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CryptoNews of the Week

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– Bernstein analysts have raised the target price for the first cryptocurrency to $200,000 by the end of 2025, up from $150,000. This forecast is driven by expectations of "unprecedented demand from bitcoin-based spot exchange-traded funds managed by BlackRock, Fidelity, Franklin Templeton, and others." "We believe that ETFs have become a turning point for cryptocurrencies, triggering structural demand from traditional capital pools. Together, ETFs have attracted about $15 billion in new net funds," Bernstein stated in a memo.
Experts at the company believe bitcoin is in a new bull cycle. They described halving as a unique situation where the natural selling pressure from miners is halved or more, creating new demand catalysts for cryptocurrency, "leading to exponential price movements."
Analysts pointed to previous cycles: in 2017, digital gold peaked at about five times the marginal cost of production and then fell to a low of 0.8 of this figure in 2018. "During the 2024-2027 cycle, we expect bitcoin to rise to 1.5 times the metric, implying a cyclical high of $200,000 by mid-2025," Bernstein concluded.

– For many years, there have been ongoing debates about the imperfections of the first cryptocurrency's concept. Some criticise its creator, Satoshi Nakamoto, for lack of foresight, while others point to the project's technical shortcomings. To uncover what exactly is wrong with bitcoin, BeInCrypto asked the latest version of ChatGPT to analyse the cryptocurrency's whitepaper, which Nakamoto published in October 2008. The AI identified several flaws and errors in the key document of the crypto industry, including:
1. The 51% Rule. The whitepaper claims the network is secure if more than 50% of the power is controlled by honest participants. However, practice has shown that attacks are possible under certain conditions with fewer resources.
2. Anonymity. The document speaks of user anonymity, but bitcoin only offers pseudonymity. Transactions can be traced to specific users.
3. Scalability. The document does not predict the scalability issues that became apparent with the network's growing popularity. High transaction volumes lead to delays and increased fees.
4. Mining Difficulty. The author did not foresee the significant increase in mining difficulty and the impact of changes on the process's energy intensity. Modern mining requires enormous computing power and electricity.
5. Software Updates. The document does not address the need for regular software updates to maintain network security and implement new features.
6. Fork Resilience. The document does not consider the risks associated with network hard forks. Forks such as Bitcoin Cash polarise the community, potentially devaluing the network.
7. Regulation and Legal Issues. The document does not mention possible legal and regulatory obstacles for bitcoin. Since its publication, many countries have already introduced or are considering regulatory measures.

– Speaking at the BTC Prague 2024 conference, MicroStrategy head Michael Saylor stated that everyone gets bitcoin at the price they deserve. The entrepreneur admitted he once made a mistake by thinking bitcoin's days were numbered and that the coin was merely an asset for online gambling. According to Saylor, when bitcoin reaches $900,000, there will be those who claim the cryptocurrency is overbought and its price will crash, but then, when BTC reaches $8 million, they will buy at that price because they deserved it due to their disbelief in the main cryptocurrency's prospects.
The billionaire stated that bitcoin should be considered one of the safest assets today. He reiterated his view that the launch of spot ETFs-ETH provided strong support for the first cryptocurrency.
When asked by journalists whether it is worth selling bitcoins now, the entrepreneur replied that the asset currently lacks fundamental growth catalysts, but a price rise is expected soon. According to Michael Saylor, those who show patience will subsequently receive huge profits from holding digital gold.
For reference: MicroStrategy is the largest holder of bitcoins among public companies, with 205,000 BTC (over $13 billion) on its balance sheet.

– Euro Pacific Capital president and fierce cryptocurrency critic Peter Schiff outlined a possible hedge fund strategy that could lead to the collapse of bitcoin and MicroStrategy. He believes investors in spot BTC ETFs view digital gold as a speculative asset. In a new tweet, Schiff noted that bitcoin has been in a "sideways" trend for the third month, trading below the March high. With such dynamics, investors may lose patience and at some point decide to close their positions, causing a BTC price collapse amid a lack of liquidity.

– Analysts at IntoTheBlock are puzzled by the current situation surrounding bitcoin. According to experts, usually bull markets for cryptocurrencies are fuelled by widespread enthusiasm around the digital coin. However, despite a surge in activity among large holders (whales), there is no influx of new market participants. In fact, the number of primary BTC users has plummeted to multi-year lows, falling to levels seen during the 2018 bear market. This lack of retail user growth creates a critical misunderstanding of why investors are not buying bitcoins.
"The current situation with bitcoin is characterised by high transaction volumes of $79.2 billion over the last 7 days and significant exchange flows ($6.0 billion inflows and $6.53 billion outflows for the week). Nevertheless, retail investors remain on the sidelines," noted IntoTheBlock. The explanation could be that 87% of them remain profitable at the current price and do not want to risk increasing their positions.

– US presidential candidate Donald Trump confirmed his intention to take a more favourable stance on cryptocurrencies compared to the current Biden administration. "Crooked Joe Biden, the worst president in our country's history, wants it to die a slow and painful death. Under my watch, this will never happen," he said. "I will end Joe Biden's war on cryptocurrencies and ensure that the future of cryptocurrencies and the future of bitcoin are secured in America!"
Trump expressed support for the mining industry, stating he wants all remaining bitcoins to be mined in the US. He also promised to make Florida the central hub for cryptocurrencies. This assurance came after Florida was recognised as the best state for digital asset taxes in the US, according to CoinLedger data. New York State was named the worst.

– General Partner at venture fund a16z and former Coinbase executive Balaji Srinivasan believes that in the foreseeable future, cryptocurrency will become a fundamental financial instrument and a core component of all economic transactions. In his opinion, the combination of advances in crypto technologies and artificial intelligence capabilities will lead to a new stage of the industrial revolution and the evolution of money. AI and robotics will generate industrial abundance, changing the paradigm of how we perceive and use money.
According to Srinivasan, the most important form of scarcity in the age of artificial intelligence will be private keys for managing robots, and Web3 technologies such as the Bitcoin and Ethereum ecosystems will be the transport system for their payment and security management.

– Renowned investor and author of finance books Robert Kiyosaki strongly opposes fiat money, considering it "fake." He claims that wealthy individuals buy and save "real assets" such as cryptocurrencies like bitcoin, Ethereum, and Solana, as well as gold and silver. To evaluate this investment philosophy, one can calculate the current value of $1,000 invested on January 1, 2024. This amount, as Kiyosaki recommends, is divided into five different assets, $200 each.
Starting with the king of cryptocurrencies, which has shown the most significant growth (53%), $200 invested in bitcoin would be worth $307.29 by June 13. Next among the growth leaders is Ethereum, which has risen by 49% since the beginning of 2024, increasing its value to $298.18. The third in the list is Solana, which grew by 48.39%. Initial investments in SOL of $200 as of June 13 are valued at $296.78.
Precious metals have shown more modest growth. Silver has risen by 22% in the first five and a half months, and gold has added only 12%. Thus, $200 invested in these assets on January 1 would now be worth $244.91 and $223.72, respectively. Therefore, the total value of Kiyosaki's portfolio would have increased by 37% by June 13, making the initial $1,000 worth $1,370.

– The international environmental group Greenpeace provided fresh data showing that bitcoin mining has become an industry dominated by traditional financial companies. They "buy and operate large, energy-consuming facilities." Greenpeace identified the five largest companies financing mining in 2022: Trinity Capital, Stone Ridge Holdings, BlackRock, Vanguard, and MassMutual. According to environmentalists, they are collectively responsible for more than 1.7 million metric tons of CO2 emissions, equivalent to the annual electricity consumption of 335,000 American households.
In 2023, global bitcoin mining consumed approximately 121 TWh of electricity, comparable to the energy consumption of a country like Poland. This led to significant carbon dioxide emissions, according to the Greenpeace report.


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 June 24 - 28, 2024


EUR/USD: Eurozone - Rising Inflation, Falling Economy

As revised Eurostat data published on Monday, June 17, showed, inflation (CPI) in the 20 Eurozone countries accelerated to 2.6% (y/y) in May, compared to 2.4% in April when it was at its lowest since November 2023. The consumer price index in the services sector increased annually from 3.7% to 4.1%. Core inflation, excluding the cost of food and energy (CPI Core), accelerated to 2.9% in May, compared to 2.7% in April - the lowest since February 2022.

Such growth in consumer prices gave euro bulls a faint hope that the European Central Bank (ECB) would slow down the rate cut. Against this backdrop, EUR/USD went up, reaching a local high of 1.0760. However, the business activity statistics (PMI) in the Eurozone, released on June 21, showed that to support the economy, the rate needs to be reduced further, not frozen at the current level of 4.25%.

In Germany, the locomotive of the European economy, the PMI index in the manufacturing sector was 43.4 points in June, worsening compared to the May figure of 45.4 and significantly below the forecast of 46.4. The PMI index in the services sector fell from 54.2 to 53.5, failing to meet market expectations of 54.4. The preliminary Composite PMI index for Germany also declined in June to 50.6 points, against the forecast of 52.7 and 52.4 in May. It is worth noting that all three indicators were the weakest in the last two months.

Eurozone statistics, in general, were not very encouraging. According to preliminary data, the PMI index in the manufacturing sector fell from 47.3 in May to 45.6 in June, missing the forecast of 47.9. The PMI index in the services sector decreased from 53.2 to 52.6 (forecast 53.5). The Composite PMI fell from 52.2 to 50.8 (forecast 52.5) and nearly reached the critical mark of 50.0 points, separating progress from regression.

After these data were released, market participants awaited similar statistics from the USA, which were to be published at the end of the workweek. The Composite PMI showed that business activity in the US private sector, unlike the Eurozone, continues to grow confidently. According to preliminary estimates, this indicator increased from 54.5 in May to 54.6 in June. The PMI in the manufacturing sector grew from 51.3 to 51.7 over the same period, while the services sector business activity index increased from 54.8 to 55.1. All these indicators exceeded analysts' expectations (51.0 and 53.4, respectively).

