Topic: Nordfx broker: news, weekly Analytics - page 4. (Read 50194 times)

Brokerage firm NordFX has summarized the trading performance of its clients for April 2024. The efficacy of social trading services, PAMM and CopyTrading, as well as the earnings of the company’s IB-partners were also evaluated.
- This month’s highest profit was earned by a client from South Asia, account number 1765XXX, who made $26,757 from trading the GBP/USD pair.
- The second place in the TOP-3 was taken by their compatriot, account number 1751XXX, with earnings of $16,976 from gold trades (XAU/USD).
- The third step of the April podium was claimed by a trader from East Asia, account number 1609XXX, who traded not physical but digital “gold”: bitcoin. It was the BTC/USD pair transactions that enabled them to profit by $14,301.

The passive investment services at NordFX showed the following trends:

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

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

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

***

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


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

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

https://nordfx.com/

EUR/USD: Inflation Persists, US GDP Growth Slows

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

CRYPTOCURRENCIES: Where Will Bitcoin Fall?

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

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

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

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

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

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

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

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

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

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

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

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


NordFX Analytical Group
 

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

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

https://nordfx.com/

CryptoNews of the Week


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

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

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

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

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

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

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

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

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

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

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


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

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

https://nordfx.com/

EUR/USD: A Pause After the Rally


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

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

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

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

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

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

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

GBP/USD: CPI Disappoints BoE

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

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

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

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

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

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

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

USD/JPY: Higher and Higher...

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


NordFX Analytical Group
 

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

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CryptoNews of the Week


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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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EUR/USD: The Dollar Soars


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

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

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

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

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

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

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

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

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

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

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

GBP/USD: The Pound Plummets

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

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

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

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

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

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

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

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

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

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

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

CRYPTOCURRENCIES: On the Eve of Hour X

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

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

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

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

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

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

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

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

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

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

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

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


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CryptoNews of the Week


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

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

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

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

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

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

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

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

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

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EUR/USD: The Dollar Weakness Puzzle

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

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

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

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

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

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

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

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

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

GBP/USD: A Result Close to Zero

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

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

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

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


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

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

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

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

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

CRYPTOCURRENCIES: A Week of Unexpected Announcements

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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CryptoNews of the Week


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

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

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

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

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

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

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

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

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

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

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

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

https://nordfx.com/

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

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

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

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

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

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

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

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

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

***

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

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

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

https://nordfx.com/

EUR/USD: Switzerland Strengthens the Dollar

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

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

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

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

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

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

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

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

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

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

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

GBP/USD: BoE Hawks Morph into Doves

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

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

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

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

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

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

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

USD/JPY: How the BoJ Sank the Yen

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

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

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

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

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

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

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

CRYPTOCURRENCIES: Bitcoin – The Calm Before the Halving


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

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

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

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

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

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

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

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

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

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

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

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

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

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


NordFX Analytical Group
 

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

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

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CryptoNews of the Week


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

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

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

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

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

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

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

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

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

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

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

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

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EUR/USD: Stubborn Inflation Refuses to Back Down

Market participants last week were keenly focused on inflation data from the US. The FOMC (Federal Open Market Committee) meeting of the Federal Reserve is scheduled for Wednesday, 20 March, and these figures will undoubtedly influence the Committee's decision on interest rates. Federal Reserve Chairman Jerome Powell recently stated that more evidence of a sustainable slowdown in inflation would be necessary to start cutting rates. However, it appears that such evidence is lacking. Data released on Tuesday, 12 March, showed that prices, instead of decreasing, have been on the rise.

The Consumer Price Index (CPI), excluding food and energy, was expected to increase by 0.3% but actually rose by 0.4% month-on-month. Year-on-year, inflation in February increased by 3.8%, slightly above the forecast of 3.7%. The overall CPI showed a monthly increase of 0.4% and an annual rise of 3.2%. Thus, the overall CPI has increased by 4.2% on an annual basis over the last three months, marking the highest level since June of the previous year. Certainly, this surge in inflation is not a cause for panic, but it is too early to declare a complete victory over it, for which the Fed raised rates to the highest level in 40 years.

Additional arguments for the Federal Reserve to refrain from hastily cutting rates emerged on Thursday, 14 March. It was found that industrial inflation, measured by the Producer Price Index (PPI), increased from 0.3% to 0.6% month-on-month, against market expectations of 0.3%. Against this backdrop, the yield on 10-year US Treasury bonds sharply increased, providing support to the dollar.

Beyond CPI and PPI, there's a third argument in favour of maintaining the Federal Reserve's tight monetary policy: the labour market, which remains relatively robust. Despite the highest unemployment rate increase in two years (from 3.7% to 3.9%), the number of new jobs created outside of the agricultural sector (NonFarm Payrolls) reached 275K, significantly exceeding both the previous figure of 229K and the forecast of 198K. Additionally, real wages continued to grow year-on-year in February.

Against the backdrop mentioned above, the euro faced pressure last week. Moderately dovish statements from officials at the European Central Bank (ECB) did not provide any relief. On Thursday, the bank's chief economist, Philip Lane, in an interview with CNBC, stated that wages are moving in the right direction. However, he added, the EU's monetary authorities avoid giving clear forecasts regarding further steps and must make decisions at each specific meeting.

According to Peter Kazimir, a member of the ECB's Governing Council and head of the National Bank of Slovakia, it would be wise to wait until June for the first rate cut. "Rushing this step is unwise and disadvantageous," he said. "Upside risks to inflation are alive and well. More convincing data on inflation prospects are needed. [And] only in June will we reach the threshold of confidence in this matter." "But the discussion on easing should start now," added the head of the National Bank of Slovakia.

Olli Rehn, a member of the ECB's Governing Council and head of the Bank of Finland, spoke similarly. He confirmed the start of discussions on reducing the restrictive aspect of the bank's monetary policy. When asked about the appropriate time to begin rate cuts, he carefully replied, "If inflation continues to decline, it would be possible to gradually start lifting the foot off the monetary policy brake pedal."

The preliminary Michigan Consumer Sentiment Index, published on 15 March, showed a slight decrease to 76.5 from the previous value and forecast of 76.9. Following this, EUR/USD ended the working week at 1.0886. As for the near-term outlook, as of the evening of Friday, 15 March, 75% of experts voted for a strengthening dollar and a decline in the pair, with 15% siding with the euro and 10% taking a neutral stance. Oscillator readings on the D1 are evenly distributed: one-third are coloured green, one-third red, and one-third neutral grey. Trend indicators' force ratio is such: 35% recommend selling the pair, while 65% recommend buying it. The nearest support for the pair is located in the zone of 1.0845-1.0865, followed by 1.0800, then 1.0725, 1.0680-1.0695, 1.0620, 1.0495-1.0515, and 1.0450. Resistance zones are found at 1.0920, 1.0965-1.0980, 1.1015, 1.1050, 1.1100-1.1140, and 1.1230-1.1275.

In the coming week, the Consumer Price Index (CPI) value for the Eurozone will be released on Monday, 18 March. However, as the ECB meeting has already taken place, this indicator is unlikely to provoke a strong market reaction. The main event of the week, as mentioned, will be the Federal Reserve's FOMC meeting on Wednesday, 20 March. It is expected to be the fifth consecutive meeting where the federal funds rate remains unchanged at 5.50%. The greatest interest for economists and investors will likely lie in the subsequent Federal Reserve leadership press conference, where they hope to hear hints about the start date for monetary policy easing. Currently, according to CME FedWatch, there is a 40% chance that the reduction will begin in June.

Apart from these events, a comprehensive package of data on business activity (PMI) across various sectors of the economy in the US, Germany, and the Eurozone, set to be released on Thursday, 21 March, also presents interest. On the same day, traditional data on the number of initial unemployment claims in the US will be published.

GBP/USD: More Negatives than Positives for the Pound

Last week, the dollar was recovering from the losses it suffered in the first ten days of March. On one hand, GBP/USD was pressured by rising inflation in the US, and on the other hand, by weak macroeconomic statistics from the United Kingdom. Data published on Tuesday, 12 March, confirmed the cooling of the country's labour market. In January, employment decreased by 21K (against a forecasted increase of 10K), and the unemployment rate rose from 3.8% to 3.9% (forecasted at 3.8%). Additionally, the number of claims for unemployment benefits sharply increased from 3.1K in January to 16.8K in February. Meanwhile, the wage growth of UK workers slowed down, marking the slowest pace since 2022.

Market participants' pessimism increased on Wednesday, 13 March. It was revealed that although the country's GDP grew by 0.2% in January, industrial production fell from +0.6% to -0.2% month-on-month and from +0.6% to +0.5% year-on-year. The manufacturing sector saw an even sharper decline, from +0.8% to 0.0% month-on-month and from +2.3% to +2.0% year-on-year.

All these data strengthen the likelihood of the Bank of England (BoE) soon shifting to a more dovish monetary policy. Some estimates suggest this could happen as early as May. If data from the United Kingdom continue to worsen, the probability of a pound interest rate cut in the coming months will only increase, pushing GBP/USD further down.

"GBP/USD could fall as the UK continues to stagnate and the Bank of England finally begins to cut rates," analysts at the French bank Societe Generale believe. Economists at the Dutch Rabobank also see potential for significant strengthening of the dollar against the British currency over a 1 to 3-month horizon. However, Rabobank forecasts that the interest rate differential, signs of improvement in the UK's economic outlook, combined with the prospect of uneventful elections in the country and a relatively stable political backdrop, should provide moderate support to the pound. "We believe," the bank's economists write, "that over a 12-month perspective, GBP/USD will recover to the 1.3000 area.".

