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USD/JPY: No Surprises Expected from the Bank of Japan Yet

Since the beginning of this year, the yen has been gradually losing ground to the U.S. dollar, with USD/JPY returning to November 2022 levels. It's worth noting that it was a year ago at these heights that the Bank of Japan (BoJ) initiated active currency interventions. This year, however, the BoJ has so far engaged only in verbal interventions, although quite actively: high-ranking Japanese officials are frequently making public comments.

In a recent interview with Yomiuri newspaper, BoJ Governor Kazuo Ueda stated that the central bank might abandon its negative interest rate policy if it concludes that sustainable inflation targets of 2% have been achieved. According to Ueda, by year-end, the regulator will have sufficient data to assess whether conditions are ripe for a policy shift.

This verbal intervention had an impact: markets responded with a strengthening of the yen. However, the "magic" was short-lived, and USD/JPY soon resumed its upward trajectory, closing the five-day trading period at 147.84.

Economists at Danske Bank believe that the global environment favours the Japanese yen and forecast a decline in USD/JPY to 130.00 over a 6-12 month horizon. "We believe that yields in the U.S. are peaking or close to it, which is the primary argument for our bearish stance on USD/JPY," they state. "Additionally, under current global economic conditions, where growth and inflation rates are declining, history suggests that these are favourable conditions for the Japanese yen." Danske Bank also anticipates that a recession could begin in the United States within the next two quarters, prompting the Federal Reserve to cut dollar interest rates. Until the Federal Reserve concludes its easing cycle, the Bank of Japan is expected to maintain its monetary policy unchanged. Therefore, any action from the BoJ before the second half of 2024 is unlikely.

As for short-term forecasts, Societe Generale does not rule out the possibility that following the FOMC decision by the Federal Reserve on September 20, USD/JPY could move closer to the 150.00 mark. As for the Bank of Japan's meeting on Friday, September 22, no surprises are expected, and it will likely involve another round of verbal intervention. Meanwhile, the vast majority of surveyed experts (80%) believe that if the Federal Reserve rate remains unchanged, USD/JPY has a high likelihood of correcting downward. Only 10% expect the pair to continue its upward trajectory, while another 10% take a neutral stance. All trend indicators and oscillators on the D1 time frame are coloured green, although 10% of these are signalling overbought conditions.

The nearest support levels are located in the 146.85-147.00 zone, followed by 145.90-146.10, 145.30, 144.50, 143.75-144.05, 142.90-143.05, 142.20, 141.40-141.75, 140.60-140.75, 138.95-139.05, and 137.25-137.50. The nearest resistance is at 147.95-148.00, followed by 148.45, 148.85-149.10, 150.00, and finally, the October 2022 high of 151.90.

We have already mentioned the Bank of Japan's meeting on September 22. No significant economic data concerning the state of the Japanese economy is scheduled for release in the coming week. Traders should be aware, however, that Monday, September 18, is a public holiday in Japan as the country observes Respect for the Aged Day.

CRYPTOCURRENCIES: Death Cross and Bitcoin Paradoxes

A "Death Cross," indicated by the intersection of the 50-day and 200-day moving averages, has appeared on bitcoin's daily chart. This pattern last emerged in mid-January 2022, and was followed by a nearly threefold decrease in bitcoin's price by November, which is cause for concern. Interestingly, a similar Death Cross was observed in July 2021, but did not result in a price decline, offering some reassurance.

The current week in the cryptocurrency market has been marked by high volatility, with trading volumes for the leading cryptocurrency reaching $15 billion. Such levels of activity are typically only seen around major macroeconomic events. In this case, they include the release of U.S. inflation data on Wednesday, September 13, and the upcoming Federal Reserve meeting on September 20.

The BTC/USD weekly chart showed the following trends. On Monday, September 11, the price of bitcoin fell below $25,000, despite a weakening dollar and rising stock indices. This decline was fueled by rumors that the controversial FTX exchange was planning to sell digital assets as part of a bankruptcy proceeding. On Tuesday, investors resumed buying at lower levels, pushing the coin's price above $26,500. On Thursday, following the ECB's decision on interest rates, bitcoin continued to strengthen its position, reaching a high of $26,838. This occurred even as the dollar was strengthening.

In fact, the recent price dynamics are quite paradoxical. Imagine BTC/USD as a set of scales. When one side becomes heavier, it goes down while the other goes up. Yet, we witnessed both sides simultaneously descending and ascending. According to some analysts, there was no fundamental rationale behind these bitcoin movements. With low liquidity and falling market capitalization, the asset was merely being "shifted" from one group of speculators to another.

Even the testimony of Gary Gensler, the Chairman of the U.S. Securities and Exchange Commission (SEC), before the U.S. Senate did not spook market participants. He stated that the overwhelming majority of cryptocurrencies fall under the jurisdiction of his agency. Consequently, all intermediaries in the market, exchanges, brokers, dealers, and clearing agencies, are required to register with the SEC.

Gensler compared the current state of the crypto industry to the "wild west" years of the early 20th century, when securities market legislation was still being developed. During those years, the agency took a series of strict enforcement actions to rein in the industry, and many cases ended up in court. Similar measures are needed today, not only to serve as a deterrent to businesses but also to protect investors, the SEC Chairman stated. (It's worth noting that, according to Ripple CEO Brad Garlinghouse, the SEC is to blame for the U.S. becoming one of the "worst places" to launch cryptocurrency projects.)

But aside from the SEC, there are other regulators, such as the Federal Reserve. It's clear that the Fed's decisions and forecasts, which will be announced on September 20, will impact the dynamics of risky assets, including cryptocurrencies. Mike McGlone, Senior Macro Strategist at Bloomberg Intelligence, has already warned investors that the near future for the crypto sector looks challenging. According to him, digital assets gained popularity during a period of near-zero interest rates. However, as monetary policy shifts, challenges could arise for the industry. McGlone pointed out that the yield on U.S. Treasury bonds is expected to reach 5.45% by November, based on futures contracts. In contrast, from 2011 to 2021, this yield was only about 0.6% annually, a period during which bitcoin and other digital assets saw significant growth. Therefore, a liquidity outflow from cryptocurrencies would not be surprising.

Once again, many analysts are offering positive medium- and long-term forecasts but negative short-term outlooks. Michael Van De Poppe, founder of venture firm Eight, predicts a final price correction for the leading cryptocurrency before an impending bull rally. According to him, if bears manage to breach the exponential moving average line, currently at $24,689, the coin could drop to as low as $23,000 in a worst-case scenario. Van De Poppe believes this upcoming correction represents the last chance to buy bitcoin at a low price.

Dan Gambardello, founder of Crypto Capital Venture, predicts that the next bull cycle could be the most impressive in the cryptocurrency market. However, he also reminds investors that the crypto market follows cycles and appears to be in an accumulation phase. Given this, Gambardello warns that there's a possibility that bitcoin's price could drop to $21,000 in the coming weeks. He attributes this potential decline to market manipulation by major players who may be driving down prices to accumulate coins in anticipation of the next bull run.

According to a popular expert known as CrypNuevo, the flagship cryptocurrency could soon reach a $27,000 mark. However, the analyst emphasized that this is likely to be a false move, and a dip down to around $24,000 should be expected thereafter. (It's worth noting that on August 17, the BTC price broke through the ascending trend line that started in December 2022 and settled below it, indicating a high risk of a prolonged bearish trend.)

As for the short-term prospects of the leading altcoin, they also appear to be less than optimistic. Analysts at Matrixport have warned that if ETH drops to $1,500, the path to $1,000 would be open: a level the experts consider justifiable based on their revenue projections for the Ethereum blockchain ecosystem. Matrixport notes that ETH is not a "super sound money" capable of resisting inflation, as the number of coins minted last week exceeded the amount burned by 4,000. This represents a deviation from the deflationary model that the blockchain adopted with the consensus algorithm transition from Proof of Work (PoW) to Proof of Stake (PoS).

Analyst Benjamin Cowen sets an even lower target. He claims that Ethereum is on the brink of "extreme volatility," potentially plummeting to a range between $800 and $400 by the end of the year. The reason remains the same: a possible decline in the profitability of blockchain platforms built on ETH smart contract technologies. According to Cowen, both ETH bulls and bears "have crashed and failed to execute their strategies," which will result in both parties locking in their losses by the end of 2023.

With three and a half months remaining until the end of the year, the current state of the market at the time of writing this review, Friday evening, September 15, shows ETH/USD trading around $1,620 and BTC/USD at $26,415. The total market capitalization of the crypto market stands at $1.052 trillion, up from $1.043 trillion a week ago. The leading cryptocurrency accounts for 48.34% of the market, while the primary altcoin makes up 18.84%. The Crypto Fear & Greed Index for bitcoin remains in the 'Fear' zone at 45 points, albeit inching closer to the 'Neutral' zone (it was 46 points a week ago).


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CryptoNews of the Week

– Bitcoin is grappling with the $27,000 level ahead of the Federal Reserve's interest rate decision, set to be announced on September 20. John Bollinger, the creator of the Bollinger Bands volatility indicator, believes that the leading crypto asset is poised for a breakout. The indicator employs standard deviation from a simple moving average to identify asset volatility and potential price ranges. Currently, the BTC/USD pair is forming daily candles that touch the upper band, which may suggest a reversal back to the central band or, conversely, an increase in volatility and an upward movement. The narrow Bollinger Bands on the charts indicate that the latter scenario is more likely. However, Bollinger himself is cautious in his commentary, stating that it's too early to draw any definitive conclusions.

– Many participants in the crypto community are confident that bitcoin will continue to grow. For instance, an analyst going by the pseudonym Yoddha believes that bitcoin has a chance to reach a new local high and target $50,000 by the end of the year. Following that, a correction to $30,000 could occur in early 2024, ahead of the halving event.
Crypto blogger Crypto Rover argues that troubles in the U.S. economy will serve as a catalyst for bitcoin's growth. Should a confident breakout occur around the $27,000 resistance level, a price movement to $32,000 could be anticipated.
Analyst DonAlt, who accurately predicted the cryptocurrency rally earlier this year, posits that bitcoin has a chance for another significant rally and could set a new high for 2023. "If we rise and overcome the resistance we're currently battling," he writes, "the target could be around $36,000. [...] I don’t rule out missing a good entry at $30,000 because if the price takes off, it may rise too quickly. [However] there are substantial reasons for a downward move as well. In the worst case, I'll take a minor hit if it dips into the $19,000 to $20,000 range."

– Prominent analyst known by the pseudonym PlanB has reaffirmed his forecast made earlier this year. He noted that the November 2022 low was the bottom for bitcoin, and its ascent will commence closer to the halving event. PlanB believes that the 2024 halving will propel the leading cryptocurrency to $66,000, and the subsequent bull market in 2025 could elevate its price beyond the $100,000 mark.

– According to CoinShares, investments in crypto funds decreased by $54 million last week, with bitcoin accounting for $45 million of the outflows and Ethereum making up $5 million. Investments in funds allowing for short positions on bitcoin decreased by $4 million. This marks the fifth consecutive week of capital outflows, which have occurred in 8 out of the last 9 weeks. The total outflows over the past two months amount to $455 million. Meanwhile, weekly trading volumes have increased to $1 billion, representing a 42% surge compared to the previous week.

– Chainalysis has compiled a ranking of 154 countries based on the proportion of citizens investing a significant share of their savings in crypto assets. India topped the list, followed by Nigeria and Vietnam. The top 20, in descending order, included the United States, Ukraine, the Philippines, Indonesia, Pakistan, Brazil, Thailand, China, Turkey, Russia, the United Kingdom, Argentina, Mexico, Bangladesh, Japan, Canada, and Morocco.
Analysts noted that the global cryptocurrency adoption index is far from the historical highs seen in 2021 and is showing a declining trend. Most countries occupying leading positions in the ranking are categorized by the World Bank as nations with below-average income per capita.

– A new wave of cryptocurrency scams impersonating Elon Musk has emerged on the social media platform TikTok, as reported by Bleeping Computer. According to the publication, videos are being uploaded hourly, featuring Musk purportedly giving interviews to major outlets and directing viewers to a website where a giveaway is taking place. Fraudsters have created hundreds of such websites, some of which pose as cryptocurrency exchanges.
Journalists from the publication tested one of the giveaways: they created an account on the platform and entered the promo code provided in the TikTok video. They were then promised a bitcoin deposit into their account. A balance of 0.34 BTC (~$9,000) allegedly appeared in their wallet. However, upon attempting to withdraw the funds, they were asked to activate their account by depositing 0.005 BTC (around $132).

– U.S. Senate Banking Committee Chairman Sherrod Brown has called for stricter disclosure requirements for companies in the digital assets industry. Brown sent letters to the U.S. Treasury Secretary, the Chairman of the Securities and Exchange Commission (SEC), and the head of the Commodity Futures Trading Commission (CFTC), emphasizing the significant financial losses suffered by cryptocurrency investors. According to his data, investors lost approximately $10 billion in 2022 due to fraud and hacking attacks.
Additionally, nine American lawmakers have endorsed a bill aimed at combating money laundering through cryptocurrencies, which has been reintroduced for consideration in the U.S. Congress.

– Analysts at Matrixport, a provider of cryptographic services, believe that the surge in applications for launching spot bitcoin ETFs is revitalizing the digital asset market and could act as a catalyst for the price growth of the flagship cryptocurrency. The company notes a substantial "potential buying pressure for bitcoin," particularly from investors interested in the offering of a spot exchange-traded fund. Against this backdrop, bitcoin's dominance level has risen to 50.2%, marking the highest level in a month and nearing the 26-month peak of 52%, reached at the end of June.

