Daily Market Analysis and News From NordFX

[Stan NordFX]

Crypto Traders Vote for NordFX Once Again​

The broker NordFX has once again affirmed the high quality of services it provides to its clients. Based on the results of the vote on the international Forex portal, FXDailyinfo, the company was awarded the title of "Best Crypto Trading Platform - 2023".

FXDailyInfo is a vital information resource that provides daily news and financial market analytics, including broker reviews, educational materials, bonus and promotion information, and other valuable insights for traders. The FXDailyInfo Awards, on the other hand, are annual accolades given for exceptional achievements and contributions to various segments of the financial market, awarded to companies and individuals based on the open voting of portal visitors.

In 2019, NordFX was named the "Best Cryptocurrency Broker" at the FXDailyInfo Awards. Now, four years later, the title of "Best Crypto Trading Platform" has reaffirmed NordFX's solid reputation in the world of online cryptocurrency trading. During the voting, visitors cited the following reasons for their decision:

- A wide selection of cryptocurrency pairs, allowing traders to find the most profitable trading opportunities at any given moment.
- Advanced analytical features and tools, reviews, and forecasts, which help traders make informed trading decisions.
- Cutting-edge security technologies that NordFX employs to protect its clients' funds. Unlike many cryptocurrency exchanges, NordFX has never been hacked in all its years of operation, and not a single cent of client funds has ever been stolen.
- Ease of use. The MetaTrader-4 platform has an intuitive interface, making cryptocurrency trading accessible to people of various experience levels.
- Extremely fast order execution. The presence of modern technologies allows for order execution in just 0.5 seconds, enabling NordFX traders to take maximum advantage of rapidly changing market conditions.
- The ability to profit both in rising and falling markets, without the need to physically own cryptocurrency.
- Finally, the availability of margin trading is a critical factor. It suffices to say that to open a transaction of 1 Bitcoin, you only need $150, only $15 for a transaction in 1 Ethereum, and $0.02 for a trade of 1 Ripple. This means that traders can trade cryptocurrency volumes tens and hundreds of times exceeding their own funds, which significantly boosts potential profits.


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]

NordFX CopyTrading: 5,343% Profit from Gold Trades​

The brokerage firm NordFX has summed up the results of its clients' trading transactions for May 2023. The social trading services, CopyTrading and PAMM, as well as the profit earned by the company's IB partners, were also evaluated.

- The leader for the month was a trader from Western Asia, account number 1692XXX, who made a profit of 130,874 USD. This substantial result was achieved through trades with gold (XAU/USD) and the British pound (GBP/USD).
- The second step of the podium was taken by a representative from Southern Asia, account number 1679XXX, with a result of 33,895 USD, also made through trades with gold (XAU/USD).
- In third place was another trader from Southern Asia, account number 1549XXX, who earned 24,857 USD in May through trades with the euro (EUR/USD) and the British pound (GBP/USD).

In NordFX's passive investment services, the situation was as follows:

- In CopyTrading, we continue to track the fate of the "veteran" signal KennyFXPRO - Prismo 2K. It continues to recover from the shock of November 14, 2022, when its maximum drawdown exceeded 67%. As of today, it has achieved a profit of 348% over 757 days. Another signal under the same "brand" also draws attention: KennyFXPRO - Variables_RBB 35. In its 175 days of existence, it has shown a relatively modest profit of 40%. However, what makes this signal interesting is that this profit was achieved with a fairly moderate drawdown of 24%.

One notable start-up signal is Future Forex, whose provider managed to achieve a 91% profit from GBP/USD trades over 68 days, with a maximum drawdown of about 30%.

Finally, the super-hit of the last two months: Trade2win. In just 62 days, this signal has achieved a phenomenal profit of 5,343% from gold (XAU/USD) trades, with an equally remarkable drawdown of less than 15%. Trade2win's trading style is not overly aggressive: there are few trades, and the average leverage is far from the maximum possible, ranging between 50 and 150. Despite these impressive achievements, it's important to remember that past performance doesn't guarantee future success, and that trading in financial markets is risky. Thus, to avoid losing funds, subscribers should exercise maximum caution and always adhere to money management principles.

- The PAMM service showcase still features two accounts we have mentioned several times in previous reviews. These are KennyFXPRO-The Multi 3000 EA and TranquilityFX-The Genesis v3. On November 14, 2022, like their CopyTrading colleagues, they suffered significant losses – drawdown approached 43% at that point. However, the PAMM managers decided not to give up, and as of May 31, 2023, the profit on the first of these accounts exceeded 100%, and on the second, 66%. We also continue to monitor the Trade and Earn account. It was opened more than a year ago, but lay dormant, awakening only in November. As a result, over the past 7 months, its return has exceeded 100% with a very small drawdown of less than 10%.

Among NordFX's IB partners, the Top 3 looks as follows:
- The largest commission reward of the month, amounting to 10,370 USD, was credited to a partner from Western Asia, account No. 1645XXX.
- In second place is a partner from Southern Asia, account No. 1668XXX, who received 9,093 USD.
- The top three is rounded off by a partner from Eastern Asia, account No. 1218XXX,


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 Cryptocurrencies Forecast for June 05 - 09, 2023​

EUR/USD: Will the Dollar Return to Steady Growth?

The dollar has been rising since May 4. The DXY Index reached the 104.609 mark on the last day of spring, May 31. It hasn't soared this high since January 2023. As we have previously mentioned, two primary factors were propelling the American currency upwards.

The first one is the investors' appetite for the dollar as a safe-haven asset, triggered by the threat of a U.S. default. However, the Senate voted in favour of passing a bill on the public debt limit last week. Consequently, the default threat has finally passed, which has improved market sentiments and weakened demand for the dollar.