In addition to PMI data, the Fed's monetary policy report at the end of Friday also drew significant interest. Following its publication, EUR/USD ended the week at 1.0691. Regarding the analysts' forecast for the near term, as of the evening of June 21, it remained unchanged from seven days ago. Thus, 60% of experts voted for the pair's decline, 20% for its growth, and another 20% remained neutral. In technical analysis, 100% of trend indicators and oscillators on D1 sided with the dollar and turned red, although a quarter of the latter are in the oversold zone. The nearest support for the pair is in the 1.0665-1.0670 zone, followed by 1.0600-1.0615, 1.0565, 1.0495-1.0515, 1.0450, and 1.0370. Resistance zones are located at 1.0760, then at 1.0810, 1.0890-1.0915, 1.0945, 1.0980-1.1010, 1.1050, and 1.1100-1.1140.

Next week, there is plenty of interesting and important information expected from the USA. On Tuesday, June 25, the US Consumer Confidence Index will be published. On Wednesday, June 26, we will learn the results of the US bank stress test. On Thursday, June 27, data on the US GDP for Q1 2024 and the number of initial jobless claims in the country will be released. Finally, at the end of the workweek, on Friday, June 28, data on the US consumer market, including such an important inflation indicator as the Core Personal Consumption Expenditure Index, will be published.

GBP/USD: How the Interest Rate Will Fall

On Wednesday, June 19, a day before the Bank of England (BoE) meeting, consumer inflation (CPI) data was published in the UK. Overall, the picture was quite good. The consumer price index remained at the previous level of 0.3% month-on-month, lower than the projected 0.4%. Year-on-year, the CPI fell from 2.3% to 2.0%, reaching the central bank's target for the first time since October 2021. The core index (Core CPI), excluding volatile components such as food and energy prices, also showed a noticeable decrease from 3.9% to 3.5% (y/y).

The still high level of inflation in the services sector was disappointing. This indicator was higher than forecasted in the central bank's May report and amounted to 5.7% (y/y) against the expected 5.3%. "Indicators such as rent growth remain quite high. [...] These data confirm that the Bank of England will not lower rates at tomorrow's meeting," commented ING Bank strategists on the published statistics on June 19, and they were right.

At its meeting on Thursday, June 20, the Bank of England left the key interest rate unchanged for the seventh consecutive time, at 5.25%. Seven members of the Monetary Policy Committee voted for such a decision, two votes were cast for lowering the rate, and zero votes for increasing it. According to several policymakers, such a decision by the regulator was "finely balanced."

The latest data on inflation in the services sector is unlikely to prevent the BoE from starting a cycle of easing its monetary policy (QE) in the second half of the year. Especially since, according to the Committee members, the higher-than-expected CPI was due to one-off wage payment factors.

If the parliamentary elections in the UK on July 4 and the inflation report on July 17 do not present significant surprises, the Bank of England is expected to begin lowering rates as early as August. As ING Bank strategists write, "markets are pricing in a 43% probability of the first rate cut in August and expect easing by 46 basis points (bps) by the end of the year." TDS analysts, in turn, give the following forecast: "We expect a 15 bps rate cut by the August meeting and around 50 bps in total for 2024." Several other market participants' forecasts also suggest a reduction of about 30 bps by November.

On the day after the BoE meeting, Friday, June 21, the Office for National Statistics (ONS) published fresh data on retail sales in the UK, which were significantly higher than forecasted. In May, they increased by 2.9% (m/m) after falling by -1.8% in April, with markets expecting a growth of 1.5%. The core retail sales index, excluding automotive fuel, also grew by 2.9% (m/m) against a previous decline of -1.4% and a market forecast of 1.3%. Year-on-year, retail sales increased by 1.3% compared to April's decrease of -2.3%, while core retail sales rose by 1.2% (y/y) against -2.5% a month earlier.

Preliminary business activity (PMI) data were mixed. However, overall, they showed that the UK's economy is on the rise. PMI in the manufacturing sector increased from 51.2 to 51.4 points (forecast 51.3). Business activity in the services sector amounted to 51.2, below the previous value of 52.9 and the forecast of 53.0. The Composite PMI showed a slight decline to 51.7 against the forecast of 53.1 and 53.0 a month earlier. Despite the last two indicators being below previous values, they still remain above the 50.0 horizon separating economic growth from decline.

Against this backdrop, the pound attempted to recoup some losses but failed, and GBP/USD ended the week at 1.2643, turning strong support in the 1.2675 zone into resistance.

The analysts' forecast for the near term looks neutral: 50% of experts voted for the dollar to strengthen, while the same number (50%) preferred the British currency.

As for technical analysis on D1, the advantage is on the dollar's side. Among trend indicators, the ratio of forces between red and green is 75% to 25% in favour of the former. Among oscillators, 85% point south (a quarter signals the pair is oversold) and only 15% look north. If the pair continues to fall, it will encounter support levels and zones at 1.2575-1.2610, 1.2540, 1.2445-1.2465, 1.2405, and 1.2300-1.2330. In the event of the pair's growth, it will face resistance at levels 1.2675, 1.2740-1.2760, 1.2800-1.2820, 1.2850-1.2860, 1.2895-1.2900, 1.2965-1.2995, 1.3040, and 1.3130-1.3140.

As for the events of the coming week, not many are expected. Among the most important is the publication of the UK's GDP data on Friday, June 28.

USD/JPY: BoJ Rate Hike Chances Close to Zero

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At its meeting on June 13-14, the Bank of Japan (BoJ) kept the interest rate unchanged at 0.1%. Recall that in March this year, the central bank made a "bold" move by raising the rate for the first time since 2007 (it had been at a negative level of -0.1% since 2016). However, after this single rate hike in 17 years, the BoJ is unlikely to continue raising it in the foreseeable future, no matter how much some analysts and investors might want it.

Such desires and forecasts are popular due to the very low level of the Japanese currency. In early 2011, USD/JPY traded around 76.00, and since then, the yen has weakened more than twofold – on April 29, 2024, the pair reached a level of 160.22, the highest since 1986. This negatively affects national businesses. The benefits of a weak yen for exports do not cover the negatives for imports, as the trade balance is negative; the country imports more than it exports. Expensive imports, primarily raw materials and energy, reduce production profitability. GDP growth rates are falling – in Q1 2024, this indicator showed an economic contraction to -1.8% (y/y) compared to +0.4% in the previous quarter. Additionally, the national debt relative to GDP is approaching 265%.

In such a situation, the economy needs support, not restraint by raising the key interest rate. Moreover, compared to other G10 countries, inflation in Japan is low and has been steadily declining in recent months. According to fresh data, the national CPI index, excluding food and energy prices, fell from 2.4% to 2.1%. Moreover, in June, it could fall below the BoJ's target level of 2.0%. Thus, combating inflation by raising rates is unnecessary and even harmful. But how can the yen's position be strengthened then?

Another method besides tightening monetary policy (QT) is currency interventions. Japan's top currency diplomat Masato Kanda stated on June 20 that the government "will respond carefully to excessive currency movements" and that he "has never felt limited in the potential for currency interventions" and that the interventions conducted in May "were quite effective in combating excessive currency movements caused by speculators."

The words are beautiful. However, looking at the chart, one would argue with the official about the effectiveness of the interventions. Of course, USD/JPY retreated from the 160.00 mark for a while. But this period was quite short, and now it is again approaching this height. One can also recall similar actions in previous years, which only temporarily restrained the national currency's weakening.

This time, it seems officials have come up with another way to increase the effectiveness of monetary policy without changing rates. According to Reuters, the Ministry of Finance's commission is likely to urge the government to issue shorter-maturity debt obligations to reduce the risk of interest rate changes. (For reference, the yield on 10-year Japanese government bonds currently exceeds 0.9%, nine times the central bank's rate).

The last chord of the past week for USD/JPY was set at 159.79. The continuation of the Fed's tight policy, confirmed at the June meeting, and the BoJ's ongoing soft policy still play in favour of the dollar. (Although, of course, new currency interventions are not excluded). Economists from Singapore's United Overseas Bank (UOB) believe that only a breakthrough of support at 156.50-156.80 will indicate that the pair's current upward momentum has faded.

The median forecast of experts for the near term is as follows: 75% of them voted for the pair's move south and the yen's strengthening (apparently expecting new interventions), while the remaining 25% pointed north. Indicators show the opposite picture; they have not even heard about interventions. Therefore, all 100% of trend indicators and oscillators on D1 are green, although 20% of the latter are in the overbought zone. The nearest support level is around 158.65, followed by 157.60-158.20, 156.80-157.05, 156.00-156.10, 155.45-155.80, 154.50-154.70, 153.60, 152.85, 151.85, 150.80-151.00, 149.70-150.00, 148.40, 147.60, and 146.50-147.10. The nearest resistance is in the 160.00-160.20 zone, followed by 162.50.

The upcoming week looks busy on Friday, June 28. On this day, data on consumer inflation (CPI) in the Tokyo region will be published, as well as data on industrial production volumes and the labour market situation in Japan. No other important economic statistics are planned for the coming days.

CRYPTOCURRENCIES: Patience, Patience, and More Patience

In the last review, we published a forecast by MN Capital founder Michael van de Poppe, who expected BTC/USD to fall to the $60,000-65,000 range. The analyst was essentially correct – the week's low was recorded on Friday, June 21, when the price dropped to around $63,365.

This time, we want to draw attention to the forecast of another influencer, the president of Euro Pacific Capital and a fierce opponent of cryptocurrencies, Peter Schiff. We have quoted his apocalyptic predictions multiple times. This time, the financier outlined a possible hedge fund strategy that would lead to bitcoin's collapse. According to him, investors in exchange-traded BTC spot ETFs treat digital gold as a speculative asset. Schiff noted that bitcoin has been in a "sideways" trend for the third month, trading below the March high. With such dynamics, investors might lose patience and decide to close positions at some point, causing BTC quotes to collapse amid a lack of liquidity.

It must be said that Schiff's negative forecast has some basis – in recent days, American spot Bitcoin ETFs have indeed shown an outflow of funds. Since June 7, their cumulative balance has decreased by $879 million to $15 billion. Over the past two weeks, long-term whale holders have sold digital gold worth $1.2 billion, with more than $370 million attributed to GBTC. Thus, whales and ETFs have collectively created downward pressure worth $1.7 billion during this time.