– According to data from Chainalysis, cybercriminals from North Korea stole $340 million in 2023, with a third of that amount coming from just two attacks. This figure is significantly less than the previous year's record of $1.65 billion stolen in 2022. However, the attack dynamics are causing concern among experts. In the last 10 days alone, the Lazarus Group has hacked the Stake platform for $40 million and the CoinEx exchange for $55 million.

– Investor and bestselling author of "Rich Dad Poor Dad," Robert Kiyosaki, believes that traditional fiat currency has no future, and the future of money lies in cryptocurrencies. According to the expert, the U.S. economy is on the brink of a serious crisis, and cryptocurrencies, especially bitcoin, offer investors a safe haven during these turbulent times. Kiyosaki forecasts that the price of bitcoin could soar to $120,000 next year, with the 2024 halving serving as a key catalyst for the rally.
The specialist also revealed that he personally owns 60 BTC, which he acquired at $6,000 per coin. As a result, his current profit from this transaction exceeds $1.25 million.

– Analyst Jason Pizzino believes that bitcoin's bullish market cycle began to form around January and this process is not yet complete, despite the recent price consolidation. According to the trader, bitcoin will confirm its bullish sentiment if it crosses a key level at $28,500.
"In this market, we've rarely seen levels below $25,000. I'm not saying it can't go down, but for the last six months, the weekly closes have been above these levels. So far, so good, but the bulls aren't here yet. They need to at least occasionally see closes above $26,550," states Pizzino. "The bulls still have a lot to accomplish. I'll start talking about them once we cross the white line again at the $28,500 level. That's one of the key levels for the beginning of bitcoin's upward movement, to then attempt to break through $32,000.".

– According to popular analyst and host of the DataDash channel Nicholas Merten, the crypto market may be in for another downturn, signalled by decreasing stablecoin liquidity. "It's a good indicator for identifying trends in the crypto market. For example, from April 2019 to July 2019, bitcoin rose from $3,500 to $12,000. During that same period, stablecoin liquidity increased by 119%. Then we see a period of consolidation where liquidity also remained stable. When bitcoin rose from $3,900 to $65,000 in 2021, stablecoin liquidity soared by 2,183%," shares the expert.
"Liquidity and price growth are linked. If liquidity is decreasing or consolidating, then the market is likely not going to grow. This holds true for both cryptocurrencies and financial markets. Market capitalization needs liquidity to grow, but we're seeing it constantly decrease, making a decline in cryptocurrency prices more likely," states Nicholas Merten.


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 Cryptocurrencies Forecast for September 25 - 29, 2023

EUR/USD: Verbal Interventions by the Federal Reserve Support the Dollar

In previous reviews, we extensively discussed the verbal interventions made by Japanese officials who aim to bolster the yen through their public statements. This time, similar actions have been taken by FOMC (Federal Open Market Committee) officials, led by the Chairman of the Federal Reserve, Jerome Powell. At their meeting on September 20th, the FOMC decided to maintain the interest rate at 5.50%. This was largely expected, as futures markets had indicated a 99% probability of such an outcome. However, in the subsequent press conference, Mr. Powell indicated that the battle against inflation is far from over, and that the 2.0% target may not be achieved until 2026. Therefore, another rate hike of 25 basis points is very much in the cards. According to the Fed Chairman, there is no recession on the horizon, and the U.S. economy is sufficiently robust to sustain such high borrowing costs for an extended period. Furthermore, it was revealed that 12 out of 19 FOMC members anticipate a rate hike to 5.75% within this year. According to the Committee's economic forecast, this rate level is expected to persist for quite some time. Specifically, the updated forecast suggests that the rate could only be lowered to 5.1% a year from now (as opposed to the previously stated 4.6%), and a decrease to 3.9% is expected in a two-year outlook (revised from 3.4%).

Market participants have mixed beliefs about these prospects, but the fact remains that the hawkish assertions from officials have bolstered the dollar, despite the absence of tangible actions. It's possible that the Federal Reserve has learned from the mistakes of their European Central Bank (ECB) counterparts, who have led market players to believe that the monetary tightening cycle in the Eurozone has concluded. As a reminder, ECB President Christine Lagarde made it clear that she considers the current interest rate level to be acceptable, while the Governor of the Bank of Greece, Yannis Stournaras, stated that, in his opinion, interest rates have peaked, and the next move will likely be a reduction. A similar sentiment: that the September act of monetary tightening was the last, was also expressed by Stournaras's colleague, Boris Vujčić, the Governor of the National Bank of Croatia.

As a result of the Federal Reserve's verbal intervention, the Dollar Index (DXY) soared from 104.35 to 105.37 within just a few hours, while EUR/USD declined to a level of 1.0616. Economists at Oversea-Chinese Banking Corporation (OCBC) believe that, given the Fed's decision to retain flexibility concerning another rate hike, it is not advisable to anticipate a dovish turn in the foreseeable future.

Danske Bank strategists opine that "the Fed was as hawkish as it could be without actually raising rates." However, they contend that "despite the ongoing strengthening of the dollar, there may be some upside potential for EUR/USD in the near term." Danske Bank further states, "We believe that peak rates, improvements in the manufacturing sector compared to the service sector, and/or a reduction in pessimism towards China could support EUR/USD over the next month. However, in the longer term, we maintain our strategic position favouring a decline in EUR/USD, expecting a breakthrough below 1.0300 within the next 12 months."

Data on U.S. business activity released on Friday, September 22, presented a mixed picture. The Manufacturing PMI index rose to 48.9, while the Services PMI declined to 50.2. Consequently, the Composite PMI remained above the 50.0 threshold but showed a slight dip, moving from 50.2 to 50.1.

Following the PMI release, EUR/USD concluded the week at 1.0645. Seventy percent of experts favoured further strengthening of the dollar, while 30% voted for an uptrend in the currency pair. In terms of technical analysis, not much has changed over the nearly completed week. All trend indicators and oscillators on the D1 timeframe are still unanimously supporting the American currency and are coloured red. However, 15% of them are signalling the pair's oversold condition. The nearest support levels for the pair lie in the 1.0620-1.0630 range, followed by 1.0490-1.0525, 1.0370, and 1.0255. Resistance levels will be encountered in the 1.0670-1.0700 zone, then at 1.0745-1.0770, 1.0800, 1.0865, 1.0895-1.0925, 1.0985, and 1.1045.

As for the upcoming week's events, Tuesday, September 26 will see the release of U.S. real estate market data, followed by durable goods orders in the U.S. on Wednesday. Thursday, September 28 promises to be a busy day. Preliminary inflation (CPI) data from Germany as well as U.S. GDP figures for Q2 will be disclosed. Additionally, the customary U.S. labour market statistics will be released, and the day will conclude with remarks from Federal Reserve Chairman Jerome Powell. On Friday, we can also expect a slew of significant macroeconomic data, including the Eurozone's preliminary Consumer Price Index (CPI) and information regarding personal consumption in the United States.

GBP/USD: BoE Withdraws Support for the Pound

The financial world doesn't revolve around the Federal Reserve's decisions alone. Last week, the Bank of England (BoE) also made its voice heard. On Thursday, September 21, the BoE's Monetary Policy Committee left the interest rate for the pound unchanged at 5.25%. While a similar decision by the Federal Reserve was expected, the BoE's move came as a surprise to market participants. They had anticipated a 25 basis point increase, which did not materialize. As a result, the strengthening dollar and weakening pound drove GBP/USD down to 1.2230.

The BoE's decision was likely influenced by encouraging inflation data for the United Kingdom published the day before. The annual Consumer Price Index (CPI) actually declined to 6.7%, compared to the previous 6.8% and a forecast of 7.1%. The core CPI also fell from 6.9% to 6.2%, against a forecast of 6.8%. Given such data, the decision to pause and not burden an already struggling economy appears reasonable. This rationale is further supported by the United Kingdom's preliminary Services Purchasing Managers' Index (PMI) for September, which hit a 32-month low at 47.2, compared to 49.5 in August and a forecast of 49.2. The Manufacturing PMI was also reported at 44.2, significantly below the critical level of 50.0.

According to economists at S&P Global Market Intelligence, these "disheartening PMI results suggest that a recession in the United Kingdom is becoming increasingly likely. [...] The sharp decline in production volumes indicated by the PMI data corresponds to a GDP contraction of more than 0.4% on a quarterly basis, and the broad-based downturn is gaining momentum with no immediate prospects for improvement.".

Analysts at one of the largest banks in the United States, Wells Fargo, believe that the BoE's decision signals a loss of rate-based support for the British pound. According to their forecast, the current rate of 5.25% will mark the peak of the cycle, followed by a gradual decline to 3.25% by the end of 2024. Consequently, they argue that "in this context, a movement of the pound to 1.2000 or lower is not out of the question."

Their counterparts at Scotiabank share a similar sentiment. New lows and strong bearish signals on the oscillator for short-term, medium-term, and long-term trends indicate an elevated risk of the pound dropping to 1.2100-1.2200.

Economists at Germany's Commerzbank do not rule out the possibility of a slight recovery for the pound if inflation outlooks significantly improve. They believe that the Bank of England has left the door open for another rate hike. The vote for maintaining the current rate was surprisingly close at 5:4, meaning four members of the Monetary Policy Committee voted in favour of a 25 basis point increase. This underscores the high level of uncertainty. Nevertheless, due to the weakness in the UK economy, the outlook for the pound remains bearish.

GBP/USD closed the past week at 1.2237. Analyst opinions on the pair's immediate future are evenly split: 50% expect further downward movement, while the other 50% anticipate a correction to the upside. All trend indicators and oscillators on the D1 chart are coloured in red; moreover, 40% of these oscillators are in the oversold zone, which is a strong signal for a potential trend reversal.

If the pair continues its downward trajectory, it will encounter support levels and zones at 1.2190-1.2210, 1.2085, 1.1960, and 1.1800. On the other hand, if the pair rises, it will face resistance at 1.2325, 1.2440-1.2450, 1.2510, 1.2550-1.2575, 1.2600-1.2615, 1.2690-1.2710, 1.2760, and 1.2800-1.2815.

In terms of economic events impacting the United Kingdom for the upcoming week, the highlight will be the release of the country's GDP data for Q2, scheduled for Friday, September 29.

continued below...

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USD/JPY: Lacklustre Meeting at the Bank of Japan

Following their counterparts at the Federal Reserve and the Bank of England, the Bank of Japan (BoJ) held its meeting on Friday, September 22. "It was a lacklustre meeting," commented economists at TD Securities. "All members unanimously voted to keep policy unchanged. The statement was largely similar to the one issued in July, and no changes were made to the forward guidance." The key interest rate remained at the negative level of -0.1%.

The subsequent press conference led by BoJ Governor Kazuo Ueda also disappointed yen bulls. Ueda did not speak against the weakening of the national currency; instead, he reiterated that the exchange rate should reflect fundamental indicators and remain stable. The central bank's head also noted that the regulator "could consider the possibility of ending yield curve control and altering the negative interest rate policy when we are confident that achieving the 2% inflation target is near."

Japan's Finance Minister Shunichi Suzuki's speech was also a typical form of verbal intervention for him. "We are closely monitoring currency exchange rates with a high sense of urgency and immediacy," the minister declared, "and we do not rule out any options for responding to excessive volatility." He added that last year's currency intervention had its intended effect but did not indicate whether similar steps could be expected in the near future.

Ten-year U.S. Treasury bonds and the USD/JPY currency pair are traditionally directly correlated. When the yield on the bonds rises, so does the dollar against the yen. This week, following hawkish statements from the Federal Reserve, rates on 10-year Treasuries soared to their highest peak since 2007. This propelled USD/JPY to a new high of 148.45. According to economists at TD Securities, considering the rise in U.S. yields, the pair could break above 150.00. Meanwhile, at the French bank Societe Generale, target levels of 149.20 and 150.30 are being cited.

The last note of the five-day trading session sounded at the 148.36 mark. A majority of surveyed experts (70%) agreed with the views of their colleagues at TD Securities and Societe Generale regarding the further rise of USD/JPY. A correction to the downside, and possibly a sharp drop due to currency interventions, is expected by 20% of analysts. The remaining 10% took a neutral stance. All 100% of trend indicators and oscillators on the D1 timeframe are coloured green, although 10% of the latter are signalling overbought conditions. The nearest support level is in the 146.85-147.00 zone, followed by 145.90-146.10, 145.30, 144.50, 143.75-144.05, 142.20, 140.60-140.75, 138.95-139.05, and 137.25-137.50. The nearest resistance is at 148.45, followed by 148.45, 148.85-149.20, 150.00, and finally, the October 2022 high of 151.90.

No significant economic data related to the state of the Japanese economy is scheduled for release in the upcoming week. However, traders may want to mark Friday, September 29 on their calendars, as consumer inflation data for the Tokyo region will be published on that day.

CRYPTOCURRENCIES: Battle for $27,000

On Monday, September 18, the price of the leading cryptocurrency began to soar, pulling the entire digital asset market upward. Interestingly, the reason behind this surge was not directly related to bitcoin, but rather to the U.S. dollar. Specifically, it was tied to the Federal Reserve's decisions regarding interest rates. High dollar rates limit the flow of investments into riskier assets, including cryptocurrencies, as large investors prefer stable returns. In this case, ahead of the upcoming Federal Reserve meeting, market participants were confident that the regulator would not only refrain from raising rates but would also keep them unchanged until year-end. Riding on these expectations, BTC/USD surged, reaching a peak of $27,467 on August 19, adding more than 10% since September 11.

However, although the rate did indeed remain unchanged, it became clear following the meeting that the fight against inflation would continue. Therefore, any hopes of a shift away from the Fed's hawkish stance should be set aside for now. As a result, the price of bitcoin reversed course. After breaking through the support zone at $27,000, it returned to its starting positions.