The second factor was the anticipation of a further rise in the key Federal Reserve interest rate. Amid hawkish statements from officials, the probability that the FOMC (Federal Open Market Committee) would increase the rate to 5.5% at its June 14 meeting rose above 60% by the end of May.

However, as the old song goes, "a beauty's heart is prone to change and fickleness". The first to play the role of such a "beauty" was the new Vice President of the Federal Reserve, Philip Jefferson, who subtly hinted at the need for a pause in the monetary tightening process. Furthermore, Patrick Harker, the president of the Federal Reserve Bank of Philadelphia, outright stated that "we should skip the rate hike at least at the June meeting". Then, Harker went even further and suggested skipping every other FOMC meeting, naturally including the one in June. Market participants immediately recalled Jerome Powell, the head of the Federal Reserve, who had also mentioned a pause.

Strong US macroeconomic data could have aided the dollar. However, the employment report from ADP released on Thursday, June 1, showed that the number of jobs in the private sector decreased from 291K in April to 278K in May. Meanwhile, the number of initial unemployment claims, albeit slightly, increased from 230K to 232K. The cooling of the economy was also indicated by the fall in the ISM's Purchasing Managers' Index (PMI) in the manufacturing sector from 47.1 to 46.9. (As a reminder, if the PMI is below 50, it indicates economic contraction, especially if the trend persists over several months). The substantial revision of data on unit labour costs for Q1 2023, which was downgraded from 6.3% to 4.2%, also fuelled dovish expectations. Such weak statistics added doubts for market participants about another rate hike on June 14th. As a result, according to the FedWatch Tool from CME Group, the chances of this happening have plummeted from 60% to 25%. The DXY Index also took a southern turn.

If the US statistics on June 1 worked against the American currency, the data from Europe the day before, on May 31, conversely, helped EUR/USD reach a 9-week low at 1.0634. The Consumer Price Index (CPI) showed that inflation in the Eurozone is on a downward trend. With a previous value of 7.0% and a forecast of 6.3%, the actual CPI dropped to 6.1%. If we talk about individual countries, the rate of consumer price growth in Italy fell from 8.7% to 8.1%, in France - from 6.9% to 6.0%, and in Germany - from 7.6% to 6.3%. In Spain, the CPI fell to a two-year low.

At the same time, with the decrease in inflation, the chances for further aggressive tightening of its monetary policy by the European Central Bank also went downhill. Although, at its next meeting on June 15, the ECB is still likely to raise the rate by 25 basis points (bp) to 4.0%, even after this, it will still remain below the current Federal Reserve rate of 5.25%. And if the ECB stops there and takes a pause, it will deprive EUR/USD bulls of an important trump card.

Strong labor market statistics, traditionally due on the first Friday of the month, June 2, could have helped the dollar towards the end of the week. The NFP (Non-Farm Payrolls) lived up to expectations: the number of new jobs created outside the agricultural sector, with a previous value of 294K and a forecasted fall to 180K, actually increased to 339K. However, another important indicator, the unemployment rate, disappointed investors: the unemployment rate in the US reached 3.7% in May (3.4% in April, forecast 3.5%).

Following such an ambiguous employment report, the pair ended the five-day period at a level of 1.0707. As for the near-term prospects, at the time of writing the review, the evening of June 2, the forecast is as neutral as possible: 50% of analysts expect the pair to move north, and just as many expect it to move south. Both among trend indicators and oscillators on D1, a substantial advantage is on the side of the dollar - 85% of each are coloured red, with 15% on the green side. Among trend indicators, 85% side with the reds (15% side with the greens). The pair's nearest support is located around 1.0680, followed by zones and levels at 1.0620-1.0635 and 1.0490-1.0525. Bulls will meet resistance around 1.0745-1.0707, then 1.0800-1.0835, 1.0865, 1.0895-1.0925, 1.0985, 1.1045, and 1.1090-1.1110.

For the upcoming week's calendar, it is worth noting Monday, June 5, when the ISM's Service Sector PMI (Purchasing Managers Index) for the US will be known. The EIA's (Energy Information Administration's) Energy Market Outlook and data on US crude oil reserves may cause some volatility on Tuesday and Wednesday. Additionally, Eurozone retail sales volumes will be announced on Tuesday, June 6. Thursday, June 8 could also be quite volatile, with data coming in on Eurozone GDP (Gross Domestic Product) and the US unemployment rate.

continued below...

 

[Stan NordFX]

GBP/USD: UK Inflation Propels Pound Upwards

Over the last week, the pound has recovered all of its losses from May 12 to May 25. This occurred after last week's inflation figures in the UK shocked the market with an unexpected increase. The April release reported a rise in consumer prices by 1.2%, compared to the 0.8% increase recorded a month earlier. The core Consumer Price Index reached multi-year highs, hitting 6.8% YoY, exceeding the predicted 6.2%. Although annual inflation has slowed from 10.1% to 8.7%, it still exceeded the 8.2% forecast. This is a 13-month low, but still significantly above the target level. In particular, food inflation reached 19.1%, a level not seen since 1977. This figure greatly impacts low-income households, forcing them to spend more on food and less on other goods and services.

UK Chancellor of the Exchequer Jeremy Hunt has already stated the need to continue a hawkish monetary policy course, despite increasing recession risks. The official noted that economic recovery is only possible if inflation is fully defeated. As a result, investors have become more confident that the Bank of England (BoE) will raise the rate by 25 basis points at its next meeting, and likely will not stop there.

There's another factor that allowed GBP/USD to reach 1.2544 on June 2. If the dollar was strengthening its position energetically in mid-May, last week the US currency found itself under selling pressure (the reasons were indicated earlier), which facilitated a rally of GBP/USD. After the release of US labour market data, it concluded on the note of 1.2450.