Of course, a cryptocurrency market crash is unlikely, no matter how much Peter Schiff might want it. However, the current situation raises concerns among many specialists. Usually, bullish cryptocurrency markets are fueled by general enthusiasm around the digital coin. However, analysts at IntoTheBlock observe that despite a surge in activity among major holders (whales) earlier this year, there is no influx of new participants in the market. In fact, the number of primary BTC users has sharply dropped to multi-year lows, falling to levels seen during the bear market of 2018. This lack of growth creates a critical misunderstanding of why investors are not buying bitcoins. "Retail investors remain on the sidelines," IntoTheBlock notes.

Perhaps it is all due to the relaxed summer mood, general macroeconomic gloom, lack of sources of fresh money inflow, and other drivers. But everything can change, of course. Speaking at the BTC Prague 2024 conference, MicroStrategy CEO Michael Saylor reiterated that bitcoin should be considered one of the safest assets today. When asked by journalists whether it is time to sell BTC, the entrepreneur replied that the asset currently lacks fundamental growth catalysts, but a price rise should be expected soon. According to Michael Saylor, those who show patience will later receive enormous profits from owning digital gold. (For reference: MicroStrategy is the largest holder of bitcoins among public companies, with 205,000 BTC on its balance sheet, worth over $13 billion).

Analysts at the financial company Bernstein have raised the target price of the first cryptocurrency to $200,000 by the end of 2025. The forecast is driven by expectations of "unprecedented demand from spot bitcoin ETFs managed by BlackRock, Fidelity, Franklin Templeton, and others." "We believe that ETFs have become a turning point for cryptocurrencies, causing structural demand from traditional pools of capital. In total, ETFs have attracted around $15 billion in new net funds," Bernstein's explanatory note reads.

According to the company's experts, bitcoin is in a new bullish cycle. They called the halving a unique situation where natural selling pressure from miners is halved or more, and new demand catalysts for cryptocurrency appear, leading to exponential price movements. Analysts pointed to previous cycles: in 2017, digital gold rose to a high roughly five times the marginal production cost and then fell to a low of 0.8 of this figure in 2018. "During the 2024-2027 cycle, we expect bitcoin to rise to 1.5 times this metric, implying a cycle high of $200,000 by mid-2025," Bernstein believes.

For now, at the time of writing, on the evening of Friday, June 21, the BTC/USD pair is far from $200,000 and trades at $64,150. The total cryptocurrency market capitalization stands at $2.34 trillion ($2.38 trillion a week ago). The Bitcoin Fear & Greed Index dropped from 70 to 63 points over 7 days but remains in the Greed zone.

To conclude the review, here's news from the world of Artificial Intelligence. For many years, there have been ongoing debates about the imperfections of the first cryptocurrency's concept. Some accuse the coin's creator, Satoshi Nakamoto, of shortsightedness, while others criticize the project's technical execution. To find out what's wrong with bitcoin, the editorial team at BeInCrypto asked the latest version of ChatGPT to analyze the cryptocurrency's whitepaper published by Nakamoto in October 2008. As a result, Artificial Intelligence found several shortcomings and errors in the main document of the crypto industry, some of which seem quite serious:

1. The 51% rule. The whitepaper claims that the network is secure if more than 50% of the power is controlled by honest participants. However, practice has shown that under certain conditions, attacks are possible with fewer resources.

2. Anonymity. The document mentions user anonymity, but bitcoin provides only pseudonymity. Transactions can be traced back to specific users.

3. Scalability. The document did not foresee scalability issues that became apparent with the network's popularity growth. High transaction volumes lead to delays and increased fees.

4. Software updates. The document does not address the need for regular software updates to maintain network security and implement new features.

5. Fork resistance. The document does not consider risks associated with network hard forks. Forks like Bitcoin Cash polarize the community, potentially reducing the network's value.

6. Regulation and legal issues. The document does not mention potential legal and regulatory obstacles for bitcoin. Since its publication, many countries have introduced or are considering regulatory measures.

7. Mining difficulty. The document's author did not foresee the significant increase in mining difficulty and the energy consumption changes. Modern mining requires enormous computing power and electricity. According to Greenpeace, in 2023, global bitcoin mining consumed approximately 121 TWh of electricity, comparable to the energy consumption of a country like Poland. This has led to significant CO2 emissions and serious atmospheric pollution, as stated in Greenpeace's report.


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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Forex | Forex Trading | NordFX
 
CryptoNews of the Week

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– On Monday, 24th June, for the first time since 3rd May, the price of bitcoin fell below $60,000, reaching $58,468 at one point. Ethereum, meanwhile, dropped below $3,250. "The market is struggling to digest large sales," Bloomberg quoted Caroline Mauron, head of Orbit Markets. Although it is difficult to pinpoint the exact source of the current selling pressure, several contributing factors can be identified. The issues in the crypto market reflect the overall instability in global financial markets and uncertainty regarding monetary and regulatory policies in several leading countries, particularly China and the USA. Moreover, in mid-June, the German government began selling a large quantity of bitcoin (approximately 50,000 BTC) that was confiscated in January.
Bearish sentiments intensified following reports of imminent payments of about 140,000 BTC to creditors of the bankrupt crypto exchange Mt. Gox, which are set to begin in July. Popular trader Bob Loukas believes that in anticipation of this event, the flagship crypto asset's prices reached their lowest level in the last eight weeks yesterday. Additionally, it became known that bitcoin miners' reserves reached a 14-year low as they were forced to sell a significant amount of coins to cover operational expenses due to the halving.

– In the absence of positive signals, the demand for spot bitcoin ETFs continues to decline, with major market participants slowing their activity in the derivatives market, further creating downward pressure. According to 10x Research, throughout the past week, US spot BTC-ETFs recorded investor outflows, with net outflows exceeding $105 million on 21st June. Earlier, Ki Young Ju, CEO of the investment company CryptoQuant, calculated that over the past two weeks, bitcoin whales and miners reduced their positions on over-the-counter platforms by $1.2 billion. 10x Research analysts believe that bitcoin will now need to find a new price range to stabilize the fall and then look for growth catalysts. In the medium term, according to 10x Research analysts, BTC is unlikely to return above $70,000.
It should be noted that according to JPMorgan analysts, the cost of bitcoin mining is $53,000. This support could become the lower boundary of the price range. However, back in March, JPMorgan did not rule out that after the April halving, bitcoin might temporarily drop to even $42,000.

– Popular analyst Matthew Hyland noted that the total balance of bitcoin on centralized exchanges has reached a multi-year low. In theory, this could be seen as a bullish signal, but the flagship of the crypto market is not yet showing upward momentum. It is expected that the publication of key US economic data in the coming week could serve as a vector for the further movement of cryptocurrencies. If macro statistics increase the likelihood of the Fed starting to ease monetary policy and the first interest rate cut as early as September, this could support risky assets, including bitcoin. Experts from Cryptology believe that the chances of bitcoin hitting an all-time high by the end of September are quite high and that the current situation is a phase of accumulation.

– Andrew Kang, co-founder of the venture company Mechanism Capital, stated that Ethereum's price could correct by 30%, falling to $2,400 after spot ETFs for ETH are approved. In his opinion, at this stage, the main altcoin attracts much less attention from institutional investors compared to bitcoin. Based on this, ETH-ETFs will be able to attract only 15% of the funds compared to what BTC-ETFs received at launch. Kang noted that to increase Ethereum's attractiveness to investors, its ecosystem needs to be positioned as a decentralized financial settlement layer, a global computer, or a Web3 application store. At the same time, selling funds on new uses for Ethereum will be difficult since the asset is perceived by investors as an overvalued stock of one large tech company.

– Unlike Andrew Kang, SkyBridge Capital CEO Anthony Scaramucci believes that Ethereum's price could reach $10,000-12,000. As for bitcoin, the entrepreneur anticipates it could grow to $170,000-250,000. The main driver here will be the institutional adoption of cryptocurrency. Scaramucci called the approval of spot exchange-traded ETFs a significant regulatory barrier breakthrough for attracting new capital. According to him, this will soon result in digital gold comprising about 3% of large players' portfolios.

– Cryptocurrency exchange Coinbase has been listed among American brands most often impersonated by scammers to deceive their victims. According to analysts at Mailsuite, from January 2020 to March 2024, the Coinbase brand was used in 416 scam schemes and phishing attacks.
Mailsuite studied 1.14 million incidents in total, in which scammers impersonated a well-known company or organisation more than 249,000 times. Among traditional firms, Facebook/Meta was the most popular American brand among scammers, mentioned in 10,457 recorded fraud cases. Next were the US Internal Revenue Service (9,762 incidents), Apple (9,110), Amazon (8,919), Steam (4,833), and Microsoft (4,518). Internationally, scammers prefer Japanese firms, with mobile operator au (18,964 cases) and railway company JR East (18,250) leading the list.

– The US Federal Bureau of Investigation has issued a warning about fake law firms promising to recover lost crypto assets from scammers or government agencies.
Scammers pose as authorised lawyers from government departments, including the FBI, and offer assistance in recovering previously lost or confiscated digital assets. The FBI recommended being wary of such service advertisements, especially when pseudo-lawyers demand advance payments and request sensitive financial information and personal data.

– Former Goldman Sachs CEO Raoul Pal predicted significant growth for bitcoin and the cryptocurrency market in Q4 2024. Speaking on the podcast "The Wolf Of All Streets," the financier noted that risky assets like bitcoin usually rally during US presidential elections. "The final quarter of an election year is a real 'banana zone' for all assets. It's always like that," Pal optimistically stated, adding that the 'banana zone' for cryptocurrencies in the autumn is much more pronounced than, for example, for the Nasdaq index.

