Daily Market Analysis and News From NordFX

[Stan NordFX]

CRYPTOCURRENCIES: Bearish Sentiment Persists

So is bitcoin digital gold after all? According to a survey conducted by Paxos among regular buyers of physical gold, almost a third of respondents consider BTC as the best alternative to the precious metal. However, judging by how both of these assets have been behaving lately, the best alternative for both of them is the US dollar. Physical gold peaked at $2,070 on March 08, 2022, after which it went down, having lost about 20% of its value so far. As for its digital counterpart, the all-time high of $67,273 occurred on November 10, 2021, and the loss is now approximately 71%. If we compare these figures, it turns out that XAU/USD was falling by 0.10% daily, while BTC/USD was falling twice as fast, by 0.22% per day. Draw your own conclusions. We only note that it is not gold and bitcoin that are to blame for what is happening, but the gaining strength of the dollar, which is growing along with the increase in the interest rate of the US Federal Reserve. So, another rate hike led to a fall in cryptocurrency quotes last week. Gold, on the other hand, although made a couple of jumps, returned to its previous price this time. After all, unlike BTC, it is a protective asset, not a risky one. Although, it is also receding step by step under the pressure of the American currency.

When it comes to precious metals, few people use derogatory epithets. Even though their price is falling as well. But in relation to cryptocurrencies, as much as you like. So, for example, the philosopher and author of the cult work "The Black Swan" Nassim Taleb called bitcoin a "tumor" that appeared due to the wrong policy of the Fed. “I believe we had 15 years […] of Disneyland which basically destroyed the economic structure. The Fed missed the mark by cutting interest rates too much. Zero interest for a long period of time damages the economy, bubbles are created, tumors like bitcoin are created,” he said, calling for a return to “normal economic life.”

Well-known bitcoin investor and analyst Willy Woo agrees that it is the US government that is now running the “ship”. True, on the contrary, he would like this “tumor” to be larger, but its growth is held back for political reasons. As he noted, it is currently theoretically possible to sell unlimited amounts of BTC due to futures contracts, although in reality the offer is limited to 21 million coins. “Futures markets can control the BTC rate,” the investor says. “CME (Chicago Mercantile Exchange) has set up a kind of bitcoin casino where you can play in US dollars. Wall Street hedge funds loved it. What are the current restrictions on the sale of bitcoin? None, because fiat has no restrictions.”

Willy Woo believes that due to the structure of the futures market, major players can suppress BTC by exerting pressure in the form of selling an asset: “Bitcoin should not be killed. Just the ability to short BTC is enough to suppress the exchange rate. Bitcoin will not be able to make a global impact without a high price. The SEC's policy is now aimed at increasing liquidity and the predominance of futures by approving futures ETFs, while spot ETFs are being rejected. Everything has turned into a political game now,” the investor sighs sadly.

DataDash analyst and founder Nicholas Merten expects the US Central bank to continue raising interest rates until it achieves a solid victory over inflation. And this, in turn, will push the quotes of digital assets further down. According to Merten, this is influenced not only by macroeconomic, but also by technical factors.

Thus, BTC's 200-week moving average (WMA) has become a resistance level, not a support level. Bitcoin has almost always remained above this indicator throughout its existence, with rare breakdowns to the downside, marking the bottom of the cycle. Currently, the 200-week WMA is around $23,250, and bitcoin is failing to rise above this level.

Merten concluded that BTC's recent exchange rate movement could signal the end of a 10-year bull market, and it can no longer be a leading asset compared to other commodities and stocks. According to the analyst, the next bottom of BTC could be around $14,000, which would mean an 80% correction from the all-time high, as in the case of previous bear markets. “$14,000 is a potential low at the moment. However, investors should consider an even sharper fall to $10,000.”

An analyst with the nickname DonAlt agrees with Merten, he believes that BTC will update the 2022 lows amid weak stock market performance. DonAlt predicts the coin will fall below the $18,000-20,000 range and form a new cycle low. “It often happens with such ranges that after it is broken, an increase occurs. And now there is a good chance to break through the $18,000-20,000 range and then form a bullish momentum. The only question is how low bitcoin can go because it can easily go all the way to $15,000.” “My forecast is based on the S&P 500 and looks terrible,” DonAlt writes. “It looks like this index is in for a big drop.”

We paid a lot of attention to the main competitor of bitcoin, ethereum, in the previous review. This was due to a very important event: the global update The Merge took place in the ETH network on September 15, including the transition of the altcoin from the Proof-of-Work protocol to Proof-of-Stake (PoS). Ethereum has fallen by about 20% since then. And we have repeatedly warned about this possibility, citing the opinions of various experts.

The coin’s price had roughly doubled from its yearly lows in June, by far outpacing bitcoin’s rise, ahead of the network upgrade. And Vijay Ayyar, vice president of the Luno crypto exchange, believes that the Merger had already been “factored into the price” of ETH, and “the actual event has become a “news selling” situation. According to Ayyar, traders are now moving investments from ethereum and other altcoins back to bitcoin, Ayyar said, “as bitcoin is expected to do better in a few months.” At the same time, the specialist believes that any “change in the macroeconomic environment in terms of inflation or unexpected interest rates” could lead BTC to fall below $18,000, and the coin will test levels up to $14,000.

However, inflation and rising rates are not the only factors that may affect the quotes of digital assets. So now investors are wondering if ethereum's regulatory status could change after the Merge. The reason for concern was the words of Gary Gensler, Chairman of the US Securities and Exchange Commission. This official said last week that cryptocurrencies operating under the Proof-of-Stake model that applies to ETH can be classified as securities. Thus, these assets fall under the competence of the regulatory authorities. Gensler did not specifically name ethereum, but it is clear that in this case the coin will attract the close attention of the SEC, and it is unknown how this may end. For example, DataDash's Nicholas Merten expects the asset to retest the $800-$1,000 range, although he doesn't rule out a move lower.

At the time of this writing (Friday evening, September 23), bitcoin and ethereum have partially recouped the fall caused by the Fed's decision. BTC/USDis trading at $18,900 ( ETH/USD is $1,320). The total capitalization of the crypto market is $0.929 trillion ($0.959 trillion a week ago). Like seven days ago, Crypto Fear & Greed Index is 20 points and is still in the Extreme Fear zone.


