Daily Market Analysis and News From NordFX

CRYPTOCURRENCIES: Bitcoin in Search of a Bottom

Bulls on the S&P500, Dow Jones and Nasdaq successfully repelled the attacks of the bears for two weeks, until June 09. However, the strengthening dollar and the flight of investors from inflationary risks became the reason for active profit-taking on speculative long positions in stocks. And the quotes fell down.

Fights between bulls and bears on the BTC/USD front line, which runs along the $30,000 horizon, have not ceased for almost five weeks. And to the credit of the bitcoin defenders, despite the stock market crash, they still (Friday evening, June 10) continue to hold the line, only retreating slightly to the south. In such a flat situation, long-term investors can only wait and hope for the pair to grow. As for Intraday traders, transactions during a side trend in a narrow corridor can bring good profits to them. This will require certain skills though.

In our opinion, everyone is free to use the trading strategy that suits them best. Different people have different experiences, different psychological states, different financial possibilities, different time frames that they can devote to trading. In general, everything is individual. For example, MicroStrategy CEO Michael Saylor believes that you should not get carried away with short-term goals. According to him, people who pay too much attention to the charts, "guess on coffee grounds." “If you don’t plan to hold it [Bitcoin] for four years, you are not an investor at all, you are a trader, and my advice to traders is: don’t trade it, invest in it,” Saylor told The Block.

Recall that as of April 14, 2022, MicroStrategy remains the largest bitcoin holder among public companies. Together with its affiliates, it owns 129,218 BTC purchased for $3.97 billion at an average price of around $30,700. So the current situation for MicroStrategy and personally for Michael Saylor is critical. The company will be at a fairly disadvantageous position if the price of the main cryptocurrency does not go up. And according to a number of experts, it may well go the other way.

So, cryptanalyst Justin Bennett, giving a forecast for the coming weeks, hinted at a repetition of the June 2021 chart. According to him, the nearest line of defense for the bulls is at $28,600. If the asset goes below this level, it risks revisiting the May lows at $26,580-26,910.

According to the analyst, if bitcoin follows the June 2021 scenario, it will form new lows for the current year: “In the event of a sell-off, the downward movement could go to the $24,000-25,000 range. But I do not think that this will be the minimum of the current cycle.”

After the formation of a new annual low, Bennett predicts some growth for bitcoin. “Most likely it will be a short-term rally to a lower macro high.” According to his calculations, the BTC price in July could rise to $35,000 during this short-term growth.

But Katie Wood, the founder and CEO of the investment company ARK Invest with assets of $60 billion, believes that BTC is already forming a bottom based on the network's performance. According to her, “short-term holders have capitulated, and this is great news in terms of hitting the bottom. The share of long-term holders is at an all-time high: 65.7% (they hold BTC for at least a year). Although there is still a possibility of capitulation of some of them to mark the bottom.

In addition to network indicators, Wood is watching the bitcoin futures market, hinting at a period of increased volatility for the asset. “It is still difficult to say exactly which direction it will go, but we believe that there is a high probability of the next burst of volatility in the upward direction.”

Despite some optimism, one has to exercise caution after the collapse of Terra (LUNA). “At the same time, we are on the alert,” says the CEO of ARK Invest. “Terra’s collapse was a fiasco for cryptocurrencies, and regulators have more reason to impose tighter restrictions than anticipated.”

By the way, commenting on the collapse of Terra and the subsequent market correction, the aforementioned head of MicroStrategy doubted that what was happening was evidence of a bearish phase. “I don’t know if this is a bear market or not, but if it is, we have had three of them in the last 24 months,” Michael Saylor stressed.

As for long-term forecasts, they, as usual, look in different directions. American economist and Nobel Prize winner Paul Krugman called cryptocurrencies a scam, comparing them to the real estate crisis in 2008. In an interview with Fox News, he mentioned the movie The Big Short, which tells the story of the financial crisis of the 2000s, which resulted from the collapse of the real estate market. Real estate prices were extremely high, but this did not stop people. The same situation is happening in the cryptocurrency market, Krugman explained.

The economist criticized people who claim that crypto assets are the future of finance. According to Krugman, bitcoin, which appeared in 2009, has not yet found significant practical use over the years, except for use in illegal activities.

“Cryptocurrencies have become a large asset class, and their supporters are increasing their political influence. Therefore, it sounds implausible to many that cryptocurrencies have no real value. But this is only a house built on sand. I remember the housing bubble and the mortgage crisis, so I can say that we have gone from a big short game to a big scam,” said the Nobel laureate.

Unlike Paul Krugman, Bloomberg expert Mike McGlone believes that we, on the contrary, are in for a big game, but not going down, but going up. According to his forecast, the highest in the last 40 years inflation is starting, which will cause the largest economic crisis, after which assets such as cryptocurrencies, US bonds and gold will show unprecedented growth. McGlone stated in an interview to Kitco News that "this may be reminiscent of the consequences of 1929. Although rather, it will be more like the aftermath of the 2008 crisis, or maybe the aftermath of the 1987 crash.”

Along with Mike McGlone, Katie Wood and Michael Saylor, American investment strategist Lyn Alden has also sided with the bulls. She does not expect inflation to ease any time soon as the US continues to print money to meet its financial obligations. That is why, in her opinion, bitcoin is now one of the most reliable assets, along with gold and real estate.

Our previous review named the target level for bitcoin, which InvestAnswers experts set by choosing the average value of a selection of forecasts from Fidelity, ARK Invest and other companies. Having combined some of the well-known crypto models, they came to the BTC rate by 2030 iaround $1,555,000 per 1 coin.

However, macro analyst and director of investment company Fidelity Jurrien Timmer has updated his long-term forecast, and it looks much more modest now. Jurrien Timmer refers to the once popular Stock-to-Flow (S2F) model of an analyst with the nickname PlanB, according to which the price of BTC was predicted based on supply shocks caused by asset halvings. However, the expert added to the S2F model two more models that track the rate of adoption of the Internet and mobile phones.

According to Timmer, based on the mobile phone adoption model, the price of bitcoin could rise sharply to $144,753 by 2025 (about a year after the next halving). But if BTC follows the pace of Internet adoption, then it turns out that the asset has already peaked and can trade at only $47,702 in 3 years. The average value obtained by Timmer based on his modified supply model is $63,778.

Time will tell which of the experts is right. In the meantime, at the time of writing the review, on the evening of Friday June 10, the total capitalization of the crypto market is at the level of $1.192 trillion ($1.225 trillion a week ago). The Crypto Fear & Greed Index is firmly entrenched in the Extreme Fear zone and is at around 13 points (10 a week ago). The BTC/USD pair is trading at $29.340.


NordFX Analytical Group


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
 
CryptoNews of the Week


- The collapse of the cryptocurrency market on June 13 and 14 was not caused by the announcement of the Celsius Network crypto-lending platform to suspend the withdrawal of funds, but by the general negative macroeconomic background. This opinion was expressed by industry participants in a survey conducted by The Block.
Celsius suspended withdrawals, exchanges, and transfers between accounts on June 13 “due to extreme market conditions.” As of May, the platform managed $11 billion in user assets.
However, many experts believe that the crypto markets “would have fallen regardless of Celsius.” Bloomberg notes that the market has entered "a period of selling everything except the dollar." Traders are leaving for a "safe harbor", fearing that due to rising inflation, the US Federal Reserve may start raising interest rates more aggressively than was previously expected. Wall Street analysts believe that the rate will rise in June by 1.0% straight away, and not by 0.5%. Such a result could have negative implications for risky assets such as stocks and cryptocurrencies.
Against this background, the price of bitcoin fell to $20,000 on June 15, ethereum fell to $1,000, and the crypto market capitalization fell to $0.86 trillion. Recall that it reached $2.97 7 months ago, in November 2021.