The pair closed the week at 1.2734. Analyst opinions on its near-term direction were divided as follows: a majority (65%) voted for a decline, 20% for an increase, and 15% remained neutral. Among the D1 oscillators, 40% point north, only 10% south, and 50% east. Trend indicators have 65% looking upwards and 35% in the opposite direction. Should the pair move southward, it will encounter support levels and zones at 1.2695-1.2710, 1.2575-1.2610, 1.2500-1.2535, 1.2450, 1.2375, and 1.2330. In the event of an upward move, resistance will be met at levels 1.2755, 1.2820, 1.2880-1.2900, 1.2940, 1.3000, and 1.3140.

In addition to the Federal Reserve's FOMC meeting, the upcoming week will also feature a meeting of the Bank of England, scheduled for Thursday, 21 March. The day before, we will learn about the inflation situation (CPI) in the United Kingdom, and just before the BoE meeting, preliminary data on business activity (PMI) in the country will be released. The workweek will conclude with the publication of retail sales data in the United Kingdom.

USD/JPY: What to Expect from the Bank of Japan


The upcoming week, on Tuesday, 19 March, will also see a meeting of the Bank of Japan (BoJ). Consequently, speculation regarding an imminent shift in the regulator's monetary policy is mounting. Analysts at TD Securities have shifted their forecast for a yen rate hike from April to March. "Following a positive round of wage negotiations, we believe the Bank of Japan has the necessary information to raise the rate at next week's meeting," they write. TD Securities expects that if the rate is increased, such a move away from NIRP could easily push USD/JPY to 145.00. However, if the BoJ does not do so but attempts to sound hawkish, hinting at the possibility of a policy reversal in April, the pair might rise, but only slightly – to 150.00.

Rabobank analysts also discussed the potential tone of the Bank of Japan's statements. "If the Bank of Japan exits its negative interest rate policy on 19 March, it is likely that rates will only be raised by 10 or 15 basis points (bps)," the Rabobank experts believe. "Furthermore, at best, the Bank of Japan's guidance next week will be cautiously optimistic. It is important to note that even after the negative rate is relegated to economic history, Japan's monetary policy settings will likely remain accommodative." Rabobank does not rule out that a very cautious tone from the BoJ regarding further changes may increase the risk of a "sell the fact" reaction post-19 March. "Nevertheless, despite the risk of a short-term increase in the pair, we continue to see the possibility of USD/JPY declining to 146.00 in a three-month perspective," conclude the Rabobank economists.

Strategists at Standard Chartered echo similar sentiments. Like many of their peers, they anticipate that the Bank of Japan will end its ultra-loose policy in March rather than April. However, in their view, the expected policy adjustment is unlikely to signal the start of an aggressive rate-hiking cycle. The abolition of the negative interest rate policy (NIRP) will not alter the negative yield differential with other countries. Nonetheless, the potential cessation of yield curve control (YCC) should ultimately be positive for the yen, especially if the Federal Reserve and the ECB start cutting rates from June. In this scenario, Standard Chartered strategists believe that by the end of Q2 2024, USD/JPY could fall to 145.00.

Economists at ING, the largest banking group in the Netherlands, have repeatedly emphasized that a sustainable rally in the yen is more dependent on cuts in the Federal Reserve's rates than on rate hikes by the Bank of Japan. "We still believe that it will be difficult for the yen to sustainably strengthen beyond the volatility surrounding the rate hike until rates in the US are reduced. This remains our base scenario for this year," they write.

Societe Generale analysts are notably optimistic about the Japanese yen in their forecasts. They believe the yen is the only G7 currency likely to significantly appreciate against the US dollar this year. Even if the Bank of Japan's steps away from negative interest rates and yield curve control on 19 March are fairly symbolic, the yen is still expected to strengthen, as it is currently considered undervalued.

Throughout the past week, USD/JPY, buoyed by a strengthening dollar, rose and concluded at 149.05. Looking ahead, whereas a majority of analysts sided with the dollar in EUR/USD and GBP/USD, the situation here is reversed – in anticipation of a historic move by the Bank of Japan, 65% of experts leaned towards the bearish side for the pair, with 35% remaining undecided. No votes were cast in favour of the American currency. Technical analysis tools seem unaware of the Bank of Japan's meeting, which is why only 35% of D1 oscillators favoured the yen, 25% favoured the dollar, and 40% remained neutral. Trend indicators show a clear advantage for the dollar – 90% are coloured green, and only 10% red. The nearest support levels are located at 148.40, 147.60, 146.50, 145.90, 144.90-145.30, 143.40-143.75, 142.20, 140.25-140.60. Resistance levels and zones are at 150.00, 150.85, 151.55-152.00, 153.15.

Apart from the Bank of Japan meeting, no other significant events related to the Japanese economy are scheduled for the coming days. Traders should also note that Wednesday, 20 March, is a public holiday in Japan: the country observes the Vernal Equinox Day.

CRYPTOCURRENCIES: Riding the Wave of FOMO to New Historical Highs

FOMO (Fear of Missing Out) is currently the dominant sentiment in the market, driving the leading cryptocurrency to new heights. Another record was set on Thursday, 14 March, when BTC/USD reached $73,743.

Following the approval of spot bitcoin ETFs in the US earlier this year, demand for the flagship crypto asset has significantly outstripped the daily supply of bitcoin mined by miners. The halving, scheduled for the third decade of April, will only intensify this imbalance. Despite these two drivers remaining on the agenda, their endless discussion has started to weary market participants. As a result, the focus has shifted towards issues of the global economy, the Federal Reserve's monetary policy, and the upcoming presidential elections in the US.

Starting with the potential Presidents of the United States, specifically what could happen if the White House is won by one of the two main contenders. Former US President and Republican Party leader Donald Trump emphasized the importance of the American national currency in a CNBC interview, comparing a departure from the dollar standard to defeat. At the same time, he stated he would not interfere with the use of bitcoin or other cryptocurrencies if he wins the elections in November. "If you think about it, it's an additional form of currency," Trump said. "[Bitcoin] is widely used, and I'm not sure I'd want to give it up right now," the politician added. However, when asked by the host if he himself invests in cryptocurrency, the former (and potentially future) president answered negatively.

Regarding the current White House occupant, a study conducted by Pierre Rochard, Vice President of Riot, is of interest. He assessed the US budget for 2025, proposed by Joe Biden's team, and concluded that Democrats are expecting BTC to reach $250,000 over a decade – by 2034-2035. This is suggested by the taxes laid out by the White House in the budget. However, the expert clarified that the document, of course, does not contain direct indications of this price. Conclusions are made based on the assessment of potential profit from taxes and regulation of the cryptocurrency market.

Discussing the US economy, former Coinbase CTO and a16z general partner Balaji Srinivasan writes, "We are in the phase of looting the treasury amidst the collapse of an empire. Bitcoin is the only available salvation from inflation and potential asset confiscation in the US, which could occur due to the unsustainable trajectory of government spending." According to Srinivasan's calculations, the US national debt has reached a record $34.5 trillion, increasing by 25% since 2020, and continues to grow by $1 trillion every 90 days. The US government spends $10 billion more daily than it receives. Given this, the former Coinbase CTO did not rule out that as the "financial reckoning" for such behaviour approaches, the "insatiable state" might consider the possibility of confiscating private assets.

"Private property will not be protected by the state in a bankrupt blue [Democratic] America. Any blockchain under Washington's control is vulnerable. Fortunately, we have digital gold. It is independent of the state and cannot be confiscated. Bitcoin maximalism will win. It will save us from state budgeting," believes the former CTO of Coinbase. He declined to specify when the "reckoning" would occur but reminded that Ray Dalio, Elon Musk, Larry Fink, and Stanley Druckenmiller have previously announced the inevitability of such a scenario.

Analysts at Matrixport, sharing Balaji Srinivasan's optimism about the global future of bitcoin, also suggest that a risk-reward analysis indicates that the coin's quotes may soon undergo a correction. "This bull market still has legs," Matrixport believes, "but the divergence between the decreasing RSI and high BTC prices could signal that bitcoin needs to consolidate before it can start rising in price again."

Investor and founder of MN Trading, Michael Van De Poppe, believes a market pullback of 20-30% is quite possible in the near term. He also noted that he has high expectations for altcoins, which have yet to reach record highs.

Raoul Pal, the founder of the investment company Real Vision, predicted the potential performance of bitcoin, ETH, and SOL. He suggested that the target mark for bitcoin in the foreseeable future is $250,000 per coin. The first cryptocurrency may exceed this projected level due to high demand for spot bitcoin ETFs. The upcoming April halving is also expected to increase demand for this cryptocurrency.

Raoul Pal is also bullish on Ethereum. Thanks to the utility of smart contracts, the value of this altcoin could rise to $17,000-$20,000. Currently, ETH is trading around $4,000, but unlike bitcoin, it has not yet surpassed its record – in November 2021, Ethereum reached a level of $4,856. The Real Vision founder believes that the altcoin's growth could be influenced by a strong correlation with bitcoin, anticipation of the launch of spot ETH ETFs, and the Dencun update.

The specialist forecasts that the price of Solana could range from $700 to $1,000, as the high performance of the blockchain will increase demand for this coin. In early November 2021, SOL reached a peak mark of $260, and the coin still has plenty of growth opportunities.