Despite the recent pullback, many in the crypto community remain confident that the digital gold will continue to rise. For instance, an analyst going by the alias Yoddha believes that bitcoin has a chance to refresh its local high in the short term and reach $50,000 by year-end. After which, he suggests, a correction to $30,000 may occur in early 2024, ahead of the halving event. Blogger Crypto Rover also anticipates that troubles in the U.S. economy will fuel BTC's growth. If the pair manages to firmly establish itself above $27,000, he expects the price to move towards $32,000.

Analyst DonAlt is of the opinion that bitcoin stands a chance to stage a new impressive rally and update its 2023 high. "If we rise and overcome the resistance we are currently battling," he writes, "the target, I believe, could be $36,000. [...] I won't rule out missing a good entry at $30,000 because if the price takes off, it may rise too quickly. [But] we have enough compelling reasons to also move downward. In the worst case, I'll take a minor hit if it plunges into the $19,000 to $20,000 range.".

Trader and analyst Jason Pizzino believes that bitcoin's bullish market cycle began forming around January, and this process is still not complete despite the recent price consolidation. According to the expert, bitcoin will confirm its bullish sentiment if it crosses a key level at $28,500. "This market has seldom seen sub-$25,000 levels. I'm not saying it can't go down, but for six months now, the weekly closings have been above these levels. So far, so good, but we're not in bull territory yet. Bulls need to see closings above $26,550 at least occasionally," states Pizzino. "Bulls still have much to do. I'll start talking about them once we cross the white line at the $28,500 level again. This is one of the key levels for bitcoin to start moving upwards and then try to break $32,000.".

John Bollinger, the creator of the Bollinger Bands volatility indicator, does not rule out the possibility that the leading crypto asset is preparing for a breakout. The indicator uses the standard deviation from the simple moving average to determine volatility and potential price ranges for an asset. Currently, BTC/USD is forming daily candles that touch the upper band. This could indicate a reversal back to the central band or, conversely, an increase in volatility and upward movement. Narrow Bollinger Bands on the charts suggest that the latter scenario is more likely. However, Bollinger himself comments cautiously, believing that it is still too early to draw definitive conclusions.

PlanB, the well-known creator of the S2FX model, has reaffirmed his forecast made earlier this year. He noted that the November 2022 low was the bottom for bitcoin, and its ascent will begin closer to the halving event. PlanB believes that the 2024 halving will drive the leading cryptocurrency up to $66,000, and the subsequent bull market in 2025 could push its price above the $100,000 mark.

Investor and best-selling author of "Rich Dad Poor Dad," Robert Kiyosaki, has high hopes for the halving event as well. According to the expert, the U.S. economy is on the verge of a serious crisis, and cryptocurrencies, particularly bitcoin, offer investors a safe haven during these turbulent times. Kiyosaki predicts that the price of bitcoin could soar to $120,000 next year, and the 2024 halving will serve as a key catalyst for the rally.

In conclusion, to balance out the optimistic forecasts mentioned earlier, let's introduce some pessimism. According to popular analyst and host of the DataDash channel, Nicholas Merten, the crypto market could experience another downturn. He cites the declining liquidity of stablecoins as an indicator. "It's a good metric for identifying trends in the cryptocurrency market. For instance, from April 2019 to July 2019, bitcoin rose from $3,500 to $12,000. During the same period, the liquidity of stablecoins increased by 119%. Then we see a period of consolidation where liquidity also remained at a constant level. When bitcoin rose from $3,900 to $65,000 in 2021, the liquidity of stablecoins surged by 2,183%," the expert shares his observations.

"Liquidity and price growth are interconnected. If liquidity is declining or consolidating, the market is likely not going to grow. This is true for both cryptocurrencies and financial markets. For market capitalization to grow, you need liquidity, but what we are seeing is a constant decline in liquidity, which makes a price drop for cryptocurrencies more probable," Nicholas Merten states.

As of the time of writing this review, Friday evening, September 22, BTC/USD is trading around $26,525. The overall market capitalization of the crypto market has remained virtually unchanged, standing at $1.053 trillion (compared to $1.052 trillion a week ago). The Bitcoin Crypto Fear & Greed Index has dropped by 2 points, moving from 45 to 43, and remains in 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

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[StanNordFX]

September 2023 Results: South Asian Traders Lead at NordFX

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

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

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

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

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

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

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

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


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

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

https://nordfx.com/

[StanNordFX]

Forex and Cryptocurrencies Forecast for October 02 - 06, 2023

EUR/USD: Correction is Not a Trend Reversal Yet

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

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

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

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

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

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

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

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

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

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

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

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

GBP/USD: No Drivers for Pound Growth

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

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

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

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

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

continued below...

[StanNordFX]

USD/JPY: Awaiting the Breach of 150.00

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

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

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

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

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

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

CRYPTOCURRENCIES: Hopes on Halving and Halloween

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


NordFX Analytical Group


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

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[StanNordFX]

CryptoNews of the Week

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

https://nordfx.com/

[StanNordFX]

Forex and Cryptocurrencies Forecast for October 09 - 13, 2023

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

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

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

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

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

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

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

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

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

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

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

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

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

GBP/USD: Worst Currency of September

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

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

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

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

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

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

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USD/JPY: Was There Really an Intervention?

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

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

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

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

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

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

CRYPTOCURRENCIES: Uptober's Target is $30,000

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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CryptoNews of the Week

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

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

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

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

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

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

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

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

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


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

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Forex and Cryptocurrencies Forecast for October 16 - 20, 2023

EUR/USD: Inflation Drives Trends

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

continued below...

[StanNordFX]

USD/JPY: Coming Full Circle

What's going on in Japan? Well, the situation remains largely as usual. After plummeting to a level of 147.24 on October 3, USD/JPY resumed its upward trajectory, marking the week's high at 149.82, just shy of the key 150.00 level. It has been noted multiple times that the divergence in monetary policies between the U.S. Federal Reserve and the Bank of Japan (BoJ) will consistently push the pair upwards. Any currency interventions by Japanese financial authorities could only result in a temporary strengthening of the yen.

According to the Bank of Japan, producer inflation has been slowing for the ninth consecutive month. Producer prices, which rose by 3.3% in August with a September forecast of 2.3%, actually increased by a minimal 2.0% year-over-year, the lowest since March 2021. However, with regard to consumer inflation, the BoJ is considering raising the target for the core Consumer Price Index (CPI) for the 2023/24 fiscal year from 2.5% to around 3%. This was reported on Tuesday, October 10, by the Kyodo news agency, citing informed sources.

Evaluating the state of Japan's economy and its monetary policy, S&P Global rating agency believes that "interest rates in Japan will start rising from 2024." However, the agency's view contradicts statements made by Bank of Japan (BoJ) officials. For instance, BoJ board member Asahi Noguchi stated on Thursday, October 13th, that "an interest rate hike would be triggered by achieving the target inflation rate of 2%," and that this target is still far from being reached. According to him, "there's no need to rush," and "there's no urgent need to adjust the Yield Curve Control (YCC) policy." From Noguchi's statements, one could infer that the Japanese regulator would not even be contemplating the topic of interest rates, keeping them at a negative level of -0.1%, were it not for the monetary policy of the Federal Reserve. Noguchi stated that rate hikes "don't necessarily reflect inflation expectations in Japan, but rather U.S. interest rates.".

USD/JPY ended the trading week at the level of 149.53. While the vast majority of experts predict a weakening of the dollar against the euro and pound, only 25% of those surveyed agreed with this view when it comes to the yen. A significant 75% forecast further weakening of the yen and strengthening of the U.S. currency. All 100% of trend indicators remain in the green. Among oscillators, slightly fewer, 80%, stay green, 10% have turned red, and the remaining 10% are in a neutral gray. The nearest support level is located at 149.15, followed by 148.15-148.40, 146.85-147.25, 145.90-146.10, 145.30, 144.45, 143.75-144.05, 142.20, 140.60-140.75, 138.95-139.05, and 137.25-137.50. The closest resistance is at 149.70-150.15, then 150.40, 151.90 (the October 2022 high), and 153.15.

No significant economic data pertaining to the state of the Japanese economy is scheduled for release in the upcoming week.

CRYPTOCURRENCIES: Where Will Bitcoin Fly Next?

Last week, bitcoin began charting its own course, detaching itself from its "big brothers" and disregarding both direct and inverse correlations. Despite rising stock indices and a weakening dollar, the leading cryptocurrency fell and moved into a sideways trend when the dollar started to gain strength.

BTC/USD has been trading within a range of $24,300-$31,300 since mid-March. Over the last eight weeks, its upper boundary has dipped even further, settling into a $28,100-$28,500 zone. As this range has narrowed, short-term speculators and retail traders have become less active, causing the realized capitalization indicator to hover near zero. Long-term holders, also known as "hodlers," are adding to their BTC wallets rather than depleting them, purchasing around 50,000 coins per month.

Historically, such market stagnation has preceded significant price movements. Many investors are now speculating that triggers for another bull rally could include the upcoming 2024 halving event and the potential approval of spot bitcoin ETFs. MicroStrategy, an American technology company, has accumulated 158,245 BTC, which is worth approximately $4.24 billion. In addition, investment giant BlackRock submitted an application for a spot bitcoin ETF in June and acquired $400 million worth of shares in leading miners.

The Bull Run could potentially commence right now; however, Bloomberg strategist Mike McGlone believes that stringent U.S. policies, particularly those by the Securities and Exchange Commission (SEC), are the main obstacles hindering bitcoin's growth. ChatGPT CEO Sam Altman also shares disappointment over the U.S. government's approach towards the crypto industry. "The war on cryptocurrencies seems endless, and the authorities appear keen on taking everything under their control," stated the Artificial Intelligence entrepreneur. Altman, along with U.S. presidential candidate Robert F. Kennedy Jr., thinks that the government's hostility towards independent digital assets is partly due to their desire to introduce their own Central Bank Digital Currency (CBDC). Should this wish materialize, it would provide the state with another surveillance tool over its citizens.

Another pressure point on virtual assets comes from the monetary policy of the U.S. Federal Reserve. Analyst Nicholas Merten opines that bitcoin could take a significant hit due to the Fed's actions, potentially leading to a prolonged economic downturn in the United States. If commodity prices, such as oil, natural gas, and uranium, start to stabilize or decline, this could signal an impending short-term recession. In such a scenario, Merten believes, stock prices could drop by approximately 33%, similar to the correction that occurred in October 2022. Bitcoin, in response, would likely plummet to a range of $15,000-$17,000.

The analyst is convinced that a sustained bull trend in the market is unlikely until the Federal Reserve begins to inject more liquidity into the economy. "Bitcoin thrives when there is an increase in the money supply and when investors are risk tolerant. At present, neither of these conditions is met," explained Nicholas Merten.

The current dynamics of bitcoin seem to align with what was observed before and after the halvings in 2016 and 2020. Following its summer peak, the coin is experiencing a downward correction; however, this isn't surprising. Typically, around 200 days before a halving, the leading cryptocurrency could lose up to 60-65% of its value but then would resume its growth trajectory.

Many experts predict a significant surge in bitcoin prices in 2024. Investor optimism is also fuelled by the current price trend of this digital gold: despite the pullback from its summer high, investments in bitcoin have yielded more than 60% returns since the beginning of the year.

JP Morgan experts forecast a price rise to $45,000 in 2024, while Standard Chartered predicts it will reach $100,000. Author and investor Robert Kiyosaki and cryptographer Adam Back also target the $100,000 mark. Fundstrat Research founder Tom Lee envisions bitcoin at $180,000, while venture capitalist Tim Draper predicts a $250,000 valuation. Billionaire Mike Novogratz and ARK Invest CEO Cathy Wood project the coin's rise to $500,000 and $1 million, respectively, for the next year.

Former BitMEX CEO Arthur Hayes has set a "modest" target of $70,000 for bitcoin next year. As for the $750,000 to $1 million range, Hayes believes BTC/USD will only reach that level by 2026. He justifies his forecast based on the asset's limited supply, the prospect of spot bitcoin ETF approvals, and geopolitical uncertainty. "I think this will be the greatest financial markets boom in human history. Bitcoin will soar to absurd levels, Nasdaq will rise to absurd levels, and the S&P 500 will climb to absurd levels," stated Hayes.

Charlie Munger, Warren Buffett's partner and the Vice Chairman of American holding company Berkshire Hathaway, has predicted a dire future for digital assets. In his view, the majority of investments in these assets will eventually become worthless. "Don't get me started on bitcoin. It's the dumbest investment I've ever seen," the 99-year-old investor expressed during the Zoomtopia online conference.

As of the time of writing this review, on the evening of Friday, October 13, the total market capitalization of the crypto market stands at $1.046 trillion, down from $1.096 trillion a week ago. bitcoin's share in the overall market has increased from 39.18% at the beginning of the year to 49.92%. Analyst Benjamin Cowen believes the crypto market is entering "one of its most brutal" phases. According to the expert, bitcoin's dominance is rising amid falling altcoin prices and decreased investor interest in this asset class. Utilizing Fibonacci retracement levels, Cowen anticipates that this dominance figure will likely peak at 60%, as it did in the last cycle, but will probably not rise to 65% or 70% due to the stablecoin market. BTC/USD closed at $27,075 on October 13th. The Crypto Fear & Greed Index for bitcoin has dropped from 50 to 44 points over the week, moving back from the Neutral zone to the Fear zone.