In the current situation, the median forecast of analysts looks as follows: 45% of experts maintain a bullish outlook, 30% prefer the bears, and the same percentage (25%) chose to abstain from comments. Among oscillators on D1, only 15% recommend selling, 50% are set to buy, and 35% are painted in a neutral grey colour. Among trend indicators, the balance of power between green and red is 85% to 15% in favour of the greens.

If the pair moves south, its support levels and zones are 1.2390-1.2420, 1.2300-1.2330, 1.2275, 1.2200-1.2210. In the event of the pair's rise, it will meet resistance at levels 1.2480, 1.2510, 1.2540, 1.2570, 1.2610-1.2635, 1.2675-1.2700, 1.2820, and 1.2940.

The Composite Business Activity Index (PMI), as well as the PMI in the services sector of the United Kingdom will be published the next week, on Monday, June 5. The picture of business activity will be supplemented by the PMI in the country's construction sector the following day, Tuesday, June 6.

USD/JPY: The Pair Seeks a Return to Earth

The previous review was titled "USD/JPY Received a 'Ticket to the Moon'. As for the current one, it could be called "The Pair Seeks a Return to Earth". Or at least, it tries to do so, justifying the forecast given by 75% of analysts a week ago. If the pair reached its maximum for the past five-day period (and the last six months) on May 30 at the height of 140.92, the minimum on June 01 was 250 points lower, at 138.42. However, then the ambition to reach the stars took over again, and the pair finished at the level of 139.95.

It's clear that the yen's strengthening in recent days has been directly tied to the weakening of the dollar. However, when it comes to future prospects, things are very unclear and uncertain. Let's just quote a few statements.

Speaking in Parliament, Bank of Japan (BoJ) Governor Kazuo Ueda said that it will take some time to reach the 2.0% price growth target. He also added that he can't specify when this target will be reached. Moreover, the BoJ chief believes that setting strict timelines to achieve this goal could cause unexpected consequences for the market and hence is undesirable.

On Friday, June 2, a statement was also issued by Japan's Finance Minister, Shunichi Suzuki. In his opinion, currency rate movements are determined by the market and various factors. He also mentioned: "A weak yen has various impacts on Japan's economy". However, the Minister did not specify what these "various factors" are and what kind of "various impacts" he was referring to.

In the current situation, economists at ING, the largest banking group in the Netherlands, believe that "USD/JPY appears overvalued compared to trading conditions, which are now much more favorable for the yen than a year ago." They also note that "there is still a risk that the Bank of Japan will surprise on June 16, further normalizing its yield curve control policy," which would be a positive factor for the yen.

Strategists from Wells Fargo, one of the "big four" U.S. banks, are also relatively optimistic about the future of the Japanese currency, expecting the yen to be the main beneficiary of a weakening U.S. dollar. They believe that "The Bank of Japan will adjust its policy in Q4 2023 for further normalization of the government bond market," which could provide an opportunity for the yen to strengthen by the end of the year. "The strengthening of the yen should also be supported by the end of the global central bank tightening cycle and a transition to global easing, as well as a recession in the U.S. in the second half of 2023," Wells Fargo strategists said. "We are targeting a USD/JPY rate of 136.00 by the end of 2023 and 129.00 by the end of 2024." (end of quote).

As for the near future of the pair, the voices of analysts are distributed as follows. At this point, 65% of them are hoping for further strengthening of the Japanese currency and movement of the pair to the south. Only 25% of experts vote for a rise in the dollar, and the remaining 10% have taken a neutral position. Among the indicators on D1, the absolute advantage is on the side of the dollar: 100% of trend indicators and 85% of oscillators point north (10% signal overbought conditions). The remaining 15% of oscillators point south. The nearest support level is in the 139.45 area, followed by levels and zones 138.75-139.05, 137.50, 135.90-136.10, 134.85-135.15, 134.40, 133.60, 132.80-133.00, 132.00, 131.25, 130.50-130.60 and 129.65. The nearest resistance is 140.90-141.00, then bulls will need to overcome obstacles at levels 142.20, 143.50 and 144.90-145.10. And from there it's not far to the October 2022 high of 151.95.

No significant economic information concerning the Japanese economy is anticipated in the coming week. The exception is Thursday, June 8, when the volume of Japan's GDP for Q1 2023 will be announced.

continued below...

 

[Stan NordFX]

CRYPTOCURRENCIES: A Moderately Positive Forecast for Bitcoin

After bouncing off the $25,850 support on May 25, the bulls launched an attack, instilling hope in the hearts of investors. However, their strength proved insufficient to reach the $29,000 resistance level. A local peak was recorded on May 29 at $28,433, after which BTC/USD retreated to the $26,500 support, leaving investors disappointed.

This dynamic was likely triggered by speculations surrounding the US government debt. Although, upon examining the charts, there was no direct correlation with stock indices (S&P500, Dow Jones, and Nasdaq), nor was there an inverse correlation with the Dollar Index (DXY) observed in bitcoin quotes.

After significant and tumultuous events in the crypto space in 2022 and early 2023, such as the FTX crash in November and numerous other bankruptcies, including Celsius, Voyager Digital, and Three Arrows Capital, bitcoin managed to recover its losses and grow by over 60%. However, a period of calm ensued for eleven weeks. Renowned cryptocurrency analyst Ton Vays believes that the leading cryptocurrency is concluding its consolidation phase, with many investors already "buying the bitcoin dip," indicating that BTC is preparing for further growth. To achieve this, though, it must overcome resistance at the $30,000 level. If the "bulls" succeed, BTC will reach new price highs.