Last week, much attention was also paid to miners, not just individually, but in conjunction with the American economy. Bill Ackman, CEO of Pershing Square Capital, called bitcoin mining one of the reasons for inflation and the fall of the US dollar. "The rise in bitcoin prices leads to an increase in mining and energy consumption, raising the latter's cost and causing inflation and the dollar's decline. This stimulates demand for bitcoin, its mining, and energy consumption. The cycle continues, bitcoin goes into infinity, energy prices skyrocket, the economy collapses," the billionaire described his scenario, adding that this relationship "works both ways."

Taking an opposite viewpoint was another influencer – the aforementioned Pierre Rochard from Riot. He believes that the mining industry could experience exponential 10-fold growth, thanks to the active development of the US market and the country's surplus of electricity. His scenario does not foresee an economic collapse and sky-high energy prices.

Time will tell which of these experts is correct. However, according to analysts at Bernstein, mining company stocks remain the best proxy investments in bitcoin as the cryptocurrency moves towards the target mark of $150,000. In a note to clients, they point out that historically, miners' quotes have almost always outperformed bitcoin in terms of growth rate during a bull market. Since we are in the middle of the current cycle, every "weakness window" for digital gold miners is, in the experts' opinion, an opportunity to buy their stocks.

Bernstein claims that retail investors currently dominate this segment, while institutional investors largely avoid "bitcoin-proxy" investments, as they remain sceptical about cryptocurrencies. However, as the asset grows to new highs, analysts expect this category of investors' interest in miners' stocks to awaken and grow.

At the beginning of spring, bitcoin surpassed the Russian rouble in market capitalization and occupied the 14th position in the overall ranking of the largest currencies. Just a few days later, on 11 March 2024, bitcoin made another leap – rising above $72,000 per coin, it surpassed silver in market capitalization. The first cryptocurrency moved to the eighth spot in the ranking of the largest assets by this measure, crossing the $1.4 trillion mark.

As of the writing of this review, on the evening of Friday, 15 March, after traders took profits, BTC/USD is trading around $68,200. The total market capitalization of the crypto market stands at $2.58 trillion ($2.60 trillion a week ago). The Crypto Fear & Greed Index has risen from 81 to 83 points and is in the Extreme Greed zone. (It's worth noting that the historical maximum for this index was recorded at 95 points during the Bull Rally at the end of 2020).

NordFX Analytical Group
 

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

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CryptoNews of the Week


– In a CNBC interview, former US President and Republican Party leader Donald Trump highlighted the importance of the American national currency and compared moving away from the dollar standard to a defeat. At the same time, he stated that he does not plan to obstruct the use of bitcoin or other cryptocurrencies if he wins the election in November. "If you think about it, it's an additional form of currency," Trump remarked. "Bitcoin is widely used, and I'm not sure I would want to give it up right now," the politician added. However, when asked by the interviewer if he himself invests in cryptocurrency, the former (and possibly future) president responded negatively.

– Balaji Srinivasan, former CTO of Coinbase and a general partner at a16z, has declared we are in the phase of treasury plunder amidst an empire's collapse. Bitcoin, he asserts, is the only available salvation from inflation and the potential confiscation of assets in the US, which could result from the unsustainable trajectory of government spending. According to his calculations, the US national debt has reached a record $34.5 trillion, having increased by 25% since 2020, and continues to grow by $1 trillion every 90 days. The US government spends $10 billion more daily than it receives. Based on this, Srinivasan did not rule out that, as we approach a "financial reckoning" for such behaviour, the "insatiable state" might consider the confiscation of private assets.
"Private property will not be protected by the state in a bankrupt blue (Democratic) America. Any blockchain under Washington's control is vulnerable. Fortunately, we have digital gold that is independent of the state and cannot be confiscated. Bitcoin maximalism will triumph. It will save us from state budgeting," believes the former CTO of Coinbase. Although he refrained from specifying when the "reckoning" would occur, he reminded that the inevitability of such a scenario had previously been mentioned by Ray Dalio, Elon Musk, Larry Fink, and Stanley Druckenmiller.

– Jamie Dimon, CEO of JPMorgan, has urged the US Federal Reserve to postpone cutting interest rates until June and shared his views on the first cryptocurrency, as reported by CNBC citing the businessman's speech at the Australian Financial Review summit. "I don't know what bitcoin is for, but just as with the right to smoke a cigarette, I'll support your right to buy bitcoin. Personally, however, I would never buy it," he stated, adding that the use of digital assets is often associated with illegal activities, including human trafficking, fraud, and terrorism.

– William Ackman, CEO of Pershing Square Capital, has attributed bitcoin mining as one of the causes for inflation increase and the fall of the US dollar. "The rise in bitcoin prices leads to an increase in mining and energy consumption, raising the latter's cost, thus causing inflation to rise and the dollar to decline. This stimulates demand for bitcoin, its mining, and energy consumption. The cycle continues, bitcoin goes into infinity, energy prices skyrocket, and the economy collapses," the billionaire described his scenario, adding that this relationship "works in reverse as well."
"Wondering if I should buy bitcoin in such a situation?" Ackman pondered, to which another billionaire, MicroStrategy founder Michael Saylor, replied, "You should buy some bitcoin, but not for the reasons mentioned above. Most bitcoin miners actually help to reduce the cost of electricity for other consumers, not the other way around. Let me know if you want to discuss this issue one-on-one," he wrote.

– Michael Saylor believes that bitcoin will "eat" gold in the future, becoming a more valuable asset because it possesses all the advantages of gold while being free from its disadvantages. Saylor pointed out that precious metal cannot be moved quickly, whereas bitcoin can be transferred to a new owner instantly.
The appearance of the first cryptocurrency in various investment products is a sign of the asset's future dominance, according to the MicroStrategy co-founder. The digital asset will also begin to take market share from other risky investment products, with Saylor naming the S&P 500 ETF fund as one of the potential "victims."
It is noteworthy that bitcoin, having risen above $72,000 per coin, surpassed silver in market capitalization on March 11, 2024. The first cryptocurrency moved to the eighth position in the ranking of the largest assets by this indicator, overcoming the $1.4 trillion mark.

– Pierre Rochard, Vice President of Research at his company, evaluated the US budget for 2025 proposed by Joe Biden's team. The researcher's conclusion is that the Democrats anticipate BTC reaching $250,000 within a decade: by 2034-2035. This is inferred from the taxes laid out by the White House in the budget. However, the expert clarified that there are no direct indications of this price in the budget. Conclusions are drawn based on the assessment of potential profits from taxes and the regulation of the cryptocurrency market.
Rochard draws another conclusion from the White House documents. According to his analysis, the mining industry in the US could experience exponential growth. This could be due to the active development of the US market and an excess of electrical energy, leading to a tenfold increase in this industry.

– Following the approval of spot bitcoin ETFs in the US earlier this year, demand for the flagship crypto asset significantly exceeded the daily supply of bitcoin mined by miners, and the halving scheduled for the third decade of April will only intensify this imbalance. As a result, many analysts believe that the price of bitcoin is in the early stages of a super-cycle, fuelled by institutional investors and issues in the global macroeconomy.
At the time of writing this overview, the maximum price of bitcoin was recorded at $73,556. Analysts at Matrixport are optimistic about the coin's global future. However, according to them, a risk-reward analysis suggests that the coin's quotes may soon adjust. "This bull market still has legs," Matrixport believes, "but the divergence between the decreasing RSI and high BTC prices may signal that bitcoin needs to consolidate before it can start increasing in price again."
Investor and founder of MN Trading, Michael Van De Poppe, believes that a market retracement of 20-30% is quite possible in the near future. He also noted that he expects a lot from altcoins, which have not yet reached record levels.

– Raoul Pal, the founder of investment firm Real Vision, has forecasted the targets BTC, ETH, and SOL could reach in the near future. He suggested that the target mark for bitcoin in the near term is $250,000 per coin. Moreover, the first cryptocurrency might exceed this projected level due to the high demand for spot bitcoin ETFs. The upcoming April halving is also expected to boost demand for this cryptocurrency.
Raoul Pal is also bullish on Ethereum, predicting its value could rise to between $17,000 and $20,000, thanks to the utility of smart contracts. Currently, ETH is trading around $4,000, but unlike bitcoin, it has yet to surpass its record: in November 2021, Ethereum reached a level of $4,856. The Real Vision founder believes that the altcoin's growth could be influenced by its strong correlation with bitcoin, anticipation of the launch of spot ETH ETFs, and the Dencun update.
Pal forecasts that the price of Solana could range from $700 to $1,000, as the blockchain's high performance will increase demand for this coin. In early November 2021, SOL reached its peak at $260, indicating the coin still has plenty of growth potential.

– Bernstein analysts believe that shares of mining companies remain the best proxy investments in bitcoin as the cryptocurrency moves towards a target mark of $150,000. In a note to clients, they point out that historically, miners' stock prices have almost always outperformed bitcoin in terms of growth rate during a bull market. As we are in the middle of the current cycle, every "weakness window" for miners of digital gold is, in experts' opinion, an opportunity to buy their shares.
Bernstein asserts that the segment is currently dominated by retail investors, while institutional investors mostly avoid "bitcoin-proxy" investments due to their ongoing scepticism towards cryptocurrencies. However, as the asset grows to new highs, analysts expect this category of investors' interest in miners' stocks to awaken, making them the primary beneficiaries of capital inflow.
 