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

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CryptoNews of the Week

– On October 16, the bitcoin exchange rate soared to $30,102 before plummeting to $27,728. Following BTC, other digital assets also experienced a sharp increase in price, only to subsequently decline steeply. According to Coinglass data, the surge in prices led to the liquidation of over 33,000 trading positions, resulting in trader losses of $154 million. Of this amount, $92.0 million was attributed to bitcoin, $22.7 million to Ethereum, and $4.6 million to Solana.
The spike in prices occurred after Cointelegraph published a report stating that the U.S. Securities and Exchange Commission (SEC) had approved BlackRock's application for a spot bitcoin exchange-traded fund (ETF). It later emerged that the news was false. Cointelegraph's editorial team apologized for disseminating inaccurate information. The publication explained that one of its staff members had seen the news about the approval of the BTC ETF on Platform X (formerly Twitter) and decided to publish it as quickly as possible, without conducting fact-checking or obtaining approval from the supervising editor. Representatives from the SEC also emphasized that "the SEC itself is the best source of information about the SEC," and advised users to "exercise caution regarding what they read online."
In response, BlackRock CEO Larry Fink clarified that he could not comment on the status of the application's review. The executive also believes that the bitcoin rally was not so much driven by rumours of the approval of a spot BTC ETF, but rather by people's desire to utilize quality assets. He included bitcoin, gold, and Treasury bonds in this category of quality assets.

– Opinions among crypto industry representatives are divided regarding what lies ahead for BTC. For example, trader, analyst, and founder of venture firm Eight, Michael Van De Poppe, believes that the false report will not hinder the cryptocurrency's growth. According to his observations, the coin has already entered a phase of positive movement. "The trend is already upward. The lows have been set for us to buy [cryptocurrency]. Sooner or later, a bitcoin ETF will enter the market; it just won't happen today," says the head of Eight.
The authors of the analytical channel Root on Platform X (formerly known as Twitter) also think that the false news did not exert significant pressure on the cryptocurrency. In their view, the coin's pump, despite the subsequent correction, has actually helped improve its position. However, there is also a substantial portion of the crypto community that holds a negative outlook, predicting that the coin could drop to the $19,000-$23,000 range.

– The founder of SkyBridge Capital and former White House Communications Director, Anthony Scaramucci, believes that the first cryptocurrency is "in many ways more valuable than gold" and could "easily" reach a market capitalization of $15 trillion. According to his calculations, at such a capitalization, the price of bitcoin would be approximately $700,000.
Scaramucci asserts that the current financial system is "broken." "Strange things could happen when you see countries that are hostile to the U.S. trading in bitcoin or other assets, distancing themselves from the dollar because the United States has used its currency to assert its personal geopolitical will," he said. However, Scaramucci clarified that bitcoin is unlikely to become the "universal standard of money," as some crypto maximalists desire.

– Italian car manufacturer Ferrari has added digital assets as a payment method in the U.S. According to Reuters, this feature will be extended to Europe in Q1 2024. Initially, the company is accepting bitcoin, Ethereum, and the stablecoin USDC.
Ferrari management stated that the decision was made in response to customer requests. "Some of these are young investors who have built their fortunes on digital assets. Others are more traditional investors looking to diversify their portfolios," company representatives explained.

– The market capitalization of the cryptocurrency sector could increase by $1 trillion if spot bitcoin ETFs are approved in the U.S., according to analysts at CryptoQuant. They believe that the chances of such an outcome have significantly increased following the legal victories of Ripple and Grayscale against the SEC. It should be noted that the deadline for the SEC's decisions on applications from BlackRock and other companies is set for March 2024.
Experts highlight that a positive decision would lead to a new wave of adoption of this asset class by institutional investors. Approximately $155 billion could flow into the bitcoin market, raising its capitalization from the current $543 billion to nearly $700 billion. In this scenario, the price of bitcoin could reach $100,000 or even $200,000, according to a study conducted by Finbold.
Finbold also consulted PricePredictions' artificial intelligence for forecasts. According to the AI calculations, after the approval of a bitcoin ETF, the flagship crypto asset could quickly reach the $100,000 mark. PricePredictions emphasized that additional factors such as the general acceptance of bitcoin, actions of institutional investors, regulatory activity, and overall macroeconomic conditions will play a significant role.
As for the short-term forecast, the AI predicts that by November 1, 2023, the coin will reach a value of approximately $29,576, which is about 4% higher than its current price.

– According to data from the Wall Street Journal, the U.S. Government owns approximately 200,000 bitcoins, valued at over $5.65 billion. These assets were primarily confiscated from cybercriminals and participants in illegal darknet activities. An interesting fact is that, according to research by specialists at Morgan Creek Capital, the U.S. Government held only 69,640 BTC last year. This significant increase indicates that the U.S. has substantially ramped up its efforts to curb criminal activity and the illicit use of cryptocurrencies.

– Edward Snowden, a former employee of the CIA and the National Security Agency (NSA) of the United States, is known for having stolen 1.7 million confidential files and leaking this classified information to The Guardian and The Washington Post newspapers in 2013. The data pertained to global mass surveillance conducted by American intelligence agencies. Following this, he fled and found asylum in Russia. According to Snowden, he used bitcoins 10 years ago to pay for the servers he used to leak the secret documents.
Now, speaking at a conference in Amsterdam, the former spy has stated that bitcoin lacks real anonymity, allowing governments to easily track the individuals behind certain transactions. Snowden spoke about government and regulatory bodies attempting to control bitcoin and the entire industry, noting that the creation of a bitcoin ETF is actually another attempt to "tame" BTC.


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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[StanNordFX]

Forex and Cryptocurrencies Forecast for October 23 - 27, 2023

EUR/USD: No Interest Rate Hikes from the Fed and ECB in the Near Future?

Starting from the last days of September, the U.S. Dollar Index (DXY) has been trading within a sideways channel. Macroeconomic data released last week did not provide a clear advantage to either the U.S. or the European currency. On Tuesday, October 17, U.S. retail sales data was published, showing a monthly increase of 0.7%. Although this figure was lower than the previous 0.8%, it substantially exceeded the market's average forecast of 0.3%. On the same day, the ZEW Economic Sentiment Index for the Eurozone was also released, outperforming expectations with a reading of 2.3, considerably better than the forecast of -8, and marking a full rebound from the previous negative figure of -8.9.

On Wednesday, October 18, revised data on consumer inflation in the Eurozone was released. The September Consumer Price Index (CPI) matched the forecast and was ultimately assessed at 4.3% year-on-year (YoY), compared to 5.2% the previous month. On Thursday, October 19, the number of initial jobless claims in the U.S. came in at 198K, surpassing expectations and falling below both the prior figure of 211K and the market forecast of 212K.

Taking a broader view of the U.S. economy, we generally observe strong employment and GDP growth rates, a deceleration in inflation, increased consumer activity, and a real estate market that remains relatively stable despite rising mortgage rates. All these factors point to the appropriateness of another rate hike, which should, in turn, push the DXY higher. However, based on statements from Federal Reserve officials, it seems unlikely that a rate hike will occur at the upcoming Federal Open Market Committee (FOMC) meeting on November 1.

Specifically, Patrick Harker, President of the Federal Reserve Bank of Philadelphia, stated that economic pressure should not be created by increasing borrowing costs. Echoing Harker's sentiments, Lorie Logan, President of the Federal Reserve Bank of Dallas, noted that although "desired progress is being observed in the fight against inflation, it is still too high." She added that "the economy continues to demonstrate strong performance, and labour markets remain tight," yet "the Fed still has some time to observe the economy and markets before making a decision on monetary policy.".

Jerome Powell's speech at the New York Economic Club on Thursday, November 19, did not meet the expectations of dollar hawks, leading EUR/USD to rise above 1.0615. According to economists at Rabobank, the Federal Reserve Chairman attempted to keep the door open for various options while maintaining a neutral stance. Rabobank believes that U.S. economic indicators are likely to sustain the possibility for further rate hikes. However, with less than a week and a half remaining until the next FOMC meeting, the current "neutral dynamics provide no basis to expect a rate hike on November 1st." Nonetheless, they note that "this option remains open for the December meeting." Despite that, economists at the bank still expect "the bond market to do the Fed's job, making further rate hikes redundant. However, if economic data remain strong, the FOMC will eventually have to resume the rate hike cycle at some point."

Analysts at the Netherlands' largest banking group, ING, opined that while the Fed Chairman's comments were perceived as dovish and led to some weakening of the U.S. currency, the dollar appears more inclined to rise than to further fall in the short term. Economists at Germany's Commerzbank characterized the mood among Fed officials as cautiously hawkish rather than dovish. They also see little chance for another rate hike in the current climate. "Indeed, it seems that the Fed has reached its peak, although Jerome Powell did not rule out the possibility of another rate hike depending on incoming data. However, monetary policy currently plays a secondary role for the market. Geopolitical risks have taken the forefront, and the dollar continues to be in demand as a safe haven," they commented. The bank's experts forecast that although it may be challenging for the dollar to continue rising in such a scenario, high oil prices will provide support.

At France's Societe Generale, it is believed that "the narrative about a higher rate over a longer term, both from the Fed and the ECB, points to a gradual decline of the euro." According to the bank's experts, "data from the Eurozone is not brilliant, and the divergence between growth forecasts in the U.S. and the Eurozone suggests that a slow movement toward parity [1.000], but not beyond it, appears likely.".

As of the time of writing this review, EUR/USD has evidently not reached parity and concluded the past week at 1.0593. Expert opinions on its near-term future are divided as follows: 50% voted for a stronger dollar, 35% foresee the pair trending upward, and 15% have adopted a neutral stance.

Turning to technical analysis, the outlook is also mixed. Among the trend indicators on the D1 chart, the ratio stands at 1:1: 50% in favour of reds (bearish) and 50% on the side of greens (bullish). Oscillators show 40% siding with the European currency, a mere 15% in favour of the dollar, with the remaining 45% taking a neutral position. The immediate support levels for the pair are situated around 1.0550, followed by 1.0485-1.0510, 1.0450, 1.0375, 1.0255, 1.0130, and 1.0000. Bulls will encounter resistance in the 1.0600-1.0620 zone, then at 1.0670-1.0700, 1.0740-1.0770, 1.0800, 1.0865, and 1.0945-1.0975.

The upcoming week promises to be highly eventful. On Tuesday, October 24, a slew of Purchasing Managers' Index (PMI) data will be released across various sectors of the German, Eurozone, and U.S. economies. The following day, October 25, will bring U.S. housing market data, along with remarks from Federal Reserve Chair Jerome Powell. On Thursday, the European Central Bank (ECB) will hold its meeting where Governing Council members are expected to make a decision on the euro interest rate, which according to consensus forecasts, is likely to remain at its current level of 4.50%. Importantly, not only the decision itself but also subsequent statements and comments from the ECB leadership will be of significance. On the same day, the U.S. will release durable goods orders data as well as preliminary GDP figures for Q3 of the current year. The workweek will conclude on October 27 with the release of U.S. personal consumption expenditure data.

GBP/USD: Will the BoE Rate Remain Unchanged as Well?

At the beginning of this month, specifically on October 4, GBP/USD trended upwards, moving from a level of 1.2037 to reach 1.2337 within a week. However, resistance around the 1.2320 zone and a trendline clearly visible on the D1 and W1 timeframes halted the bullish momentum, sending the pair back downwards. As a result, the British currency has lost approximately 7.5% against the dollar since mid-July. The driving factors behind this are not merely technical analysis but also the prevailing economic and geopolitical landscape.

Amid tensions in the Middle East and the ongoing escalation of armed conflict between Israel and Hamas, investors are turning back to the dollar, viewing it as a safe-haven currency. Naturally, the rising cost of energy commodities is also affecting prices in the United Kingdom, which will undoubtedly put pressure on the country's economy and its currency, often considered by investors to be a riskier asset.

It's worth noting that at the beginning of the year, experts predicted that the United Kingdom would slide into a recession. So far, those forecasts have not materialized, although the economy is teetering on the edge, with the current annual GDP growth rate at 0.6% (compared to 2.1% in the United States). The situation could deteriorate by year-end, as high energy prices amid winter cold spells could further fuel inflation. It's already observable that the country's inflation slowdown has stalled, and the Consumer Price Index (CPI) has been hovering around 6.8-6.7% year-on-year for the third consecutive month.

In such a scenario, the Bank of England (BoE) might very well opt to focus on supporting the economy over combating inflation. Although some representatives of the central bank have stated that the issue of raising interest rates remains open, the recent interview given by BoE Governor Andrew Bailey to the Belfast Telegraph appeared rather dovish, neutralizing the effect of Jerome Powell's similarly dovish comments. Mr. Bailey indicated that he expects "a noticeable decrease" in inflation in the coming month. "Looking at September's inflation data, we can say that core inflation has dropped a bit compared to our expectations, which is quite encouraging," added Bailey, sending GBP/USD into a minor knockdown.

Pressure on the pound was also exerted by the UK retail sales data released on Friday, October 20. According to the Office for National Statistics, retail sales declined by -0.9% month-on-month in September, significantly below the -0.1% forecast and the previous 0.4% value.

At the moment, the situation for the pound remains complicated. It's unclear how the BoE will react to the latest data. Most likely, until the upcoming meeting on November 2, the central bank will adopt a "close your eyes and hope for the best" approach. Meanwhile, analysts from Bank of America, Deutsche Bank, Goldman Sachs, and RBC are in agreement that the rate hike cycle in the United Kingdom has likely come to an end. At the very least, the probability of a rate hike in the upcoming BoE meeting is estimated to be below 50%.

The weekly low for GBP/USD was recorded at 1.2089, while the week closed at 1.2163. When polled about the near-term future of the pair, 40% of analysts voted for its rise. The majority (60%), however, believe that the pair will continue its move toward the 1.2000 target. On the D1 timeframe, trend indicators are unanimously (100%) pointing to a decline, displayed in red. Oscillators are less decisive: 65% indicate a decline, 15% point to a rise, and the remaining 20% are neutral.

In terms of support levels and zones, if the pair continues to move southward, it will encounter 1.2085-1.2130, 1.2040, 1.1960, and 1.1800. On the flip side, if the pair rises, it will face resistance at 1.2190-1.2215, 1.2270, 1.2330, 1.2450, 1.2510, 1.2550-1.2575, and 1.2690-1.2710 levels.