"It is indeed time for bitcoin to grow," says Vays. "However, looking at the weekly chart, the bulls lack strength. [...] There is still time to overcome resistance. We need to surpass $30,000, reverse the Lucid SAR indicator, and then we will rise to $34,000, where another resistance awaits." (For reference: The Lucid SAR indicator is a variation of the Parabolic SAR. It is a trend-following indicator that combines price and time to calculate trends and determine entry and exit points.)

According to analysts at JPMorgan, the price of bitcoin is expected to rise to $45,000. This is indicated by the current price of gold, which is close to $2,000 per ounce. Analysts note that these two assets usually move in tandem. Based on JPMorgan strategists' calculations, the value of physical gold held outside central banks is currently estimated at around $3 trillion. This implies a price of digital gold, or bitcoin, at around $45,000 per coin, assuming the volume of bitcoin in private investors' portfolios matches that of the precious metal.

However, analysts at JPMorgan view $45,000 as the upper limit for bitcoin's price, suggesting limited potential for the asset. This calculation does not take into account the halving process and the increasing costs for miners. The upcoming halving in 2024 will automatically double the cost of bitcoin mining to approximately $40,000, and historically, this figure has served as the lower boundary for the asset's price.

When it comes to miners, the situation is twofold. In pursuit of profits, they contribute to the increasing computational difficulty. Over the past five months of 2023, the difficulty has grown by 45%, equal to the growth seen throughout the entire year of 2022. The price increase of bitcoin in Q1 of this year added optimism among miners, leading them to actively expand their computing power. However, this had the opposite effect, as the increased difficulty impacted mining profitability, bringing it down to levels seen on January 13 when BTC was trading at $19,000.

Former CEO of BitMEX, Arthur Hayes, believes that 2023 will be highly volatile for bitcoin due to the actions of the Federal Reserve System (FRS) in the United States. However, he does not expect the cryptocurrency to reach new all-time highs this year. Hayes states, "I don't think bitcoin will reach $70,000 this year. Most likely, we will surpass that level next year after the halving. Bitcoin will continue to grow in 2025 and 2026. And then, I anticipate an apocalypse. This situation will occur when least expected... We are currently sitting on a powder keg: the US has printed a massive amount of money, there is a lack of trust in them, and people are trying to make a living for themselves," Hayes concludes.

Popular analyst Credible Crypto disagrees with him. According to his opinion, bitcoin may replicate the impulsive waves of growth observed in previous bull cycles and set a new price record as early as 2023. "I keep hearing that it's impossible for bitcoin to reach a new all-time high this year. But I think we need to compare it to the last impulse in 2020. Remember, it took bitcoin about three months to surpass the $10,000 level. But within the next two months, it increased by another 90%. And just four months later, it set a new price record, growing fivefold from $10,000. So don't tell me that anything is impossible for bitcoin. We'll see it at new highs, most likely this year," Credible Crypto burst with optimism.

The publication Business Insider has also taken an interest in expert forecasts regarding what may happen to the leading cryptocurrency by the end of 2023. Charmyn Ho, Head of Analytics at the crypto exchange Bybit, believes that bitcoin will not be able to reach a new high until the macroeconomic environment becomes clearer. It all depends on the potential forecast of a recession in the US, Europe, and other major economies due to an inverted yield curve combined with a range of other unfavorable macroeconomic factors, such as inflation. The halving factor should also be taken into account, although it is expected to occur in April 2024.

According to Jagdeep Sidhu, President of the Syscoin Foundation, despite several crypto storms, the resilience of the ecosystem remains evident. The market has recovered from the ashes of FTX, with its inherent ability to absorb shocks and evolve. If inflation in the US decreases and there is more clarity in terms of regulating digital assets, bitcoin could reach the $38,000 mark by the end of the year, which is approximately 40% higher than the current level.

According to the scenario presented by Tim Shan, Chief Operating Officer of the crypto exchange Dexalot, bitcoin is expected to trade in a range of $25,000 to $32,000 by the end of 2023. However, if inflation remains high, it may return to the lows seen earlier this year.

David Uhryniak, Director of Ecosystem Development at TRON, is confident that bitcoin will finish the year above $35,000. According to him, traders are not rushing to invest significant amounts of money and want to see which direction the leading cryptocurrency and the market as a whole will move. By Q4 2023, most of the uncertainties should disappear.

The cryptocurrency market is not solely reliant on bitcoin. It's been a while since we discussed the second most significant cryptocurrency, ethereum. This altcoin also demonstrates high volatility, and investment returns depend heavily on the entry point. For example, the coin's price increased from $90 to $4,855 from March 2020 to November 2021, a more than 50-fold gain. However, it had dropped to $880 by June 2022, losing 80% of its value. Looking at the returns from the beginning of 2018 to the present, they stand at a modest 30%.

Researchers from VanEck have presented three price scenarios for ethereum over a seven-year horizon. In the base case scenario, the coin will be valued at $11,849 in 2030. In the bullish scenario, ETH could reach $51,006, while in the unfavourable bearish scenario, ethereum would plummet to $343. "Our estimates are based on the assumption that ethereum will become the dominant global network for transactions, hosting a significant portion of the most profitable business sectors. The dominant platform is likely to capture the lion's share of the market," write the VanEck analysts.

The report also notes that ethereum is likely to become a store of wealth, much like bitcoin, but with some differences. "We argue that ETH goes beyond being a transactional currency or a commodity-like oil or gas. We believe the coin is not a full-fledged store of value like bitcoin, due to the potential for code changes in ethereum and the project's utility-focused position. Nevertheless, this cryptocurrency can become a savings asset for government organizations seeking to maximize human capital."