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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EUR/USD: A Bad Week for the Dollar


The past week was dominated by the European Central Bank (ECB)'s meeting on Thursday, 7 March. As anticipated, the pan-European regulator decided to maintain its current monetary policy, leaving the interest rate unchanged at 4.50%. This move reaffirmed its commitment to steering inflation into the desired range. The ECB aims to be absolutely certain that inflation is consistently moving towards its 2.0% target, which currently stands at 2.6%.

According to analysis from ANZ Bank, a reduction in euro rates is expected in Q2. "Our interpretation of current ECB official guidance is that hawks are on the rise and prefer to wait for more detailed wage growth data before initiating a rate cut. We believe a consensus will be reached in June," ANZ economists wrote.

This expectation was echoed by Gediminas Šimkus, a member of the ECB Governing Council and head of Lithuania's central bank, on Friday, 8 March. He stated that "all conditions are set for a transition to a less stringent monetary policy, with a rate cut in June being very likely. While a cut in April cannot be ruled out, the likelihood is low." He added that there is no reason to reduce the rate by more than 25 basis points in one go.

It's important to note that the Federal Reserve usually acts more aggressively than the ECB, changing its rate more frequently and with greater amplitude. To see this, one only needs to look at the statistics from the last 10 years. According to analysts at Commerzbank, this means that if both central banks start their easing cycles at the same time, the dollar rate could very quickly fall below the euro rate, which would support an increase in the EUR/USD exchange rate.

However, what the cycles will look like this time remains unclear. The CME FedWatch Tool estimates a 56% probability of a Federal Reserve rate cut in June. Yet, speaking to the US Congress on 6-7 March, Fed Chair Jerome Powell only vaguely stated that the regulator would ease monetary policy "at some point this year".

A statement by Loretta Mester, president of the Federal Reserve Bank of Cleveland, proved to be more interesting. Speaking at the European Centre for Economics and Finance, she expressed concerns about the continued steady decrease in inflation throughout the year. Therefore, in Mester's view, it would be appropriate to keep the rate at its current level of 5.50%. The head of the Federal Reserve Bank of Cleveland also suggested that if economic conditions align with forecasts, the likelihood of a rate cut towards the end of the year might increase.

Regarding the macroeconomic statistics released last week, Eurostat's final assessment showed that the Eurozone economy grew by 0% in quarterly terms over the last three months of 2023. Year-on-year, GDP increased by 0.1%. Both figures matched preliminary estimates and market expectations, thus having no impact on the exchange rates.

Throughout the week, the dollar was under pressure, and not just due to Jerome Powell's "dull" Congressional testimony. US macroeconomic reports appeared relatively weak. For instance, the ISM Services Sector Business Activity Index for February fell from 53.4 points to 52.6 points. Manufacturing orders in January also dropped by 3.6%, which was worse than the 2.9% forecast. The number of job openings (JOLTS) in the US last month was 8.863 million, down from 8.889 million the previous month, and initial unemployment claims for the week ending on 2 March rose to 217K, exceeding the 215K forecast. All these factors together led to the EUR/USD pair moving out of the narrow range of 1.0800-1.0865, in which it had been trading since 20 February, and rising to the 1.0900 mark.

Labour market statistics released on Friday, 8 March, could have supported the dollar, but this did not happen, even though the market's reaction was somewhat puzzling. On one hand, the number of new jobs created outside of the agricultural sector (NonFarm Payrolls) was 275K, significantly exceeding both the previous figure of 229K and the forecast of 198K. Typically, such indicators would push the EUR/USD pair down. However, this time, it sharply rose instead. This likely relates to the unemployment rate increasing from 3.7% to 3.9% (with a forecast of 3.7%) and the average hourly earnings showing a sharp drop from 0.5% (month-over-month) to 0.1% (against a forecast of 0.2%). It seems the last two indicators outweighed the positive effect from the NFP. Market participants decided that these would be additional arguments in favour of a more imminent interest rate cut, resulting in EUR/USD soaring to 1.0980.

Subsequently, the excitement settled, and EUR/USD closed at 1.0937. As for the short-term outlook, as of the evening of Friday, 8 March, 35% of experts were in favour of the dollar strengthening and the pair falling, while 65% sided with the euro. Trend indicators and oscillators on the D1 chart are 100% coloured in green, with a quarter of the latter in the overbought zone. The nearest support levels for the pair are situated in the 1.0845-1.0865 zone, followed by 1.0800, then 1.0725, 1.0680-1.0695, 1.0620, 1.0495-1.0515, and 1.0450. Resistance zones are located around 1.0970-1.1015, 1.1050, and 1.1100-1.1140, up to 1.1230-1.1275.

The upcoming week is expected to be quite tumultuous. Significant volatility can be anticipated on Tuesday, 12 March, with the release of consumer inflation (CPI) data in Germany and the USA. On Thursday, 14 March, retail sales statistics and the Producer Price Index (PPI) in the United States will be announced. The week will conclude with the publication of the University of Michigan Consumer Sentiment Index on Friday, 15 March.

GBP/USD: A Good Week for the Pound

Starting the week at 1.2652, GBP/USD recorded a local high of 1.2893 on Friday, gaining 241 points and breaking out of the medium-term sideways channel of 1.2600-1.2800. The first reason for such dynamics is the weakness of the dollar, as mentioned earlier. The second reason is the positive economic statistics from the UK: the Construction PMI increased from 48.8 to 49.7. This indicates that the real estate sector is almost overcoming a period of stagnation, which, in turn, will eventually provide significant support to the country's economy.

There's also a third reason. In our last review, we warned that a key event for the pound sterling last week would be the announcement of the UK Government's budget on Wednesday, 6 March. This pre-election budget could significantly impact the British currency, which in 2024 is the second most successful G10 currency after the US dollar.

Finance Minister Jeremy Hunt, presenting the spring government budget, called it a plan for long-term growth. Hunt announced various benefits and subsidies amounting to £1.8 billion, as well as an allocation of £360 million for funding research and development in the biomedical sector, car manufacturing, and aerospace production. The government will also assist British households by partially reducing taxes. Moreover, it will actively stimulate economic growth to ensure the prosperity of the country's citizens. Specifically, the temporary reduction in duties on fuel and alcohol will continue.

Hunt also stated that inflation could fall to 2.0% by the end of the year, and the UK's GDP this year would grow by 0.8%. Overall, the finance minister's figures and promises, as is customary before elections, were quite impressive, allowing the pound to strongly challenge the dollar.

But will this boost of strength last for the British currency? Economists at HSBC note that the UK still faces a challenging combination of inflation and growth. This limits the Bank of England (BoE)'s ability to maintain a maximally hawkish stance compared to other central banks. As it becomes more dovish, the pound may face significant downward pressure in the coming months.

GBP/USD concluded last week at 1.2858. Analysts' opinions on its near-term behaviour are divided: a majority (60%) predict a decline, 20% anticipate growth, and 20% remain neutral. Among trend indicators and oscillators on the D1 chart, the situation mirrors that of EUR/USD: all point north, although 25% of oscillators signal the pair is overbought. Should the pair move southward, it will encounter support levels and zones at 1.2800-1.2815, 1.2750, 1.2695-1.2710, 1.2575-1.2610, 1.2500-1.2535, 1.2450, 1.2375, and 1.2330. In the event of an upward trend, resistance will be met at levels 1.2880-1.2900, 1.2940, 1.3000, and 1.3140.

On Wednesday, 13 March, the UK's GDP data for January 2024 will be released. The country's economy is expected to show growth of 0.2%, reversing a decline of -0.1% in December, which would confirm Jeremy Hunt's optimism. No other significant macroeconomic statistics regarding the UK economy are scheduled for release next week.

USD/JPY: A Great Week for the Yen

If the past week was very good for the pound, it was simply great for the Japanese yen. USD/JPY reached a local minimum of 146.47 on the evening of Friday, 8 March, meaning the yen reclaimed more than 360 points from the dollar.

In addition to the weakening of the dollar, the yen was bolstered by rumours that the Bank of Japan (BoJ) may soon decide to normalize its monetary policy. Citing informed sources, Reuters reported that "if the results of the spring wage negotiations [on 13 March] are strong, the Bank of Japan may not have to wait until April" to exit its negative interest rate policy, and that the BoJ "is leaning towards ending negative rates as early as March."

Another report by Jiji News mentioned that "the Bank of Japan is considering a new quantitative framework for its monetary policy, which will outline the prospects for future government bond purchases." "The Bank of Japan," Jiji continues, "will review its Yield Curve Control (YCC) as part of considering a new quantitative policy.".

Thus, Wednesday, 13 March, could become a significant day for the Japanese currency, as could 19 March, when the next meeting of the Bank of Japan is scheduled. It's possible the regulator might increase the interest rate on this day for the first time since 2016. However, analysts at the French Natixis Bank believe that if there is an increase, it would be very slight. "In reality, the depreciation of the yen is beneficial for the Japanese economy," the bank's analysts write. "It helps to bring inflation back to the 2% target and stimulates exports. Since Japan has very significant net foreign assets, primarily in dollars and euros, a depreciation of the yen leads to a capital gain in yen value of these external assets." "As a result," Natixis concludes, "one should not expect Japan to move to a tighter monetary policy. At most, a symbolic increase in the base rate can be expected."

Commerzbank holds a similar position, believing that the yen's potential is limited, and a strong appreciation, especially in the medium and long term, should not be expected. According to Commerzbank economists, this is due to the Bank of Japan's lack of capacity for a pronounced normalization of interest rates.