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

 

[Stan NordFX]

CryptoNews of the Week

- Analysts have estimated the “painful” breakeven threshold for miners at $18,300. According to Glassnode's calculations, 78,400 BTC could be at risk of liquidation if the price of bitcoin goes below this price, which follows from the mining difficulty regression model. This value is slightly higher than the June low of $17,840.
Against the background of price stability, mining metrics are improving, which is a signal that the situation will improve in the coming months. In particular, the hash rate reached a record 242 EH/s. The growth of computing power is due to the introduction of the most efficient ASIC devices. This confirms the dynamics of revenue per EH/s (4.06 BTC). In dollar terms, it ranges from $78,000-$88,000. The last time such values were observed was after the halving in October 2020, when bitcoin was worth half what it is now (~$10,000).
The balances of miners, which account for 96% of the current hash rate, have 78,400 BTC, the maximum number of coins that can increase sales in case of stress for this category of market participants. At the moment, most of the sales are carried out by miners associated with the Poolin pool. In September, representatives of this company admitted that there were problems with liquidity.
Glassnode experts also noted a growing likelihood of increased volatility after a long period of consolidation in the $18,000-20,000 range.

- McDonald's restaurant chain has started accepting BTC payments in Lugano, Switzerland. Back in March, Lugano authorities announced that they would make digital gold, USDT, and the city's LVGA token "de facto" legal tender. The decision was the development of an initiative to turn the city into the “Bitcoin Capital of Europe”.

- Robert Kiyosaki, the author of the bestseller Rich Dad, Poor Dad, called the strengthening of the US dollar an excellent opportunity to buy the first cryptocurrency and other digital assets. “Buy more. When the Fed turns around and cuts interest rates, you will smile while others cry,” he said.

- George Soros' former Quantum associate, billionaire Stanley Druckenmiller, predicted a revival of digital assets amid the collapse of the fiat-based economy. He said this at the CNBC conference. The financier expects a "hard landing" of the economy in 2023 against the backdrop of an aggressive tightening of the Fed's monetary policy.
In his opinion, quantitative easing and low rates led to bubbles in financial markets. These factors have not only been stopped now, but reversed. The Fed has begun cutting its $9 trillion balance and has already managed to raise the key rate five times to 3.25%, expecting its peak at 4.60%. “You don’t even need to talk about black swans to start worrying,” the billionaire said. In his opinion, if confidence in the actions of central banks is lost, cryptocurrencies “will play a big role in the revival”.

- Unlike global investors, ordinary people look at what is happening a little differently. The collapse in the crypto assets market forced not only the older generation, but also young people to reconsider their attitude towards them. The financial company Bankrate conducted a survey, according to which, the number of Americans who were comfortable investing in digital money has dropped sharply.
Millennials, who had previously been considered most open to new technologies, have lost confidence in cryptocurrencies more than others. The percentage of young people for whom cryptocurrencies were a convenient investment method fell from 49% in 2021 to 29% in 2022. People between the ages of 40 and 55 are losing trust in digital assets as well. Over the year, this figure fell from 37% to 21%. Among the older generation, the figure fell from 21% to 11%.
“It's much easier to invest enthusiastically in something when you see its value constantly increasing,” says Greg McBride, Chief Financial Analyst at Bankrate. “A real test of the faith happens when the market falls, and what you fervently believed until recently ceases to be profitable. Recent movements have forced many to reconsider their attitude towards the digital asset market radically.”

- Some different data was provided by The Block. According to their calculations, despite the global bearish trend, the number of active investors in the bitcoin network continues to grow. This trend is due to the serious economic crisis in Europe, against the background of which retailers are increasingly investing in the main cryptocurrency in order to diversify risks. According to The Block, the number of investors in the bitcoin ecosystem has grown by 4.5 million since January 1, 2022.
It is noteworthy that the number of bitcoin addresses with a balance of at least 0.01 BTC reached an all-time high of 10.7 million this month. About 47% of holders remain in profit, despite the flagship cryptocurrency's prolonged drawdown relative to its historical maximum.

- Galaxy Digital CEO Mike Novogratz suggested that a reversal could form in the stock market in October. The expert also stressed that the Fed's policy is likely to remain aggressive. And there are no clear signs so far that the US department is ready to cut interest rates, as such a drastic move would harm efforts to combat inflation. However, the expert did not rule out that the regulator may re-initiate the quantitative easing procedure at some point in order to stabilize the market situation.
The head of Galaxy Digital believes that bitcoin looks quite stable in the current macroeconomic conditions, and that BTC will still be able to reach $500,000 within a few years.

- Unlike many optimists, cryptocurrency strategist and trader Cantering Clarke expects BTC to crash to five-year lows amid stock market weakness. According to his calculations, bitcoin could fall by almost 40% from current levels if the S&P 500 stock index resumes its bearish trend. “If the S&P 500 drops to the next major area between 3,200-3,400 [pips], I think the correct assumption is that the crypto crash will be 2-3 times greater. This means at least that BTC will re-test the largest protrusion in five years: about $12,000-13,000,” the trader warns.
However, in the short term, he believes bitcoin bulls could bring back some confidence to the market if they manage to gain a foothold above $20,000. “If we can break these local highs, I think BTC will see some momentum,” Cantering Clark predicts.

- Social media users are vigorously discussing the fact that October 7 will be a key day for the cryptocurrency market this week. The fact is that the US authorities will announce updated data on unemployment and wages in the non-agricultural sector of the country this Friday. Employment and CPI data will signal how much the Fed will raise interest rates at its next meeting in November.
Experts are clearly divided on the future of the industry. Some of them predict a rapid growth in the exchange rate of the flagship cryptocurrency and altcoins due to the geopolitical situation in the world. Others, on the contrary, predict a protracted crisis. In their opinion, the industry will face a crypto winter in the next few years, so there is no point in waiting for prices to rise.

- According to US Treasury Secretary Janet Yellen, failure to regulate cryptocurrencies could harm the entire US financial system. According to her, this industry, left without regulation, is fraught with risks, although they do not pose a “real threat” to financial stability so far.
A true cascade of defaults and bankruptcies in the crypto industry has led firms like Celsius, Voyager, and Three Arrows to file for bankruptcy and prevent clients from withdrawing funds. We can recall the fall of the Luna token and the Terra stablecoin associated with it. All this led to the US Securities and Exchange Commission (SEC) deciding to increase its focus on the digital asset market by doubling its crypto division staff in May. And SEC chief Gary Gensler even called this entire industry the “Wild West”.

- Increased regulation of cryptocurrencies is often frowned upon by crypto investors, and the threat of such increased regulation has often been a bearish factor for bitcoin and other cryptocurrencies. However, the Commodity Futures Trading Commission (CFTC), which oversees the US futures market, believes that proper regulation could have a powerful bullish effect on the price of BTC.
CFTC chief Rostin Behnam explained that a clear regulatory framework could help increase the number of institutional investors. According to him, “these incumbent institutions in the crypto space see a huge opportunity for an institutional influx that will only happen if a regulatory structure is put in place around this market.” Behnam also noted that the bill submitted to the US Senate would make the CFTC the main regulator of the crypto industry, expanding the commission's powers and requiring crypto firms to register with the CFTC.


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

 

[Stan NordFX]

Results of September 2022: Gold Is Still Valuable at NordFX​

NordFX Brokerage company has summed up the performance of its clients' trade transactions in September 2022. The services of social trading, PAMM and CopyTrading, as well as the profit received by the company's IB-partners have also been assessed.