Tuesday, October 24 is noteworthy in the economic calendar for the upcoming week. Data on the UK labor market and business activity will be released on this day.

continued below...

[StanNordFX]

USD/JPY: Amidst Prolonged Uncertainty

Many times have we heard these reassuring statements from Japanese officials about everything and... nothing! Let's take, for example, some quotes from Friday, October 20. First, from Bank of Japan (BoJ) Governor Kazuo Ueda: "The Japanese economy is recovering at a moderate pace. […] Uncertainty regarding Japan's economy is very high. […] Inflation rates will likely slow down and then pick up again. [But] overall, Japan's financial system remains stable."

Next, from Finance Minister Shunichi Suzuki: "It is important for currencies to move stably and reflect fundamental indicators. […] Exchange rates are influenced by various factors. [I] will not comment on currency levels in the Forex market. [And] I will not comment on our response to the currency market situation."

And, as the cherry on top, a quote from the Bank of Japan's latest report, also published on October 20: "Although the country's financial system is generally stable, the 'stress period may be further prolonged due to the ongoing tightening of central banks' monetary policy and concerns about slowing economic growth rates in foreign countries." In summary, Japan, on one hand, is doing well, but on the other, is experiencing stress caused by other central banks that are tightening their monetary policy and raising interest rates.

As experts note, the BoJ continues to maintain an ultra-accommodative monetary policy, persistently ignoring the risks of rising inflationary pressures in the country. On Tuesday, October 17, Bloomberg reported that the Bank of Japan's new core CPI forecast for the 2023 fiscal year is likely to approach 3.0%, compared to 2.5% previously.

The fact that interest rates in Japan remain very low due to yield curve control policy should lead to a further decline in the yen against the dollar. This decline could cease under two conditions: if the dollar interest rates decline or if the Bank of Japan abandons its YCC (Yield Curve Control) policy. Both could potentially begin to happen as early as mid-2024, but certainly not now. (Although one should not forget the possibility of currency interventions by the Japanese Ministry of Finance).

According to strategists at Societe Generale, "if we see further increases in yields in the U.S. and no more than a change in the inflation forecast by the Bank of Japan at its meeting on October 31, then another surge [in USD/JPY] above 150.00 is practically inevitable." "The yen has every chance of becoming one of the most successful currencies in 2024," Societe Generale believes, "but predicting when USD/JPY will peak is as easy or difficult as determining when the yield on 10-year U.S. Treasury bonds will peak."

Amid a prolonged atmosphere of uncertainty, USD/JPY ended the previous trading week at 149.85. When it comes to the pair's short-term outlook, a mere 15% of experts foresee a renewed push towards the 150.00 mark. An additional 20% predict a downward correction, while the majority, 65%, remain noncommittal. On the D1 timeframe, all trend indicators are unanimously signalling 'buy' with a green coloration. Likewise, 100% of oscillators are green, although 40% indicate that the pair may be overbought. Immediate support can be found in the 149.60 area, followed by zones at 148.30-148.65, 146.85-147.25, 145.90-146.10, 145.30, 144.45, 143.75-144.05, and finally 142.20. On the upside, resistance is present at 150.00-150.15, then at 150.40, followed by the October 2022 high of 151.90, and 153.15.

No significant economic data concerning the state of the Japanese economy is scheduled for release in the upcoming week. The only noteworthy item is the publication of the Tokyo Consumer Price Index on Friday, October 27.

CRYPTOCURRENCIES: The Real Market Surge Triggered by Fake News About BTC-ETF

Undoubtedly, the most significant day of the past week was Monday, October 16. On this day, the bitcoin price soared to $30,102 before plummeting to $27,728. Following BTC, other digital assets also saw a sharp price increase, followed by a steep decline. According to Coinglass data, the price surge led to the liquidation of over 33,000 trading positions, with traders incurring losses totalling $154 million. Of this amount, bitcoin accounted for $92.0 million in losses, Ethereum for $22.7 million, and Solana for $4.6 million.

The surge in quotations occurred after Cointelegraph published news that the U.S. Securities and Exchange Commission (SEC) had approved BlackRock's application for a spot bitcoin exchange-traded fund (ETF). It was later revealed that the news was fake. Cointelegraph's editorial team apologized for publishing the false news. The publication clarified that one of their staff had seen the news about the SEC's approval of the BTC-ETF on Platform X (previously Twitter) and decided to publish it as quickly as possible without fact-checking or obtaining editorial approval. Representatives from the Commission also noted that "the best source of information about the SEC is the SEC itself" and advised users to "be cautious about what they read online.".

To understand this issue more deeply, it's helpful to look back to its origins in 2021. That year, a series of companies submitted applications to create such funds. Three years ago, Bitwise Chief Investment Officer Matt Hougan explained that cryptocurrency futures ETFs are not particularly suitable for long-term investors due to high ancillary costs. It is only when spot bitcoin exchange-traded funds become available that institutional investors will begin large-scale capital inflows.

For clarification: A spot BTC-ETF is a fund whose shares are traded on an exchange, and which tracks the market, or spot price, of bitcoin. The primary idea behind such ETFs is to give institutional investors access to bitcoin trading without physically owning the asset, through a regulated and financially familiar product.

All applications submitted to the SEC in 2021 were rejected, leading to a hiatus that was interrupted on June 15, 2023. On that day, the situation dramatically changed: the financial world was abuzz with the news that investment giant BlackRock had submitted its application for a spot bitcoin trust. In an interview with Bloomberg, Hougan heralded the dawn of a new era. He stated, "We now have BlackRock raising the flag and declaring that bitcoin matters: that it is an asset institutional investors want to invest in. I believe we have entered a new era in cryptocurrency, which I call the foundational era, and I expect a multi-year bull trend that is just beginning."

Under the banner raised by BlackRock, seven more leading financial institutions also submitted similar applications to the SEC. Among them were global asset managers like Invesco and Fidelity, who, experts believe, have the capacity to absorb trillions of dollars. The ninth on the list was the asset management company GlobalX. They, along with several other financial giants, had entered the ETF race back in 2021, but were then thwarted by the SEC. Now, in August 2023, GlobalX made another attempt.

Owing to the initiatives of these investment titans, bitcoin experienced a meteoric rise starting in the latter half of June. It shattered the $25,000 resistance barrier, soared beyond $30,000, and peaked at $31,388 on June 23. This resulted in a weekly gain exceeding 26%. Following bitcoin's lead, altcoins like Ethereum also saw significant upward movement, registering approximately a 19% increase during the same period. However, due to subsequent regulatory pressures from the SEC and actions by the U.S. Federal Reserve, along with other negative news, the BTC/USD trading pair began to decline. It reached a low point of $24,296 on August 17.

And now, two months later, we see another surge and subsequent drop. What's next? It's a pertinent question, as the approval of spot bitcoin ETFs is expected to unleash a significant wave of adoption of this asset class by institutional investors. According to analysts at CryptoQuant, this could quickly propel the market capitalization of the crypto space by $1 trillion. In their opinion, the odds of this happening have significantly increased following the legal victories of Ripple and Grayscale against the SEC. Bloomberg analysts currently estimate these odds at 90%.

It's worth noting that the deadline for the SEC's decisions on the applications from BlackRock and other companies will arrive in March 2024. However, Mike Novogratz, the CEO of Galaxy Investment, believes that spot bitcoin ETFs could become a reality as early as this year. Larry Fink, the head of BlackRock, declined to comment on the status of their application but added that the October 16 rally was driven not so much by rumours of its approval but rather by a desire among people to use quality assets, which he believes includes bitcoin, gold, and Treasury bonds.

Anthony Scaramucci, founder of SkyBridge Capital and former White House Communications Director, believes that the leading cryptocurrency is "in many ways even more valuable than gold," and could "easily" achieve a market capitalization of $15 trillion. According to his calculations, such a capitalization would propel the price of bitcoin to approximately $700,000.

Scaramucci asserts that the current financial system is "broken." "Strange things could happen when you see countries that are hostile to the U.S. trading in bitcoin or other assets to distance themselves from the dollar. This is because the United States has used its currency to assert its own geopolitical will," he said.

Opinions within the crypto industry regarding the near-term future of bitcoin (BTC) are divided. A study conducted by Finbold revealed that a substantial number of experts do not rule out the possibility of BTC/USD climbing to $100,000 or even $200,000. Finbold specialists also sought forecasts from the artificial intelligence PricePredictions. According to AI calculations, after the approval of a bitcoin ETF, the flagship crypto asset could swiftly reach the $100,000 range. PricePredictions noted that additional factors like mainstream bitcoin adoption, institutional investor actions, regulatory activity, and overall macroeconomic conditions will be significant.

Trader, analyst, and founder of venture firm Eight, Michael Van De Poppe, believes that the October 16th fake news will not hinder the cryptocurrency's growth. According to his observations, the coin has already entered a phase of positive momentum. "The trend is already upward. The lows we're seeing now offer a buying opportunity. A bitcoin ETF will eventually enter the market; it's just not happening today," said the Eight CEO.

Authors of the analytical channel Root in X (formerly known as "Twitter") also think that the fake news did not exert significant pressure on the cryptocurrency. In their opinion, the coin's pump, despite the subsequent correction, has actually helped improve its position. However, there is also a sizable portion of the crypto community that supports a bearish outlook, suggesting the coin could drop to the $19,000-$23,000 range.

On Friday, October 20, BTC/USD made another attempt to breach the $30,000 mark, reaching a high of $30,207 before retreating. At the time of writing this overview, it is trading at $29,570. The overall market capitalization of the crypto market stands at $1.120 trillion, up from $1.046 trillion a week ago. The Crypto Fear & Greed Index has risen over the week from 44 to 53 points, moving from the 'Fear' zone into the 'Neutral' zone.


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[StanNordFX]

CryptoNews of the Week

– Bitcoin experienced a rapid ascent on October 23 and 24, reaching a level of $35,188 for the first time since May 2022. This surge in the value of the leading cryptocurrency was driven by a combination of real-world events and high-impact speculative and false news related to the U.S. Securities and Exchange Commission (SEC).
For instance, Reuters and Bloomberg reported that the SEC would not contest the court's decision in favour of Grayscale Investments. (To recap, at the end of August, the court granted Grayscale's lawsuit challenging the regulator's refusal to approve its application to launch a bitcoin ETF. Consequently, the company has effectively obtained permission from the U.S. court to convert its flagship fund, GBTC, into a spot bitcoin ETF). Additionally, there was news of the SEC discontinuing its legal proceedings against Ripple and its executives.
Discussions also revolved around the potential approval of an ETF for Ethereum and rumours of BlackRock's spot BTC-ETF gaining approval. BlackRock confirmed last week that this news was false. Nevertheless, the short squeeze prompted by this counterfeit news somewhat bolstered the cryptocurrency's growth, unsettling the market. The initial local trend gained momentum due to a series of liquidations of short positions opened with substantial leverage. According to Coinglass, a total of $161 million worth of such positions were liquidated.
Undoubtedly, the news was fabricated, but as the saying goes, there's no smoke without fire. A spot exchange-traded fund on bitcoin by BlackRock, named iShares Bitcoin Trust, appeared on the list maintained by the Depository Trust and Clearing Corporation (DTCC). BlackRock informed the SEC about the planned commencement of a seed round in October for its spot BTC-ETF, and it may have already initiated the acquisition of cryptocurrency for this purpose. This also fueled speculations and rumors that approval for their ETF is inevitable.
In discussing the catalysts for bitcoin's surge, it's also essential to mention the drop in the U.S. Dollar Index (DXY) to monthly lows on October 23rd, a decline attributed to the reduction in 10-year treasury yields. Additionally, several experts believe that technical factors played a role - technical analysis has long signaled the possibility of a bull rally after breaking out of a sideways trend.

– Another reason cited by experts for bitcoin's rise is the inflation issues in the United States and geopolitical risks such as the escalation of tensions in the Middle East. As explained by Zach Pandl, the Managing Director of Grayscale Investments, many investors view bitcoin as "digital gold" and aim to use it to minimize financial risks. According to CoinShares, investments in crypto funds increased by $66 million last week, marking the fourth consecutive week of capital inflow.

– Optimism regarding the SEC registration of many spot bitcoin ETFs has increased, and a positive decision is expected "within months." This conclusion has been drawn by analysts at JPMorgan. Specialists have taken note of the lack of an SEC appeal against the court's decision in the Grayscale case. The regulator has been instructed not to obstruct the transformation of the bitcoin trust into an exchange-traded fund. "The timing of approval [...] remains uncertain, but it is likely to occur [...] by January 10, 2024 - the final deadline for the ARK Invest and 21 Co. applications. This is the earliest of various final deadlines to which the SEC must respond," noted JPMorgan. Experts also emphasize that the Commission may choose to approve all proposals at once to ensure fair competition.

– In the distant future, the security of the first cryptocurrency is threatened not by quantum computing but by changes in the reward model for miners. This statement was made by Dr. Lawrence H. White, a professor of economics at George Mason University. According to him, after the last bitcoin is mined, which is expected to occur around 2140, the primary source of income for miners will be transaction fees. "People are concerned that it may not be possible to attract a sufficient number of miners to ensure the system's security," White warned. At the same time, the professor emphasized that at the current moment, the first cryptocurrency is protected from hacking because an attack on its network using quantum computers is not in the miners' interests.
White considers it unlikely that bitcoin will be used as a means of payment. Although, according to him, other cryptocurrencies that provide "more stable purchasing power" could assume that role.

– Peter Schiff, the President of Euro Pacific Capital, and a critic of the first cryptocurrency, has stated, "It's not a resource; it's nothing." He also likened holders of the asset to a cult. "No one needs bitcoin. People only buy it after others persuade them to do so. After acquiring [BTC], they immediately try to convince others to join in. It's like a cult," Schiff wrote.