USD/JPY concluded last week at 147.06. As for the near future, it's impossible to come to a consensus: 20% sided with the bears, an equal 20% with the bulls, and 60% remained undecided. Among the oscillators on the D1 chart, only 15% are coloured in green, while the remaining 85% are in red, with 40% indicating an oversold condition. The distribution of strength among trend indicators is exactly the same: 85% to 15% in favour of the reds. The nearest support levels are found at 146.50, 145.90, 144.90-145.30, 143.40-143.75, 142.20, and 140.25-140.60. Resistance levels and zones are located at 147.65, 148.25-148.40, 149.20, 150.00, 150.85, 151.55-152.00, and 153.15.

In the upcoming week's calendar, noteworthy events include the announcement of Japan's Q4 2023 GDP volume on Monday, 11 March. Additionally, as previously mentioned, the wage negotiations on 13 March are of significant interest. No other major events related to the Japanese economy are planned for the near future.

CRYPTOCURRENCIES: Two Historic Records in One Week

In less than 24 hours on 4 March, bitcoin appreciated by approximately 10% and reached the mark of $69,016. This was a new (but not the last) historical record, surpassing the previous one of $68,917 set on 10 November 2021. Most top-10 crypto assets also saw a 10-30% increase in value over the week.

This surge in bitcoin is attributed to purchases by a supposed billionaire from Qatar, who flew in on his private jet to Madeira for the three-day Bitcoin Atlantis conference. Keychainx CEO Robert Rodin wrote that he saw something at Madeira airport that "could forever change bitcoin." BTC maximalist Max Keiser, in turn, shared a video in which the President of El Salvador, Nayib Bukele, greets the Emir of Qatar with the words "It's happening!"

What exactly Rodin and Bukele meant is unknown. However, this was enough to fuel discussions about Qatar adding bitcoins to its balance sheet. The accuracy of such claims is unproven, but social networks are abuzz with speculation on this matter. It's worth noting that rumours about one or two sovereign wealth funds or investment companies from the Middle East secretly buying up bitcoins have been circulating for several months.

Following the update of its historical high, bitcoin then plunged, dropping to $59,107 on 5 March, with forced liquidations on the futures market reaching $1 billion. However, this dip was short-lived as whales bought up much of the supply, not only returning the market to its previous dynamics but also setting a new record: on 8 March, the leading cryptocurrency reached $69,972. This is largely because most market participants anticipate its continued growth, surpassing at least the $100,000 mark.

According to trader Gareth Soloway, the upcoming bitcoin halving in April does not guarantee by itself that the digital gold will reach the mentioned size. Soloway identifies the monetary policy of the US Federal Reserve as the deciding factor. The Fed's reluctance to aggressively cut interest rates could support high inflation, potentially contributing to bitcoin's upward trend. "If we see an increase in liquidity (which will definitely happen), then bitcoin will rise to $100,000 in 2024," writes Soloway. However, on its way to this round figure, the trader does not rule out a short-term bearish correction.

Experts at JPMorgan also discuss the possibility that the halving could trigger a sharp decrease in the price of the first cryptocurrency. The algorithmic reduction of the reward from 6.25 BTC to 3.125 BTC will decrease mining profitability. Based on this, economists at JPMorgan, led by senior analyst Nikolaos Panigirtzoglou, predict that the price will fall to $42,000 after the halving. "The cost of mining bitcoin empirically acts as a floor for its price," their report states. "After the halving, this metric will be $42,000." "This is also the level towards which, in our view, the price will gravitate once the post-halving euphoria subsides in April," note JPMorgan's experts.

According to the well-known Stock-to-Flow (S2F) model, the primary cryptocurrency has transitioned from the accumulation phase to the growth phase. The accumulation phase is characterized by a relatively smooth price increase, low volatility, and moderate corrections, with the maximum drawdown in the concluded cycle not exceeding 22%. The growth phase presents a different picture. Historical data shows that during movements towards new highs, drawdowns ranged from 36% to 71%. JPMorgan has predicted a drop in bitcoin to $42,000. At the current price, this correction would be approximately 36-40%, aligning with the lower end of the specified range. A 70% correction, however, could lead to a significantly deeper fall.

How could this happen? Initially, to stay afloat, miners, whose incomes will be halved, will begin to sell off their stocks. Then, institutional and short-term speculators, looking to lock in profits, will join in. Concurrently, stop orders will start to trigger, leading to an avalanche-like plunge in quotations. And if investors who have put their money into spot BTC-ETFs also join this "crypto-fall", the depth of the drop could be hard to imagine. It's worth noting that in January-February, BTC-ETFs attracted 75% of all investments in the main cryptocurrency, and there are no guarantees that panic sentiment won't affect the depositors of these funds.

However deep the correction might be, bitcoin, in the opinion of many experts, will still remain within the long-term upward trend. "We have entered the era of the bitcoin gold rush. It started in January 2024 and will last approximately until November 2034," believes MicroStrategy's founder Michael Saylor. According to his calculations, by that time, miners will have extracted 99% of all coins, marking the beginning of the "growth phase." (According to BitcoinTreasuries, 93.5% has already been mined as of now).

Saylor believes that currently, only 10-20% of asset managers are interested in spot BTC-ETFs. In the future, as existing barriers are removed, this figure will approach 100%. "When they [managers] can buy BTC through a bank, platform, or prime broker, they'll spend $50 million in an hour," he stated. The founder of MicroStrategy also expressed confidence that "there will come a day when bitcoin will surpass gold and will be traded more than the S&P 500 ETFs."

In the next 15 years, bitcoin could appreciate 64 times to reach $10.63 million. This forecast was made by Professor Giovanni Santostasi based on a power-law model. According to the scientist, this model provides a clear and predictable scenario for the price change of the first cryptocurrency over long periods. However, over shorter spans, which the media primarily focus on, the quotations behave chaotically. Unlike the S2F model by the analyst known as PlanB, the power law is logarithmic, not exponential. In other words, the price of bitcoin is not expected to constantly increase over time. According to Santostasi's calculations, digital gold will peak at $210,000 in January 2026, then drop to $60,000, and after that, it will continue its wave-like growth to $10.63 million.

(For reference: A power-law relationship is a mathematical relationship between two quantities where a relative change in one quantity leads to a proportional relative change in the other, regardless of the initial values of those quantities. The manifestation of this law can be found across a wide range of natural phenomena, from the frequency of earthquakes to the dynamics of stock market changes.).

As of the evening of Friday, 8 March, BTC/USD is trading at around $68,100. The Crypto Fear & Greed Index has slightly risen from 80 to 81 points, entering the Extreme Greed zone. The total market capitalization of cryptocurrencies stands at $2.60 trillion (up from $2.34 trillion a week ago), with the main cryptocurrency's dominance index at nearly 52%, and its capitalization exceeding $1.35 trillion. This surpasses the fiat currency market capitalizations of Malaysia, Indonesia, Vietnam, Thailand, the UAE, Mexico, and many other countries. A few days ago, BTC surpassed the Russian ruble in capitalization, taking the 14th spot in the overall ranking of the largest currencies, with the Swiss franc as its nearest competitor. Amid news that bitcoin exceeded the rouble, jokes flooded the internet suggesting Vladimir Putin is Satoshi Nakamoto. Ethereum ranked 28th, performing better than the Chilean peso but not as well as the Turkish lira.

In the overall ranking of the most capitalized assets, which includes precious metals and companies, bitcoin secured the 10th place. It surpassed Berkshire Hathaway, the company of well-known cryptocurrency critic billionaire Warren Buffett, but did not reach Meta. The top 3 are currently occupied by gold, Microsoft, and Apple.
 

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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There's also a third advantage: becoming a lottery participant and getting a chance to win one or even several prizes is very straightforward. You just need to have a Pro account with NordFX (or register and open a new one), fund it with $200, and simply trade. By making a trade turnover of just 2 lots in Forex currency pairs or gold (or 4 lots in silver), a trader automatically receives a virtual lottery ticket. The number of tickets per participant is unlimited. The more deposits and the higher the turnover, the more lottery tickets a participant will have, and the greater their chances of becoming one of the winners. The Super Lottery from NordFX is an excellent opportunity for traders not only to try their luck in winning cash prizes but also to increase their trading activity and possibly discover new trading strategies.

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For more details, visit NordFX's website. You can become a participant of the Mega Super Lottery 2024 and start receiving lottery tickets right now.


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

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CryptoNews of the Week


– Bitcoin appreciated by about 10% in less than a day on March 4, reaching a new all-time high of $69,016. The previous record was $68,917, set on November 10, 2021. The market capitalisation of the leading cryptocurrency exceeded $1.3 trillion. Most of the top 10 crypto assets also saw a 10-30% increase in value over the week.

– The surge in bitcoin on March 4 is reportedly due to purchases by a certain billionaire from Qatar, who flew to Madeira on his private jet for the three-day Bitcoin Atlantis conference. Robert Rodin, CEO of Keychainx, mentioned seeing something at Madeira airport that "could change bitcoin forever." Meanwhile, BTC maximalist Max Keiser shared a video in which El Salvador's President Nayib Bukele greets the Emir of Qatar with the words "It's happening!"
This has sparked discussions about Qatar adding bitcoin to its balance sheet. The validity of such claims remains unproven, but social media is rife with speculation on the matter. It's worth noting that rumours have been circulating for several months about one or two sovereign wealth funds or investment companies from the Middle East secretly buying up bitcoin. There's also the mysterious Mr. 100BTC, who, according to rumours, has been consistently buying 100 bitcoins every day since November 2022. This individual has never emerged from the shadows, but if he does indeed exist, he would have amassed about 60,000 coins to date.