However, according to JPMorgan strategists, the main threat to the number one altcoin comes from government organizations. It is their pressure and selling activity that poses a challenge for ethereum, and in the near future, it may lag behind bitcoin in terms of growth. This became particularly noticeable after SEC Chairman Gary Gensler stated that "everything other than bitcoin" falls under securities laws. "Crypto tokens and crypto securities will be regulated and may even cease to exist. Bitcoin is the only commodity that the SEC does not intend to regulate. Bitcoin is the safest network and the safest asset," commented MicroStrategy CEO Michael Saylor on Gensler's statement.

At the time of writing this review on the evening of Friday, June 2, BTC/USD is trading at $27,155, and ETH/USD is trading at $1,900. The total cryptocurrency market capitalization stands at $1.149 trillion ($1.123 trillion a week ago). Bitcoin's dominance in the market is 47.51%, while ethereum accounts for 20.65%. The Crypto Fear & Greed Index has remained relatively unchanged over the past seven days and is currently in the Neutral zone at 50 points (compared to 49 points a week ago).


NordFX Analytical Group


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

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

 

[Stan NordFX]

XAU/USD: Historical Overview and Forecast Until 2027​

Gold is one of the favourite trading instruments of the most successful traders at NordFX. This can be easily confirmed by looking at the monthly rankings published by this brokerage company. That is why it is appropriate to provide a special review, focusing solely on the XAU/USD pair.

Is Gold Truly a Protective Asset?

In the current economic situation, as leading central banks worldwide attempt to curb inflation, the price of this precious metal has reached a historic high, hitting $2,080 per troy ounce on May 4. Market participants are rushing to buy gold, believing it can safeguard their capital from devaluation.

According to a survey conducted by Bloomberg, approximately 50% of respondents identified gold as their primary safe-haven asset (with US Treasury bonds coming in second place, receiving only 15% of the votes). However, is gold truly an effective tool for hedging price risks, or is this a widespread misconception?

Consider, for instance, the period from March to October 2022 when gold prices fell from $2,070 to $1,616, a decline of almost 22%. This occurred despite the fact that inflation in the United States reached a 40-year peak during that time. So, what kind of protective asset is gold, then?

The Growth of Gold Prices

If we trace the dynamics of gold prices since the beginning of the 20th century, we observe the following pattern. In the year 1900, the price of this precious metal was approximately $20 per troy ounce.

During the period from 1914 to 1918, amidst and immediately after World War I, the price rose to around $35. Then, in the 1930s, during the Great Depression and as a result of currency reforms in the United States, the price was set at $20.67 per troy ounce. Throughout World War II, the value of the asset remained stable and was fixed at $35 under the Bretton Woods system, the same level as during World War I.

In 1971, the United States abandoned the gold standard, which led to floating exchange rates and an increase in the price of gold. In the late 1970s and early 1980s, the price exceeded the $800 mark per troy ounce due to geopolitical tensions, inflation, and a reduction in gold production. From the 1980s to the 2000s, the price of gold declined and fluctuated within a range of approximately $250 to $500.

Since the early 2000s, there has been a significant increase in the price of gold due to geopolitical events, financial instability, and inflationary pressures. In August 2020, amidst the COVID-19 pandemic and economic uncertainty, the price of gold surpassed the $2,000 mark per troy ounce for the first time. However, following this peak, it experienced a decline due to expectations of economic recovery, tightening monetary policies by central banks, rising interest rates, and various other factors.

A subsequent unsuccessful attempt to break above the $2,000 resistance level occurred in March 2022. Finally, the third surge occurred in May of this year.

Why Gold Prices Are Rising

So, what contributes to the value of gold and why does its price rise?

- Rarity and Limited Supply: Gold is a rare metal, and its extraction is limited and requires significant efforts and resources.
- Durability and Longevity: Gold is highly resistant to wear and corrosion. It retains its physical properties over time, making it suitable for long-term storage and attractive for use in jewellery and various industries.
- Store of Value: Gold has long been considered a store of value. It can preserve its purchasing power over extended periods, serving as a hedge against inflation and the instability of stocks and currencies.
- Liquidity and Recognizability: Gold is universally recognized and accepted as an asset. It can be easily exchanged for cash or used as a medium of payment in different countries and cultures.
- These factors contribute to the desirability and demand for gold, thus driving its price upward.

Factors Influencing Gold Prices

Let's delve into the factors that influence the price of gold. It's important to note that there is no direct correlation between the price of gold and each of these factors individually. Market forecasts and the combination of these factors also play a role in determining gold prices. For example, the recent surge in XAU/USD can be attributed to expectations of a reversal in the Federal Reserve's interest rate hike cycle, potential U.S. debt default, as well as geopolitical and economic instability due to Russia's armed actions in Ukraine. Now, let's explore the key factors:

- Economic Conditions: The global economic situation, including GDP growth or decline, unemployment, and overall financial stability, can impact gold prices. Uncertainty in the markets or a recession, for instance, may increase demand for gold as a risk-free asset.
- Geopolitical Events: Political and geopolitical events such as armed conflicts, wars, terrorist acts, sanctions, elections, etc., can cause market instability and uncertainty, leading to an increased demand for gold as a safe haven.
- Inflation: The level of inflation plays a crucial role in determining the value of gold. When inflation rises, the price of gold typically follows suit as investors seek protection against the devaluation of money.
- Central Banks: Actions taken by central banks, including changes in interest rates, can influence gold prices. For example, a decrease in interest rates may stimulate demand for gold as holding it becomes comparatively more attractive than other assets.
- Currency Movements: Fluctuations in exchange rates between different countries can also impact the price of gold. If the currency of a gold-producing country weakens against other currencies, the price of gold in that currency may increase, stimulating exports and raising the demand for gold.
- Investment Demand: Investment demand includes the purchase of gold bars, coins, and futures market transactions. Demand typically rises when trust in fiat currencies weakens.
- It's important to consider the interplay of these factors and market expectations when assessing the price of gold.