- The widespread adoption of the first cryptocurrency may occur faster than previous innovative technologies and reach 10% by 2030. This is stated in the Blockware Intelligence study.
Analysts studied the historical curves of adoption of cars, electricity, the Internet and social networks, as well as the pace of bitcoin adoption since 2009. “All disruptive technologies follow a similar exponential S-curve […] but new network technologies continue to be introduced much faster than the market expects,” the report says. However, Blockware Intelligence emphasizes that the model used at this stage is just a concept and is not an investment recommendation.

- Real Vision CEO Raoul Pal also compared the rate of adoption of cryptocurrencies by society with the development of the Internet. The macroeconomist concluded that the slowdown in the development of the industry will begin in four years. He stated that “if the pace of development of the industry remains at the same level, we will have five or four billion people using cryptocurrency by 2030.”

- Well-known trader and analyst Tony Weiss believes that the real capitulation for bitcoin will take place soon. Weiss reviewed the Bitcoin Momentum Reversal Indicator (MRI), which predicts trend lifecycles based on an asset's momentum. According to him, MRI points to a few more days (4-5) of falling, after which a market reversal may occur.
According to Weiss, most likely, the BTC rate will not fall below $19,000. But a further fall is not ruled out: “Is it possible to reach $17,180? I think so. But if the downward movement continues, the next level could be around $14,000. In my opinion, bitcoin will not fall so much, and the lowest level will be $19,000,” the expert believes.

- Bank of America analyst Jason Kupferberg told CNBC in an interview that the bank conducted a large survey among Americans in June 2022. The expert noted that about 90% of respondents answered unequivocally that they plan to buy a certain amount of cryptocurrency over the next few months. It is noteworthy that Bank of America itself does not yet plan to provide digital currency trading services.
The survey also showed that the majority of respondents had previously acted as short-term investors. About 77% of them held digital coins in their portfolio for less than one year. Almost a third spoke in favor of the fact that they are not going to sell their assets for the next six months.
According to Jasonf Kupferberg, this user interest is due to the increase in the number of crypto-fiat products. For example, the appearance of the Coinbase Visa card has significantly simplified the process of exchanging digital assets for fiat money. He also confirmed that cryptocurrencies are closely correlated with high-risk assets like stocks of fast-growing technology corporations.

- The American Express international payment service, together with the Abra crypto company, will offer its customers a Crypto Rewards credit card with cryptocurrency bonuses. According to public information, cardholders will be rewarded for purchases of any amount in more than 100 different cryptocurrencies supported by Abra, with no fees for transactions.

- The bear market upsets all investors. But the two largest institutional bitcoin holders have been particularly distinguished. They lost a total of about $1.4 billion on this asset. According to the analytical resource Bitcointreasuries.net, almost 130,000 bitcoins owned by Microstrategy and 43,200 bitcoins owned by Tesla made their owners significantly poorer (we are talking about an unrealized loss yet).
MicroStrategy CEO Michael Saylor spent almost $4 billion ($3,965,863,658) on 129,218 BTC, which is approximately 0.615% of the total issuance of the first cryptocurrency. The fall in the price of bitcoin depreciated the company's investment to $3.1 billion, thus the loss amounted to $900 million. Apart from this, Microstrategy shares also fell to their lowest levels in recent months.
The investment of Elon Mask, whose car company Tesla bought more than 40,000 bitcoins during the 2021 bull market, has also taken a big hit. He lost about $500 million on his investments.

- Anthony Scaramucci, founder of $3.5 billion investment fund SkyBridge Capital, shared his thoughts on the current bear market. In an interview with CNBC, he called what was happening "a bloodbath", adding that he managed to survive seven "bear" markets. The former politician and White House communications director hopes he will be able to "get out" of the eighth one as well.
“I am encouraged by the fact that bitcoin exceeds currently 50% of the total market capitalization of the crypto market. This is another sign that proves its value,” said Scaramucci, recommending that investors keep buying bitcoin and stay calm. The financier believes that it is better to stick to a long-term investment strategy, but at the same time do without borrowed funds.
“All cryptoassets have a long-term perspective as long as they don’t face short-term losses. Then investors begin to tear their hair out and bang against the wall. It is better to buy a quality crypto asset (BTC or ETH) without being distracted by others, and maintain discipline without looking back at the bear markets that sometimes happen. If you remain calm during these periods, you will get rich,” says SkyBridge Capital's managing partner.

- The collapse of the bitcoin rate did not lead to a quick recovery. However, bulls have managed to protect an important level so far. We are talking about the 200-week moving average (200WMA), which served as a strong support in all previous bear market phases. Bitcoin has never managed to gain a foothold below this line so far. (By "gaining a foothold" traders mean the closing of the candle below a certain level). After dropping to almost $20,000, there was a quick rebound that took the price above the critical $20,400 mark.
Big buying saved the day, according to Material Indicators analysts, but “it's still too early to tell if support can be sustained. The eyes of the entire market are focused on the meeting of the FOMC (Federal Open Market Committee) of the US Federal Reserve, which will be held on June 15 at 22:00 CET, at which a decision will be made to increase the key interest rate.

- The Crypto Fear & Greed Index BTC fell to 7 points out of 100 ahead of the FOMC meeting, which is comparable to March 2020 values. Then the price of bitcoin bottomed out at $3,800. According to Arcane Research analysts, the index has been in the Fear zone for 56 days, which is a record. “Market participants are undoubtedly tired of this, many capitulate. Historically, buying has been a profitable strategy in times of fear. However, it is not easy to catch a falling knife,” the researchers shared their thoughts.
The company noted that $20,000 is a critical level for bitcoin in the context of technical analysis. “Therefore, a possible visit below this level could lead to the capitulation of many hodlers and deleverages.” There is also significant open interest in bitcoin options around the $20,000 mark. This is a factor of additional pressure on the spot market if the above level does not withstand the onslaught of bears.


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 #forex #cryptocurrencies #bitcoin #stock_market
 
Forex and Cryptocurrency Forecast for June 20 - 24, 2022


EUR/USD: Fed FOMC Meeting Results


Last week's events were based on Friday, June 10, when US inflation statistics were released, which amounted to 8.6% against the expected 8.3%. Having learned these disturbing data, market participants began to include in dollar quotes the possibility of raising the interest rate by 0.75% instead of the previously predicted 0.5%. Some hotheads even talked about its increase by 1.0% straight away. As a result, the FOMC (Federal Open Market Committee) at its meeting on Wednesday, June 15, raised the key rate to 1.75%, that is, by 0.75%.

According to Fed Chairman Jerome Powell, this was the most aggressive round of monetary tightening since 1994. Moreover, the US Central Bank, despite the threat of a recession, intends to follow the chosen course further, raising the rate by another 50 or 75 basis points at the next meeting.