– "We have entered the era of the bitcoin gold rush. It started in January 2024 and will last approximately until November 2034," declared Michael Saylor, the founder of MicroStrategy, speaking at Bitcoin Atlantis. According to his calculations, by that time miners will have extracted 99% of all coins, marking the beginning of the "growth phase." (Currently, 93.5% have already been mined, according to BitcoinTreasuries data).
Saylor believes that at present, only 10-20% of asset managers are interested in spot BTC-ETFs. In the future, as existing barriers are removed, this figure is expected to approach 100%. "When they [the managers] can buy BTC through a bank, a platform, or a prime broker, they'll spend $50 million in an hour," he stated. The MicroStrategy founder is also confident that "the day will come when bitcoin surpasses gold and will be traded more than the S&P 500 ETFs."

– Since its network launch in 2009, bitcoin has repeatedly proven its viability. Over the years, the cryptocurrency has managed to surpass many traditional currencies. Currently, BTC has outperformed the Russian rouble in market capitalisation and occupies the fourteenth position in the overall ranking of the world's largest currencies. Its nearest competitor is the Swiss franc. (Following the news that bitcoin surpassed the rouble, the internet was flooded with jokes suggesting that Vladimir Putin is Satoshi Nakamoto).
In the overall ranking of the most capitalised assets, which includes precious metals and companies, bitcoin has taken the tenth place. It surpassed Berkshire Hathaway, the company of well-known cryptocurrency critic billionaire Warren Buffett, but fell short of Meta. The top three positions are currently held by gold, Microsoft, and Apple. Additionally, bitcoin's market capitalisation ($1.3 trillion) has reached the GDP levels of many countries. For instance, the Gross Domestic Product of Saudi Arabia is $1.108 trillion, and Indonesia's is $1.319 trillion.
Following bitcoin, Ethereum is positioned at twenty-eighth in the overall ranking of the most capitalised currencies. ETH's result was better than that of the Chilean peso but worse than the Turkish lira.

– Anthony Scaramucci, the founder of Skybridge and former White House Communications Director, asserts that US President Joe Biden has a positive impact on cryptocurrency and the financial markets at large. To support his statement, Scaramucci cited Biden's legislative proposals related to digital assets.
According to the Skybridge chief, the current president's commitment to the rule of law will expedite the establishment of regulations for the crypto industry. "While these rules may not please everyone," Scaramucci writes, "having clear guiding principles will provide a solid foundation for legal arguments in court. [Thanks to this,] we will continue to win against the Biden administration in the United States judicial system."

– Robert F. Kennedy Jr, a contender in the US presidential race, admitted last year that he bought bitcoins for his children. The politician believes that BTC is the best alternative to central bank digital currencies (CBDCs) because it offers financial freedom to people.
In a recent interview with CNBC, Robert Kennedy reiterated his view of BTC as the superior currency, emphasizing that it allows Americans to transfer funds anywhere with minimal costs and complete anonymity. "Banks are trying to destroy digital currency and hinder the development of its infrastructure. However, the process of integrating cryptocurrency cannot be stopped anymore, and the repressive measures of the authorities against this instrument only increase its popularity," stated the presidential candidate.

– According to Professor of Physics Giovanni Santostasi, bitcoin could appreciate 64 times in the next 15 years, reaching $10.63 million. This forecast is based on a power-law model.
A power-law relationship is a mathematical connection between two quantities where a relative change in one quantity leads to a proportional relative change in the other, regardless of the initial values of these quantities. The relationship between one quantity and another represents a power function. This law is observable in a wide range of natural phenomena, from the frequency of earthquakes to the dynamics of stock market changes.
Santostasi stated that this model provides a clear and predictable scenario for the price change of the first cryptocurrency over long periods. However, over shorter spans, which the media primarily focuses on, the quotations behave chaotically.
According to the professor, unlike the well-known S2F (Stock-to-Flow) model by the analyst known as PlanB, the power law is logarithmic, not exponential. In other words, the price of bitcoin is not expected to rise continuously over time. According to Santostasi's calculations, the digital gold will peak at $210,000 in January 2026, then drop to $60,000, and after that, it will continue its wavy growth to $10.63 million.

– Experts at JPMorgan suggest that the upcoming bitcoin halving in April could trigger a significant drop in the price of the first cryptocurrency. The algorithmically mandated reduction of the mining reward from 6.25 BTC to 3.125 BTC will decrease mining profitability. Based on this, economists at JPMorgan, led by senior analyst Nikolaos Panigirtzoglou, predict that the price will fall to $42,000 after the halving.
"The cost of mining bitcoin empirically acts as a price floor," their report states. "Currently, the cost of mining is $26,500. After the halving, this figure will be $42,000." "This is also the level towards which we believe the price will gravitate once the post-halving euphoria subsides in April," JPMorgan notes.
The experts also considered the possibility of a 20% drop in the bitcoin network's hash rate, primarily due to the mass disconnection of low-efficiency equipment. Consequently, the capacity may concentrate among large cryptocurrency miners who have taken measures to reduce costs and maintain efficiency. "There might also be some horizontal integration through mergers and acquisitions among miners in different regions to take advantage of synergies in their business," concluded the specialists.

– Trader Gareth Soloway has identified a critical factor that could propel bitcoin's price to another historical high of $100,000. The expert pointed to a dilemma in the US Federal Reserve's monetary policy management amidst approximately 3% inflation. He emphasized that the institution's reluctance to aggressively cut rates could sustain high inflation, potentially contributing to bitcoin's upward trend. "If we see an increase in liquidity (which is bound to happen), then bitcoin will rise to $100,000 in 2024," writes Soloway. On the way to the mentioned round figure, like the JPMorgan experts, the trader does not exclude a short-term bearish correction. However, in his opinion, the upcoming halving in itself does not guarantee the digital gold's rise to the specified amount.

– Researchers from the University of Texas in the USA have discovered that over four years, cryptocurrency scammers utilizing the "pig butchering" scheme could have stolen more than $75 billion. The "pig butchering" scheme is a fraudulent attack where cybercriminals convince unsuspecting people to invest in a doomed or non-existent business. Once the victim believes and hands over their money, the scammers immediately disappear.
According to the study, from January 2020 to February 2024, such criminals duped at least 4,000 people. The illegal operations predominantly took place in Southeast Asia. The researchers found that tracked transactions amounting to $15 billion out of the reported $75 billion led to five cryptocurrency exchanges: Binance, Coinbase, OKX, Crypto.com, and HTX (formerly Huobi). The favorite asset among criminals was the stablecoin Tether (USDT), with more than 84% of the total transaction volume attributed to this popular coin.
Paolo Ardoino, CEO of Tether's issuer, stated that the report is rather misleading. "Every Tether transaction occurs online, so any action can be tracked, assets can be confiscated, and the criminal caught. This is why we cooperate with law enforcement agencies," he commented to Bloomberg. It's noteworthy that the United Nations (UN) has also previously stated that USDT is one of the most popular means of payment among criminal groups in Southeast Asia. Representatives of the issuer then questioned the accuracy of such data.

– In the summer of 2022, it would have been the 110th birthday of Milton Friedman, the great economist and Nobel Prize laureate, often called "the most influential economist of the second half of the 20th century." Back in 1999, Friedman gave an interview in which he predicted the emergence of digital currencies. He described a system where transactions are conducted electronically, and the parties involved do not need to know each other's identities. In his forecast, Friedman highlighted the potential of digital currencies to provide unprecedented privacy and efficiency in financial transactions, marking a significant departure from traditional banking systems.
"I think that the internet is going to be one of the major forces for reducing the role of government," said the distinguished scientist at the time. "The one thing that’s missing but will soon be developed is reliable electronic cash, a method whereby on the Internet you can transfer funds from A to B without A knowing B or B knowing A."
 

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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EUR/USD: Weak Bulls vs. Weak Bears

Throughout the past week, EUR/USD has been trading within a narrow channel. News favouring the euro pushed it towards the resistance level at 1.0865, while positive developments for the dollar brought it back to the support level at 1.0800. However, neither the bulls nor the bears had enough strength to break through these defence lines.

The preliminary GDP data for the US in Q4 2023, released on Wednesday, 28 February, put pressure on the American currency as it fell short of both forecasts and the previous figure – 3.2% against 3.3% and 4.9%, respectively. However, the dollar managed to recover its losses the following day. This rebound was related to the Personal Consumption Expenditures (PCE) Index in the US, a measure used by the Federal Reserve to calculate inflation levels and a crucial factor in determining the regulator's future actions.

The US Bureau of Economic Analysis report, released on 29 February, revealed that the Core PCE, which excludes volatile food and energy prices, stood at 2.8% year-on-year in January. This was slightly below the previous value of 2.9% but matched analysts' forecasts precisely. On a monthly basis, the PCE increased from 0.1% to 0.4%. Market participants were immediately reminded of previously published data on consumer (CPI) and producer (PPI) inflation, which were higher than expected. This convinced them that, despite the GDP decline, the regulator might continue to postpone the start of easing its monetary policy. (Currently, the market expects the Fed to begin a rate-cutting cycle in June).