Forecast: Will the Price of Gold Rise?

When it comes to forecasts, it's important to note that they are mere assumptions based on available information and analysis. As mentioned before, the gold market is complex and subject to the influence of multiple factors. Any forecasts are subjective assessments and can change depending on economic and geopolitical situations, as well as changes in market demand and supply. However, it should be acknowledged that some forecasts have proven to be relatively accurate.

Here are a few examples of such forecasts made before September 2021. In May 2021, analysts at Goldman Sachs predicted that the price of gold would reach $2,000 per troy ounce by 2024. Two months later, their counterparts at Bank of America made the exact same forecast. The touch of this resistance level occurred one year earlier. However, whether XAU/USD will be able to sustainably establish itself above this level, turning it from resistance to support, remains to be seen.

Currently, Goldman Sachs strategists are indicating a target of $2,200. Meanwhile, the Swiss financial holding UBS believes that the price of gold may rise to $2,100 by the end of 2023 and to $2,200 by March 2024. (It's worth noting that their previous forecast projected a peak of $2,400 for this year). Similar figures are mentioned by analysts at the Economic Forecasting Agency, who believe that the price of gold may even exceed $2,400, but this is expected to occur only in 2027.

***

At the beginning of this overview, we raised the question of whether gold is a protective asset. In his early statements, Warren Buffett expressed scepticism about investing in gold, referring to it as an unproductive asset that doesn't generate income. However, looking at the chart, it becomes clear that he was mistaken. Even the legendary investor himself acknowledged this and later expressed a positive attitude towards gold as a store of value. Prominent financier George Soros also recognized gold as a diversification asset that provides protection against inflation and political instability. Ray Dalio, the founder of investment firm Bridgewater Associates, recommended including this precious metal in one's portfolio.

Most likely, they are all correct, and in the foreseeable future, gold will retain its role as a primary capital preserver. However, it is always important to remember that the effectiveness of any investment depends on the entry point. If the timing of a trade is chosen incorrectly, it is possible that your deposit may start to decrease. Nevertheless, in the case of gold, the probability of XAU/USD rising again is significantly higher than that of many fiat currencies. To withstand drawdowns and ultimately achieve profit, sound money management, as well as time and patience, are necessary.


NordFX Analytical Group


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

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

 

[Stan NordFX]

CryptoNews of the Week

– American bitcoin exchanges are likely to be required to register with the U.S. Securities and Exchange Commission (SEC) as brokers, and all cryptocurrencies will be classified as securities. These conclusions were drawn by strategists at JPMorgan bank. According to experts, such a situation will exert significant pressure on the industry. However, they believe that this approach also has positive aspects, as digital assets will be subject to the same legislation as traditional ones.
JPMorgan analysts noted that the actions of the SEC highlight the need for U.S. lawmakers to develop a clear regulatory framework. According to them, otherwise, the crypto industry is likely to leave the United States and relocate to other jurisdictions, while venture financing in the sector will decline. The new rules will "rid the industry of bad practices and dishonest players, which, in turn, is necessary for the industry to mature and witness more active institutional participation."
It is worth recalling that earlier, the SEC filed lawsuits against Binance and Coinbase, accusing the platforms of selling unregistered assets. In the court documents, the SEC named over a dozen tokens as securities. According to experts, a regulator's victory could lead to the delisting of these coins and limit the potential development of their blockchains. In total, over 60 coins have already ended up on the regulator's blacklist.

– According to the analytical platform Glassnode, investor behavior has noticeably shifted the distribution of Bitcoin across regions. Experts from the company have reported a significant decline in the share of American players, whose dominance peaked between 2020 and 2021. The downward trend has been observed since the sharp drop in BTC price last year, with the share of Americans decreasing by 11% since mid-2022. During the same period, the share in the Asian region increased by 9.9%.

– Adam Back, the creator of the Hashcash algorithm and CEO of Blockstream, is considered one of the key figures in the field of modern cryptography and the crypto industry. In a recent conversation with Decrypt, this prominent scientist stated that the cryptocurrency market is "anti-fragile." Like water, it flows and, when faced with obstacles, finds alternative paths. Therefore, if any major crypto exchange operating in the United States stops serving its customers due to regulatory pressure, the industry will eventually find a way out. In the event of restrictions on bank transfers in the US, bitcoin traders would simply shift towards opening bank accounts in other jurisdictions in euros or Swiss francs and engage in trading using a different currency.

– Journalists from Bitcoin.com conducted a survey with six popular AI chatbots regarding the potential of Bitcoin becoming a global reserve currency. The experiment involved ChatGPT 3.5 and ChatGPT 4 from OpenAI, Bard from Google, Claude Instant and Claude 4 from Anthropic, as well as the creative mode of Bing AI.
ChatGPT 3.5 struggled to assess the potential of bitcoin and other digital assets, citing existing "issues and uncertainties." According to its response, the likelihood of achieving reserve currency status depends on "current events and the evolution of the crypto currency ecosystem." However, it noted that its information was based on data available until September 2021.
Bard emphasized the need for wider adoption of bitcoin by central banks and other financial institutions, as well as the improvement of price stability and advancements in blockchain technology. The bot stated, "If bitcoin can overcome these challenges, it could become a global reserve asset within the next decade. However, it is also possible that this may never happen or that it will take much longer to achieve this goal."
Claude Instant, pointing out "significant obstacles" for bitcoin in terms of stability and recognition, considered it unlikely for BTC to become a reserve currency in the next 5-10 years. As for the 10–15-year horizon, Claude 4 estimated the probability of such an event to be in the low to moderate range. ChatGPT 4 also stated that it would take "several years or even decades" for bitcoin to achieve reserve currency status and warned that it "cannot confidently predict the future."
Bing AI took a "creative" approach and listed a range of factors that will determine the future of bitcoin. These factors include widespread adoption of the asset, including by financial institutions, innovation and improvement of technology, scalability and user-friendliness, regulation and legal status management, taxation and compliance with regulatory requirements, and competition and interaction with other crypto assets and fiat currencies.
In summary, it can be said that all six Artificial Intelligences behaved like experienced politicians and did not provide any specific answers to the question posed.