Following the FOMC meeting, the inflation estimates for 2022 were revised from 3.4% to 5.2%, and the forecast for the key rate was raised from 1.9% to 3.4%. At the same time, Jerome Powell hopes that this will not be a shock to the economy, given the strength of the consumer sector and the US labor market. True, despite the optimism of the head of the Fed, the expected rate of economic growth for 2022 was reduced from 2.8% to 1.7%, and the forecast for the unemployment rate, on the contrary, was raised from 3.5% to 3.7%.

In general, Jerome Powell's comments on the regulator's plans turned out to be rather vague, and the market did not understand how strong quantitative tightening (QT) would be and what the prospect of raising the federal funds rate to 4.0% was. As the head of the Fed said, "a rate hike of 75 basis points is unusually large," so he does not think "such hikes will happen often."

As a result, the DXY dollar index reached its maximum (105.47), and the EUR/USD pair reached its minimum (1.0358) not following the FOMC meeting, but directly during it. The reason for the rapid strengthening of the dollar at the beginning of the week was not only the expectations of an unprecedented rate hike, but also poor macroeconomic statistics from Europe. The rate of decline in industrial production in the Eurozone accelerated from -0.5% to -2.0%, although it had been expected that they would slow down on the contrary. The main reason is still the energy crisis caused by anti-Russian sanctions due to Russia's military invasion of Ukraine.

The dollar seemed to have exhausted its upside potential on the evening of June 15, resulting in a rapid bounce on June 16, sending EUR/USD soaring to 1.0600. As for the last day of the working week, the trend changed again after the ECB promised new support to contain the cost of borrowing among the southern countries of the Eurozone. The pair placed the final chord of the five-day period in the zone of 1.0500, at the level of 1.0495.

Many analysts believe that the US and European currencies will reach 1:1 parity by the end of the year (or maybe even earlier). In the meantime, the votes of experts are divided as follows on the evening of June 17: 30% side with the bulls, 20% - with the bears, and 50% cannot decide on the forecast. The indicators on D1 give quite unambiguous signals. Among oscillators, 100% are colored red, among trend indicators, 90% are red and 10% are green. Except for 1.0500, the nearest strong resistance is located in the 1.0600 zone, if successful, the bulls will try to break through the 1.0640 resistance and rise to the 1.0750-1.0760 zone, the next target is 1.0800. For the bears, task number 1 is to break through the support in the 1.0460-1.0480 area, and then update the May 13 low at 1.0350. If successful, they will move on to storm the 2017 low of 1.0340, there is only support from 20 years ago below.

As for the events of the upcoming week, Monday, June 20 is a public holiday in the US, the country celebrates Juneteenth. Data from the housing market will come on Tuesday, June 21 and Friday, June 24, and from the US labor market on Thursday. In addition, we will have two speeches by Fed Chairman Jerome Powell in Congress on June 22 and 23. Also we recommend paying attention to the publication of data on business activity in Germany and the Eurozone as a whole on June 23.

GBP/USD: A Pleasant Surprise from BoE

Ahead of the US Fed meeting, the dollar appreciated against the pound by 585 points in just 3 business days, from June 10 to 14, and the GBP/USD pair fell to 1.1932, the lowest level since March 2020. But then the regulator of the United Kingdom stepped in.

At its meeting on Thursday, June 16, the Bank of England (BoE) raised its key rate from 1.00% to 1.25%. It would seem that 25 basis points is only a third of the 75 bp that the Fed raised the rate the day before, but the pound flew up and the pair fixed a local high at 1.2405. The British currency strengthened by 365 points in just a few hours.

The reason for this rally, as often happens, is expectations. First, 3 out of 9 members of the Bank's Management Board supported an increase in the refinancing rate not by 25, but by 50 basis points at once. And secondly, the comments published after the meeting clearly indicated the possibility of accelerating the pace of tightening of monetary policy, starting from the next meeting of the regulator. That is, the rate may reach 1.75%, as early as August 4, which is significantly higher than market forecasts. In addition, the Bank of England intends not to stop there and raise interest rates further.

In contrast to the Fed's vague comments, the BoE was clear enough about its monetary policy that made a positive impression on investors. Analysts also noted that, unlike their colleagues on the other side of the Atlantic, the Bank of England leaders did not shift all the blame for rising inflation to China and Russia.

The pound retreated from the gained positions at the end of the week, and the pair ended the trading session at the level of 1.2215. At the moment, 50% of experts believe that in the near future the pair will try to test the resistance at 1.2400 again, 10%, on the contrary, are waiting for a test of support around 1.2040, the remaining 40% of analysts have taken a neutral position.

Both among trend indicators and among oscillators, 90% indicate a fall, while the remaining 10% look in the opposite direction. Supports are located at the levels 1.2155-1.2170, then 1.2075 and 1.2040. The pair's strong foothold lies at the psychologically important 1.2000 level, followed by the June 14 low at 1.1932. In case of growth, the pair will meet resistance in the zones and at the levels of 1.2255, 1.2300-1.2325, 1.2400-1.2430, 1.2460, then the targets in the area of 1.2500 and 1.2600 follow.

Among the macroeconomic events of the upcoming week concerning the United Kingdom, we can highlight the publication of the May value of the Consumer Price Index (CPI) on Wednesday, June 22, and of a whole package of PMI Indices, reflecting business activity in individual sectors and in the economy of the country generally the next day, on June 23. Retail sales in the UK for May will be announced on Friday, June 24.

continued below...
 
USD/JPY: No Surprises from the Bank of Japan

Rising dollar pushes USD/JPY again and again to fresh 20-year highs. Last week, having reached the height of 135.58, it broke the January 01, 2002 record of 135.19. This was followed by a powerful pullback to the level of 131.48 and a no less powerful new upswing, after which the pair finished near the level of 135.00, at around 134.95.

A weak yen, especially in the face of high inflation, is a big problem not only for households, but for the entire Japanese economy, as it increases the cost of raw materials and natural energy imported into the country. However, the Bank of Japan is stubborn to maintain its ultra-soft monetary policy, in contrast to the sharp tightening by the Central banks of other countries. After the US Federal Reserve, the Swiss National Bank and the Bank of England raised interest rates last week, the Japanese Central Bank left its rate at the previous negative level - minus 0.1% at its meeting on Friday June 17, while promising to maintain the yield of 10-year government bonds at around 0%. There have been several attempts to test the 0.25% yield on government debt over the past weeks, but aggressive buybacks of these securities immediately followed in response.

Japanese officials tried to give some support to the yen on the morning of June 17. The government and the Bank of Japan issued a joint (rarely seen) statement that they were concerned about the sharp fall in the national currency. These words were supposed to indicate to investors that the possibility of adjusting monetary policy is not ruled out at some point. But there was not a word in the statement about when and how this could happen, so the market reaction to it was close to zero.

A number of specialists, such as, for example, strategists at the largest banking group in the Netherlands ING, believe that there is still “an increased risk that USD/JPY will significantly exceed 135.00 in the coming days if the Japanese authorities do not step up and carry out currency intervention”.