Hawkish comments from Federal Reserve officials, following the PCE publication, supported the American currency. Mary Daly, head of the Federal Reserve Bank of San Francisco, stated that lowering rates too quickly could lead to inflation stagnation. Meanwhile, her colleague, Raphael Bostic, president of the Federal Reserve Bank of Atlanta, suggested that it might be appropriate to start cutting rates in the summer.

The sellers of the single European currency were also influenced by relatively weak statistics from the Eurozone, where the volume of consumer lending in January showed the slowest growth since 2016. This indicator increased by only 0.3%. Experts cite the pressure on consumers from the high interest rates of the European Central Bank (ECB) as the main reason for this trend, which could become an additional argument for lowering them.

Regarding consumer inflation, the figures in Europe were quite mixed. Data published at the beginning of the last week from Spain and France came out stronger than forecasts. Meanwhile, in Germany, the CPI fell from 3.1% to 2.7% year-on-year, aligning with market expectations. The dynamics of EUR/USD could have been influenced by the Eurozone's overall figures, which were published on the first day of spring. The preliminary report from Eurostat showed that the Consumer Price Index (CPI) increased by 2.6% year-on-year in February, lower than the 2.8% growth in January but above the 2.5% forecast. Core inflation for the month decreased to 3.1% year-on-year compared to the previous figure of 3.3%, but it exceeded expectations of 2.9%. While inflation fell on a yearly basis, it sharply rose on a monthly basis, from a negative -0.4% to +0.6%.

At the very end of the working week, the final values of the Manufacturing Sector Purchasing Managers' Index (PMI) in the United States were released, somewhat disappointing market participants. The PMI for February fell from 49.1 to 47.8 points, despite being expected to rise to 49.5. As a result, after rebounding from the support level at 1.0800, EUR/USD once again moved upward, closing the week at 1.0839. As for the near-term forecast, as of the evening of Friday, 1 March, 45% of experts voted for the dollar's strengthening and the pair's decline. 30% sided with the euro, while 25% held a neutral position. Among the oscillators on D1, only 20% are coloured red, another 20% are in neutral grey, and the remaining 60% are green, with 10% of them in the overbought zone. Among the trend indicators: 20% are red, and 80% green. The nearest support levels for the pair are found at 1.0800, followed by 1.0725-1.0740, 1.0680-1.0695, 1.0620, 1.0495-1.0515, and 1.0450. Resistance zones are located at 1.0845-1.0865, 1.0925, 1.0985-1.1015, 1.1050, 1.1110-1.1140, and 1.1230-1.1275.

As for the upcoming week, the value of the Services Sector Purchasing Managers' Index (PMI) in the US will be announced on Tuesday, 5 March. Wednesday and Thursday are set to bring a batch of data from the US labour market, with Federal Reserve Chairman Jerome Powell scheduled to speak in Congress on the same days. The main event of the week will be the European Central Bank (ECB) meeting on Thursday, 7 March. Market participants expect the pan-European regulator to leave the interest rate unchanged at 4.50%, so the subsequent press conference by the central bank's leadership and their comments on future monetary policy will be of particular interest. The end of the week could also prove to be quite volatile. On Friday, 8 March, we will first receive data on the Eurozone's GDP for Q4 2023, followed by a batch of very important statistics from the American labour market, including the unemployment rate, average wage level, and the number of new jobs created outside the agricultural sector (Non-Farm Payrolls, NFP).

GBP/USD: Will the Budget Bolster the Pound?

With the European Central Bank (ECB) meeting just a few days away, the Federal Reserve (Fed) and the Bank of England (BoE) meetings are not due for a while: on 20 and 21 March, respectively. The nearest key event for the sterling pound in the coming week will be the announcement of the budget by the UK Government on Wednesday, 6 March. This budget is pre-election, and therefore, according to strategists at the Dutch Rabobank, it could have a significant impact on the British currency, which in 2024 is the second most successful G10 currency after the US dollar.

It's worth noting that, according to current rules, general elections in the UK must take place no later than 28 January 2025. According to The Guardian, Prime Minister Rishi Sunak is leaning towards holding them in the second half of 2024. However, The Daily Telegraph reports that elections for the lower house of the British Parliament could occur even earlier: as soon as this spring.

Economists at Rabobank anticipate that the pre-election budget will include fiscal incentives, which could serve as a new stimulus for strengthening the pound. This entails a moderate easing of fiscal policy, potentially involving changes more in national insurance than in income tax. Any reforms that could boost incentives to work or changes in regulation that might enhance investment incentives will be of particular interest to the market. An increase in the labour force would contribute to economic growth and, therefore, could be seen as a favourable factor for the British pound.

Both Rabobank and the Japanese MUFG Bank believe that the extent of potential fiscal incentives is unlikely to be sufficient to significantly improve the metrics of the British economy. However, even a small number of such stimuli is likely to reinforce the general view that the Bank of England will not be in a hurry to cut interest rates and will not do so either in May or June.

Let's recall that at its meeting on 1 February, the Bank of England (BoE) maintained the rate at the previous level of 5.25%. The accompanying statement mentioned that "more evidence is needed that the Consumer Price Index will fall to 2.0% and remain at this level before cutting rates." Market participants are anticipating the first rate cut to occur in August. This expectation has already been factored into prices and prevents GBP/USD from declining.

However, if inflation remained unchanged at 4.0% in February and the country's GDP contracted by -0.3%, it seems the Government intends to bolster the economy with new fiscal incentives. Nonetheless, if these measures do not lead to GDP growth, discussions may once again turn towards an imminent rate cut, which would exert pressure on the pound.

GBP/USD concluded the past week at the level of 1.2652, failing to break out of the medium-term sideways channel of 1.2600-1.2800. Regarding the analysts' forecast for the near future, their opinions were evenly divided: a third voted for the pair's decline, a third for its rise, and a third remained neutral. Among the oscillators on D1, 25% point south, 40% look north, and the remaining 35% are pointing east. Trend indicators, as a week ago, show a significant bias towards the British currency – 80% indicating north and 20% south. Should the pair move southward, it will encounter support levels and zones at 1.2575-1.2600, 1.2500-1.2535, 1.2450, 1.2375, and 1.2330. In the event of a rise, it will meet resistance at levels 1.2695-1.2710, 1.2785-1.2815, 1.2880, 1.2940, 1.3000, and 1.3140.

Besides the announcement of the country's budget on 6 March, no significant macroeconomic statistics regarding the economy of the United Kingdom are scheduled for release in the coming week.

USD/JPY: Petal Predictions

There's an ancient method of fortune-telling with a flower. A girl takes a flower in her hand and plucks the petals one by one: the first one means someone will love her, the second means they won't, the third means love, the fourth means no love, and so on until the petals run out. The fate declared by the last petal is believed to come true. This method of fortune-telling can quite aptly be applied to the Bank of Japan (BoJ): will change its monetary policy, won't change, will change, won't change...

Low interest rates make the yen cheap, which in turn stimulates exports, making Japanese goods competitive in foreign markets. However, on the flip side, it creates problems for the national industry as it makes imports more expensive, primarily the import of raw materials and energy resources.

In January, the trade balance was sharply negative. If in December the balance was in favour of imports (+69 billion yen), in January, it collapsed to minus 1758 billion yen. Looking at the balance for the entire year of 2023, imports often lost to exports. Industrial production decreased by -7.5% in January, which is worse than the previous growth of +1.4% and the forecast of -6.7%. Thus, Japanese officials, like with the flower method, wonder what is better and more important – supporting the economy or fighting inflation. Meanwhile, the BoJ does not take any concrete steps but limits itself to vague statements, often very contradictory.

On 29 February, following hawkish comments from Bank of Japan (BoJ) Board member Hajime Takata, the yield on Japanese government bonds rose from 0.68% to 0.71%, and USD/JPY plummeted from 150.14 to 149.20. This high-ranking official stated that the BoJ should consider the possibility of adopting flexible countermeasures, including moving away from monetary easing policies, which investors interpreted as a signal for a rate hike.

However, just a day later, Kazuo Ueda, the head of the Bank of Japan, stated that the country's economy would continue to recover gradually, and the GDP decline in the fourth quarter was somewhat of a correction after the strong growth spurred by the economic restart post-COVID pandemic. According to Ueda, inflation is decreasing at a faster pace than expected, without any rate hikes. Following this, USD/JPY reversed direction, heading north and rising to 150.70.

The main advantage of the yen right now is that while the major G10 central banks are considering easing their policies, the Bank of Japan can only contemplate tightening its policy. It is clear that it will not lower its already negative interest rate of -0.10%. Commerzbank still does not rule out the possibility that the BoJ may decide to take initial steps towards normalizing its monetary policy soon. "However, we expect this to be limited in nature," write the bank's economists. "As in 2000 and 2006, the first interest rate hikes are likely to slow inflation. After that, there will be no further normalization." As a result, Commerzbank forecasts a gradual decline in USD/JPY to 142.00 by December this year, followed by a steady rise to 146.00 by the end of 2025.

Last week concluded at 150.10 for the pair, following the release of weak PMI data in the US manufacturing sector. Looking ahead, the analysts' median forecast positions 60% in favor of the bears for the USD/JPY pair, 20% for the bulls, and 20% remain indecisive. On the D1 oscillators, 65% are green (with 10% in the overbought zone), and the remaining 35% display a neutral-grey color. Similarly, 65% of the trend indicators are green, with 35% red. The nearest support level is at 149.60, followed by 149.20, 148.25-148.40, 147.65, 146.65-146.85, 144.90-145.30, 143.40-143.75, 142.20, and 140.25-140.60. Resistance levels and zones are at 150.90, 151.70-152.05, and 153.15.