Gold, or rather the XAU/USD pair, remains one of the most popular instruments among traders of the NordFX brokerage company. So, it was this precious metal that helped them take all three steps of the podium in September.

- The highest profit in the first month of autumn was received by a client from West Asia, account No. 1634XXX. Trading on the XAU/USD pair, this trader managed to earn 34,551 USD.
- The second step on the September podium went to the representative of East Asia (account No.1646XXX), whose result of 24,154 USD was also achieved thanks to transactions with gold.
- This precious metal helped another trader from West Asia as well (account No.1632XXX) enter the September TOP-3 with a profit of 22,735 USD.

The situation in NordFX's passive investment services is as follows:

- At CopyTrading, we highlighted a number of startups a month ago. That's what we call them because of their short lifespan, which is an additional risk factor. Three such signals continued to work in September, still attracting attention. These are Andy EU250 (profit 372%/maximum drawdown 26%/75 days of life), JANUNGFX (261%/48%/75) and PT_bot Scalping (51%/8%/99) signals. Here, as usual, we recall that, in addition to a short lifespan, aggressive trading is a serious risk factor. Therefore, we urge you to be extremely cautious when working on financial markets.

- As for “veteran” signals, the first of them, KennyFXPro, Prismo 2K, has increased profits to 208% in 522 days with a maximum drawdown of about 45%. The readings of the second, KennyFXPro - The Cannon Ball, are slightly lower in all respects: a lifespan of 190 days, a profit of 61%, a drawdown of slightly less than 13%.

- The TOP-3 in thePAMM service has undergone certain changes over the past month. The leader is still the same manager under the nickname KennyFXPRO. The capital on his KennyFXPRO-The Multi 3000 EA account has been increased by 155% in 621 days. The account TranquilityFX-The Genesis v3 also remained among the leaders, showing a profit of 117% in 553 days. Both of these accounts have a very moderate maximum drawdown, about 20%. KennyFXPro - The Multi 3000 v2, closes the top three, which showed a return of 32% in 103 days of life with a drawdown of less than 14%.

TOP 3 NordFX IB Partners in September are as follows:
- the largest commission amount, 15,684 USD was accrued to the partner with account No.1645ХXХ;
- the second place went to the owner of account No.1507ХХХ, who received 8,394 USD;
- and, finally, the partner with account No.1633XXX, who received 7,178 USD as a reward, closes the top three.


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

 

[Stan NordFX]

Forex and Cryptocurrency Forecast for October 10 - 14, 2022​

EUR/USD: It's Getting Worse in the EU, It's Getting Better in the US

EUR/USD updated another 20-year low on September 28, bottoming at 0.9535. This was followed by a correction, and the pair came close to the parity level on Tuesday, October 04, rising to 0.9999. However, the happiness of the bulls was short-lived, followed by another reversal to the south and the finish line at 0.9737.

Judging by the economic macro statistics, the advantage will remain on the side of the bears for a long time to come. According to the latest data, the index of business activity in the services sector (ISM) of the Eurozone fell from 49.8 to 48.8 points. A similar indicator in the US decreased as well, but much less: from 56.9 to 56.7, and at the same time it turned out to be higher than the forecast of 56.0 points.

Things are even worse in Germany: this locomotive of the region's economy, instead of pushing the pan-European train forward, began to pull it back. The service sector activity index sank from 47.7 to 45.0 points, while the Composite Index fell from 46.9 to 45.7 points.

The August data on trade in Germany also indicate serious problems. Imports increased by 3.4%, more than three times the forecast of 1.1%. As a result, the country's trade surplus fell from €3.4 billion to €1.2 billion.

This depressed state of the economy against the background of continuing inflation suggests the threat of stagflation in the Eurozone. The increase in energy prices adds to the negative. And it is likely to continue, as the OPEC + countries decided to seriously reduce oil production. Recall that these prices were one of the most powerful triggers for the global wave of inflation. Another negative factor is the proximity of the EU countries to the theater of Russian-Ukrainian military operations, especially since Russian President V. Putin constantly threatens to use nuclear weapons.

The situation in the US is much better, which contributes to the strengthening of the US currency across the board. The country is far from the Russian-Ukrainian front, and the oil and gas crisis does not threaten it. According to ADP, private sector employment rose by 208K in September, above market expectations of 200K. The number of new jobs outside the agricultural sector of the country (NFP) also turned out to be higher than expected: 263K against 250K, and unemployment in the US decreased from 3.7% to 3.5% over the month.

This situation in the labor market allows the Fed to continue to fight inflation, using the policy of quantitative tightening (QT) and raising the interest rate on the dollar. Atlanta Fed chief Rafael Bostic said the tightening cycle is "still at the very beginning" and warned against betting on a "reversal" soon. Similar statements were made by his colleague Mary Daly from San Francisco. What will actually happen to the rate will be known on November 2, when the next meeting of the FOMC (Federal Open Market Committee) of the US Central Bank will take place.

At the time of writing this review, on the evening of Friday October 07, the votes of the experts were distributed as follows. 50% of analysts say that the pair will continue to move south in the near future, another 30% expect it to move north, and the remaining 20% vote for a sideways trend. Among the trend indicators on D1, 40% are red, 25% are green and 35% are neutral gray. The picture is completely different among the oscillators: all 100% advise to sell the pair.

The immediate support for EUR/USD is at 0.9700-0.9725, followed by 0.9645, 0.9580 and finally the Sep 28 low at 0.9535. The next target of the bears is 0.9500. The resistance levels and targets of the bulls look like this: 0.9800-0.9825, 0.9900, the immediate task is to return to the range of 0.9950-1.0020, the next target area is 1.0130-1.0200.

As for the upcoming week, the publication of the minutes of the last FOMC meeting, as well as the speech of the head of the ECB, Christine Lagarde, will give food for forecasts on Wednesday, October 12. The following day, Thursday 13 October, will see data from the consumer market (CPI) in Germany, as well as from the consumer market and the US labour market. US retail sales, as well as the University of Michigan Consumer Confidence Index, will become known at the very end of the working week, on Friday, October 14.

GBP/USD: A Disservice for the British Pound

As a result of the shock collapse on September 23-26, the British pound almost reached parity with the dollar. After flying 860 pips, the pair landed at 1.0350, below the 1985 low.

Such a record head-down throw was provoked by British Finance Minister Kwasi Kwarteng, who, instead of the planned increase, announced a program to reduce the tax burden for citizens and legal entities of the country. That is, in the context of inflation, which exceeded 10% in July, and could rise to 14% by the end of the year, in the face of growing public debt and the problems that have accumulated since Brexit, the government decided to turn around and return to quantitative easing (QE) . Alas for a while, this was enough to knock down the national currency.