Most analysts (55%) have long been waiting for the intervention of the authorities, or at least a revival of interest in the yen as a safe-haven currency. However, this forecast has not come true for several weeks. Although it is possible that a strong correction will be repeated, as happened on June 15-16, when the pair fell by 410 points. 35% of experts are counting on updating the high at 135.58, and 10% believe that the pair will take a breather, moving in a sideways trend. For indicators on D1, the picture is very different from the opinion of experts. For trend indicators, all 100% are colored green, for oscillators, 90% of them are, 10% of which are in the overbought zone, and another 10% vote for the red. The nearest support is located at 134.50, followed by zones and levels at 134.00, 133.50, 133.00, 132.30, 131.50, 129.70-130.30, 128.60 and 128.00. It is difficult to determine the further targets of the bulls after the new update of the January 01, 2002 high. Most often, such round levels as 136.00, 137.00, 140.00 and 150.00 appear in the forecasts. And if the pair's growth rates remain the same as in the last 3 months, it will be able to reach the 150.00 zone in late August or early September.

With the exception of the release of the Bank of Japan Monetary Policy Committee meeting report on Wednesday, June 22, no other major events are expected this week.

continued below...
 
CRYPTOCURRENCIES: Bloodbath or the Battle for $20,000

Anthony Scaramucci, founder of $3.5 billion investment fund SkyBridge Capital, called it a "bloodbath." And it's hard to disagree with him.

In total, bitcoin lost 70% between November 11, 2021 and June 15, 2022. It has lost about a third of its value in the past week alone. According to some experts, the trigger this time was the announcement of the crypto-lending platform Celsius Network to suspend the withdrawal of funds, their exchange and transfer between accounts “due to extreme market conditions.” (As of May, the platform managed $11 billion in user assets.)

However, the general negative macroeconomic background is most likely to blame. This opinion was expressed by industry participants in a survey conducted by The Block. Many experts believe that the crypto markets “would have fallen regardless of Celsius.” Bloomberg notes that the market has entered "a period of selling everything except the dollar." Traders are leaving for a "safe harbor" due to more aggressive tightening of the monetary policy of the US Federal Reserve (QT), caused by rising inflation. The market is actively getting rid of risky assets, the S&P500, Dow Jones and Nasdaq stock indices are falling, and bitcoin and other cryptocurrencies along with them.

The price of BTC fell to almost $20,000 on Wednesday June 15, ethereum quotes fell to $1,000, and the capitalization of the crypto market fell to $0.86 trillion. Recall that it had reached $2.97 trillion 7 months ago, in November 2021.

The bear market upsets all investors. But the two largest institutional bitcoin holders have been particularly distinguished. They lost a total of about $1.4 billion on this asset. According to the analytical resource Bitcointreasuries.net, almost 130,000 bitcoins owned by Microstrategy and 43,200 bitcoins owned by Tesla made their owners significantly poorer (we are talking about an unrealized loss yet).

MicroStrategy CEO Michael Saylor spent almost $4 billion ($3,965,863,658) on 129,218 BTC, which is approximately 0.615% of the total issuance of the first cryptocurrency. The fall in the price of bitcoin depreciated the company's investment to $3.1 billion, thus the loss amounted to $900 million. Apart from this, Microstrategy shares also fell to their lowest levels in recent months.

The investment of Elon Mask, whose car company Tesla bought more than 40,000 bitcoins during the 2021 bull market, has also taken a big hit. He lost about $500 million on his investments.

Of course, Michael Saylor and Elon Musk aren't the only ones struggling. The fall of the crypto market hit the largest US crypto exchange as well. Coinbase Global announced the layoff of 1,100 employees (approximately 18% of the entire staff). Shares of Coinbase itself fell in price by 26% over the past week, and its capitalization decreased to $11.5 billion. Director and co-founder of the company Brian Armstrong said that “a recession can cause a new crypto winter that will last for a long time.”

Stablecoins also add cold to investors' hearts. The passions for UST (Terra) have not subsided yet, as the USDD of the Tron network has faced a systemic crisis. USDD lost touch with the dollar on June 13, and TRX fell by 22%.

As of this writing, the BTC/USD bull/bear fight is for the 200-week moving average (200WMA). This WMA used to serve as strong support in all previous bear market phases. Until now, bitcoin has never managed to gain a foothold below this line, and we will find out on Monday June 20 if it managed to do so this time. (By "gaining a foothold" traders mean the closing of a candle below a certain level).

Arcane Research believes that the $20,000 level is critical for bitcoin in the context of technical analysis. “Therefore, a possible visit below this level could lead to the capitulation of many hodlers and deleverages.” There is also significant open interest in bitcoin options around the $20,000 mark. This is a factor of additional pressure on the spot market if the above level does not withstand the onslaught of bears.

Renowned trader and analyst Tone Vays cites the Bitcoin Momentum Reversal Indicator (MRI), which predicts the life cycles of a trend. At the moment, MRI points to a few more days (4-5) of falling, after which a market reversal may occur.

According to Vays, most likely, the BTC rate will not fall below $19,000. But a further fall is not ruled out: “Is it possible to reach $17,180? I think so. But if the downward movement continues, the next level could be around $14,000. However, in my opinion, bitcoin will not fall so much, and the level of $19,000 will be the lowest mark,” the expert said.

This forecast can be considered optimistic. For example, the president of the brokerage company Euro Pacific Capital, Peter Schiff, predicted a fall to $8,000 a month ago. And the American economist and Nobel Prize winner Paul Krugman called cryptocurrencies a fraud and a bubble that will soon burst.

As of Friday evening, June 17, the total crypto market capitalization is at $0.895 trillion ($1.192 trillion a week ago). The BTC/USD pair is trading at $20,500. Bitcoin's Crypto Fear & Greed Index is firmly entrenched in the Extreme Fear zone and was falling to 7 points out of 100 possible (13 weeks ago). This value is comparable to March 2020 values. Then the price of bitcoin bottomed out at $3,800. According to Arcane Research analysts, the index has been in the Fear zone since April 12, which is a duration record. “Market participants are undoubtedly tired of this, many capitulate. Historically, buying has been a profitable strategy in times of fear. However, it is not easy to catch a falling knife,” the researchers shared their thoughts.

And finally, a bit of optimism from the founder of SkyBridge Capital, Anthony Scaramucci, with whose words we began this review. In an interview with CNBC, the former politician and White House director of communications not only called what was happening a “bloodbath,” but also added that he had survived seven bear markets and he hopes that he will be able to “crawl out” of the eighth.

“All crypto assets have a long-term perspective, as long as they do not face short-term losses,” the financier said. “Then investors start tearing their hair out and hitting the wall. It is better to buy a quality crypto asset without being distracted by others and maintain discipline without looking back at the bear markets that sometimes happen. If you remain calm during these periods, you will get rich,” Scaramucci encouraged investors.


NordFX Analytical Group


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
 
CryptoNews of the Week


- Ethereum co-founder Vitalik Buterin supported The Daily Gwei creator Anthony Sassano, who called on the popular PlanB analyst to delete his account. The reason is the failure of the Stock-to-Flow (S2F) model, which PlanB has been actively promoting in recent years.
“It's rude to gloat, but I think financial models that give people a false sense of confidence about asset growth are harmful and deserve ridicule,” Buterin wrote. The Ethereum co-founder added a chart to his post that shows a significant divergence between the real price of bitcoin and its S2F forecast.
PlanB reacted to Buterin's criticism with restraint. He said that in the aftermath of the crash, many are looking for scapegoats, including leaders. PlanB then presented a chart of five different bitcoin rate prediction models. According to the illustration, the most accurate picture is given by estimates based on the complexity and cost of mining the first cryptocurrency. The S2F model, in turn, offers an overly optimistic view.