– MicroStrategy founder Michael Saylor is convinced of the potential for the first cryptocurrency to grow to $10 million, supported by China and other factors.
He believes that in the future, governments, especially China, will fully accept the first cryptocurrency and integrate it into state infrastructure.
Calling bitcoin a "perfect asset," the entrepreneur explained that digital gold acts as a "corporate machine" that will allow companies to "live forever." He is confident that firms investing in bitcoin can last longer than those "mired in corporate ailments of the past." "The average lifespan of a corporation is about 10 years. […] We're talking about eliminating corporate mortality; we're talking about easily increasing economic viability by ten, a hundred, or maybe a million times," added the MicroStrategy founder.
Saylor also called all economic tools that appeared before bitcoin outdated. "Before Satoshi Nakamoto, economics was a pseudo-science. All economists before Satoshi tried to develop economic laws using shells, glass beads, bits of paper, and credit instruments," the businessman emphasized.
Recall that MicroStrategy is one of the world's largest holders of bitcoin. In June 2024 alone, it purchased 11,931 BTC.

– Founder and CEO of tech giant Dell Group Michael Dell expressed interest in bitcoin in correspondence with Michael Saylor. The situation has caused a stir in the cryptocurrency community for several reasons. Dell was among the top 10 richest people in the world in 1999 and 2000. He periodically appeared in the top 20 afterward. At the same time, the entrepreneur himself has positively commented on the digital industry. In 2021, he publicly stated that blockchain technology is highly undervalued. His company, Dell Technologies, accepted bitcoin as a payment method from 2014 to 2017. However, this option was later removed due to "low demand," as explained by the company. Now, the billionaire posted a statement on his page regarding the value of bitcoin and published another note on this topic.

– Ahead of the US presidential election, former cryptocurrency advisor Carole House has returned to work with Joe Biden's team. "It is an honour for me to return to the Biden administration, where I hold the position of special advisor on the White House National Security Council," House wrote on her LinkedIn. In 2022, Carole House co-authored Biden's executive order on cryptocurrencies and digital assets. Her return to the White House signals an improvement in the US president's attitude towards cryptocurrencies.

– Matt Hougan, CIO of Bitwise, which manages cryptocurrency funds, cited three reasons why long-term investments in both bitcoin and ethereum have advantages over investments in bitcoin alone. These are: 1. portfolio diversification, 2. the ability to profit from vastly different ecosystems, and 3. economic benefits.
Given the difference in capitalization levels between bitcoin and ethereum, Matt suggests investing 75% of capital in BTC and 25% in ETH. According to the report, from May 2020 to May 2024, the return on such an investment portfolio was 3% higher annually than one in which bitcoin alone accounts for 100%.
However, Hougan acknowledges that in the short term, a portfolio consisting solely of bitcoin outperforms a diversified one. Additionally, investing solely in bitcoin carries less risk due to its higher market capitalization and features such as limited coin issuance and gradual reduction of inflation to zero.


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

Forex | Forex Trading | NordFX
 
Forex and Cryptocurrency Forecast for 01 – 05 July 2024


EUR/USD: Inflation in the US – Everything is Going According to Plan

Last week, specifically on Thursday, 27 June, the dollar received support from positive macroeconomic data from the US. The Department of Commerce reported that according to the final estimate, the US GDP grew by 1.4% in Q1, against the forecast of 1.3%. (According to the current Fed forecast, the country's real GDP will expand by 2.1% in 2024). Labour market statistics were also optimistic – the number of initial jobless claims in the US amounted to 233K, lower than both the forecast of 236K and the previous figure of 239K. Durable goods orders did not disappoint either, rising by 0.1% in May against the forecast of a decline of -0.1%. Against this backdrop, the DXY dollar index rose to 106.10, approaching April highs, and EUR/USD dropped to 1.0685.

However, the main events of the week were scheduled for Friday, 28 June, the last trading day of Q2. It is worth noting that the cash flows typical for the end of the quarter and the adjustment of trading positions at this time usually increase market volatility and can even cause chaotic movements in major currency pairs. Additionally, intrigue was added by the fact that on this day, the Bureau of Economic Analysis of the USA was to publish data on the Personal Consumption Expenditure (PCE) index for May. This indicator is the Fed's preferred inflation gauge and therefore influences decisions regarding interest rate changes.

According to preliminary estimates, the markets expected that the core index would decrease from 2.8% to 2.6% year-on-year and from 0.3% to 0.1% month-on-month. If this forecast were to come true, it would have strengthened expectations of an imminent easing of the American regulator's monetary policy. On the eve of the publication, market participants predicted that the first Fed rate cut would occur in September, with another one in November or December.

However, there was also an alternative scenario. On Wednesday, 26 June, Fed Board member Michelle Bowman stated that if the disinflation process in the US stalls, the regulator would have no choice but to resume tightening policy (QT).

The actual figures matched the forecasts exactly – core PCE decreased from 2.8% to 2.6% year-on-year and from 0.3% to 0.1% month-on-month. It is obvious that this result was already priced in, so it did not produce a "wow" effect on market participants, and after a brief dip, DXY returned to current levels.

The dollar was also supported by the President of the San Francisco Federal Reserve Bank, Mary Daly, who commented on the PCE data: "The Fed has not yet made a decision, but the PCE data is good news. [...] There is evidence that policy is sufficiently tight. [...] It takes more time for the policy to work. [...] If inflation remains stable or decreases slowly, rates will have to be raised longer."

As for the European Central Bank (ECB), unlike its overseas counterpart, it has already started the easing process (QE). At its meeting on 06 June, it already lowered the euro rate by 25 basis points (b.p.) to 4.25%. And as ECB representative Olli Rehn stated on 26 June, the market forecast for two more rate cuts in 2024 seems "reasonable". These words from Rehn signalled tolerance towards inflation spikes in the Eurozone, which is a negative factor for the common European currency.

The final point of the week, month, and quarter was set by the EUR/USD pair at 1.0713. The analyst forecast for the near future as of the evening of 28 June is as follows: 65% of expert votes were given for the pair's decline, 20% for its growth, and another 15% remained neutral. In technical analysis, 80% of trend indicators on D1 sided with the dollar and turned red, while 20% preferred the euro. Among oscillators, 75% were on the dollar's side, with the remaining 25% taking a neutral position. The nearest support for the pair is located in the zone of 1.0665-1.0670, followed by 1.0600-1.0615, 1.0565, 1.0495-1.0515, 1.0450, and 1.0370. Resistance zones are found around 1.0740-1.0760, then 1.0815, 1.0850, 1.0890-1.0915, 1.0945, 1.0980-1.1010, 1.1050, and 1.1100-1.1140.

The upcoming week will be rich in macroeconomic statistics. On Monday, 01 July and Tuesday, 02 July, preliminary data on such an important indicator as the consumer price index (CPI) in Germany and the Eurozone will be released, respectively. Speeches by ECB President Christine Lagarde and Fed Chair Jerome Powell are also scheduled for 01 and 02 July. In addition, on Monday and Wednesday, business activity indicators (PMI) in various sectors of the US economy will be known. But this is not the end of the flow of important information. Late in the evening of 03 July, the minutes of the last FOMC (Federal Open Market Committee) meeting of the Fed will be published. On Wednesday, 03 July, and Friday, 05 July, we will be flooded with statistics from the US labour market, including the unemployment rate and the number of new jobs created outside the agricultural sector (NFP). Traders should also keep in mind that 03 July is a short day in the US, and 04 July is a full holiday as the country celebrates Independence Day. And looking a bit further ahead, we remind you that early parliamentary elections will be held in France on Sunday, 07 July, the result of which could greatly affect the common European currency.

GBP/USD: Focus – On 04 July Elections

General parliamentary elections will be held not only in France but also in the United Kingdom, scheduled for Thursday, 04 July. Announcing this event, Prime Minister Rishi Sunak stated that he is proud of the "achievements of his government [Conservatives]". "Economic stability is the foundation of any success," he added, noting that the UK economy is still growing and inflation has returned to normal levels.

Despite Sunak's assurances, in May 2024, the monitoring company Ipsos reported that 84% of the population are "dissatisfied with how the government is managing the country". Current election forecasts based on public opinion polls show that 21.3% may vote for the Conservatives, 41.9% for their opponents, the Labour Party, and the rest for other parties.

It must be noted that the government of Rishi Sunak has several real achievements. On 19 June, data on consumer inflation (CPI) was published, and overall, the picture turned out to be quite good. The consumer price index month-on-month remained at the previous level of 0.3%, lower than the forecasted 0.4%. Year-on-year, the CPI decreased from 2.3% to 2.0%, reaching the Bank of England's (BoE) target for the first time since October 2021. The core index (Core CPI), which excludes volatile components such as food and energy prices, also showed a significant decrease from 3.9% to 3.5% year-on-year.

According to the report from the Office for National Statistics (ONS), presenting the final data on 28 June for Q1 2024, the UK economy grew by 0.7%, higher than the previous value and forecast of 0.6%. Year-on-year, real growth was 0.3%, exceeding the previous value and expectation of 0.2%. This was the best dynamic since Q4 2021.

If the UK parliamentary elections on 04 July and the inflation report on 17 July do not bring significant surprises, the markets predict that the BoE will start lowering rates at its nearest meeting on 01 August. According to ING bank strategists, "we still forecast that the Bank of England will start lowering rates in August and will begin to signal this in its speeches as soon as the general elections on 04 July are over". In their opinion, the likelihood of rate cuts by the Bank of England is much higher than those by the Fed, which will put pressure on the pound sterling. TDS company analysts, on the other hand, give the following forecast: "We believe a rate cut of 15 b.p. is expected in August, and about 50 b.p. in total for 2024". In several other market participant forecasts, it is also mentioned that by November, the reduction could be around 30 b.p.

GBP/USD ended the past five-day period exactly where it started – at 1.2644. The analyst forecast ahead of the parliamentary elections is unequivocal – 100% side with the dollar and expect the British currency to weaken. Regarding technical analysis on D1, there is also a clear advantage on the dollar's side. Trend indicators are in favour of the dollar at 65% to 35% red to green. Oscillators are 100% pointing south, with 20% signalling the pair is oversold. In case of further decline, the pair's levels and support zones are 1.2610-1.2620, 1.2540, 1.2445-1.2465, 1.2405, 1.2300-1.2330. In case of the pair's growth, it will meet resistance at levels 1.2675, 1.2700, 1.2740-1.2760, 1.2800-1.2820, 1.2860-1.2895, 1.2965-1.2995, 1.3040, and 1.3130-1.3140.