The Office of Budget Responsibility (OBR) estimates that this decision, along with previous support programs for the population and continued high energy prices, will lead to an increase in public debt from the current 96% to 320% of GDP over the next 50 years. The Parliament of the United Kingdom immediately talked about a vote of no confidence in the government of the country. Even the IMF flinched in surprise and lashed out at the British Cabinet. There is no need to talk about citizens: in anticipation of a further fall in the pound, they began to actively buy up gold and cryptocurrencies. New account openings have more than doubled, according to Bullion Vault, the London Bullion Market Association. A twofold increase in trading volumes for the BTC/GBP pair was also registered on crypto exchanges. In other words, what has been called a “disservice” since ancient times has happened.

The final chord of the week was set at 1.1079. According to strategists at ING, the largest banking group in the Netherlands, the current levels of the pound are unstable, given the instability of the bond market, the deterioration of the fiscal situation and the state of the UK current operations account. Therefore, they predict a return of GBP/USD below 1.1000. Their colleagues from MUFG Bank expect it to fall again to the lows of the last ten days of September. As for the median forecast, here the majority of analysts (55%) side with the bears as well. 15% expect the pound to strengthen, and 30% have taken a neutral position. All 100% of the oscillators on D1 point exactly south. But the picture is mixed among the trend indicators: 35% are colored red, the same amount is green, and the remaining 30% are gray. The nearest levels and support zones are 1.0985-1.1000, 1.0500-1.0740 and the September 26 low of 1.0350. In case the pair reverses to the north, the bulls will meet resistance at the levels of 1.1230, 1.1400, 1.1470, 1.1720, 1.1800 1.1960.

The event calendar can mark Tuesday, October 11, when UK unemployment data will be released. The head of the Bank of England, Andrew Bailey, will make a speech by the end of the same day.

continued below...

 

[Stan NordFX]

USD/JPY: “Sharp Yen Movements Are Undesirable”

Recall that the experts' median forecast for USD/JPY looked more than uncertain two weeks ago. Then 45% of the experts sided with the bulls, 45% took the opposite position, the remaining 10% remained neutral. And this uncertainty has been fully confirmed: the pair has been moving in the side channel 143.50-145.30 since September 26, spending most of the time in an even narrower trading range of 144.00-144.85. The assault on the height of 146.00 has not happened. The strengthening of the yen, which bears hoped for after the Japanese Ministry of Finance ordered the Central Bank (BOJ), for the first time in 24 years, to intervene in support national currency, has not happened either.

A record amount of 2.8 trillion yen ($19.3 billion) was allocated for this purpose last month. As a result of this move, Japan's foreign exchange reserves fell by 4.2% to $1.238 trillion. The country's total foreign exchange reserves were $1.409 trillion a year ago. Japan's deposits in other countries' Central Banks, the volume of foreign securities, and gold reserves have also decreased.

It looks like the country's leadership is quite satisfied with the lull in USD/JPY quotes. Thus, the Japanese Prime Minister Fumio Kishida, commenting on the last intervention on October 7, stated that "the recent sharp, one-sided movements of the yen are undesirable." And this raises the question: did the Ministry of Finance and the Central Bank take such a step contrary to the Prime Minister's position? Or did they not expect such an increase in volatility?

At the same time, the fact remains that, as we predicted, there was no long-term strengthening of the Japanese currency, and USD/JPY finished last week at 145.30 Supports are located in zones and at levels 144.85, 144.20, 143.50, 142.60, 141.80-142.20 and 140.25-140.60. The bulls' task No. 1 is to prevent the pair from falling below 145.00, and task No. 2 is to storm the height of 146.00. This is followed by 146.78, the level reached before the joint actions of Japan and the US to support the yen in 1998. Trend indicators and oscillators on D1 are 100% on the green side, although among the latter, one third signal that the pair is overbought.

No important statistics on the state of the Japanese economy are expected to be released this week. In addition, traders should keep in mind that Monday, October 10, is a day off in the country, National Sports Day.

continued below...

 

[Stan NordFX]

CRYPTOCURRENCIES: Bitcoin Is Still Gold. Although Digital One.

According to The Block, despite the global bearish trend, the number of active investors in the bitcoin network has increased by 4.5 million since January 01, 2022. The number of bitcoin addresses with a balance of at least 0.01 BTC has reached an all-time high of 10.7 million in the last few weeks alone (At the same time, about 47% of holders remain in profit, despite the flagship cryptocurrency’s long drawdown relative to the all-time high).

This dynamic is due to a serious economic crisis in Europe, against which retail holders are increasingly investing in the main cryptocurrency in order to diversify risks. It suffices to cite the UK as an example, where, due to the loss of confidence in the government's fiscal policy, the pound went into a peak on September 23-26. As a result, panic-stricken investors began to convert the British currency into physical gold and crypto-assets. We wondered in the last forecast if BTC is digital gold. In the case of the UK, the answer is yes.

What happened suggests that the destabilization of traditional financial markets can benefit the crypto market. And this is not just our opinion. Billionaire Stanley Druckenmiller, a former associate of George Soros at Quantum, predicted a resurgence of digital assets amid the collapse of the fiat-based economy. He stated this at the CNBC conference. The financier expects a "hard landing" of the economy in 2023 against the backdrop of an aggressive tightening of the Fed's monetary policy.

In his opinion, quantitative easing and low rates led to bubbles in financial markets. These factors have not only been stopped now, but reversed. The Fed has begun cutting its $9 trillion balance and has already managed to raise the key rate five times to 3.25%, expecting its peak at 4.60%. “You don’t even need to talk about black swans to start worrying,” the billionaire said. In his opinion, if confidence in the actions of central banks is lost, cryptocurrencies “will play a big role in the revival”.

Not only Stanley Druckenmiller, but the market as a whole fear that the economy will not be able to withstand such monetary tightening. In addition to the rate hike, the monthly rate of contraction in the global money supply, according to Morgan Stanley, has reached $750 billion in dollar terms. This is leading to a deepening recession. it is only the Fed that can change the situation if it retreats from its plans to combat inflation. Looking to the future, Rich Dad Poor Dad bestselling author Robert Kiyosaki called the current situation a great opportunity to buy the first cryptocurrency and other digital assets. “Buy more. When the Fed turns around and cuts interest rates, you will smile while others cry,” he said.

Mike Novogratz, CEO of Galaxy Digital, gave a similar forecast. This expert did not rule out that the regulator may re-initiate the quantitative easing procedure at some point in order to stabilize the market situation. In his opinion, bitcoin looks quite stable even in the current macroeconomic conditions. And in the event of a change in the policy of the Fed, BTC will still be able to reach $500,000 within a few years.