- The internet is talking again about the death of bitcoin. The number of search queries on this topic has returned to its highest levels against the backdrop of the collapse in the price of the first cryptocurrency. The bitcoin dead request scored 93 points on Google Trends in the week ending June 18. This is just one point less than the maximum recorded in December 2017. Canada, Singapore and Australia are among the leaders among the “pessimists”. The United States and Nigeria follow them, even though the population there is much larger.

- Bitcoin's return to levels above $20,000 does not mean that it has bounced off the bottom. This was stated by Peter Schiff, a well-known cryptocurrency critic, President of Euro Pacific Capital. According to this gold supporter, the $20,000 mark will be the same “bull trap” as the $30,000 level was before. “Nothing falls in a straight line. In fact, it's a very orderly crash in slow motion. There is no sign of capitulation so far, which usually forms the bottom of a bear market,” Schiff said.
The head of Euro Pacific Capital had said Earlier that the collapse of the cryptocurrency market is good for the economy. He also added that even if digital assets have a future, bitcoin will never be part of it. Recall that Peter Schiff predicted back in May that bitcoin would test $8,000. And the investor suggested in mid-June that the minimum could be even lower, around $5,000.

- El Salvador President Nayib Bukele advised bitcoin investors not to worry about the quotes of the first cryptocurrency. “My advice is to stop looking at charts and enjoy your life. If you have invested in BTC, your investment is safe, its value will rise immeasurably after the end of the bear market. The main thing is patience,” he wrote.
In response, the aforementioned Peter Schiff stated that Bukele's advice was as bad as his "buy the top" recommendation. The latter is likely a reference to the "buy the dip" stock exchange slogan that Bukele often mentioned.
For reference, there are 2,301 BTC in El Salvador's public bitcoin fund, purchased at an average price of $43,900. Thus, at the moment, the loss on them has amounted to about 55%.

- An analyst aka Capo, who had correctly predicted the collapse of the cryptocurrency market this year, updated his forecast for top crypto assets. According to him, investors are fooling themselves into believing that a short-term rally means bitcoin has reached the bottom of the cycle. According to Capo, bitcoin is only rising because investors are liquidating their holdings of altcoins and investing in BTC in order to exit it: “Bull trap. Funds from altcoins flow into BTC, which will also be sold, but a little later. There is no bottom yet." The analyst shared his updated forecast regarding the fall levels of these assets: BTC is expected to decline to $16,200, and ETH to $750.

- According to crypto strategist Kevin Svenson, bitcoin has a chance to bottom in the $17,000-18,000 range, after which a short-term rally to above $30,000 could occur. At the same time, although Svenson expects this short-term growth, he does not see the prerequisites for launching a new bull market in the near future: “Overcoming the main downward resistance is the main obstacle and the process may last until the end of the year.”
According to the strategist, after the breakthrough of the diagonal resistance, bitcoin can trade in a narrow range for several months and start a new uptrend only by 2024 year.

- Cryptocurrency analyst Benjamin Cowen proposed his bottom search model for bitcoin. He believes that the bottom can be predicted based on the correlation of inflation, the S&P 500 stock index and the BTC price. The analyst argues that the S&P 500 index does not historically sink to the very bottom until inflation peaks and reverses. Accordingly, BTC cannot reach the bottom for the same reason. “Macroeconomic indicators look incredibly bleak at the moment. If you go back to the 1970s, you'll see a very similar type of move where the S&P bottomed just as inflation hit its first peak. By this point, the S&P was down about 50%,” writes Cowen.

- Shark Tank business TV show co-host Kevin O'Leary says big companies shouldn't be afraid of bankruptcy during the crypto winter, as their departure forms a promising market bottom. “This is good for all other companies as they will learn from this. I think we will soon see a wave of bankruptcies in the cryptocurrency market. I don't know who it will be, but I assure you that I have seen it before. Later you will recognize those who have taken a high-risk position. They have been destroyed, and that's good,” said the millionaire.
Crypto channel InvestAnswers, in turn, named 3 possible catalysts for the market collapse. The BTC price may fall even more if MicroStrategy CEO Michael Saylor decides to sell the bitcoins in the company's reserves. In addition, the potential collapse of the stablecoin Tether (USDT) and the problems of the cryptocurrency hedge fund Three Arrows Capital may also contribute to further capitulation of BTC. According to InvestAnswers, we should not forget about the possible sale of crypto assets by Tesla.
MicroStrategy reported a $1.2 billion loss last week due to the fall of bitcoin. As for the Three Arrows Capital fund, it now has about $2.4 billion left in assets out of $18 billion.

- Despite the low current rate of bitcoin, many participants in the crypto industry believe in its future growth. For example, there is a belief that BTC could reach $100,000 by 2025. Bloomberg Senior Strategist Mike McGlone is one of them. He has no doubt that the widespread use of cryptocurrencies and, in particular, bitcoin, can lead to a rise in the price of BTC to six figures.
Cryptocurrency is about 1% of the total market capitalization of all stocks on the planet. It was only 0.01% just a few years ago. According to Mike McGlone, this indicates a growing adoption of the new asset class. In addition, investors tend to buy gold during inflation, but now they have a digital alternative to it. Another reason is that the adoption of the asset occurs against the background of a reduction in its emission. This allowed the expert to conclude that prices could skyrocket in the coming years.

- The fall of bitcoin was one of the factors stimulating the growth in the number of addresses in the network with a balance of more than one coin. Glassnode estimates that investors stepped up in May and June during each pullback. In the last week alone, the number of such holders increased by 13,091. There are currently 865,254 addresses holding more than 1 BTC.
The number of small bitcoin holders has also grown significantly. The number of wallets holding at least 0.1 BTC has come close to 3.06 million since the beginning of last week. However, the number of "whales" with a balance of more than 100 coins has on the contrary decreased by 136 addresses.

- The Bangkok police arrested a suspect in a jewellery store robbery. According to Thai PBS, the man stole gold jewellery worth about 1.8 million baht (over $50,000) at gunpoint. After his arrest, he told the police that he was under great stress and was in dire need of money since he had recently suffered large losses from investing in bitcoin.


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 #forex #cryptocurrencies #bitcoin #stock_market
 
Forex and Cryptocurrency Forecast for June 27 - July 1, 2022


EUR/USD: Just a Calm Week


The last week was quite calm for the EUR/USD pair. It moved along the Pivot Point 1.0500, and the maximum range of fluctuations was less than 140 points (1.0468-1.0605), which is quite small for today.

President Joe Biden's appeal to the US Congress, with the exception of a proposal to introduce a tax holiday on fuel for 3 months, was, in fact, about nothing. And the federal tax on gasoline is only 18 cents per gallon, which is less than 4%. So, in such a short period of time, this measure will not have any effect on the economy, much less tame inflation.

As for the Fed, its head Jerome Powell, speaking in Congress, did not say anything new either. He only confirmed that, despite the threat of a recession, his organization will continue to fight inflation by tightening monetary policy. These intentions were also confirmed by Powell's colleague Michelle Bowman, a member of the Fed's Board of Governors, who stated that raising the key rate by 0.75% in July and by at least 0.50% at the next few meetings of the FOMC (Federal Open Market Committee) is not only appropriate, but also necessary.