As for the events of the upcoming week, all investor attention is focused on the elections on 04 July. The next important event, as mentioned, will be the publication of the fresh inflation report in the United Kingdom on 17 July.

USD/JPY: Another Peak Conquered

Last week, 75% of analysts expecting new currency interventions voted for the USD/JPY pair's retreat south, while the remaining 25% pointed north. The minority, as is often the case with the Japanese currency, turned out to be right: no interventions occurred, and the pair reached another peak – 161.28.

Frankly, there's nothing to comment on here – everything has been discussed dozens and hundreds of times. The problem of the yen's weakening lies in the ultra-loose monetary policy of the Bank of Japan (BoJ). And as long as it does not decisively turn towards tightening, the national currency will continue to lose its positions. Of course, for a while, the Ministry of Finance and the Central Bank can support its exchange rate with currency interventions. But spending billions and billions on something that disappears like ripples on water after a few days – is there any point in that? Can this be called monetary policy?

If inflation falls in major competing countries, in Japan, it rises. According to data published on Friday, 28 June, the Consumer Price Index (CPI) in Tokyo for the year ending in June rose to 2.3% compared to 2.2% for the previous period. The core CPI inflation (excluding volatile food prices) also increased to 2.1% year-on-year, which is higher than both the forecast of 2.0% and the previous value of 1.9%. Another core CPI index for Tokyo (excluding food and energy prices) decreased in June to 1.8% year-on-year compared to the previous value of 2.2%.

Of course, these are not jumps that warrant sounding a loud alarm – all indicators are "hovering" around the target 2.0%. This allows Japanese officials to pause, without changing the vector of their monetary policy, and to limit themselves to verbal "interventions". Thus, Japan's Finance Minister Shunichi Suzuki once again stated that he is "deeply concerned about excessive and unilateral movements in the Forex market" and expressed hope that "trust in the Japanese currency is maintained". Suzuki's colleague, Cabinet Secretary Yoshimasa Hayashi, delivered almost the same speech word for word. However, he added that the authorities "will take appropriate measures regarding excessive currency movements", hinting at another currency intervention.

This hint from Yoshimasa Hayashi scared 60% of experts who voted for the pair's southward movement and yen strengthening, 20% pointed north, and 20% took a neutral position. The opinion of the indicators is unambiguous, as they have never heard of interventions. Therefore, all 100% of trend indicators and oscillators on D1 are green, although a quarter of the latter are in the overbought zone. The nearest support level is around 160.25, followed by 159.20, 158.65, 157.60-157.80, 156.60, 155.45-155.70, 154.50-154.70, 153.60, 153.00, 151.90-152.15, 150.80-151.00. The nearest resistance is in the 160.85 zone, followed by 161.30 and 162.50.

In the upcoming week, the calendar highlights Monday, 01 July. On this day, the Tankan Large Manufacturers Index will be published. No other important macro statistics regarding the state of the Japanese economy are planned for the coming days.

CRYPTOCURRENCIES: Causes and Consequences of "Black Monday" on 24 June

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Monday, 24 June, presented investors with a very unpleasant surprise – on this day, bitcoin's price fell below $60,000 for the first time since 03 May, reaching $58,468 at one point. Ethereum, in turn, fell below $3,250. Analysts highlight several reasons for the active sell-offs, noting that they reflect overall instability in global financial markets and uncertainty about monetary and regulatory policies in several leading countries, especially China and the US. However, there are also more specific factors that contributed to the development of the bearish trend.

In mid-June, the German government began selling off a huge amount of bitcoins (about 50,000 BTC) confiscated in January. Panic sentiment sharply intensified after the announcement on 24 June that creditor payments for the bankrupt crypto exchange Mt.Gox would begin in early July. The total amount of funds to be distributed among former clients is 162,100 BTC, roughly $10 billion. Bitcoin responded to this news with an 8% drop. It's no surprise – such a volume of coins flooding the free market can seriously knock down prices. In the derivatives market, long positions worth $177 million were forcibly liquidated, and the total financing rate for futures contracts turned negative for the first time in June, indicating that sales exceeded purchases.

It is precisely on the expectations of Mt.Gox debt payments that the flagship crypto asset's quotes reached the lowest level in the past eight weeks last Monday. In this situation, two things are encouraging. Firstly, the deadline for repayment falls on 31 October, and it's possible that payments will be made in parts over four months rather than all at once. And secondly, there is hope that not all creditors will rush to convert their bitcoins into fiat, but will hold onto them, hoping for price growth.

In addition to the above, BTC miners exerted some downward pressure on the market. It became known that their coin reserves reached a 14-year low, as they had to sell a significant amount of BTC due to the April halving to cover operational expenses. Recall that the cost of mining bitcoin, according to JPMorgan analysts, is $53,000. Historically, this cost level is a strong support for BTC/USD. However, even in March, JPMorgan did not rule out that after the halving, bitcoin could temporarily fall to $42,000.

In the absence of positive signals, the demand for spot bitcoin ETFs continues to decline, major market participants slow down their activity, and start to take profits. This also pressures the prices. CEO of investment company CryptoQuant Ki Young Ju calculated that over the past two weeks, bitcoin whales and miners set a record by selling coins worth $1.2 billion.

According to 10x Research, all last week, US spot BTC ETFs recorded investor outflows, and on 21 June, net outflow exceeded $105 million. 10x Research believes that bitcoin will now need to find a new price range to stabilize the decline and then find growth catalysts. In the medium term, according to 10x Research analysts, it is not worth expecting BTC to return above $70,000.

Popular analyst Matthew Hyland noted that the combined bitcoin balance on centralized exchanges reached a multi-year low. In theory, this could be seen as a bullish signal, but the crypto market leader is not yet eager to show an upward trend. Naturally, the publication of key US economic data could serve as a vector for further cryptocurrency movements. If the Fed takes its first step in easing its monetary policy in September, it could support risky assets, including bitcoin. According to Cryptology experts, the chances of bitcoin reaching a new all-time high by the end of September are quite high, and what is happening now is a phase of accumulation.

Despite the current decline, many investors remain optimistic, citing the cyclical nature of the crypto market. They also do not forget about the US elections. For example, former Goldman Sachs CEO Raoul Pal predicted significant bitcoin and cryptocurrency market growth in Q4 2024. In an episode of The Wolf Of All Streets podcast, the financier noted that risky assets like bitcoin usually rally against the backdrop of US presidential elections. "The final quarter of an election year is a real 'banana zone' for all assets. It always is," Pal optimistically stated, noting that the "banana zone" for cryptocurrencies in autumn is much more pronounced than, for example, for the Nasdaq index.

Bitcoin was also supported by billionaire Michael Saylor. His company, MicroStrategy, is one of the largest bitcoin holders in the world, with 205,000 BTC on its balance sheet. Despite the negative trend, it increased its reserves by another 11,931 BTC (over $700 million) in the past month alone. Saylor is convinced of the first cryptocurrency's ability to grow to $10 million with support from China and other factors. He believes that in the future, governments, especially China, will fully embrace the first cryptocurrency and integrate it into the state infrastructure. The entrepreneur declared all pre-bitcoin economic instruments obsolete. "Before Satoshi Nakamoto, economics was a pseudoscience. All economists before Satoshi tried to develop economic laws with shells, glass beads, pieces of paper, and credit instruments," the businessman wrote, calling bitcoin a "perfect asset."

In previous reviews, we already wrote that the launch of exchange-traded spot ETFs on Ethereum could give a certain boost to the digital asset market. On 25 June, SEC (US Securities and Exchange Commission) Chairman Gary Gensler noted that the registration process for new ETFs is "going smoothly," and the approval date depends on how quickly applicants submit adjusted S-1 forms. Bloomberg analysts call 02 July the expected approval date for new products. Reuters, citing anonymous sources, reports that a consensus has been reached between fund managers and the SEC in negotiations, and only the "final touches" remain.

Co-founder of venture company Mechanism Capital Andrew Kang stated that after the approval of ETH-ETF, Ethereum's rate could correct by 30%, falling to $2,400. In his opinion, at this stage, the main altcoin attracts much less attention from institutional investors compared to bitcoin. Based on this, ETH-ETF will attract only 15% of funds compared to what BTC-ETF received at the start.

Kang noted that to increase Ethereum's attractiveness among investors, its ecosystem needs to be positioned as a decentralized financial settlement layer, a global computer, or a Web3 application store. At the same time, it will be difficult to sell new ideas for Ethereum's application to funds, as the asset is perceived by investors as an overvalued stock of a large technology company.

Significantly more positively views the future of Ethereum Matt Hougan, CIO of Bitwise, a company managing cryptocurrency funds. In his opinion, the appearance of a long-awaited exchange product is undoubtedly a positive factor, and the net inflow of investments into ETH-ETF over the first 18 months will amount to $15 billion. In his analysis, he relies on the experience of Canada and the EU, where in similar products the inflow ratio for Ethereum and Bitcoin is approximately 1 to 4 (i.e., 25%). In other words, if in the first quarter of work for spot Bitcoin-ETF the total inflow was $26.9 billion, for Ethereum it is expected to be at the level of $6.7 billion. In this case, in three months of work, the leading altcoin could rise to $4,400-5,000.

CEO of SkyBridge Capital Anthony Scaramucci believes that the price of Ethereum could rise even higher, reaching $10,000-12,000. Regarding bitcoin, the entrepreneur allows for its growth to $170,000-250,000. The main driver, in his opinion, will be the further institutional acceptance of cryptocurrency. Scaramucci called the approval of spot exchange ETFs an important regulatory barrier breakthrough for attracting new capital. Thanks to this, in his opinion, the share of digital gold in the portfolios of major players will soon be about 3%.

As of the evening of Friday, 28 June, BTC/USD is trading at $60,190, and ETH/USD is in the $3,390 zone. The total crypto market capitalization is $2.24 trillion ($2.34 trillion a week ago). The bitcoin Fear & Greed Index (Crypto Fear & Greed Index) has dropped from 63 to 47 points over the past 7 days, moving from the Greed zone to the Neutral zone.

In conclusion, here is another observation from Matt Hougan. The CIO of Bitwise presented three reasons why long-term investments in both bitcoin and Ethereum are more advantageous compared to investing only in bitcoin. These are: 1. portfolio diversification 2. the opportunity to earn on very different ecosystems and 3. economic benefit.