As for the near future, Ardian Zdunczyk, founder and CEO of The Birb Nest, shared his forecast here. He referred to historical data, according to which the fourth quarter has always been successful for BTC. Based on this, investors can expect good returns over the next two months. True, Zdunczyk made a reservation straight away that no one would give guarantees on this score.

Another argument in favor of the pre-New Year rally, according to the specialist, is the fact that the coins rose slightly compared to their 200-day trends. Unlike fiat currencies that are on a rollercoaster ride, bitcoin is holding steady around $20,000. And now all markets are waiting for stability. They are already tired of the recession, the fall in company stocks, the gloomy forecasts of the IMF and the ill-conceived policies of the Central Banks, says Ardian Zdunczyk. Therefore, against such a background, bitcoin is becoming more and more attractive.

Against the backdrop of BTC price stability, mining-related metrics are also improving. In particular, the hash rate reached a record 242 EH/s. Analysts have estimated the “painful” breakeven threshold for miners at $18,300. According to Glassnode's calculations, 78,400 BTC could be at risk of liquidation if bitcoin goes below this price, which is derived from a mining difficulty regression model. This value is slightly higher than the June low of $17,840.

The balances of miners have 78,400 BTC, the maximum number of coins that can increase sales in case of stress for this category of market participants. At the moment, most of the sales are carried out by miners associated with the Poolin pool. In September, representatives of this company admitted that there were problems with liquidity.

Cryptocurrency strategist and trader Cantering Clark also warns that BTC could plunge to five-year lows amid weak stock markets. According to his calculations, bitcoin could fall by almost 40% from current levels if the S&P 500 stock index resumes its bearish trend. “If the S&P 500 drops to the next major area between 3,200-3,400 [pips], I think the correct assumption is that the crypto crash will be 2-3 times greater. This means at least that BTC will re-test the largest protrusion in five years: about $12,000-13,000,” the trader predicts.

However, in the short term, he believes bitcoin bulls could bring back some confidence to the market if they manage to gain a foothold above $20,000. “If we can break these local highs, I think BTC will see some momentum,” Cantering Clark thinks.

Social media users had been recently discussing vigorously the fact that October 07 will be a key day for the cryptocurrency market last week. The reason for this is the release of data on the US labor market that day. Together with CPI, these statistics allow us to predict how much the Fed can raise interest rates at its next meeting in November. And this, in turn, will certainly affect the value of risky assets, such as stocks and cryptocurrencies.

The market reacted to the release of these data by lowering the quotations of risky assets: at the time of writing the review (Friday evening, October 07), BTC/USD went below $20,000 and is trading at $19,610. The total capitalization of the crypto market is $0.946 trillion ($0.935 trillion a week ago). The Crypto Fear & Greed Index has risen only 1 point in seven days, from 22 to 23, and is still in the Extreme Fear zone.

And at the end of the review, as usual, we will try to give everyone a boost of optimism. According to US Treasury Secretary Janet Yellen, the crypto industry, left unregulated, is fraught with risks and could harm the entire US financial system. Usually, such statements were perceived by the market as a threat, and became a bearish factor for bitcoin and other cryptocurrencies. However, the Commodity Futures Trading Commission (CFTC), which oversees the US futures market, believes that proper regulation could have a powerful bullish effect on the price of BTC. CFTC chief Rostin Behnam explained that a clear regulatory framework would help boost the number of institutional investors.

There is no doubt that the US government agencies will soon squeeze the crypto industry into their regulatory “embrace”. But what if that's when Mike Novogratz's predictions come true, and we see bitcoin at around $500,000?


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

 

[Stan NordFX]

CryptoNews of the Week

- Paul Tudor Jones, a trader and founder of the Tudor Investment Hedge Fund, said in an interview with CNBC that he continues to hold a position in the first cryptocurrency. “I still have a small bitcoin investment,” Jones noted. According to this Wall Street King, the first and second most capitalized cryptocurrencies will be valuable “at some point” because of too much money.
Jones pointed to the monetary policy of the US Federal Reserve. It was quite simple until 2018, but the regulator “went too far with quantitative easing” two years later to support the economy, and then changed its strategy drastically. “Inflation is a bit like toothpaste,” the famous trader explained. "Once you squeeze it out of the tube, it will be difficult to put it back. The Fed is furiously trying to wash that taste out of their mouths. […] If we go into a recession, it will have a really negative impact on a range of assets.”

- Mike McGlone, senior strategist at Bloomberg Intelligence, predicted a rise in the bitcoin price by the end of 2022. Digital gold and ethereum tend to outperform most major assets during economic downturns. Therefore, McGlone called the increase in interest rates by Central banks “a strong tailwind.”
He noted that October has been the best month for bitcoin since 2014. At the same time, the analyst believes that ethereum's transition to the Proof-of-Stake consensus algorithm can help ETH and BTC gain a foothold above the $1,000 and $20,000 levels, respectively.

- A popular crypto analyst known as Dave the Wave accurately predicted the bitcoin crash in May 2021. He believes now that if bitcoin equals gold in the long term in market capitalization, this will be equal to an increase in its price by about 40 times. According to the expert, this global goal can be achieved within two decades.
Dave the Wave also notes that the MACD momentum indicator may indicate soon if BTC has hit the market bottom. “The recent local downtrend is now equal to the previous uptrend. A monthly closure with a strength/contraction histogram will contribute to a significant assumption [if not confirmation] of the bottom.”

- Google has announced that it will soon start accepting payments for subscriptions to its own cloud services in cryptocurrency. This was reported by the CNBC news agency. The partner of the IT giant is the Coinbase crypto exchange. It is noted that Google will accept 10 types of cryptocurrencies, including bitcoin, Ethereum, Litecoin, Bitcoin Cash and even Dogecoin. The feature will become available in early 2023. At the first stages, only “a few corporate clients in the world” will be able to pay Google with cryptocurrency. However, a much larger number of Google users will later access it.
According to CNBC, Coinbase will receive a commission on each transaction, the amount of which has not yet been disclosed. However, it is noted that as part of the partnership, Coinbase will abandon Amazon's cloud infrastructure in favor of a similar solution from Google.

- Amsterdam Stock Exchange trader Michael van de Poppe believes that bitcoin's current low price volatility will begin to increase in the second half of October, after US inflation data is released. Together with the latest data on retail sales and labor market dynamics, it will have a strong impact on both Wall Street and the cryptocurrency market.
The next important point is early November, when the Fed is likely to raise the benchmark interest rate by 0.75%. The probability of this is estimated above 90% at the Chicago CME Group. If so, according to JP Morgan, the S&P 500 index, which has lost 24.21% since the start of the year, faces a new collapse of about 20%. Thus, investors will be able to receive less than $56 out of the $100 dollars that they invested in the shares of the 500 largest US companies.
Bitcoin's price is sure to react to such a move in the US stock market, but how? Opinions differ here. Wall Street stock prices, like any other risky asset measured in USD, are under pressure that the dollar DXY index is rising and is now reaching its highest level since May 2002 (113 points). However, the correlation of cryptocurrencies with the stock market is not stable: it either rises or falls. And it will become clear in the foreseeable future whether bitcoin can become a hedge asset against the risk of unwinding global inflation at this stage.