– Opinions among members of the crypto community about BTC's future have diverged. Many market participants are confident that a positive news backdrop will support the further rise of the cryptocurrency. For example, Will Clemente, the co-founder of Reflexivity Research, believes that the behavior of the coin should unsettle the bears who planned to buy BTC at a lower price. The forecast of a trader and analyst known as Titan of Crypto implies that the coin will move to $40,000 by November 2023. Optimists are also joined by Michael Van De Poppe, the founder of the venture company Eight, and Charles Edwards, the founder of Capriole Fund.
However, there are those who believe that BTC won't continue to rise. For instance, analysts Trader_J and Doctor Profit are confident that after hitting a local maximum, the coin will enter into a prolonged correction. Their forecast does not rule out a drop in the BTC/USD pair to $24,000-$26,000 by the end of the year. A negative BTC forecast was also supported by a trader known as Ninja. In his view, the technical analysis, which includes an analysis of gaps on CME (gaps between the opening and closing prices of Bitcoin futures on the Chicago Mercantile Exchange), indicates a likelihood of BTC dropping to $20,000.

– The company Matrixport has published an analytical report discussing the growing FOMO (Fear of Missing Out) effect in the cryptocurrency market. Analysts cite their proprietary trading indicators, which allow them to successfully forecast digital asset prices. In their view, by the end of the year, the price of Bitcoin could reach $40,000, and in the event of the approval of a Bitcoin ETF, it could rise to $56,000.
(FOMO - Fear of Missing Out is a term that describes situations where the fear of missing opportunities or valuable resources leads to specific actions. Examples include investments driven by the fear of being left behind while others are making profits.).

– Investor and author of the bestseller "Rich Dad, Poor Dad," Robert Kiyosaki, has stated that once physical gold surpasses the $2,000 threshold (the current price is $1,975), bitcoin will move towards $100,000, with the next target being $135,000. Kiyosaki expressed scepticism regarding the value of the U.S. dollar, referring to it as counterfeit.

– Hal Finney was the first recipient of BTC. Consequently, many members of the crypto community speculate that the late Hal Finney might indeed be the enigmatic Satoshi Nakamoto. However, Jameson Lopp, a former Chief Engineer at BitGo and co-founder of Casa, conducted an investigation and became convinced that Finney is not the creator of the first cryptocurrency. Lopp discovered that Satoshi Nakamoto sent an email to Bitcoin developer Mike Hearn just 2 minutes before Finney completed a 10-mile race in Santa Barbara, California. Given that Finney was running for 1 hour and 18 minutes, it seems implausible that he could have been at a computer to send that email to Mike Hearn.

– As it turns out, traders in Thailand are using Tarot cards and astrology to predict price movements. For example, a popular astrologer who goes by the name Pimfah leads a Facebook group with over 160,000 members. There are also predictors on YouTube, like Ajarn Ton, who has over 26,000 subscribers. His channel features hundreds of videos, and in one of the recent ones, he predicts a 50,000% rise in the altcoin Terra Luna Classic. Considering that the project has collapsed and been abandoned for a long time, it's unlikely that this prediction will come true. However, there have been successful predictions as well. For instance, in August 2022, a well-known local predictor named Mor Plai forecasted the recovery of the crypto market. Several months later, this prediction made headlines in Thai newspapers.


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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[StanNordFX]

CryptoNews of the Week

– The share of bitcoins potentially yielding profit has reached 83.7% of the total supply. This is the highest figure since November 2021, according to a report from Bitfinex analysts. Meanwhile, market activity is low. Experts have noted that coin owners are reluctant to sell, and buyers are not actively seeking them. "One reason for this is that the actual size of unrealized profits remains modest," added Bitfinex.
According to analysts, the ratio between short-term and long-term holders of digital gold is shifting in favor of the latter. The active supply of bitcoin has fallen to a five-year minimum: only 30% of coins have moved in the past year. Accordingly, approximately 70% of bitcoins, or "unprecedented" 16.3 million BTC, remained inactive throughout the year. At the same time, 60% of coins have remained motionless for two years. According to Bitfinex specialists, these indicators signify that the market is "in a relatively strong position" as coin owners see a positive return on their investments and are not in a hurry to liquidate assets.

– As a result of the resolution of the U.S. authorities' claims against Binance and its former CEO Changpeng Zhao, bitcoin is now poised to exceed $40,000 by the end of the year, according to statements from Matrixport. Various estimates suggested that Binance could face fines of up to $10 billion, with allegations of illegal misappropriation of user funds or market manipulation. However, on November 21, an agreement was reached, with the company agreeing to pay $4.3 billion to U.S. authorities. Changpeng Zhao stepped down as CEO and posted a bail of $175 million to remain free. This outcome is considered by Matrixport experts as a "turning point in the crypto industry," indicating that Binance will likely retain its position among the largest crypto exchanges for at least the next two to three years.
In light of this news, Bitcoin initially experienced a temporary correction but then rebounded from $36,000. This confirmed a strong trend, and according to Matrixport experts, a rise above $40,000 in December appears "inevitable." However, they assess the probability of this "inevitable" outcome not at 100%, but at 90%.

– During a speech before students in Frankfurt, Christine Lagarde, the President of the European Central Bank, shared that despite "numerous warnings," her son invested in cryptocurrencies. However, the investments turned out to be unsuccessful, and he lost approximately 60% of the invested funds. Nevertheless, according to the head of the ECB, the investment amount was not very significant.
"He ignored my recommendations. Of course, it's his right. But when we talked about it next time, he admitted that I was right. I have a very negative attitude towards cryptocurrencies. People can invest in anything and speculate on anything. But they don't need to enable participation in various criminal and sanction-evading schemes and businesses," concluded Ms. Lagarde.

– The TRON (TRX) blockchain, created by the head of the cryptocurrency exchange HTX and Poloniex, Justin Sun, has reportedly surpassed bitcoin in popularity among terrorists, according to experts interviewed by Reuters. They claim that this is due to the higher transaction speed and lower cost of transactions. The TRON company stated that they do not control the users of the blockchain, adding that theoretically, any technology can be used for criminal activities.
Reuters-analysed experts also stated that the dominant asset in the TRON network is the stablecoin USDT from the company Tether. Tether has previously faced accusations of aiding fundraising for terrorists from US legislators. The company has denied these allegations, emphasizing its active participation in freezing suspicious funds, including in collaboration with Israeli authorities. It's worth noting that the National Bureau for Counter Terror Financing in Israel froze 143 wallets on the TRON blockchain from July 2021 to October 2023.
However, journalists point out the difficulties in accurately assessing the amounts collected by terrorists in cryptocurrencies, and it is challenging to determine whether the assets in the frozen wallets were indeed intended for such groups.

– Specialists from the analytical company Santiment have noted an increase in the correlation between the cryptocurrency and stock markets. In November, bitcoin, Ethereum, and the S&P 500 index, on average, grew by 9.2%. The strengthening correlation was observed after bitcoin traded in a narrow price range in late October to early November, showing no significant fluctuations. According to historical data, if bitcoin continues to outpace stocks, it will once again disrupt the correlation, which is considered one of the factors for the formation of a bullish crypto market, according to Santiment.
On November 24, the price of the leading cryptocurrency reached $38,300 for the first time since May of the previous year, prompting bitcoin traders to start taking profits. This is indicated by the slowing growth of the number of wallets with a positive balance. From November 23 to 27, the indicator increased by only 0.25%, reaching 50.91 million wallets.

– The trader, analyst, and founder of the venture company Eight, Michael van de Poppe, predicts that a few weeks before the approval of the first spot bitcoin exchange-traded fund (ETF), the coin's price may rise to $48,000. The expert anticipates that the bitcoin ETF will be approved by the SEC in the next five to six weeks. Consequently, the price of BTC could increase in December as investors seek to profit from the potential rally.
However, after approval, the price of the leading cryptocurrency may experience a sharp decline. The potential retracement target is the 200-week exponential moving average (EMA), currently around $26,500. Van de Poppe suggests that this downward trend may persist even after the upcoming halving. The analyst suspects that it is during this period that traders will actively accumulate coins, triggering the next bullish rise with a target ranging from $300,000 to $400,000.

– Strategists at Standard Chartered Bank believe that BTC could reach $50,000 this year and $120,000 by the end of 2024. The bank's initial forecast hinted at a potential surge to $100,000 but was later revised upward. The price of $120,000 is nearly three times the current value. The optimism from Standard Chartered's experts is linked to the increased profitability of mining when selling a smaller quantity of tokens to maintain the same cash flow volume, ultimately leading to price growth.

– The term "Bitcoin Santa Rally" is gaining popularity on social media platforms, fuelled by the impressive growth of the leading cryptocurrency by approximately 10% in November and 130% since the beginning of the year. This phenomenon echoes the historical "Santa Claus Rally" in the stock market when stocks surge between Thanksgiving and Christmas.
In the crypto market, a similar rally first occurred in late November 2013 when the price of bitcoin was less than $1,000. Throughout December, the bitcoin price consistently rose, reaching a peak of $1,147 by December 23. The next significant surge happened during the holiday season in 2017. Bitcoin embarked on a steep upward trajectory, surpassing $19,000 by mid-December and touching $20,000 for the first time.
However, in 2021, Santa Claus didn't bring joy to crypto traders; the result was the opposite. On November 10, the asset reached an all-time high, approaching $69,000, but in December, the price was influenced by volatility and low trading volumes during the holiday season. By the end of the year, bitcoin was trading around $46,000.
Naturally, this year, members of the crypto community are hopeful for bitcoin's growth, as indicated by Google Trends data.

– Charles Hoskinson, the founder of Cardano (ADA), criticized the U.S. Securities and Exchange Commission (SEC) for not classifying bitcoin as a security, thereby granting it "complete freedom of action," unlike other cryptocurrencies. According to Hoskinson, BTC is not as decentralized as the SEC believes: more than 51% of the hashing power can be controlled simply by taking the three largest mining pools to court.
In response, Blockstream CEO Adam Back explained to Hoskinson that the main reason is that bitcoin did not conduct an initial coin offering (ICO). "Bitcoin did not conduct an ICO. Most people thought it had no value. It was mined from scratch, it is decentralized, the project has no CEO. ICOs are what led regulators to demand registration from crypto companies. So ADA, Ethereum, and other crypto assets are considered securities under the Howey Test. And bitcoin is considered a commodity," stated Adam Back.
Hoskinson countered by stating that Cardano also did not conduct an ICO. According to him, the project simply distributed coins, and then thousands of people, who had never met before, began trading ADA on crypto exchanges and using the Cardano blockchain for their projects.

– The National Police Agency of South Korea has issued a warning about an increase in activity from North Korean hackers. Experts noted that the criminals are resorting to new sophisticated schemes, often posing as government officials and well-known journalists.
In 2023, North Korean hacking activity has shown a significant escalation in both scale and aggression. Unlike the previous year, where the primary focus was on the spread of ransomware programs, this year there is a shift towards more aggressive phishing attacks. In 2023, South Korean authorities halted the operations of more than 40 fictitious websites associated with cybercriminals.

– Dan Tapiero, Managing Partner and CEO of 10T Holdings, is confident in the inevitable increase in the value of the world's first cryptocurrency. The businessman believes that bitcoin is becoming an increasingly attractive means of savings. "There are many things, such as real estate, that people often invest in. Art, paintings... And bitcoin really can become part of such asset lists."
According to Tapiero, the "next bull trend will come in 2025. And we will see bitcoin surpass $100,000." "I think that's a pretty conservative estimate," he added. The expert believes that negative interest rates on U.S. Treasury bonds will serve as a special "mega-bull signal" for BTC.

– Former CEO of the crypto exchange BitMEX, Arthur Hayes, intends to withdraw funds invested in U.S. Treasury bonds and put them into cryptocurrency before the "Chinese printing press starts its monetary intervention."
According to his forecast, China will significantly increase its investment volumes in external markets. This monetary and credit expansion, combined with the weakening of the U.S. dollar, has the potential to benefit the cryptocurrency market. "Such a scenario will have a positive impact on the value of many risky assets, including cryptocurrencies. The interchangeable nature of global fiat credit implies that capital from China may permeate adjacent financial markets and contribute to the increase in the value of digital assets such as bitcoin," explains the co-founder of BitMEX.


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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[StanNordFX]

NordFX Super Lottery $100,000

Participation in the NordFX Super Lottery is a great opportunity to improve your financial situation by winning one or even several large cash prizes. The total prize pool is $100,000. 60 prizes of $250 and 15 prizes of $1000 to $5000 will be drawn on January 5.

The organizer of the Super Lottery is NordFX, an international brokerage company with 15 years of experience in financial markets, which is trusted by clients from 188 countries around the world. All information about the terms of the Super Lottery can be found on the broker's official website.

As early as 1748, Benjamin Franklin, whose portrait adorns the $100 bill, formulated one of the main financial laws: Time is Money. So, hurry up and don't waste time: the sooner you participate in the lottery (which is not difficult at all), the more likely you are to win there!


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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[StanNordFX]

November 2023 Results: NordFX's Top 3 Traders Set Records with Profits of $470,000

NordFX Brokerage Company Summarizes Client Trading Performance for November 2023. Additionally, an evaluation was conducted on the social trading services – PAMM and CopyTrading, along with the profits generated by the company's IB partners.

- The client from Western Asia with account number 1691XXX secured the highest profit this month, reaching $351,521. This remarkable achievement was attained through trading in gold (XAU/USD), euro (EUR/USD), and the British pound (GBP/USD).

- Similarly, fellow countryman with account number 1692XXX claimed the second position on the podium of distinction, accruing a profit of $91,650. The same currency pairs – XAU/USD, EUR/USD, GBP/USD, along with USD/JPY, contributed to this impressive outcome.