Considering the difference in the capitalization levels of bitcoin and Ethereum, Hougan believes that 75% of the capital should be invested in BTC and 25% in ETH. According to calculations, over the period from May 2020 to May 2024, the yield of such an investment portfolio is 3% per annum higher than one that only contains bitcoin. However, Hougan acknowledges that in the shorter term, a portfolio including 100% BTC outperforms a diversified one. Moreover, investing only in bitcoin carries fewer risks due to its higher market capitalization and features such as limited coin issuance and a phased reduction in the inflation rate to zero.

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

Forex | Forex Trading | NordFX
 
June Results: Gold Brings Astronomical Profits to NordFX's Top 3 Traders


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The brokerage firm NordFX has summarised the trading performance of its clients for June 2024. Additionally, the social trading services PAMM and CopyTrading, as well as the income generated by the company's IB partners, have been evaluated.

- The leader of the month is a trader from South Asia, account No. 1773XXX, with a profit of USD 82,933. This impressive "astronomical" result was achieved through trades in gold (XAU/USD), a favourite instrument among NordFX's most successful traders.
- In second place, with a result of USD 59,135, is another representative from South Asia, account No. 1771XXX, who also achieved success through the "golden" pair XAU/USD.
- A trader from West Asia, account No. 1774XXX, secured third place with earnings of USD 58,653 from gold transactions in June.

In NordFX's passive investment services, the following developments were noted:

- In the PAMM service, several startups caught attention due to their activity. AI Scalping Master High Risk showed a 100% profit in exactly 100 days, and Zenix 786 achieved a 72% profit in 99 days. These results are impressive, but the maximum drawdown for both managers was also significant – 46% and 36%, respectively. Therefore, the "High Risk" note in the name of the first account is not just words but a warning that trading in financial markets is risky. Investors must exercise maximum caution when entrusting money to any manager.

- In CopyTrading, we continue to monitor the performance of the signal yahmat-forex, which recently celebrated its anniversary. Over 372 days, the provider of this signal managed to show a yield of 467% with a maximum drawdown of 47%. Among startups, the signal AA Strategy is notable, with a profit of 299% in just two months, though it also had a drawdown of more than 63%.

When considering subscribing to a signal, besides profit and drawdown, we advise paying attention to the manager's own capital. For example, in the case of AA Strategy, it is only USD 142. Now imagine you subscribe to this signal with the same lot (1:1), but your starting capital is not USD 142 but USD 425, which is three times more. In this case, your drawdown would be only 21% of the deposit, though the profit would also decrease from 299% to approximately 100%. However, doubling your capital in just two months is still quite impressive.

It should be noted here that the purpose of this explanation is not to convince you to subscribe to this particular signal but to remind you of the basic rules of money management and ways to reduce financial risks.

Among NordFX's IB partners, the top three are as follows:
- The first place is held by a partner from West Asia, account No. 1645XXX, who was credited with a reward of USD 34,454 in June;
- In second place is a partner from South Asia, account No. 1565XXX, who received a commission of USD 5,962;
- Completing the top three is another representative from South Asia, account No. 1576XXX, who earned USD 5,429 for the month.


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

Forex | Forex Trading | NordFX
 
CryptoNews of the Week

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– To continue the rebound from June's lows, bitcoin needs to surpass the $65,000 mark. This level corresponds to the acquisition cost of coins bought by short-term investors, according to CoinDesk. Analysts at Blockware Intelligence observed that the value of digital gold fell below the cumulative cost of short-term holders for the first time since August 2023. "Last summer, under similar circumstances, the price remained in a sideways trend for another two months before surging again," the specialists added.
A similar cost metric for hodlers (long-term holders) is less than $20,000. For this market participant category, the current 15-18% drop from the all-time high (ATH) on March 14 is a routine event. "During the 2017 cycle, bitcoin experienced 10 pullbacks of 20% or more. This is a healthy correction of a bull market. Volatility provides opportunities for strategic capital placement for those with a long-term horizon," commented Blockware experts.

– According to Fundstrat analyst Tom Lee, the bitcoin sell-off in June was partly caused by nervousness over the payments to 20,000 creditors of the Mount Gox (Mt.Gox) crypto exchange, which blocked about $9 billion in cryptocurrencies when it declared bankruptcy 10 years ago. Research by K33 indicates that the anticipation of this event recently exerted significant pressure on digital asset prices. However, Lee believes that the influence of these repayments will gradually weaken and predicts a new major rally that will drive bitcoin's price to $150,000 by the end of the year.

– The level of bullish sentiment on networks like X, Reddit, Telegram, 4Chan, and BitcoinTalk has significantly decreased, with traders losing confidence in the markets. Analysts at Santiment view this as one of the factors indicating a local bottom. According to expert data, trader sentiment was most optimistic in April before the halving. However, over the past three months, the bullish narrative has weakened due to bitcoin's inability to reach a new ATH. Bearish calls have also been slowly decreasing, suggesting a decline in market participant interest. "We interpret this as crowd fear and apathy—a potential signal of the lower boundary," noted Santiment. At the same time, discussions about holding cryptocurrency have increased, which may be a positive signal.

– "Bears still control the situation, but bitcoin is heavily oversold," says analyst Willy Woo. According to him, the markets will correct the oversold condition, but this does not imply a rise in fundamental demand and does not guarantee a continued bull trend. Woo emphasized that breaking the RSI resistance line on bitcoin's daily chart will create a "technical but not fundamental recovery."

– DigitalX Analyst Pratik Kala predicted consolidation and low volatility in the cryptocurrency market in July. "Bitcoin is looking for the next major catalyst for upward movement. It is not yet on the horizon, but everything will change as the US elections approach," he said. Jag Kooner, Head of Derivatives at Bitfinex, noted in an interview with Decrypt that changes in regulatory policy and the release of macroeconomic statistics could play a decisive role in trend development. The expert suggested a scenario where economic data is worse than expected. This could weaken traditional markets and increase interest in bitcoin and other cryptocurrencies as alternative investments. "Historically, during economic downturns, investors often turn to digital gold as a means of capital preservation," noted Kooner.

– Quinn Thompson, CEO of the cryptocurrency hedge fund Lekker Capital, believes that the current "excessively bearish" sentiments will gradually change. Catalysts for the growth of the crypto market will include the US presidential elections, increased liquidity from the Federal Reserve, and the launch of spot exchange-traded funds (ETFs) on Ethereum. According to Thompson, by November, bitcoin's price will reach $100,000, and Ethereum's price will reach $7,000. He also mentioned the IPO planned by Circle, the company issuing USDC stablecoins. Another reason for bitcoin's growth could be the increase in mining profitability.
The founder of Lekker Capital believes that the pressure from the sale of coins received by Mt.Gox creditors (162,100 BTC) is already priced in by the market. The same applies to the movement of bitcoins confiscated by the German authorities (about 50,000 BTC). The founder of Galaxy Digital, Mike Novogratz, agrees with Thompson. Recently, he made a similar forecast, predicting that bitcoin's price will reach $100,000 by the end of 2024.

– Some analysts believe that bitcoin could see a strong rebound in the coming weeks. The founder of MN Trading, Michael van de Poppe, suggested that the bulls start to dominate at the $60,000 zone. According to his forecasts, a reversal will occur "next week with the upcoming listing of the Ethereum ETF."
Another expert, Ali Martinez, noted that in previous years when June ended with a downtrend, there was a sharp rise the following month: historically, bitcoin gained an average of 7.42%. Nevertheless, July could be more challenging than usual due to the sale of bitcoins by the German government and the upcoming Mt.Gox creditor payments. Jonathan De Wet, Chief Investment Officer at ZeroCap, expects the asset to fall to the "key support level" around $57,000 in the coming weeks as payouts to Mt.Gox's affected clients begin.

– Jesse Powell, co-founder and CEO of the crypto exchange Kraken, donated $1 million to Donald Trump's campaign "mostly in ETH." He noted that he supported "the only major party candidate advocating for cryptocurrency." "Despite enormous efforts by the bipartisan Congress to establish clear rules, the White House under [current US President Joe] Biden has stood aside and allowed a campaign of uncontrolled regulation through coercion. This approach reduces the US's competitiveness as other major economies around the world propose clear rules for regulating digital assets," Powell wrote. Previously, the head of Kraken called the SEC (Securities and Exchange Commission) "the main drag" and warned businesses to "flee the US."
The founders of the bitcoin exchange Gemini, brothers Cameron and Tyler Winklevoss, also donated $2 million in bitcoin to Trump. However, according to Bloomberg, part of the funds was returned due to exceeding the maximum amount.
Recall that in June, Trump declared himself the "crypto president" and criticized the Democrats' attempts to regulate the industry while promising to protect mining in the US and worldwide.

– As of the end of June, the number of crypto ATMs worldwide reached 38,278 units. This figure is approaching the December 2022 peak of 39,541 devices, according to Coin ATM Radar data. In 2023, the sector lost 2,861 units, shrinking by approximately 11.5%. However, since the beginning of 2024, 2,564 new bitcoin ATMs have been installed, increasing the total number by 17.8%.
The US remains the undisputed leader, accounting for 82% (31,968) of the total number of crypto ATMs. In second place is Canada with 7.7% (3,028). In April, Australia reached the third position with 2.8% (1,107).


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

Forex | Forex Trading | NordFX
 
Forex and Cryptocurrency Forecast for 08 – 12 July 2024


EUR/USD: The US is Not Very Good, Europe is Not Very Bad

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On Friday, June 5, the Dollar Index (DXY) hit a three-week low, while the euro showed its largest weekly gain against the dollar in a year. This was due to the US not performing as well as expected and Europe not faring as poorly.

Disappointing private sector employment statistics from ADP (150K versus the forecasted 163K and previous 157K) and an increase in repeated jobless claims (238K versus 234K) for the ninth consecutive week indicate a cooling labour market. The slowdown in business activity in the service sector, the fastest in four years, and the drop in the ISM Index from 53.8 to 48.8 points, below the threshold of 50.00, suggest that the US economy is not as smooth as the Federal Reserve (Fed) would like.