- Real Vision founder and former Goldman Sachs CEO Raoul Pal said that the macroeconomic background is beginning to look attractive for investing in cryptocurrencies. Many investors are now in a state of extreme fear, fearing that the global financial system will soon collapse. And this could be a growth catalyst for risky assets like bitcoin and altcoins.
According to the businessman, investors are very negative and are playing it safe. Previously, the market had incredibly high amounts of investments, but the market does not work now, as sellers predominate over buyers. This situation may encourage the Fed to relax its monetary policy.
“There is currently no liquidity on the market, as only sellers are left there. I think this will cause huge problems in the future. Ultimately, businesses will demand more money to be issued and the situation on the market to be changed,” said Raul Pal. So once Central banks start printing money again, assets like bitcoin and altcoins will rise. “This is a sad state of affairs, but this is the real situation,” says the financier. “You will be able to see when the shift comes and use it to your advantage by investing in cryptocurrencies.”

- An experienced cryptocurrency market expert Zack Voell, who is a mining analyst at Braiins, shared a model that reflects the dynamics of bitcoin (BTC) prices in previous bear cycles. He studied the behavior of quotes in all past periods between highs and lows, on the basis of which he predicted a fall in the BTC rate to $13,800.
The analyst emphasized that he studied the behavior of the bitcoin price in 2011, then in 2013-2015 and 2017-2018, as well as during the current cycle, which began in November 2021. According to him, the value of the cryptocurrency lost more than 80% of its peak values the last two times. If history repeats, the rate will fall to at least this mark and may even go lower.
He noted among other things that the bearish cycle of 2011 led to a drop in the value of BTC by as much as 95%. However, this happened when the cryptocurrency was practically unknown to anyone and was not on the way to mass adoption.
Voell also noted that despite the negative sentiment, bitcoin was the most profitable asset in Q3 2022. Digital gold has shown extreme stability over the past months. In addition to BTC, according to statistics published by NYDIG, only precious metals and fiat USD turned out to be profitable in Q3.

- According to the analytical cryptocurrency platform Santiment, large bitcoin holders have increased their BTC savings by 46.173 coins (about $929 million) since September 27.
The list of so-called whales includes owners of addresses that store between 100 and 10,000 bitcoins. Analysts stressed that such activity by large coin holders is very rare this year. Apparently, bitcoins were bought with USDT stablecoins: the the latter's stocks in whales' wallets have fallen significantly.
It is quite possible that large holders expect the crypto market to grow. Indeed, bitcoin has been trading along the Power Point $20,000 for several weeks now, and this is an accumulation phase that should give way to an up phase. At the same time, 45.72% of all available bitcoins were stored on whale wallets at the end of September: this is the lowest figure in the last 29 months.
It has been repeatedly said that the fall in digital and other risky assets is associated with an increase in base rates by regulators in the United States and other world leading economies. However, financial analysts expect the Central banks of these countries to start cutting rates to combat the economic recession. This should push the price of bitcoin up.

- The bitcoin consolidation near the $20,000 level continues, and one of the tools used to determine the possible movement of the price of BTC is the Blockchain Center’s rainbow price chart. It shows how past price statistics can help predict the future behavior of an asset.
In the long term, the chart indicates that bitcoin could hit six figures at $626,383 by October 9, 2024. The flagship cryptocurrency will reach the “maximum bubble territory” then, marked in dark red.
Additionally, the chart indicates that the current crypto winter may have bottomed out. It is noteworthy that bitcoin's current price of about $19,500 is estimated to be in the “Main Sale” zone (marked in blue). Ahead of another bull run, the rainbow chart also shows that bitcoin’s “HODL” status will take effect at the end of the year when the asset trades at $86,151.
The color bars follow a purely logarithmic regression, which has no scientific basis. In addition, the bands have been adjusted to match past periods in the better way. However, the chart creators note that this is at least an interesting way to look at the potential future profitability of the main cryptocurrency.


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

 

[Stan NordFX]

Forex and Cryptocurrency Forecast for October 17 - 21, 2022​

EUR/USD: Market, Are You Crazy?

Throughout the first half of the week, EUR/USD moved sideways along the 0.9700 horizon as markets waited for the release of US inflation data. And it was on Thursday, October 14 that the Department of Labor Statistics of the country published fresh values of the Consumer Price Index (CPI), which exceeded the forecast values. In monthly terms, the September CPI reached 0.6% against the forecast of 0.5%, in annual terms - 6.6% against the forecast of 6.5% and the previous value of 6.3%.

The first reaction of the markets was quite expected. The DXY dollar index soared to 113.94 points (the highest value since September 28, when a 20-year high of 114.79 points was reached), the yield of 10-year treasuries updated a 14-year high, reaching 4.08%, and EUR/USD reached the level 0.9630. Risky asset quotes associated with the dollar by reverse correlation went down. The S&P500 index fell by 2.4% and updated its 2-year low. Dow Jones, Nasdaq and crypto assets behaved in a similar way.

But something extraordinary happened in less than one hour: all the markets, as if going crazy, turned 180 degrees all of a sudden. Moreover, for no apparent reason.

The dollar began to lose its positions rapidly: DXY fell to 112.46, and EUR/USD broke through 0.9800. On the contrary, the S&P500 was positive by the end of Thursday and grew by 2.6%. Analysts cite the strong oversold stock market as the main reason for this change in sentiment and the sharp increase in risk appetites. It is believed that stocks lose about 30% during recessions. At this stage, the S&P500 is down 27.5% during 2022. Therefore, some investors have decided that the bottom has already been reached or will be reached soon, and it is time to start buying. A large number of put options have recently been bought in the US market, on which profit-taking took place, and the freed fiat was used to purchase risky assets.

Despite the events of the past week, market opinion regarding the further increase in interest rates by the US Federal Reserve has not changed. Billionaire investor Ray Dalio has warned that the US will face a "perfect storm" of problems: a combination of debt, political infighting, and conflict abroad. But at the same time, despite the threat of a recession, the Fed will have no other choice to beat inflation.

The market has no doubts that the key rate will be increased by 75 basis points (bp) at the next meeting of the FOMC (Federal Open Market Committee) on November 2. The largest North American financial derivatives market, CME Group, estimates the probability of this at over 90%. Moreover, it is possible that the rate will also increase to 75 bp in December (or, alternatively, by 50 bp in December and another 50 bp in Q1 2023). The peak of the rise is predicted at the level of 4.93-5.00% per annum, and this rate may remain until 2024.