There were no surprises in the words of both officials, and the markets, apparently, have already included this increase in their quotes for a long time. However, the yield on 10-year US bonds corrected against this backdrop to the lowest level in the last two weeks, falling from 3.5% to 3%. Stock Markets (S&P500, Dow Jones and Nasdaq), as well as other risky assets, on the contrary, grew slightly. This was facilitated by the absence of any significant events on the Ukrainian-Russian front and the associated decline in prices for natural energy resources. So, for example, the cost of oil has decreased by about 10-13% over the past 10 days.

The macro statistics released on Thursday, June 23, although caused an increase in volatility initially, eventually returned the EUR/USD pair to the equilibrium point like a swing. The reason is that business activity in both the EU and the US turned out to be noticeably worse than expected. In the Eurozone, the index of business activity in the manufacturing sector, according to the forecast, should have decreased from 54.6 to 54.0, but actually fell to 52.0 points. The index of business activity in the services sector has similar indicators: it fell from 56.1 to 52.8 instead of the expected 55.8 points. Thus, the composite index Markit lost 2.9 points instead of 0.6, falling from 54.8 to 51.9 (forecast 54.2).

Following the European one, the similar American statistics came out, which turned out to be no less disappointing. Thus, the index of business activity in the manufacturing sector fell by as much as 4.6 points to 52.4 (previous value 57.0, forecast 56.0). A similar indicator in the service sector turned out to be slightly better: a drop from 53.4 to 51.6 points (forecast 53.0). As a result, the composite index of business activity decreased from 53.6 to 51.2 points, instead of the forecasted 52.8 points.

EUR/USD ended the trading session at 1.0555. At the time of writing the review, on the evening of June 24, the votes of experts are divided as follows: 35% side with the bulls, 55% - with the bears, and 10% cannot decide on the forecast. The readings of the indicators on D1 look quite chaotic. Among the oscillators, 35% are colored red, 25% are green and 40% are neutral gray. Among the trend indicators, 60% are red and 40% are green. The nearest strong resistance is located in the 1.0600 zone, if successful, the bulls will try to break through the 1.0640 resistance and rise to the 1.0750-1.0770 zone, the next target is 1.0800. Apart from 1.0500, the number 1 task for the bears is to break through the support around 1.0470, and then update the May 13 low at 1.0350. If successful, they will move on to storm the 2017 low of 1.0340, there is only support from 20 years ago below.

As for the upcoming week, data on the US consumer market will be released on Monday June 27, the German consumer market data on June 29 and 30, and Eurozone consumer prices (CPI) on Friday July 01. The value of the US Manufacturing PMI will be published on July 01 as well. In addition, it is worth paying attention to the data on US GDP (Q1), which will become known on June 29. In addition, a whole series of speeches by the head of the ECB, Christine Lagarde, is scheduled for the week: she will speak on June 27, 28 and 29. There will also be a performance by her overseas colleague Jerome Powell, but only one, on Wednesday, June 29.

GBP/USD: Looking for Drivers

Having started the five-day period at 1.2216, the GBP/USD pair ends it at 1.2280. And if in the period from June 13 to June 17, the maximum range of fluctuations exceeded 470 points, it was 3 times less last week, keeping within just 160 points. This lull was caused largely by the absence of high-profile macroeconomic events. However, it also suggests that the market cannot decide what to do with the pound, and is looking for drivers that can move the pair in one direction or another.

According to some analysts, the strengthening of the British currency is hindered by political instability. Prime Minister Boris Johnson already survived a vote of no confidence in June, with several lawmakers from his own Conservative Party voting against him. In addition, after the by-elections, the party lost two seats in the UK Parliament.

In terms of the national economy, retail sales fell 0.5% m/m in May according to the Office for National Statistics. This turned out to be slightly better than market expectations, which predicted a decline of 0.7%. But it did not help the British currency much, as the annual figure reached 9.1%, updating the 40-year high. The main contribution to the growth of inflation was made by the increase in prices for fuel and food products.

According to some experts, inflation in the United Kingdom will continue to grow and may exceed 11% by November. It is clear that this causes discontent among the population, as it reduces the level of income, depreciates savings, and also undermines the current purchasing power. To combat this evil, the Bank of England (BOE) raised its key rate from 1.00% to 1.25% on June 16. As a result, the British currency gained 365 points in just a few hours. But can the regulator, just like the US Federal Reserve, not be afraid of the economy slipping into recession and continue to regularly increase the cost of borrowing? Many traders and investors doubt this.

At the moment, 40% of experts believe that the GBP/USD pair will try to test the resistance of 1.2400 again in the near future, 25%, on the contrary, are waiting for a support test in the 1.2170-1.2200 area, the remaining 35% of analysts have taken a neutral position.

Among the trend indicators on D1, the balance of power is 75-25% in favor of the reds. There is no such clear advantage among oscillators: only 45% are pointing to a fall, 25% are looking in the opposite direction, and the remaining 30% are looking east. Supports are located at levels 1.2170-1.2200, then 1.2075 and 1.2040. The pair's strong foothold lies at the psychologically important 1.2000 level, followed by the June 14 low at 1.1932. In case of growth, the pair will meet resistance in the zones and at the levels of 1.2300-1.2325, 1.2400-1.2430, 1.2460, then the targets in the area of 1.2500 and 1.2600 follow.

As for the macroeconomic events of the coming week regarding the United Kingdom, we can highlight the publication of data on the country's GDP for the Q1 2022 on Thursday, June 30. The speech of the Governor of the Bank of England Andrew Bailey, which will take place the day before, on Wednesday, June 29, may also be of interest. And the business activity index (PMI) in the UK manufacturing sector will be published at the very end of the working week, on Friday, July 01.

continued below....
 
USD/JPY: "Head" and "Shoulders" Are Visible. What's next?

The USD/JPY formed a classic technical analysis head and shoulders pattern over the past week. Starting from 134.95, it rose to the height of 136.70, then rolled back to the local low of 134.25, and finished at 135.20.

The divergence between the monetary policies of the Bank of Japan and the US Federal Reserve helped to update the 24-year high once again, having risen to 136.70 on Wednesday, June 22. We have already written about this many times. As for the subsequent rollback down, the reason is most likely the June decline in world prices for mineral fuels, on which the country's economy is highly dependent, as well as the fall in the yield of 10-year US Treasuries.

It is common knowledge that there is a direct correlation between 10-year US Treasury bills and the USD/JPY currency pair. And if the yield of these securities falls, the yen shows growth against the dollar, and the USD/JPY pair forms a downtrend. This is what we observed in the second half of the week, when the yield on government bonds fell to 3%.

Reuters reported that Japan's annual core consumer inflation in May exceeded the central bank's target of 2% in May for the second consecutive month. Which is a signal of increasing pressure on the fragile Japanese economy due to rising world prices for raw materials.

A number of experts believe that the forecast of the Bank of Japan (BOJ) about the temporary nature of price growth is incorrect. Hence, the “super-dove” monetary policy of the regulator is wrong. Rising fuel and food prices driven by Russia's invasion of Ukraine and a weak yen that pushes up the cost of imports could keep inflation above the Bank of Japan's target for much of 2022, these analysts said.

Japanese officials do not deny this problem. Thus, the Government and the Bank of Japan issued a joint statement on June 17 stating that they are concerned about the sharp fall in the national currency. Seiji Kihara, Deputy Chief Cabinet Secretary of Japan, also said that the impact of inflation on consumer sentiment will be closely monitored. However, according to Masayoshi Amamiya, Deputy Governor of the Japanese Central Bank, the country's economy is gaining momentum, so the BOJ will continue to adhere to a relaxed monetary credit policy.