- The third spot is occupied by the account holder with number 1733XXX from Southeast Asia. Utilizing the favoured NordFX trading instrument – gold (XAU/USD), they achieved a profit of $26,713.

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

- In the PAMM service, the Trade and Earn account continues to attract attention. It was opened 631 days ago but remained dormant, awakening only in November 2022. Over 13 months, its profitability approached 210% with a relatively small maximum drawdown of less than 17%. Undoubtedly, the manager of this account can take pride in such performance.

Two long-standing accounts on the PAMM service's showcase have persevered, previously mentioned in our past reviews – KennyFXPRO-The Multi 3000 EA and TranquilityFX-The Genesis v3. Recall that on November 14, 2022, they suffered significant losses, with the drawdown at that moment approaching 43%. However, PAMM managers decided not to give up, and by November 30, 2023, the profit on the first of these accounts exceeded 118%, and on the second, 78%.

- In CopyTrading, noteworthy is the signal yahmat-forex, which, over 160 days, demonstrated a profitability of 190% with a maximum drawdown of 37%. Also catching attention is the startup with the original name $20 - ⟩ $1,000,000. One can reasonably guess that the provider of this signal intends to increase the deposit from $20 to $1 million. Currently, in its 37 days of existence, the profit stands at 101% with a moderate drawdown of less than 18%.

Undoubtedly, such profitability appears very attractive and far exceeds the returns on bank deposits. However, subscribers must always remember that past successes do not guarantee the same results in the future. Therefore, as usual, we urge investors to exercise maximum caution when investing their money.

Among the IB partners of the NordFX brokerage company, the top three are as follows:
- The largest commission reward once again was credited to a partner from Western Asia, account number 1645XXX. This time it amounted to $10,525.
- Next is their colleague from South Asia, account number 1675XXX, who earned $6,510 in November.
- Finally, another partner from South Asia, account number 1700XXX, closes the top three leaders, receiving $5,034 in commissions.

***

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

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[StanNordFX]

Forex and Cryptocurrencies Forecast for December 04 – 08, 2023

EUR/USD: December – A Formidable Month for the Dollar

Who will start loosening the grip on their monetary policies earlier, the Federal Reserve (FRS) or the European Central Bank (ECB)? The discussion on this topic remains active, as clearly seen in the quotes' charts. The statistics from the past week did not allow EUR/USD to solidify above the significant level of 1.1000. It all began on Wednesday, November 29, with the publication of inflation data in Germany. The preliminary Consumer Price Index (CPI) in annual terms amounted to 3.2%, which is lower than both the forecast of 3.5% and the previous value of 3.8%. In monthly terms, the German CPI went even deeper into the negative territory, reaching -0.4% (against a forecast of -0.2% and 0.0% the previous month).

These data marked the beginning of the euro's retreat. EUR/USD continued its decline after the release of the Harmonized Index of Consumer Prices (HICP) for the Eurozone. Eurostat reported that, according to preliminary data, the HICP fell to the lowest level since June 2021, amounting to 2.4% (y/y), which is lower than both the 2.9% in October and the expected 2.7%. The monthly indicator was -0.5%, decreasing from 0.1% in the previous month.

All these data have shown that deflation in the Eurozone significantly outpaces the American one. As a result, many market participants, including strategists at the largest banking group in the Netherlands, ING, have started talking about the imminent victory of the ECB over inflation. They have concluded that the European Central Bank will be the first to ease its monetary policy, including lowering interest rates and engaging in monetary expansion. According to forecasts, this process may begin in April, and with a 50% probability, even a month earlier, in March. The likelihood that the key interest rate will be reduced by 125 basis points (bps) during 2024, from 4.50% to 3.25%, is estimated at 70%. Indirectly, the move towards a more dovish policy was recently confirmed by a member of the ECB's Executive Board and the head of the Bank of Italy, Fabio Panetta, who spoke about the "unnecessary harm" that can be caused by persistently high-interest rates.

As for the United States, FOMC officials speak not of harm but, on the contrary, of the benefits of high-interest rates. For instance, John C. Williams, the President of the Federal Reserve Bank of New York, stated that it is appropriate to keep borrowing costs on a plateau for an extended period. According to him, this would allow for a complete restoration of the balance between demand and supply and bring inflation back to 2.0%. Williams predicts that the Personal Consumption Expenditures (PCE) Index will decrease to 2.25% by the end of 2024 and stabilize near the target level only in 2025.

Therefore, it is unlikely that we should expect the hawks of the Federal Reserve to turn into doves in the near future. Especially considering that the U.S. economy allows maintaining such a position: stock indices are rising, and the GDP data published on November 29 showed a growth of 5.2% in Q3, surpassing both market expectations of 5.0% and the previous value of 4.9%.

Given this situation, it's not surprising that EUR/USD experienced a decline.

On Friday afternoon, it reached a local low at the level of 1.0828 and would have continued to decline further if it were not for the head of the Federal Reserve. Jerome Powell spoke at the very end of the workweek and stated that he considers premature the discussion of when the U.S. central bank can begin to ease its monetary policy. He hinted that the Fed will keep the interest rate unchanged at the current level of 5.50% at the December meeting. Powell also noted that the core inflation in the U.S. is still significantly higher than the target of 2.0%, and the Federal Reserve is ready to continue tightening its policy if necessary. In general, he said the same things as John Williams. However, if the words of the President of the New York Fed strengthened the dollar, somehow similar words from the Fed Chair weakened it: during Powell's speech, the DXY Index lost about 0.12%. Market reactions are truly unpredictable! As a result, the final chord of the week sounded at the level of 1.0882.

What awaits us in December? Following the logic mentioned above, the dollar should continue its advance against the euro. However, a seasonal factor may intervene, indicating a bearish movement for the dollar in December against a range of currencies. According to economists at Societe Generale, the average decline of the Dollar Index (DXY) over the last 10 years in December is 0.8%. Seasonally, the euro (EUR), Swedish krona (SEK), British pound (GBP), and Swiss franc (CHF) tend to rise, while the movements of the Australian dollar (AUD), Canadian dollar (CAD), Japanese yen (JPY), and Mexican peso (MXN) can be considered mixed.

Specialists at the Japanese MUFG Bank also confirm bullish indicators for EUR/USD in the last month of the year. "The seasonal tendency in December," they write, "is quite convincing: over the last 20 years, December has seen EUR/USD rise 14 times, with an impressive average gain of 2.6% over these 14 years. If we exclude December 2008 (+10.1%), the average gain in the other 13 cases was still significant at +2.0%. Moreover, in 8 out of 11 cases when EUR/USD rose in November, it was followed by a rise in December" (and it rose indeed!). "But this does not mean," caution MUFG, "that we can ignore fundamental factors." It is relevant to remind here that based on such factors, the Federal Reserve (FRS) and the European Central Bank (ECB) will make decisions at their meetings on December 13 and 14, respectively.

At the moment, experts' opinions on the near future of EUR/USD are divided as follows: 50% voted for the strengthening of the dollar, 30% sided with the euro, and 20% remained neutral. Regarding technical analysis, 50% of oscillators on the D1 chart are coloured green, 30% are in a neutral grey, and only 20% are red. Interestingly, half of these 20% are already signalling oversold conditions. Among trend indicators, 65% favour the bullish side, while 35% point in the opposite direction.

The nearest support for the pair is located in the area of 1.0830-1.0840, followed by 1.0740, 1.0620-1.0640, 1.0480-1.0520, 1.0450, 1.0375, 1.0200-1.0255, 1.0130, and 1.0000. Bulls will encounter resistance around 1.0900, 1.0965-1.0985, 1.1070-1.1110, 1.1150, 1.1230-1.1275, 1.1350, and 1.1475.

A substantial flow of data is anticipated from the American labour market in the upcoming week of December 5 to 8. The highlight will be on Friday, December 8, when crucial indicators such as the unemployment rate and the number of new non-farm jobs (NFP) will be published. Additionally, on Tuesday, December 5, we will learn about business activity (PMI) in the U.S. service sector. Data on retail sales in the Eurozone will be available on Wednesday, December 6, and the following day, we will find out about GDP. Finally, on Friday, December 8, revised data on consumer inflation (CPI) in Germany will be released.

GBP/USD: Three Reasons in Favor of the Pound

The likelihood that the US Federal Reserve has likely concluded its cycle of monetary restriction and interest rates have plateaued has been mentioned earlier. Similar sentiments were expressed regarding the historical seasonal advantages of the British pound over the dollar in December.

Verbal support for the British currency was provided by the rhetoric of the Bank of England (BoE) leadership, which currently has no plans to adjust its current monetary policy trajectory. As known, this trajectory is aimed at tightening. Deputy Governor of the BoE, Dave Ramsden, stated that monetary policy should continue to be restrictive to curb inflation. A similar hawkish position was taken by BoE Governor Andrew Bailey, who emphasized that rates should rise for longer, even if it negatively affects the economy.

Currently, the key interest rate for the pound is at a 15-year high of 5.25%. Its last increase occurred on August 3, after which the Bank of England took a pause. However, this does not necessarily mean that they won't resume and increase the rate by 25 basis points at their December or January meeting.

Similar hawkish statements from the leaders of the Bank of England contribute to bullish sentiments for the pound. Even despite the dollar's rise in the second half of the past week, GBP/USD couldn't breach the support at 1.2600. According to economists from the Singaporean United Overseas Bank (UOB), as long as this strong level remains unbroken, there is a possibility for the pair to move slightly higher in the next 1-3 weeks before an increased risk of a pullback. UOB believes that, at the moment, the likelihood of the pound rising to the resistance level of 1.2795 is not substantial.

Following Jerome Powell's remarks, GBP/USD settled at the level of 1.2710 at the conclusion of the past week. Regarding its immediate future, 20% are in favour of further ascent, while the majority of surveyed analysts (55%) have taken the opposite position, and the remaining 25% remain neutral. On the D1 chart, all trend indicators and oscillators unanimously point north, with the latter indicating overbought conditions at 15%.

In the event of a southward movement, the pair will encounter support levels and zones at 1.2600-1.2635, followed by 1.2570, 1.2500-1.2520, 1.2450, 1.2370, 1.2330, 1.2210, and 1.2040-1.2085. In case of an upward movement, resistance awaits at levels 1.2735-1.2755, then 1.2800-1.2820, 1.2940, 1.3000, and 1.3140.

No significant economic events related to the United Kingdom are anticipated for the upcoming week.

continued below...

[StanNordFX]

USD/JPY: Caution, More Caution, and Even More Caution

We mentioned in the previous overview that the dynamics of USD/JPY in the coming weeks would be almost entirely dependent on the dollar's performance. Additionally, its volatility would be influenced by the oversold condition of the yen: in mid-November, the pair reached a peak at 151.90, a level not seen since October 2022, and before that, 33 years ago in 1990. The result of the synergy between these two factors was observed last week. Following the Dollar Index (DXY), the pair initially dropped by 300 points, from 149.67 to 146.67, then rose in two waves to 148.51. On December 1, it responded with a significant red candle to the statement from the head of the Federal Reserve, finishing at 146.79.

The influence of the United States on the dynamics of USD/JPY is consistently evident. However, will the Bank of Japan (BoJ) impact the strength of its national currency? Hopes for this are diminishing. BoJ board member Toyoaki Nakamura made comments on Thursday, November 30, expressing his opinion on the possibility of transitioning from an ultra-easy monetary policy. He stated that tightening it prematurely is risky, and for now, it is necessary to patiently maintain the current course. As for the timing of when this can be done, according to the official, it is currently challenging to determine. 'We can change our policy when the Japanese economy sees sustainable growth in wages and inflation,' Nakamura explained. 'Now is the time to exercise caution in our policy.'

One might think, was the Bank of Japan not cautious before this? Judging by its monetary policy, BoJ can confidently contend for the title of the 'Most Cautious Central Bank in the World.'.

According to economists at the Singaporean United Overseas Bank (UOB), in the next 1-3 weeks, USD/JPY is likely to trade in a range between 146.65 and 149.30, then start declining. Regarding the median forecast, in the near term, only 20% of experts anticipate further strengthening of the dollar, while 60% are in favour of the yen, and 20% have refrained from making any predictions. As for trend indicators on D1, 85% favour the yen, recommending buying the pair in only 15% of cases. All oscillators are in the red, with 100%, and a quarter of them are in the oversold zone. The nearest support level is located in the 146.65 zone, followed by 145.90-146.10, 145.30, 144.45, 143.75-144.05, and 142.20. The closest resistance is at 147.25, then 147.65-147.85, 148.40, 149.20, 149.80-150.00, 150.80, 151.60, 151.90-152.15, 152.80-153.15, and 156.25.

Among the events in the upcoming week's calendar, it is worth noting Tuesday, December 5, when data on consumer inflation in the Tokyo region will be released, and Friday, December 8, when the GDP volume of Japan for Q3 2023 will be announced.

CRYPTOCURRENCIES: A Year Between a Bear Past and a Bull Future

December is upon us, making it a fitting time not only to review the week's outcomes but also to assess the entire passing year. Apparently, 2023 has the potential to serve as a transition between the bear 2022 and the bull 2023, supported by an impressive 11% growth in the leading cryptocurrency in November and a staggering 130% increase since the beginning of the year.

The share of potentially profitable bitcoins has reached 83.7% of the total supply, marking the highest level since November 2021. According to analysts at Bitfinex, the balance between short-term and long-term holders of digital gold is tilting in favour of the latter. The active supply of bitcoin has dropped to a five-year low, with only 30% of coins moving over the year. Consequently, approximately 70% of bitcoins, or an "unprecedented" 16.3 million BTC, remained stagnant throughout the year. Moreover, 60% of these coins have been motionless for two years. According to Bitfinex experts, these metrics indicate that the market is in a "relatively strong position" as coin holders are experiencing positive returns on their investments and are not rushing to liquidate assets in anticipation of even greater profits.