As for Europe, the ECB representative and head of the Slovak Central Bank, Peter Kazimir, recently said that “raising the rate by 75 bps in October is appropriate”. However, this had almost no impression on the market. Economists at Commerzbank still expect the European regulator to raise the rate to only 3.0% by March next year. Thus, it will still be far behind the USD rate.

In addition, the energy crisis and the problems associated with sanctions against Russia due to its invasion of Ukraine will also continue to put pressure on the common European currency. According to analysts at Commerzbank, the euro will start to recover only when investors bet more and more on the end of the crisis next year. In the meantime, they write, “a decisive tightening of monetary policy and a remarkably strong US economy make the US dollar the favorite currency of international investors.”

Thus, EUR/USD in the short term is still aimed south. And according to the forecasts of DBS Bank strategists, if it breaks through the important support level just below 0.9600, it may fall into the range of 0.8270-0.9500, which was observed in 2000-2002.

Following the release of September US Retail Sales and the University of Michigan Consumer Sentiment Index, the EUR/USD pair was trading in the 0.9750 zone at the time of writing the forecast on Friday evening, October 14. 55% of analysts support the fact that it will continue to move south in the near future, another 35% expect it to move north, and the remaining 10% vote for a sideways trend. Among the trend indicators on D1, 90% are red and 10% are green. The picture is quite different among the oscillators: only 40% of them advise selling the pair, 15% are in favor of buying, and 55% have taken a neutral position.

The immediate support for the EUR/USD is at 0.9700, followed by 0.9670, 0.9630, 0.9580 and finally the September 28 low at 0.9535. The next target of the bears is 0.9500. The resistance levels and targets of the bulls look like this: 0.9800-0.9825, 0.9900, the immediate task is to return to the range of 0.9950-1.0020, the next target area is 1.0130-1.0200.

The upcoming week's calendar highlights Tuesday October 18, when the German ZEW Economic Sentiment Index is released. The Consumer Price Index (CPI) of the Eurozone will be known. And there will be data on manufacturing activity and the housing market in the US on Thursday, October 20.

GBP/USD: UK Changes Course

In general, the GBP/USD chart was similar to the EUR/USD chart last week, except for the volatility. The local minimum was fixed at the level of 1.0922, the maximum - 1.1380, thus the range of fluctuations for the five-day period amounted to more than 450 points.

The statistics on the UK economy released this week looked mixed. Friday, October 14, was the key day, when Prime Minister Liz Truss fired Treasury Secretary Quasi Kwarteng. Now, after this event, the markets are awaiting details about the country's upcoming mini budget. Former British Foreign Secretary Jeremy Hunt has been appointed as the new Chancellor of the Exchequer, and Liz Truss has announced a dramatic change in fiscal policy. However, this has not helped the British currency much so far: it was in the 1.1200 area at the end of the working week.

As for the median forecast, here the majority of analysts (75%) side with the bears, 25% have taken a neutral position, while the number of supporters of the strengthening of the pound is 0. Among the oscillators on D1, the ratio is 60% to 40% in favor of the reds. Among the trend indicators, only 15% are colored red, 40% are green, and the remaining 45% are neutral gray.

The nearest levels and support zones are 1.1100, 1.1055, 1.0985-1.1000, 1.0925. This is followed by 1.0500-1.0740 and the September 26 low of 1.0350. When the pair moves north, the bulls will meet resistance at the levels of 1.1300, 1.1350, 1.1400, 1.1470, 1.1500, 1.1610, 1.1720, 1.1800 and 1.1960.

Regarding the release of UK macro statistics, the Consumer Price Index (CPI) will be released on Wednesday, October 19, as in the Eurozone, and UK retail sales for September will be announced on Friday, October 21.

continued below...

 

[Stan NordFX]

CRYPTOCURRENCIES: How Much Will BTC Be Worth on October 9, 2024?

The crypto market was relatively quiet until Thursday October 13. The BTC/USD pair, despite the downward pressure, looked quite stable, holding positions around $19,000. However, it flew down after the values of the US Consumer Price Index (CPI) became known, following the stock indices S&P500, Dow Jones and Nasdaq. However, it never reached the June 19 low of $17,940, and having found a local bottom at $18,155, it then went up sharply, following the stock indices. At the time of writing this review, on the evening of Friday, October 14, the pair is trading in the $19.375 zone.

According to Amsterdam Stock Exchange trader Michael van de Poppe, bitcoin price volatility will increase in the second half of October. The US inflation data, along with the latest data on retail sales and labor market dynamics, will have a strong impact on both Wall Street and the cryptocurrency market. The next important point will be early November, when the Fed is likely to raise the benchmark interest rate by 0.75%. Based on this, JP Morgan strategists predict a new collapse of the S&P500 index, by about another 20%. Thus, the unrealized loss of those who invested in the shares of the 500 largest US companies at the beginning of 2022 could exceed 44%. However, many crypto investors hope that, as in the case of the recent crisis in the UK, bitcoin will play the role of digital gold this time and will not collapse after other assets. It will become clear in the foreseeable future whether these hopes will come true.

If we look at the latest analysts' forecasts by color, the palette is as follows: short-term forecasts are dark black, medium-term forecasts are gray, and long-term forecasts are sky blue.

Among the dark blacks, this time, let's highlight the scenario of Zack Voell, who is a mining analyst at Braiins. He has recently shared a model that reflects BTC's price performance in previous bearish cycles. Zach Voell studied the behavior of quotes in all past periods between highs and lows, on the basis of which he predicted a fall in the BTC rate to $13,800.

The analyst emphasized that he studied the behavior of the bitcoin price in 2011, then in 2013-2015 and 2017-2018, as well as during the current cycle, which began in November 2021. According to him, the value of the cryptocurrency lost more than 80% of its peak values the last two times. If history repeats, the rate will fall to at least this mark and may even go lower. He noted among other things that the bearish cycle of 2011 led to a drop in the value of BTC by as much as 95%. However, this happened when the cryptocurrency was practically unknown to anyone and was not on the way to mass adoption.

Voell also noted that despite the negative sentiment, bitcoin was the most profitable asset in Q3 2022. Digital gold has shown extreme stability in the past months. (Apart from BTC, according to statistics published by NYDIG, only precious metals and fiat USD turned out to be profitable in Q3).

Now let's talk about what may happen in the last, Q4 2022. Mike McGlone, senior strategist at Bloomberg Intelligence, predicted a rise in the bitcoin price by the end of 2022. Digital gold and ethereum tend to outperform most major assets during economic downturns. Therefore, McGlone called the increase in interest rates by Central banks “a strong tailwind.” He noted that October has been the best month for bitcoin since 2014. At the same time, the analyst believes that ethereum's transition to the Proof-of-Stake consensus algorithm can help ETH and BTC gain a foothold above the $1,000 and $20,000 levels, respectively.