The FOMC's June meeting minutes mentioned that monetary policy should be ready to respond to economic issues, a sentiment echoed by Fed Chairman Jerome Powell. Consequently, this gloomy macroeconomic data increased the likelihood of a monetary expansion cycle and interest rate cuts in September from 63% to 73%. Derivatives are almost certain that there will be two 25 basis point (bp) cuts in 2024, lowering the rate from 5.50% to 5.00%. This caused US Treasury yields and the DXY to drop, while stock indices and EUR/USD rose. The S&P500 set its 33rd record this year, and EUR/USD reached a high of 1.0842 on July 5.

The euro was also bolstered by the situation in France. The left-wing "New People's Front" (NFP) and the government bloc "Together for the Republic" (Ensemble) joined forces to prevent the right-wing from gaining power, which might end successfully. If the right-wing "National Rally" (RN) does not gain an absolute majority in the new parliament after the second round of elections, there will be no confrontation with the EU or Frexit (analogy with British Brexit).

Polls indicate the right-wing will secure 190 to 250 out of 577 seats, while 289 are needed for an absolute majority. The second round of elections will be held on Sunday, July 7, which might cause gaps in euro pairs on Monday.

Last week, the euro was also supported by the European Central Bank, or rather, by the minutes of its June Governing Council meeting. On one hand, 25 out of 26 Council members voted for a 25 basis point rate cut. However, this decision was made with several caveats concerning still high wage growth rates and the persistence of inflation, which resists and does not want to drop to the target level of 2.0%.

Preliminary June data showed that the CPI decreased only by 0.1% from 2.6% to 2.5%, and the Core CPI remained at 2.9% (y/y), above the consensus forecast of 2.8%. ECB officials fear the CPI might rise due to geopolitical tensions, supply chain disruptions, raw material and energy price increases, and other factors. This almost rules out a rate cut at the ECB Governing Council meeting on July 18 and suggests only one act of monetary expansion in the second half of 2024.

Key US labour market data released at the end of the week on Friday, July 5, could change the dollar's position and the EUR/USD dynamics. According to the Bureau of Labour Statistics (BLS), non-farm payrolls (NFP) increased by 206K in June, lower than May's 218K but above the forecast of 190K. Other data showed the unemployment rate rose from 4.0% to 4.1%, and wage inflation dropped from 4.1% to 3.9% (y/y).

After the publication of this data, EUR/USD ended the week at 1.0839. However, this does not mean it will start the next week at this level. Traders are closely watching the French elections and the political situation related to the November US presidential elections. Biden's interview with ABC News at 00:00 GMT on Saturday, July 6, when markets are closed, could also impact dollar pairs.

As of the evening of July 5, analysts' forecasts for the near future are as follows: 55% predict the pair will rise, 45% foresee a fall. In technical analysis, all trend indicators and oscillators on D1 are in favour of the euro, although a quarter indicate the pair is overbought. The nearest support is in the 10790-10805 zone, followed by 1.0725, 1.0665-1.0680, 1.0600-1.0620, 1.0565, 1.0495-1.0515, 1.0450, and 1.0370. Resistance zones are at 1.0890-1.0915, 1.0945, 1.0980-1.1010, 1.1050, and 1.1100-1.1140.

Notable events in the upcoming week include Jerome Powell's testimony in the US Congress on July 9 and 10, updated CPI data for Germany and the US on Thursday, July 11, and US initial jobless claims. The week will end with Germany's retail sales data and the US Producer Price Index (PPI) and the University of Michigan Consumer Sentiment Index.

GBP/USD: The Pound Gained with the Labour Party

The pound sterling and British stocks rose after the opposition centre-left Labour Party secured a convincing victory in the parliamentary elections. The British currency achieved a weekly gain of 1% – the best in the last seven weeks.

According to Reuters, the Labour Party won 337 out of 650 seats, indicating a majority in the House of Commons. UK Prime Minister Rishi Sunak conceded defeat and congratulated his opponents on their victory. In turn, Labour Party leader and Prime Minister-elect Keir Starmer declared that from today "we are embarking on a mission of national renewal and starting to rebuild our country." Starmer will replace Sunak as Prime Minister, ending 14 years of Conservative rule.

The markets responded positively to the national election results. The pound became the only component of the DXY to strengthen (by 0.2%) this year. "Apart from the weakening of the dollar," commented Singapore's DBS Bank, "the markets warmly welcomed the victory of the opposition Labour Party. This will put an end to years of political and economic uncertainty under Conservative leadership following the Brexit referendum in 2016. Labour leader Keir Starmer, while he is alive, has ruled out the possibility of the UK joining three blocs – the EU, the single market, and the customs union. […] However, Labour may seek more favourable trade agreements by aligning with EU rules in specific sectors such as agriculture, food, and chemicals."

"As for monetary policy," continued DBS strategists, "the OIS market assesses a 62.4% probability of the Bank of England (BoE) cutting the rate by 25 basis points to 5.0% at the meeting on August 1." However, DBS believes this will not significantly harm the pound, provided that expectations for a Fed rate cut in September increase.

The final note of the five-day period saw the GBP/USD pair at 1.2814. Specialists from another Singaporean bank, UOB, believe the likelihood of the pound strengthening has increased. They note that a strong resistance level is in the area of last month's high of 1.2860. The median forecast for the near term is as follows: 35% of analysts expect further pound strengthening and pair growth, 50% foresee a decline, and the remaining 15% are neutral. As for technical analysis on D1, 100% of trend indicators are green. Among the oscillators, 90% are green, a third of which are in the overbought zone, and the remaining 10% are neutral grey. In case of further decline, the pair will find support levels and zones at 1.2735-1.2750, 1.2680, 1.2655, 1.2610-1.2625, 1.2540, 1.2445-1.2465, 1.2405, and 1.2300-1.2330. In case of growth, the pair will meet resistance at levels 1.2850-1.2860, followed by 1.2895, 1.2965-1.2995, 1.3040, and 1.3130-1.3140.

Among the events of the coming week, the publication of UK GDP data for May on Thursday, July 11, stands out. The next important event, as previously mentioned, will be the publication of a fresh inflation report in the United Kingdom on July 17.

USD/JPY: Back to 1986

The yen lost over 12% against the dollar this year due to the large interest rate differential between Japan and the US. It continued to lose ground in the first half of the past week, reaching a new 38-year high of 161.94 on Wednesday, July 3, but failed to break above 162.00 due to disappointing US statistics.

Until Friday, Japanese officials largely refrained from discussing possible interventions. According to several experts, they may fear the wrath of the United States following sharp remarks from American authorities regarding recent similar actions. However, on July 5, Finance Minister Shunichi Suzuki once again stated that the authorities would closely monitor the state of the stock and currency markets. A week earlier, he expressed that he was "deeply concerned about excessive and unilateral movements in the forex market" and hoped that "confidence in the Japanese currency remains."

OCBC Bank economists noted that "USD/JPY will follow US Treasury yields and the dollar. A reversal in USD and a Fed rate cut or a BoJ signal to normalize (rate hike or accelerated balance sheet reduction) is needed for a downward reversal, none of which seem to be happening." OCBC concluded that the path of least resistance for USD/JPY might still be upward unless there is intervention. "Intervention, at best, is a tool to slow the yen's depreciation, not to reverse the trend," they added.

The week ended with USD/JPY at 160.78. UOB Group analysts noted that the pair's upward momentum is starting to weaken, but only a break below 160.45 would indicate that the USD will not strengthen further. If the pair breaks above 162.00, the next level to watch is 163.00. OCBC economists see further targets for USD/JPY at 164.00 and 164.90, with support at 160.20, 158.10 (21 DMA), and 156.90 (50 DMA).

Many traders remain cautious, fearing another intervention by Japanese authorities. 65% of analysts expect another intervention and a southward movement of the pair, while the remaining 35% point north. Among trend indicators on D1, only 10% point south, with the rest looking north. Oscillator indicators are 25% red and 75% green.

No significant macroeconomic data is expected for Japan in the upcoming week.

CRYPTOCURRENCIES: Back to February 26

The last five days of June gave investors hope that the black streak was over. But alas! On the first day of July, the bulls' strength waned, and BTC/USD turned south again, easily breaking support around $60,000 and plummeting to a local bottom at $53,543, a level last seen on February 26.

A long time ago, in 1961, the 35th President of the United States, John Fitzgerald Kennedy, uttered a phrase that became famous: "Victory has a thousand fathers, but defeat is an orphan." So, the current victory of the bears over the bulls also has many "fathers," although not a thousand. Several factors influenced the decline of the crypto market.

Firstly, investor disappointment that bitcoin failed to reach a new all-time high (ATH) after the April halving. Due to the halving of their reward, BTC miners were forced to sell a significant amount of their coins to cover operational costs. It was reported that their reserves reached a 14-year low. Downward pressure was also exerted by the German government, which began selling a large amount of bitcoin (about 50,000 BTC) seized by the police from a pirate site in January.

Sales intensified sharply after the announcement on June 24 that creditor payments from the bankrupt crypto exchange Mount Gox (Mt.Gox) would start in early July. These assets had been blocked, and now 20,000 former clients are to receive a total of 162,100 BTC (about $9 billion). According to a K33 study, the anticipation of this event put significant pressure on digital asset prices. Traders assumed that most recipients would be inclined to sell their tokens, given that BTC's price had risen exponentially since 1994. Real panic ensued when test transactions were observed on wallets associated with Mt.Gox.

According to Quinn Thompson, CEO of the crypto hedge fund Lekker Capital, the market has largely accounted for the German government's actions and Mt.Gox creditor payments. Thus, this negative pressure is expected to gradually weaken, as noted by Fundstrat analyst Tom Lee.

Another disappointment was the anticipated launch of Ethereum exchange spot ETFs last week, which did not materialise. The US Securities and Exchange Commission (SEC) rejected the applicants' S-1 form submissions, requesting additional adjustments by July 8. Therefore, approval may occur closer to mid-month or later, if at all. As a result, investors withdrew a record $119 million over the past two weeks, the highest since August 2022, making Ethereum an outsider in the crypto market.