In the upcoming week's calendar, Tuesday, 5 March, is notable for the announcement of the Consumer Price Index (CPI) in the Tokyo region. There are no other significant events related to the Japanese economy scheduled for the near future.

CRYPTOCURRENCIES: New Records for the "Naked King"


Last week, bitcoin set historical highs against local currencies in many countries. Now, the leading cryptocurrency is aiming to test and possibly surpass its all-time high of $68,917, reached on 10 November 2021. At least, the current dynamics suggest this goal: starting from $50,894 on Monday, 26 February, BTC/USD soared to $63,925 by Wednesday, gaining more than 25% in just three days. At this point, the Bitcoin Fear & Greed Index jumped to 82 points, entering the Extreme Greed zone. As Matt Simpson, a senior market analyst at City Index, wrote, "If this were any other market, it would probably be classified as 'peak overheating – stay away from this bubble.' But bitcoin has entered a parabolic rally phase, and there are no immediate signs of a peak forming.".

Let's recall that on 1 February, BTC was trading at $41,877. Thus, in 29 days, the digital gold gained approximately 50%, making this past February the most successful month for investors in the last three years. We thoroughly examined the five reasons behind the ongoing bull rally in our previous review, ranging from the most to the least important. Large investments in spot Bitcoin ETFs acted as a catalyst for the frenzied demand for bitcoin. However, as noted by JPMorgan, purchases by retail crypto investors with relatively small amounts have even surpassed the cash flows from large companies at this point.

Glassnode analysts believe that the current situation resembles the boom observed in 2020–2021. The dynamics of capital flows, exchange activity, leverage in crypto derivatives, and demand from both institutional and retail speculators all indicate an explosion in investors' risk appetite. Signs of speculative sentiment have also emerged in the derivatives market. The total open interest (OI) in bitcoin futures reached $21 billion and is also approaching the euphoria levels of 2021. Only in 7% of trading days was the OI value higher. The substantial increase in the liquidation of short positions on bitcoin acted as an additional trigger. 

Investor, founder of Heisenberg Capital, and host of the Keiser Report, Max Keiser, compared investing in the leading cryptocurrency to buying shares of Warren Buffett's Berkshire Hathaway in March 1985, when they were priced at $1,500 each. Since then, the price of these shares has risen to $629,000. According to Keiser, bitcoin has the potential to increase by more than 41,000%. If the leading cryptocurrency experiences such rapid growth, each coin would be worth over $21,000,000, and the digital asset's market capitalization would exceed $450 trillion. (For comparison, the current market capitalization of Apple Inc. is $2.82 trillion, making it one of the most valuable companies in the world, followed by Microsoft at $2.0 trillion, Alphabet at $1.77 trillion, and Amazon at $1.6 trillion).

Furthermore, Max Keiser warned traders and investors of a potential major crash in the US stock market. He stated, "A crash akin to 1987 is coming. Bitcoin is the perfect safe haven, whose price will soar above $500,000." It should be noted that bitcoin has completely "decoupled" from such risk assets as stocks, and its correlation with stock indices such as the S&P500, Dow Jones, and Nasdaq has virtually dropped to zero.

After BTC/USD broke through the $56,000 level on 27 February, legendary trader, analyst, and head of Factor LLC, Peter Brandt, revised his forecast for the first cryptocurrency's rate in 2025 from $120,000 to $200,000. The expert raised the bar as bitcoin overcame the upper boundary of resistance of a 15-month channel (on the BTC/USD chart, these are the trend lines that connect the lows of November 2022 and September 2023, as well as the highs of April 2023 and January 2024). According to Brandt, the current bullish cycle will conclude in August-September 2025. By that time, the quotes of the digital gold should reach the stated goal.

Regarding the exit point from the position, Brandt, half-jokingly, half-seriously, wrote that he would use laser eyes on the X network as a "contrarian indicator," just as in 2021. "So, folks," he urged, "if you want bitcoin to maintain a strong trend, please do not post laser eyes on your social media profile picture. Too many laser eyes are a sell signal."

A similar figure was mentioned by ChatGPT-4. According to this Artificial Intelligence, by August 2025, the price of BTC could reach $179,000. However, ChatGPT-4 acknowledged the difficulty of precise forecasting and warned that "these calculations are speculative and depend on a wide range of unpredictable economic, regulatory, and technological factors.".

Regarding the current year, 2024, the price of the first cryptocurrency could reach $150,000 in the next 10 months. This opinion was expressed by Tom Lee, co-founder of the analytical firm Fundstrat, in an interview with CNBC. "ETFs increase demand, halving reduces supply, and the expected easing of monetary policy all support risk assets and bitcoin," he explained. At the same time, the expert believes that a correction in the crypto market should not be expected in the near future. In the long-term perspective, Lee reiterated his January forecast of bitcoin reaching $500,000 within five years. "It's sound money, I think it's proving its utility. It's a great store of value, a good risk asset, and also incredibly safe," added the Fundstrat co-founder.

As of the review's writing on the evening of Friday, 1 March, BTC/USD is trading in the vicinity of $62,500. The total market capitalization of the crypto market has surpassed an important threshold of $2 trillion and reached $2.34 trillion (up from $1.95 trillion a week ago). The Crypto Fear & Greed Index has risen from 76 to 80 points and is in the Extreme Greed zone.

And finally, a fly in the ointment amidst the general rejoicing. Contrary to numerous bitcoin enthusiasts, experts at the European Central Bank believe that the fair value of BTC is... zero. And this is despite the approval of spot bitcoin ETFs in the US and the current price rally.

In November 2022, ECB experts published an article titled "Bitcoin's Last Stand". There, they referred to the stabilization of the cryptocurrency's quotes as "an artificially induced last gasp before the road to ultimate irrelevance". Since then, the price of digital gold has risen from ~$17,000 to ~$60,000. However, this has not caused the bank's specialists to change their opinion. In a new essay titled "ETF Approval - New Clothes for the Naked King", they stated that they were right in their main arguments more than a year ago. Firstly, bitcoin has failed as a global decentralized digital currency for payments. Secondly, the cryptocurrency has not become a suitable investment asset whose value will inevitably increase.

"Bitcoin is still not suitable as an investment," the essay states. "It does not generate any cash flows (like real estate) or dividends (like stocks), cannot be productively used (like commodities), does not offer any social benefits (like gold jewellery), or subjective value based on outstanding abilities (like works of art)," believe ECB experts. It would be interesting to see what they would say if, for example, Max Keiser's forecast comes true, and the "naked king" is worth $21 million per coin.
 

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

- The best result in February was achieved by a trader from Southeast Asia, account number 1745XXX, who made a profit of 70,757 USD through transactions with gold (XAU/USD).
- The gold pair XAU/USD, along with the British pound (GBP/USD), assisted a client from Western Asia, account number 1704XXX, in securing the second spot on the podium with earnings of 45,303 USD.
- Third place went to another trader from Southeast Asia, the owner of account number 1748XXX. Utilising the same instrument, XAU/USD, they managed to gain a profit of 25,570 USD.

The following situation has emerged in the passive investment services of NordFX:

The PAMM service at NordFX continues to attract investors' attention to the "Trade and earn" account, which opened in March 2022. After four months of dormancy, it reactivated in November of the same year. For a long time, its maximum drawdown did not exceed 17%. However, at the end of 2023, the account manager made a significant mistake, and within a few days, the drawdown neared a risky 60%. Fortunately, the manager was able to rectify the situation, resulting in a sharp increase in profitability, exceeding 477% over 16 months of operation.

In our last review, we also highlighted a startup named Kikos2. A month later, it remains showcased in the PAMM service, boasting a profit of 394% within 101 days of its existence, despite a significant maximum drawdown of around 60%. Therefore, in this and all other cases, investors must exercise maximum caution and be prepared for both profits and losses.

Those familiar with NordFX's passive investment services will likely know the accounts named KennyFXPRO, the oldest of which has been operating for over three years. This time, we want to highlight two new accounts created by this manager. The first, KennyFXPRO - The CAD Bank, has shown a profit of 7% in 87 days with a very low maximum drawdown of less than 5%. The profitability of the second, KennyFXPRO - Road to 250, was nearly 15% over 89 days, with a drawdown of less than 7%.

In CopyTrading, we continue to monitor the yahmat-forex signal, which has shown a return of 372% over 251 days, with a maximum drawdown of 37%. Among the startups, it's worth noting the FxBro Tradings account, which has demonstrated a return of 26% in just 23 days, with a maximum drawdown of less than 8%.

Among the IB partners of the brokerage firm NordFX, the top 3 are as follows:
- The largest commission reward in February was credited to a partner from Southeast Asia, account number 1743XXX, amounting to 10,975 USD.
- Following them is their colleague from Western Asia, account number 1645XXX, who earned 6,137 USD for the month.
- Finally, completing the top three leaders is another partner from Southeast Asia, account number 1516XXX, who received a commission of 5,535 USD.

***

Attention! Starting from February 20, clients of the brokerage firm NordFX have been given the opportunity to participate in a new accumulation program called the Margin Call Bonus. The program's uniqueness lies in the fact that traders earn bonus funds for themselves: the more actively they deposit into their account and the more actively they trade, the larger the amount they can receive when a Margin Call occurs.


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/