Considering the above, the general fundamental background remains on the side of the USD/JPY bulls, and its current decline can be regarded as a correction from the previous multi-year highs, which was caused by lower fuel prices and a drop in Treasury yields.

Most analysts (50%) expect the correction to continue at least to the level of 133.00-133.50. 30% of experts have voted for the fact that the pair will once again try to renew the high and rise above 137.00, and 20% believe that the pair will take a breather, moving in a sideways trend. For indicators on D1, the picture is very different from the opinion of experts. 85% of the oscillators are colored green (of which 10% are in the overbought zone), the remaining 15% have taken a neutral position. For trend indicators, 85% point north and only 15% look south. The nearest support is located at 134.40, followed by zones and levels at 134.00, 133.50, 133.00, 132.30, 131.50, 129.70-130.30, 128.60 and 128.00. Apart from breaking the immediate resistance at 135.40 and the June 22 high at 136.70, further targets for the bulls are difficult to determine. Most often, such round levels as 137.00, 140.00 and 150.00 appear in the forecasts. And if the pair's growth rates remain the same as in the last 3 months, it will be able to reach the 150.00 zone in late August or early September.

As for the calendar for the coming week, we can mark Friday, July 01, when Tankan (Q2) sentiment indexes of large manufacturers and large non-manufacturing companies in Japan will be published.

continued below...
 
CRYPTOCURRENCIES: BTC Forecast from the President of El Salvador

We called the last review "Bloodbath or $20,000 Battle". As for the past week, there was not much blood this time, but the battle for $20,000, as predicted, did not subside. The week's low was fixed at $17,597, the maximum at $21,667, and the BTC/USD pair met Saturday, June 25, at $21,350. At this point, the total crypto market capitalization was $0.960 trillion ($0.895 trillion a week ago). The Crypto Fear & Greed Index is still not going to leave the Extreme Fear zone and is at around 11 points out of 100 possible (7 points a week ago).

The general mood of the market is fully consistent with this Extreme Fear. The Internet is talking again about the death of bitcoin. According to Google Trends, the number of search queries on this topic has returned to its maximum levels, close to December 2017. Recall that at that moment, approaching the coveted $20,000, the main cryptocurrency turned around and flew down, losing more than 40% of its value in a few days. The only difference with that long-standing situation is that bitcoin was approaching the $20,000 level from below then, and it is from above now. And the market was looking for a top then, and for a bottom now. Moreover, according to a number of influencers, it is not at all necessary that the bottom is at this particular mark.

So, according to Peter Schiff, Euro Pacific Capital President, a well-known cryptocurrency critic, “so far, there are no signs of surrender, which usually forms the bottom of the bearish market”. According to this gold supporter, the $20,000 mark will be the same “bull trap” as the $30,000 level was before. “Nothing falls in a straight line. It's actually a very ordered crash in slow motion," Schiff said. Recall that he predicted back in May that bitcoin would test $8,000. And he suggested in mid-June that the minimum could be even lower, around $5,000.

According to the president of Euro Pacific Capital, the collapse of the cryptocurrency market will be good for the economy. Kevin O'Leary, co-host of the business TV show Shark Tank, made a similar point. He believes that one should not be afraid of the bankruptcy of large companies during the crypto winter. “This is good for all other companies as they will learn from this. I think we will soon see a wave of bankruptcies in the cryptocurrency market. I don't know who it will be. Later you will recognize those who have taken a high-risk position. But I assure you I have seen this before. They have been destroyed, and that's good,” said the millionaire.

The InvestAnswers crypto channel, in turn, named 3 possible catalysts for a further market collapse. The BTC price may fall even more if MicroStrategy CEO Michael Saylor decides to sell the bitcoins in the company's reserves. In addition, the potential collapse of the stablecoin Tether (USDT) and the problems of the cryptocurrency hedge fund Three Arrows Capital may also contribute to further capitulation of BTC. According to InvestAnswers, we should not forget about the possible sale of crypto assets by Tesla.

MicroStrategy reported a $1.2 billion loss last week due to the fall of bitcoin. As for the Three Arrows Capital fund, it now has about $2.4 billion left in assets out of $18 billion.

Big problems are experienced not only by investors, but also by miners. Due to the fall in the price of BTC and the increase in computational complexity, the total return from mining is now 65% lower than the average for the year. At the same time, the efficiency of the Antminer S19 ASIC from Bitmain is 80% worse than the level of November 2021, and the popular S9 model has lost profitability altogether. This situation has led to the fact that mining companies are forced to sell their BTC holdings in order to pay off loans and cover current operating costs, which puts pressure on the market. Their remaining reserves are estimated at 46,000 coins (about $920 million). In the event that these bitcoins are also thrown into sale, quotes will certainly fall further down.

An analyst aka Capo, who had correctly predicted the collapse of the cryptocurrency market this year, updated his forecast. In his opinion, BTC expects a decline to $16,200, and ETH to $750. According to Capo, investors are fooling themselves into believing that a short-term rally means bitcoin is bottoming the cycle: “Bull trap. Funds from altcoins flow into BTC, which will also be sold, but a little later. There is no bottom yet,” he said.

According to another specialist, crypto strategist Kevin Svenson, bitcoin has a chance to bottom in the $17,000-18,000 range, after which a short-term rally to above $30,000 may occur. At the same time, although Svenson expects this short-term growth, he does not see the prerequisites for launching a new bull market in the near future: “Overcoming the main downward resistance is the main obstacle and the process may last until the end of the year.” According to the strategist, after the breakthrough of the diagonal resistance, bitcoin can trade in a narrow range for several months and start a new uptrend only by 2024 year.

Despite the low current rate of bitcoin, many participants in the crypto industry believe in its future growth. For example, there is a belief that BTC could reach $100,000 by 2025. One of those who supported such optimism was an analyst called PlanB, who built his forecasts based on the Stock-to-Flow (S2F) model. This model worked well for three years until March 2022, after which it failed.

The Daily Gwei creator Anthony Sassano and Ethereum co-founder Vitalik Buterin have recently criticized S2F, advising PlanB to delete their account.

The analyst reacted to criticism with restraint. He said that in the aftermath of the crash, many are looking for scapegoats, including leaders. PlanB then presented a graph of five different BTC price prediction models. According to the illustration, the most accurate picture is given by estimates based on the complexity and cost of mining the first cryptocurrency. The S2F model, in turn, offers an overly optimistic view.

Another expert, Benjamin Cowen, proposed his bitcoin bottoming model. He believes that the bottom can be predicted based on the correlation of inflation, the S&P 500 stock index and the BTC price. The analyst argues that the S&P 500 index does not historically sink to the very bottom until inflation peaks and reverses. Accordingly, BTC cannot reach the bottom for the same reason. “Macroeconomic indicators look incredibly bleak at the moment. If you go back to the 1970s, you'll see a very similar type of move where the S&P bottomed just as inflation hit its first peak. By this point, the S&P was down about 50%,” writes Cowen.