Overall, global cryptocurrency exchange-traded funds recorded a third consecutive week of outflows, losing a total of $1.2 billion in investments. Most of the losses came from US spot Bitcoin ETFs, with about half of the inflows coming from retail investors, who typically lack long-term planning and patience. Many whales also began to take profits due to the absence of positive signals. The stock market also played against digital assets. In the last two months, both the S&P500 and Nasdaq Composite consistently hit record highs, prompting some investors to shift their funds from cryptocurrencies to stocks.

Despite the current gloomy outlook, many experts remain cautiously optimistic about the future. MN Trading founder Michaël van de Poppe believes an upward reversal will occur with the upcoming listing of Ethereum ETFs. Another expert, Ali Martinez, noted that in previous years, when June ended in a downtrend, there was a sharp rise the following month: historically, bitcoin gained an average of 7.42%. However, he believes July may be more challenging than usual due to the shock from Germany's bitcoin sales and Mt.Gox creditor payments.

Santiment analysts observed that both bullish and bearish sentiments in X, Reddit, Telegram, 4Chan, and BitcoinTalk networks are waning, indicating traders' loss of interest in trading. "We interpret this as fear and apathy among the crowd – a potential bottom signal," Santiment noted. "At the same time, there is increased talk about holding cryptocurrencies, which could be a positive sign."

"Bears still control the situation, but bitcoin is heavily oversold," said analyst Willy Woo. He believes markets will correct the oversold condition, but at this stage, it does not indicate fundamental demand growth or guarantee a sustained bullish trend. Woo emphasized that a breakout of the resistance line on the daily bitcoin RSI chart will create a "technical but not fundamental recovery."

According to Blockware Intelligence experts, bitcoin needs to overcome the $65,000 level to develop a rebound. This level corresponds to the acquisition cost for short-term investors. Currently, the digital gold prices have dropped below the total cost of short-term holders for the first time since August 2023. "Last summer, under similar circumstances, the price remained in a sideways trend for another two months before breaking out again," added Blockware Intelligence specialists.

Pratik Kala, a DigitalX analyst, predicts consolidation and low volatility for the crypto market in July. He stated, "Bitcoin is looking for the next major catalyst to move up. It's not visible on the horizon yet, but things will change as the US elections approach." Quinn Thompson from Lekker Capital also believes that the current "overly bearish" sentiments will gradually shift. He sees the US presidential elections as a growth catalyst for the crypto market, along with increased liquidity from the Fed and the launch of spot ETH ETFs. Another reason for growth could be the increased profitability of mining. Thompson predicts bitcoin will reach $100,000 and Ethereum $7,000 by November.

Galaxy Digital founder Mike Novogratz shares Thompson's view, recently forecasting bitcoin will hit $100,000 by the end of 2024. Tom Lee of Fundstrat expects an even higher figure of $150,000.

As of writing this outlook on the evening of Friday, July 5, BTC/USD is trading at $56,400 and ETH/USD at $2,975. The total crypto market capitalization is $2.06 trillion ($2.24 trillion a week ago). The market lost about $625 billion over the last 30 days. The Crypto Fear and Greed Index dropped from 47 to 29 points in 7 days, moving from the Neutral zone to the Fear zone.


NordFX Analytical Group


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

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

Forex | Forex Trading | NordFX
 
CryptoNews of the Week

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– Many members of the crypto community believe that bitcoin has already reached its local bottom. For example, this forecast is supported by an analyst known as MartyParty. In his opinion, this is indicated by the fact that the main cryptocurrency has fallen to levels that barely cover the costs of its mining.
MartyParty believes that the behaviour of bitcoin can be predicted using the Wyckoff method. However, the analyst is confident that it is important to consider the impact of the upcoming US presidential elections. MartyParty overlaid the Wyckoff distribution on the BTC price curve to show the expected trajectory of the cryptocurrency, considering the potential reaction to the election outcome. According to his calculations, the peak of bitcoin's growth may be recorded in June 2025.
Ryan Lee, the Chief Analyst at Bitget Research, also shared a positive forecast in a conversation with BeInCrypto. He noted that on the weekly chart, BTC is near the lower boundary of the Bollinger Bands. Such behaviour of the cryptocurrency, in his observations, indicates that the coin has reached its local bottom.

– However, many in the crypto community predict further declines for bitcoin. For instance, a trader known as AltstreetBet does not rule out the coin falling to $47,000, with the bearish trend continuing until the end of the year. A similar forecast was given by analyst Inmortal. He noted the similarity between BTC's behaviour and its trajectory in 2019. If history repeats itself, bitcoin will be able to grow only at the beginning of 2025.

– The correction of the first cryptocurrency may continue until it reaches $44,000. This opinion was expressed by legendary Wall Street trader and head of Factor LLC, Peter Brandt. The expert questioned whether bitcoin has completed the "double top" pattern on the daily chart. According to his calculations, the upper level of this model is around $72,000, and the lower level is at $43,970.
It is worth recalling that a "Double Top" is a chart pattern that signals a medium- or long-term trend reversal from bullish to bearish. It forms when the price of an asset reaches a peak twice with subsequent pullbacks.

– Popular analyst known as Dave the Wave gave a forecast similar to Peter Brandt's. He warned his 146,700 followers on social media platform X that bitcoin might be reflecting the price movement seen at the beginning of 2017. In this case, according to the logarithmic growth curve (LGC) model, the dip could lead to $44,000, followed by a parabolic surge. (The LGC model aims to predict the lows and highs of BTC's long-term cycle by filtering out short-term volatility).
According to the analyst, downward volatility is an integral part of a bull market. "Bitcoiners have to take the good with the bad... technically we are still in a bull market… And although one can be confident in ultimate victory, there may be a fall along the way."
Dave the Wave emphasizes that a deep corrective movement will benefit bitcoin in the long term. According to his forecast, the dip will allow BTC to rise by 400%, reaching $220,000 by the end of 2025.

– Benjamin Cowen, founder and head of ITC Crypto, also commented on the BTC price drop. In his opinion, digital gold is near a critical level. The movement of the two-week trend strength indicator (RSI) will soon show whether the price will go up (as in 2013 and 2016) or down (as in 2019). "I keep playing these games, trying to figure out what year it is now, but then I tell myself it's 2024, and [bitcoin] must be doing something different than before," the expert emphasized.

– Peter Schiff, a fierce opponent of cryptocurrencies and president of Euro Pacific Capital, pointed to the lack of institutional demand for bitcoin. "Pumpers blame the price drop on sales related to [payments to creditors of the bankrupt crypto exchange] Mt. Gox. This is partly true, but the liquidation also exposes the myth of institutional demand. If it existed, buyers would have jumped at the chance to buy Mt. Gox bitcoins," said the entrepreneur.

– According to a document published on Monday, June 8, the Republican Party of former US President Donald Trump has officially adopted a platform aimed at supporting innovation in the crypto sphere, reflecting Trump's and his fellow party members' interest in digital assets. "Republicans will end the Democrats' illegal and un-American repression in the crypto field and oppose the creation of a Central Bank digital currency," the document states. "We will protect the right to mine and the right of every American to self-custody their bitcoins [and] conduct transactions without government oversight and control."

– Katie Stockton, Managing Partner at Fairlead Strategies, confirmed in an interview on CNBC that the current drop in bitcoin prices is due to the beginning of payments to clients of the Mt. Gox exchange, which went bankrupt ten years after the hack. In her opinion, the long-term upward trend remains, and the BTC price drop is short-term: "In the second half of the year, more volatility is likely to be observed. The upward trend will remain, but more correction phases will occur."
Katie Stockton emphasized that bitcoin should be considered a long-term investment with significant growth potential akin to a call option. However, if the first cryptocurrency's price drops to $40,000, this could threaten the long-term bullish trend.

– Michael Saylor, co-founder and former CEO of MicroStrategy, stated that the decline in the first cryptocurrency's value would not affect the asset's attractiveness among investors. As evidence, he showed a table comparing the price dynamics of various asset classes over several years. Among them were bitcoin, gold, emerging market stocks, emerging market bonds, and treasury bonds. The best results were shown by bitcoin, young company stocks (U.S. Growth index), and the Nasdaq 100 index. From 2011 to 2024, the price of bitcoin increased by 18,881%, while during the same period, the Nasdaq 100 index rose by 931%, and gold by 59%. Earlier, Michael Saylor predicted bitcoin's growth to $10 million, declaring that the first cryptocurrency would offer economic immortality for corporations.

– According to Forbes, citizens of Argentina, a country with the highest level of cryptocurrency adoption in the Western Hemisphere and inflation of about 300%, prefer buying and holding digital assets. Forbes cites the latest study by analytical company SimilarWeb, according to which out of 130 million visitors to the 55 largest global crypto exchanges, approximately 2.5 million were from Argentina.
According to Maximiliano Hinz, head of the Latin American division of the crypto exchange Bitget, "Argentinians do not play lotteries with meme coins and do not try to get rich on the next hot token. Instead, they buy and hold Tether (USDT) stablecoins. This is an abnormal market where many people just buy USDT and do nothing else with it." Newly elected Argentine President Javier Milei stated that the country is moving towards a "regime of competing currencies" where every citizen will choose which assets to use for payments. However, according to Forbes, none of the five largest crypto exchanges represented in Argentina - Binance, eToro, BingX, HTX, and Bitget - have been registered with the National Securities Commission (CNV).


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

Forex | Forex Trading | NordFX
 
Gold as an Investment: Detailed Analysis and Price Forecasts for 2025-2050


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

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Gold Price: From Ancient Times to the 20th Century

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

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

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

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

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

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

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

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

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

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

20th Century: $20 – $850 – $250

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

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

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

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

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

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

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

Why Gold?

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

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

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

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

Forecasts for the Second Half of 2024 and 2025

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

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

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

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

Forecasts to 2050

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

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

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


NordFX Analytical Group


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

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Forex | Forex Trading | NordFX
 
CryptoNews of the Week

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

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

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

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

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

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

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

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

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

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

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

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


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

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Forex | Forex Trading | NordFX
 
Forex and Cryptocurrency Forecast for 22 – 26 July 2024


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


NordFX Analytical Group


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

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