Positive sentiments have increased, especially among large investors (those with investments of $1 million or more). Over the first 11 months of 2023, they have increased their investments in crypto funds by 120%, bringing the total to $43.3 billion. Bitcoin remains the leader in this regard, with its volume growing to $32.3 billion, a 140% increase. Among altcoins, Solana has also attracted institutional interest. However, Ethereum had been showing negative dynamics for a while, although it has recently started to recover.

The rise in optimism in the market is attributed to: 1) the resolution of the issues between the U.S. authorities and the crypto exchange Binance, 2) the anticipation of the imminent launch of spot bitcoin ETFs, and 3) the upcoming bitcoin halving in April next year.

Regarding point 1, as a result of a settlement agreement between the U.S. authorities and Binance, bitcoin is now expected to exceed $40,000 by the end of the year, according to Matrixport. Various estimates suggested that Binance could face fines of up to $10 billion and might be accused of unauthorized appropriation of user funds or market manipulation. However, on November 21, an agreement was reached that Binance would pay a $4.3 billion fine, cease operations in the U.S., and its CEO, Changpeng Zhao, stepped down and posted a $175 million bail to remain free. This outcome is considered by Matrixport experts as a 'turning point in the crypto industry,' indicating that Binance will maintain its position among the largest crypto exchanges for at least the next two to three years.

In light of this news, bitcoin initially experienced a temporary correction but then bounced back from $36,000. This confirmed a strong trend, and according to Matrixport experts, a rise above $40,000 in December appears 'inevitable.' However, they assess the probability of this 'inevitable' outcome at 90%, acknowledging that unforeseen events could still impact the situation.

According to some experts, the "peaceful" withdrawal of Binance from the U.S. market should ease tensions and facilitate the approval by the Securities and Exchange Commission (SEC) of applications for the creation of exchange-traded funds (ETFs) for spot bitcoin. In November, the SEC held a series of meetings with applicants to allow them to edit their submissions in accordance with the regulator's requirements. The presence of this dialogue was viewed as a positive factor. It is not ruled out that by January 10, 2024, the Commission will approve a significant portion, if not all, of the applications for launching bitcoin ETFs. This date marks the deadline for approving the joint application from ARK Invest and 21Shares. If the regulator makes a negative decision, it risks getting involved in legal proceedings again. The SEC has already lost a legal battle with an investment giant like Grayscale, with the court deeming the SEC's actions "arbitrary and capricious." So, is it worth stepping on the same rake again and risking similar humiliations?

Trader, analyst, and founder of the venture company Eight, Michael Van De Poppe, expects the first bitcoin ETFs to be approved by the SEC in the next five to six weeks. Consequently, the price of BTC could rise in December as investors try to profit from the potential rally. The expert forecasts its growth to $48,000. However, after approval, according to Van De Poppe, BTC/USD could sharply decline. The lower target of this potential pullback is the 200-week exponential moving average (EMA) line, which is currently around $26,500. This downward trend may continue even after the upcoming halving, Van De Poppe believes. The analyst suspects that it is then that traders will actively accumulate coins, triggering the next bullish rally with a target ranging from $300,000 to $400,000.

The strategists at Standard Chartered believe that BTC could reach $50,000 by the end of this year and $120,000 by the end of 2024. The bank's initial forecast indicated a possible rise to $100,000 but was later increased. The price of $120,000 is three times higher than the current level. This optimism from Standard Chartered experts is linked to the increased profitability of mining when selling a smaller quantity of tokens to maintain the same cash flow volume, leading to price growth.

The Managing Partner and CEO of 10T Holdings, Dan Tapiero, is confident in the inevitable growth of the first cryptocurrency and believes that bitcoin is becoming an increasingly attractive means of savings. However, in his opinion, the next bullish trend will not occur in 2024 but in 2025. "And we will see bitcoin surpass $100,000," predicts Tapiero, adding that this is a rather conservative estimate. The businessman believes that negative interest rates on US Treasury bonds will be a special "mega-bull signal" for BTC.

(Note that the former CEO of the crypto exchange BitMEX, Arthur Hayes, intends to withdraw the funds he invested in US Treasury bonds and invest them in cryptocurrency in the near future, without waiting until 2025.)

We have repeatedly noted earlier that the leading cryptocurrency has "decoupled" from both stock indices and the dollar exchange rate, disrupting direct and inverse correlations. However, now analysts at the Santiment analytical company are observing an increase in the correlation between the crypto and stock markets. In November, bitcoin, Ethereum, and the S&P 500 index grew on average by 9.2%. The strengthening connection was recorded after bitcoin traded in a narrow price range in late October to early November, showing no significant fluctuations. "If bitcoin continues to grow, surpassing stocks," say the analysts at Santiment, "this will once again disrupt the correlation, which, according to historical data, is one of the factors for the formation of a bullish crypto market.

BTC/USD set a new high for 2023 on Friday, reaching $38,950, aided by the surge in risk assets, including cryptocurrencies, mentioned in this review by the Federal Reserve Chair Jerome Powell in his speech. As of the evening of December 1, BTC/USD is trading around $38,765. The overall market capitalization of the crypto market is $1.45 trillion ($1.44 trillion a week ago). The Crypto Fear and Greed Index rose from 66 to 71 points and still remains in the Greed zone.

So, December has arrived, and many members of the crypto community are once again talking about the "Bitcoin Santa Rally." This phenomenon mirrors the historical "Santa Claus Rally" in the stock market when stocks rise between Thanksgiving and Christmas. On the crypto market, a similar rally first occurred at the end of November 2013 when the price of BTC was less than $1,000. Throughout December, the price of bitcoin steadily rose, reaching a peak of $1,147 by December 23. The next significant surge happened four years later during the holiday season of 2017. Bitcoin embarked on a steep upward trajectory, surpassing $19,000 by mid-December and touching $20,000 for the first time. However, in 2021, Santa Claus didn't bring joy to traders; the result was the opposite. On November 10, the asset reached an all-time high, approaching $69,000, but in December, the price was influenced by volatility and low trading volumes during the holiday days. By the end of the year, bitcoin was trading in the $46,000 range.

Naturally, this year, members of the crypto community are hoping for a convincing rise in digital gold. It remains to be seen whether Santa Claus will fulfil these hopes.


NordFX Analytical Group


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[StanNordFX]

CryptoNews of the Week

– On the night of December 5 to 6, the flagship cryptocurrency reached a peak of $44,464. The last time BTC traded above $40,000 was in April 2022, before the collapse of the Terra ecosystem triggered a massive crypto market downturn. The current positive sentiments in the market are linked to the potential approval of spot Bitcoin ETFs in the United States. Bloomberg analyst James Seyffart stated that the approval of these fund launches is likely to occur between January 5 and 10. Among other reasons for the rise in BTC are the increasing network hash rate and investor optimism regarding the recovery of the U.S. economy. Investor hopes are also fuelled by upcoming changes in crypto industry regulations.

– Bitcoin's price is expected to surpass the $100,000 level even before the upcoming halving in April 2024, according to Blockstream CEO Adam Back. The cryptocurrency industry veteran noted that his forecast does not take into account a potential bullish impulse in the event of the SEC approving spot Bitcoin ETFs. Regarding the long-term movement of digital gold quotes, the entrepreneur agreed with the opinion of BitMEX co-founder Arthur Hayes, who predicts a range of $750,000 to $1 million by 2026.
For reference: Adam Back is a British businessman, a cryptography expert, and a cypherpunk. It is known that Back corresponded with Satoshi Nakamoto, and a reference to his publication is included in the description of the bitcoin system. Adam Back, who had not previously made public price forecasts for BTC, garnered significant attention from many members of the crypto community due to these statements.

– Ledger's CEO Pascal Gauthier, Lightspark's Chief Marcus David, and CoinDCX's top executive Vijay Ayyar also anticipate the bitcoin price to reach $100,000 in 2024. They shared this outlook in an interview with CNBC. "It seems that 2023 was a year of preparation for the upcoming growth. The sentiments towards 2024 and 2025 are very promising," stated Pascal Gauthier.
"A number of market participants expect bullish growth sometime after the halving, but considering the news about ETFs, we could very well start seeing growth before that," believes Vijay Ayyar. However, in his opinion, a "complete rejection of ETF could disrupt this process," and this is something that should always be kept in mind.

– Cardano's leader, Charles Hoskinson, ridiculed CoinDesk's annual list of "Most Influential Personalities in the World of Cryptocurrency." According to Hoskinson's calculations, "appearing on Coindesk's most influential list carries an 18 percent chance of a prison sentence." Since Ethereum co-founder Vitalik Buterin has topped this list four times, he has a very high chance of ending up behind bars.
Previously, leaders of crypto projects who now face legal issues were included in this prestigious list. This includes the founder of the collapsed Terra project, Do Kwon, and the former CEO of the bankrupt crypto exchange FTX, Sam Bankman-Fried. According to observations by Hoskinson and other prominent figures who appeared on the CoinDesk list multiple times, they have encountered legal problems.
Some members of the crypto community responded to Cardano's leader, suggesting that he might be envied for not being on this list. It's worth noting that last year, Hoskinson expressed displeasure with CoinDesk for not including him in the top 100 most influential figures in the cryptocurrency industry and for not mentioning him in surveys over the eight years.

– Jim Lee, Chief of Internal Revenue Service, Criminal Investigation (IRS), has stated that investigations related to cryptocurrency occupy more than 50% of the agency's working hours. While almost 90% of cases were related to money laundering three years ago, last year, over half of various tax violations were related to failure to report income from capital gains in cryptocurrency or mining, as well as concealing ownership of crypto assets.
"The desire to evade cryptocurrency taxes spans a wide range of taxpayers, from individuals to various levels of corporate institutions intentionally not disclosing their cryptocurrency income. Therefore, the IRS Criminal Investigation Division is forced to initiate an increasing number of cases of tax crimes involving crypto assets every year," lamented the official.
Jim Lee reminded that cryptocurrency is subject to taxation, and failure to pay or report accurate information about crypto income to the authorities can result in both penalty sanctions and imprisonment for up to five years.

– According to the well-known bitcoin maximalist Max Keiser, bitcoin may soon surpass the $150,000 mark and continue to rise. Keiser shared that, according to unconfirmed rumours, the Sovereign Wealth Fund of Qatar is preparing to enter the crypto market with massive investments, intending to allocate up to $500 billion into the leading cryptocurrency. "This will be a seismic shift in the cryptocurrency landscape," believes Keiser.
He noted that, in his observations, many major financial institutions such as BlackRock, Fidelity, Ameritrade, Bakkt, JP Morgan, and others are gearing up to launch crypto products. These products could potentially encourage institutional investors, including hedge funds, pension funds, and sovereign wealth funds, to invest in digital assets.

– Not all influencers are confident in the optimistic prospects of BTC's value growth and strongly recommend exercising maximum caution when it comes to cryptocurrency investments. For instance, one of the prominent public crypto sceptics and advocate for physical gold, Peter Schiff, is certain that the speculative frenzy surrounding bitcoin ETFs will soon come to an end, and the collapse of bitcoin will be more impressive than its recent rallies.

– Renowned analyst Ali Martinez believes that if Ethereum closes above $2,150 for the week, this altcoin could pave the way for an upward movement with a target level of $2,600, and possibly even up to $3,500. These targets are determined by Martinez based on the analysis of graphic patterns.
Martinez also notes that approximately 5.85 million crypto wallets hold 43.8 million ETH acquired at prices ranging from $1,900 to $2,100. Therefore, this range could become a "significant support level for years to come."

– Military forces should prioritize the study of the underlying algorithm of bitcoin, Proof-of-Work (PoW), to ensure the defense capability of the country, according to U.S. Space Force Major and author of the book "Softwar," Jason Lowery. In an open letter to the Defense Innovation Board of the U.S. Department of Defense, he highlighted that the issue holds "national strategic significance." According to him, the blockchain of the first cryptocurrency is not only a "monetary system" but also provides the foundation for securing "all forms of data, messages, or command signals."

– Bloomberg Intelligence's Senior Macro Strategist, Mike McGlone, asserts that currently, bitcoin exhibits much greater strength than gold. The expert noted that on December 4th, the price of gold reached a record high, fuelled by investors' expectations of a potential interest rate cut by the U.S. Federal Reserve. Subsequently, gold declined by 5.1%, while bitcoin continued to rise, surpassing $44,000.
However, the analyst cautioned that bitcoin's volatility may hinder its ability to trade reliably, similar to physical gold, during periods of "risk aversion." According to McGlone, for bitcoin to compete with the precious metal as an alternative asset, it must establish key reliability indicators. These include achieving a negative correlation of BTC with the stock market and attaining a high deficit during periods of money supply growth.

– Alejandro Cao de Benos was detained at the Madrid railway station. According to the U.S. Department of Justice, in April 2019, Benos demonstrated to North Korean officials how a state could use cutting-edge technologies for money laundering and evading international sanctions. Before his arrest, the Spaniard had been on the Federal Bureau of Investigation's (FBI) most-wanted list for over a year, hiding in Barcelona under a fictitious name.
As a supporter of the North Korean regime, in 2000, Benos founded the Korea Friendship Association and appeared in documentaries about North Korea. The U.S. Department of Justice claims that Benos began planning a blockchain conference in North Korea in 2018. Among its participants was former Ethereum developer Virgil Griffith, who was also arrested for involvement in the event. In 2022, Griffith was sentenced to five years in prison.
On Friday, December 1, Benos appeared before the High Court of Spain. He refuted the charges brought by the U.S. prosecution, deeming them false. The man faces up to 20 years of imprisonment in a U.S. prison, but extradition proceedings have not yet begun.


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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