– According to The Wall Street Journal, the actions of hackers associated with North Korea have caused $3 billion in damage to the crypto industry. Half of this amount was reportedly used to finance a program for the development of ballistic nuclear missiles. As per the statement by U.S. authorities, North Korea has formed a "shadow" army of thousands of IT specialists around the world for these purposes. Cybersecurity experts believe that the "arms race" with North Korean hackers has only just begun.

– Peter Brandt, known as the "Mysterious Market Wizard," has been successful in accurately predicting the crypto winter of 2018 and many other market movements in the digital asset space. Now, this legendary trader and analyst has virtually "buried" all coins except bitcoin. "Bitcoin is the only cryptocurrency that will be able to finish this marathon. All others, including Ethereum, are counterfeits or scams," wrote Brandt.
Many members of the crypto community were puzzled by the fact that a respected analyst placed the second-largest cryptocurrency, ethereum, in the same category as fraudulent projects. In response, Brandt stated, "Silver to BTC's gold is ETH. ETH will likely survive, but the real legacy is BTC."

– Vitalik Buterin, the founder of ethereum, believes that the success of his blockchain depends on three main "transitions" that need to happen almost simultaneously. According to him, the leading altcoin is "failing" without sufficient scaling infrastructure that would make transactions on the network cheaper.
Another factor is related to the transition to smart contract wallets, which has been challenging in terms of user interaction. Moreover, these wallets will need to protect data to fully align with the concept of zero-knowledge (ZK) privacy. The last factor for ethereum's success that Buterin mentioned is privacy. In his opinion, significant improvements in identification systems and the implementation of hidden addresses are necessary.
"Achieving scalability, wallet security, and user privacy is crucial for the future of ethereum. It's not just about technical feasibility but also about practical accessibility for ordinary users," concluded the network's founder.

– Benjamin Cowen, the founder of Into The Cryptoverse, has noted that liquidity in the crypto market has dried up for quite some time, and many people have been blaming the SEC for what is happening. Most of them believe it is the end for the entire industry. According to Cowen, altcoins will face retribution, while Bitcoin dominance will continue to grow.
A similar sentiment was expressed by renowned trader Gareth Soloway, who compared the crypto market to the dot-com bubble. He stated that the collapse that occurred in the early 2000s would repeat itself in this industry. Soloway asserted that the "system needs to be cleansed of garbage" in order to thrive. According to him, 95% of all tokens "will strive toward zero."

– ARK Invest CEO Cathy Wood has doubled down on her bitcoin forecast, stating that the leading cryptocurrency will reach seven-figure values. In an interview with Bloomberg, she reaffirmed her confidence that the $1 million target for BTC will be achieved.
According to Wood, the current global economic environment increases her trust in the flagship crypto asset. "The more uncertainty and volatility in the global economy, the more our confidence grows in Bitcoin, which has been and remains a hedge against inflation," she stated. The head of ARK Invest believes that the greater risk lies not in inflation but in deflation, which she sees looming over the world. In this case, the primary cryptocurrency would act as an antidote against the crisis in the traditional financial system.

– Prominent investor and founder of venture firm Eight, Michael Van De Poppe, has analyzed the market capitalization chart of the crypto market and arrived at discouraging conclusions. According to the analyst, the current situation is not what one would want to see. He noted that a breakthrough below the support of the 200-week moving average (SMA) indicates a continuation of the downward trend.


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 Cryptocurrencies Forecast for June 19 - 23, 2023​

EUR/USD: The Euro's Victory Over the Dollar

The key events of the past week were the meetings of the Federal Open Market Committee (FOMC) of the US Federal Reserve on Wednesday, June 14, and the European Central Bank's Monetary Policy Committee on Thursday, June 15. The outcome of these meetings resulted in a decisive victory for the euro over the dollar.

During the COVID19 pandemic, the Federal Reserve printed and released a large amount of cheap money into the market. This action spurred inflation, which ultimately reached its highest level in the last 40 years. With the pandemic over, the American regulator completely reversed its monetary policy, shifting from Quantitative Easing (QE) to Quantitative Tightening (QT). Over the course of the last ten meetings, in an attempt to curb inflation, the Fed raised the key interest rate, which ultimately reached 5.25%: the highest level since 2006.

Data published on Tuesday, June 13, showed that the core inflation (CPI) in May was 5.3% (year-on-year) after 5.5% a month earlier. This is, of course, progress, but very slight, and the target value of 2.0% is still far off. However, in an effort to avoid economic problems and the continuation of the banking crisis, the Federal Reserve leaders at their meeting decided to keep the interest rate unchanged.

This was not a surprise to the market. Both the vice president of the Federal Reserve, Philip Jefferson, and the president of the Federal Reserve Bank of Philadelphia, Patrick Harker, talked about the need for a pause in the monetary tightening process. Even the head of the Federal Reserve, Jerome Powell, mentioned the possibility of a break. As a result, on the eve of the meeting, the likelihood of the rate remaining at the previous level was estimated by market participants at 95%.

