151.85-152.00, 153.15, and 156.25.

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

CRYPTOCURRENCIES: A Week of Unexpected Announcements

After bitcoin reached a new historical high of $73,743 on 14 March, BTC/USD sharply pulled back, losing approximately 17.5%. A local minimum was recorded at $60,778. This moment marked a record outflow of funds from exchange-traded funds, with bitcoin accounting for 96%. The departure of institutional capital from the crypto sphere overlapped with many investors and miners' desire to secure profits after updating the price record. At the peak, the realized profit exceeded $2 billion per day, with a third attributable to investors in Grayscale. Analysts at JPMorgan, in a note to investors dated 21 March, mentioned the overbought condition of the cryptocurrency and the risk of a continued correction.

However, a further downfall did not occur; the market sentiment changed. While crypto funds continued to lose assets, crypto exchanges registered an increase in the withdrawal of coins to cold wallets. Whales and sharks returned to accumulating the main cryptocurrency, expecting new BTC records in anticipation of or following the halving. If the net outflow amounted to $888 million in the week of 18-24 March, it changed to an inflow of $860 million in the week of 25-31 March. The record for coin accumulation by hodlers was 25,300 BTC per day. Bitcoin reached a high of $71,675 on 27 March.

The first half of the past week brought a new wave of sales; however, analysts at Coinshares believe that the absolute majority of investment companies and hedge funds are not interested in lowering BTC quotes, and whales will try to prevent a collapse below $60,000. The absence of new price records in those days was compensated by a series of if not sensational, then at least unexpected announcements made by crypto influencers.

For instance, CoinChapter reported that the head of Tesla and SpaceX, Elon Musk, declared meme coins Dogecoin (DOGE) the official currency of the colony to be built on Mars. "The brave colonists heading to the Red Planet will be rough and ruthless people. They won't drag gold bars with them. They will need a fast and fun currency that embodies the spirit of space travel. Dogecoin meets all these criteria," Musk said. One might expect such inspiring words to propel the token's price to cosmic heights, but this did not happen. Instead, it slightly declined. This may be related to the fact that the aforementioned information appeared on 1 April – April Fool's Day or All Fools' Day. Thus, it's possible that Musk was merely joking with his fans by assigning DOGE the status of Martian currency.

Attention was also drawn to a statement by the founder of the cryptocurrency exchange FTX, Sam Bankman-Fried (SBF), who was sentenced to 25 years in prison. Arrest did not prevent him from giving an interview to ABC News. In it, SBF stated that if he or another FTX employee had remained as CEO, the clients of the bankrupt exchange "would have long returned their money" at the current rate. Hence, the question arises: why not give Sam such an opportunity? Let him first compensate the clients for their losses and then go to jail.

Sam Bankman-Fried is far from the only notable crypto figure of interest to US law enforcement agencies. Changpeng Zhao, co-founder and former CEO of the Binance exchange, also faced court proceedings. However, last week, he made headlines not in the criminal chronicle but in Forbes' new billionaire ranking, where he placed 50th with a net worth of $33 billion. (Bloomberg's own index attributes Zhao with assets amounting to an even larger sum – $45.1 billion). Note that the Forbes list also includes other representatives of the crypto industry. For example, Brian Armstrong, co-founder and CEO of Coinbase, was ranked 180th with $11.2 billion. In total, the publication counted 17 entrepreneurs associated with cryptocurrencies with a net worth of over a billion dollars.

Another unexpected statement came from the pen of "Rich Dad Poor Dad" author and entrepreneur Robert Kiyosaki. He is widely known for his numerous constant calls not to save "fake dollars" that will soon turn into worthless paper but to buy gold, silver, and bitcoin. Kiyosaki repeated this mantra again this time, not ruling out that bitcoin could ... crash to zero! According to him, it's possible that the first cryptocurrency is as much a fraud or a Ponzi scheme as the US dollar, euro, yen, or any other "fake" fiat currency.

As of the writing of this review on the evening of Friday, 05 April, bitcoin quotes are far from zero; the BTC/USD pair is trading around $67,680. The total market capitalization of the crypto market has slightly decreased and stands at $2.53 trillion ($2.68 trillion a week ago). The Crypto Fear & Greed Index fell from 80 to 79 points, remaining in the Extreme Greed zone.

We have already detailed the history and meaning of halvings in a previous review. Now, we remind you that the upcoming fourth halving is expected to take place soon, most likely on 20 April. After this event, according to Mark Yusko, CEO of Morgan Creek Capital, "interest in the asset will increase – many will enter FOMO mode. We should see a twofold increase in fair value. In the current cycle, it stands at ~$75,000 with downward adjustments. [...] Thus, [by the end of the year] we get $150,000," he shared his calculations on CNBC. Yusko also believes that "historically, about nine months after the event, a price peak will be formed before the next bear market."

The senior manager called the first cryptocurrency the "dominant token" and the "best form of gold". Regarding long-term prospects, the expert stated that bitcoin "can easily" increase tenfold over the next decade. Separately, the head of Morgan Creek Capital mentioned that his hedge fund likes Ethereum, Solana, and Avalanche, although they fall short of the "king-bitcoin". Mark Yusko did not mention Elon Musk's "Martian" Dogecoin at all...

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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– 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.

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

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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.

continued below...
 
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.

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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.

continued below...
 
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.

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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.

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