Such levels for ethereum and bitcoin will certainly not impress investors. Therefore, this forecast of the Bloomberg Intelligence strategist can be classified as neutral gray. Then move on to sky blue scenarios.

Paul Tudor Jones, a trader and founder of the Tudor Investment Hedge Fund, said in an interview with CNBC that he continues to hold a position in the first cryptocurrency. According to the influencer, the first and second most capitalized cryptocurrencies will be valuable “at some point” because of too much money.

That moment, according to Raoul Pal, could come when the Fed retreats from its plans to fight inflation by tightening monetary policy. This Real Vision founder and former Goldman Sachs chief executive said that the macroeconomic background is beginning to look attractive for investing in cryptocurrencies. Many investors are now in a state of extreme fear, fearing that the global financial system will soon collapse. And this could be a growth catalyst for risky assets like bitcoin and altcoins.

According to the businessman, investors are very negative and are playing it safe. Previously, the market had incredibly high amounts of investments, but the market does not work now, as sellers predominate over buyers. This situation may encourage the Fed to relax its monetary policy.

“There is currently no liquidity on the market, as only sellers are left there. I think this will cause huge problems in the future. Ultimately, businesses will demand more money to be issued and the situation on the market to be changed,” said Raul Pal. So once Central banks start printing money again, assets like bitcoin and altcoins will rise. “This is a sad state of affairs, but this is the real situation,” says the financier. “You will be able to see when the shift comes and use it to your advantage by investing in cryptocurrencies.”

A popular crypto analyst known as Dave the Wave accurately predicted the bitcoin crash in May 2021. He believes now that if bitcoin equals gold in the long term in market capitalization, this will be equal to an increase in its price by about 40 times. According to the expert, this global goal can be achieved within two decades.

The rainbow price chart of the Blockchain Center looks no less optimistic. (It differs somewhat from our forecast). It shows how past price statistics can help predict the future behavior of an asset. In the long term, the graph indicates that bitcoin could reach a six-figure value of $626,383 by October 9, 2024. The flagship cryptocurrency will reach the “maximum bubble territory” then, marked in dark red.

Additionally, the chart indicates that the current crypto winter may have bottomed out. It is noteworthy that bitcoin's current price is estimated to be in the “Main Sale” zone (marked in blue). Ahead of another bull run, the rainbow chart also shows that bitcoin’s “HODL” status will take effect at the end of the year when the asset trades at $86,151.

The color bars follow a purely logarithmic regression, which has no scientific basis. In addition, the bands have been adjusted to match past periods in the better way. However, the chart creators note that this is at least an interesting way to look at the potential future profitability of the main cryptocurrency.

At the time of writing, the total crypto market capitalization is $0.927 trillion ($0.946 trillion a week ago). The Crypto Fear & Greed Index has climbed 1 point in seven days from 23 to 24 and is still in the Extreme Fear zone.


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

 

[Stan NordFX]

CryptoNews of the Week

- Most of the 564 crypto investors surveyed by MLIV Pulse think that bitcoin will continue to trade in the $17,600-25,000 price range until the end of 2022. Almost two-thirds (65%) of retail investors said that the regulation of the crypto industry was more attractive than a repulsive factor for buying digital assets. The figure was 56% among professionals.
Only a third of respondents admitted the possibility of flipping: the superiority of ethereum over bitcoin in terms of market capitalization in the next two years. After being asked to choose one word to describe the crypto industry, investors were almost evenly divided between opposite options: “Ponzi” and “future.”

- Katie Wood, the head of ARK Invest management company, shared her opinion on the capitalization of the first cryptocurrency. She predicted a rise to $4.5 trillion even when bitcoin was trading at $250. It was then that Wood asked Arthur Laffer, a well-known economist, and member of the US President Reagan's Advisory Board, to study the digital gold white paper. ARK Invest CEO was interested in the prospects of bitcoin as a unit of account, a means of preserving value and circulation. Laffer spoke positively about the first cryptocurrency. “I've been looking for this ever since we dropped the gold standard. Bitcoin is a rules-based monetary system,” he said. Laffer also compared the prospects for capitalization of digital gold with the size of the US monetary base.
Wood added that it was this conversation that prompted her to immediately invest more than $100,000 in bitcoin, which was 400 BTC at that time (about $8.0 million at the time of writing).

- The quotes of the first cryptocurrency will reach $100,000 next year, against the background of the approaching halving. This was stated by well-known trader Ton Weiss in an interview with Kitco. He also warned that the price of digital gold could fall to $14.000 before the bull market sets in.
According to Weiss, capital flows from Europe to the United States and the syndrome of lost profits can become the engine of growth. “They missed their chance to catch the low in 2018. This is another possibility. If bitcoin ever drops below $10,000, investors will immediately take advantage of this,” the trader explained.
He also noted the decentralization and resistance to censorship of the first cryptocurrency. According to Weiss, these characteristics will provide the asset with mass adoption. “We are seeing how governments, the Central Bank and ordinary banks freeze accounts. This year alone, we have seen how the West and the US confiscate funds from people because of their Russian passports,” he said.

- One of the events that could significantly push the price of BTC up is the halving, which is due to take place in 2024. This opinion is also shared by a well-known crypto trading specialist under the nickname PlanB. He provided an analysis of previous bitcoin price movements and made predictions for the future using a Stock-to-Flow (S2F) model. His colleague was supported by another trader and analyst, Josh Rager, who also expects bitcoin to grow significantly after the halving in 2024. At the same time, in his opinion, growth should not be expected before this event.
As we know, the last bitcoin halving took place on May 11, 2020, when the reward for each created block was halved to 6.25 BTC. This reward will again be halved to 3.125 BTC per block during the fourth halving, which is expected to take place in May 2024.

- The legendary trader and analyst Peter Brandt has a slightly different opinion. He said that bitcoin would reach a new all-time high in about 32 months, but it would first fall to $13,000. The expert believes that the first cryptocurrency will find this bottom at the beginning of 2023 and will not show “impressive” performance over the next year and a half.
According to Brandt, the US Federal Reserve is not going to ease monetary policy. He assumes that the regulator will raise interest rates by another 75 basis points at least twice more by the end of 2022 in order to combat inflation.
However, the analyst expects that the value of the first cryptocurrency will no longer depend on other markets at some point. “Bitcoin will eventually correlate with bitcoin,” Brandt explained. The expert also noted that the cryptocurrency will become the “main store of value” in the next 10 years.
Recall that Peter Brandt has been working in the financial markets for more than 40 years, he is the creator of the Factor Trading service, which provides expert reports and analysis of asset value charts. Brandt has repeatedly noted that bitcoin is one of the largest parts of his investment portfolio.

- According to an October survey conducted by the financial company Finder, the median forecast of analysts is that the price of BTC will reach $270,722 by 2030. They also think that the first cryptocurrency will be traded at $21,344 by the end of this year.

continued below...