And to conclude the review, one more “prediction model”, which we put in our humorous crypto life hacks section. It was presented by the President of El Salvador, Nayib Bukele. “My advice is to stop looking at charts and enjoy your life. If you have invested in BTC, your investment is safe, its value will rise immeasurably after the end of the bear market. The main thing is patience,” he wrote. For reference, there are 2,301 BTC in El Salvador's public bitcoin fund, purchased at an average price of $43,900. Thus, at the moment, the loss on them is about 55%. But, according to the "model" of Nayiba Bukele, this "trifle" should not be paid attention to. The main thing is to get the most out of life!


NordFX Analytical Group


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
 
CryptoNews of the Week


- Concerns about the crypto winter have not dampened investor interest in the industry. This is stated in the analytical report of Bank of America (BofA). “Customer engagement continues to grow. The focus continues to be on the rapid development of blockchain technology.” BofA believes regulatory clarity is critical to corporate and institutional outreach. Many are currently refraining from taking action until a comprehensive legal framework is in place.
Some participants in the BofA survey recalled that the most innovative projects came from previous market downturns. The low points of the cycle are "likely beneficial for the development of the ecosystem in the long run," they added.

- Cryptocurrency payments will become a reality in the future, but they are currently not economically efficient. This was stated in an interview with Cointelegraph by one of the directors of American Express, Gonzalo Pérez del Arco. According to him, crypto payments are not relevant for a number of reasons at the moment, including high transaction costs and the unwillingness of merchants to accept digital assets.

- The recession in the cryptocurrency market will last for about 18 more months, and the industry will see the first signs of recovery after the easing of the Fed’s monetary policy. This was stated by the head and founder of the Galaxy Digital cryptobank Mike Novogratz in an interview with New York Magazine. “I hope we have already seen the worst. I would be more confident about this if I knew what inflation would be like in the next two quarters. [...] I think the Fed will have to abandon the rate hike by the fall, and I believe that will make people calm down and start building again,” said the head of Galaxy Digital.
According to Novogratz, the crisis has changed people's attitudes towards high-risk assets like cryptocurrencies. He noted that the past few months have shown the industry's dependence on leverage, which no one knew about. And it will take time now for the bankruptcy of weak players and the sale of collapsed assets. According to the head of Galaxy Digital, the situation is similar to the global financial crisis of 2008, followed by a wave of consolidation in the investment and banking industries.

- Mining companies in need of liquidity in Q3 are able to continue to exert downward pressure on the quotes of the first cryptocurrency. This is the conclusion reached by JPMorgan strategist Nikolaos Panigirtsoglou, Bloomberg writes. According to the expert's calculations, public mining companies account for about 20% of the hash rate. Many of them sold bitcoins to cover operating expenses and service loans. Due to the more limited access to capital, private miners took similar steps as well. “Unloading will continue in Q3, if the profitability of production does not improve. This was already evident in May and June. There is a risk that the process will continue,” the strategist believes.
According to Panigirtzoglou, the cost of mining 1 BTC dropped from $18,000-$20,000 at the beginning of the year to about $15,000 in June due to the introduction of more energy-efficient equipment.

- The first cryptocurrency is “technically oversold”, if you look at the current price in the context of the exponential growth in wallet activity and an increase in the number of use cases. This was stated by Anthony Scaramucci, the founder of the SkyBridge Capital investment fund. The hedge fund manager advised investors to evaluate bitcoin in retrospect. With this approach, the asset will turn out to be "very cheap due to excess leverage, which is worth taking advantage of."
Scaramucci was philosophical about the collapse of Terra, which he had supported, as well as Three Arrows Capital's liquidity problems. “I have seen such mistakes made several times,” he explained. According to the financier, during periods of "easy money", when new industries or technologies are being formed, young representatives of the sector "tend to lose relevance."

- Crypto analyst Benjamin Cowen doubts that the forecasts for a high BTC rate for 2023 can come true. In particular, he spoke about the forecast of venture capital investor Tim Draper, according to which the price of bitcoin could grow by more than 1000% from current levels and reach $250,000.
“I used to believe that BTC would be above $100,000 by 2023, but now I am skeptical about this idea. Especially after the Fed's policy has changed so much over the past six months,” Cowen wrote. "I also look at other things, like social media statistics, and I see that the number of people interested in cryptocurrencies is in a downtrend. If it is difficult for people to buy gasoline, it will be even more difficult to buy bitcoin.”
Instead of a huge rally, Cowen predicts an uninteresting BTC market over the next two years: “I think the bear market will end this year, and then the accumulation phase will begin, as in 2015 and 2019. Then there will be slow preparations for the next bitcoin halving, and the Fed may lower interest rates due to the victory over inflation during this period.”

- According to the cryptanalytic platform CryptoQuant, most cyclical indicators (Bitcoin Puell Multiple, MVRV, SOPR and the MPI BTC Miner Position Index) indicate that bitcoin is close to the bottom. The readings of these indicators are based on a historical pattern that has preceded an uptrend several times. Indicators also suggest that bitcoin is currently undervalued, signaling an imminent rally. A significant amount of unrealized losses confirms this forecast.

- A crypto strategist with aka Dave the Wave, who had previously predicted the May collapse of bitcoin in 2021, expects to see a rapid increase in the BTC rate in the coming years. He uses a logarithmic growth curve (LGC) model and believes that BTC can grow by 1100% within 4 years and reach $260,000. In the short term, Dave the Wave predicts the possibility of bitcoin rising to $25,000.

- Robert Kiyosaki predicted the collapse of the financial markets in autumn 2021. In his opinion, due to the actions of the US financial regulators, the value of all assets, including bitcoin, gold and securities, should have collapsed. Now, the author of the bestselling book Rich Dad Poor Dad predicts another 95% drop in bitcoin and is waiting for bitcoin to drop to $1,100. And when “the losers capitulate and leave the market,” according to the economist, he will replenish his stocks of the first cryptocurrency.
Recall that Kiyosaki has previously repeatedly stated that the US dollar is dying, and called for buying more BTC, gold and silver, because, according to him, these assets help to ride out hard times.

- It is possible that the long-standing dispute over whether cryptocurrencies are securities or commodities will be put to an end. In an interview with CNBC, U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler stated that, according to his ideas, bitcoin meets all the characteristics of a commodity. The head of the SEC noted that his opinion concerns only bitcoin, and he is not going to discuss other cryptocurrencies.
A similar view was expressed a month earlier by Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam, who also said that bitcoin and ethereum are commodities.
The cryptocurrency community enthusiastically supported the position: “This makes it almost impossible to change this classification in the future,” digital asset manager Eric Weiss tweeted.

- Yifan He, CEO of Chinese blockchain company Red Date Technology, published an article comparing cryptocurrencies to pyramid schemes. He mentioned the May collapse of the Terra project, when the LUNA crypto asset fell to almost zero in just a few days, and the UST token lost its peg to the dollar.
In his opinion, all crypto assets are similar to a Ponzi scheme, it’s just that each has its own level of risk, depending on the market capitalization and the number of users. He added that he has never had a cryptocurrency wallet, has not bought cryptocurrencies and does not intend to buy them in the future. Even if digital assets become regulated by governments, this is unlikely to increase their value, He said.
The businessman believes that the authorities of El Salvador and the Central African Republic (CAR), who decided to legalize bitcoin, are in serious need of basic financial education. According to He, the leaders of these states put entire countries at risk, unless their original intention was to fraud their own citizens.


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 #forex #cryptocurrencies #bitcoin #stock_market
 

Similar threads