Moreover, data published on Thursday, June 15, showed that industrial production in the US fell by 0.2% in May, and the number of unemployment benefit claims stubbornly remains at the previous level of 262K. This weak statistics increased the market's expectations that the current Fed pause might be extended for a longer period. As for the long-term forecasts published by the FOMC, the peak rate is seen by the committee members at 5.60%, after which a decrease should follow: in a one-year perspective to 4.60%, in a two-year perspective to 3.40%, and then further down to 2.50%.

So, while the Federal Reserve left borrowing costs unchanged at its June meeting, the European Central Bank raised it by 25 basis points (b.p.) - from 3.75% to 4.00%. Furthermore, ECB President Christine Lagarde noted that the tightening of monetary policy will continue in July. Additionally, inflation forecasts were revised upwards due to rising wages and high energy prices. Based on this, the market expects a 25 b.p. rate hike not only next month but also in September. The ECB's hawkish stance caused a surge in German government bond yields, while U.S. security yields conversely dropped. As a result, the Dollar Index (DXY) continued its decline, and EUR/USD continued to build on its bullish impulse formed earlier in the week. If on Monday, June 12th, it was trading at 1.0732, by June 16th it had reached 1.0970, closely approaching the psychologically important level of 1.1000.

EUR/USD concluded the five-day period at 1.0940. As for near-term prospects, at the time of writing this review on the evening of June 16, most analysts (65%) expect the continuation of its upward trend, 25% voted for the pair's fall, and 10% took a neutral position. Among trend indicators on D1, 100% are in favour of the bulls, and among oscillators, 90% are in the green, although a third of them are signalling overbought conditions. The remaining 10% are in the red. The pair's nearest support is located around 1.0895-1.0925, then 1.0865, 1.0790-1.0800, 1.0745, 1.0670, and finally, the May 31 low of 1.0635. The bulls will encounter resistance in the area of 1.0970-1.0985, then 1.1045, and 1.1090-1.1110.

Notable dates on the calendar for the upcoming week include June 21 and 22, which are set for the testimony of Federal Reserve Chairman Jerome Powell before Congress. Fresh unemployment data from the US will also be released on Thursday. At the end of the work week, preliminary Purchasing Managers' Index (PMI) figures for both Germany and the Eurozone as a whole, as well as for the US services sector, will be revealed. In addition, traders should note that Monday, June 19, is a public holiday in the United States: Juneteenth.

GBP/USD: The Pair's Growth May Continue

Taking advantage of the weakening dollar, the pound actively strengthened its position throughout the past week. Having bounced off the local low of 1.2486 on Monday, GBP/USD soared by 362 points on Friday and reached a high of 1.2848. The week ended slightly lower: at the level of 1.2822. The British currency last felt this good over a year ago, in April 2022.

Bullish investor sentiment was also supported by the expectation that the Bank of England (BoE) will raise its rate from 4.50% to 4.75% at its meeting on Thursday, June 22, accompanying this decision with hawkish rhetoric and promises to continue tightening its monetary policy.

As a result, economists at Scotiabank expect that GBP/USD may soon rise to 1.3000. They are joined in this prediction by their colleagues from ING, the largest banking group in the Netherlands. "Looking at the charts," they write, "it seems that there are no significant levels between current levels and 1.3000, which suggests that the latter is not far off."

Overall, the median forecast from analysts appears more neutral. Bullish sentiment is supported by 50% of experts, 40% favor bears, and 10% prefer to refrain from comments. As for technical analysis, 100% of both trend indicators and oscillators point north, but a quarter of the oscillators are in the overbought zone. If the pair moves south, support levels and zones await it – 1.2685-1.2700, 1.2570, 1.2480-1.2510, 1.2330-1.2350, 1.2275, 1.2200-1.2210. In case of the pair's growth, it will meet resistance at levels 1.2940, 1.3000, 1.3050 and 1.3185-1.3210.

Next week, on the eve of the aforementioned meeting of the Bank of England, on Wednesday, June 21, inflation statistics will be released in the United Kingdom. It is expected that it will show a decrease in the Consumer Price Index (CPI) from 8.7% to 8.5%. However, such a slight drop will likely not deter the BoE in its hawkish stance. In addition, attention should be paid to Friday, June 23, when the preliminary Manufacturing Purchasing Managers Index (PMI) value will be published in the UK. Since the PMI for Germany, the Eurozone, and the US will also be announced on this day, it will vividly illustrate and allow a comparison of the state of their economies.

continued below...

 

[Stan NordFX]

USD/JPY: The Pair Yearns to Return to Earth, But Can't

It would have been logical to assume that as a result of the fall in the US Dollar Index (DXY) and US Treasury bond yields, the Japanese currency would strengthen its position and USD/JPY would finally change course: instead of flying to the Moon, it would start landing on Earth. Such a movement even appeared on Thursday, June 15. But it only lasted one day: until the meeting of the Bank of Japan (BoJ), at which it again maintained the policy rate at the negative level of -0.1%. (We recall that the Japanese Central Bank has not changed this rate since January 2016). In addition, as part of the new decision, the regulator announced that it also plans to buy a "necessary" amount of government bonds and continue to target the yield of 10-year securities at a level close to zero.

Economists at MUFG Bank believe that the increasing divergence in monetary policy between the Bank of Japan and other major central banks is a recipe for further yen weakening. "The expansion of yield spreads between Japan and foreign countries, coupled with the decrease in currency exchange rate volatility and rates [...] contributes to the yen becoming more undervalued," write MUFG analysts.

Their colleagues at Commerzbank believe that if the Federal Reserve signals two potential new dollar rate increases, the yen's decline will continue. According to specialists from the French financial conglomerate Societe Generale, if another rate hike occurs in the US in July, USD/JPY could rise to 145.00.

Only hopes that the BоJ will eventually take the first step towards ending its ultra-loose monetary policy can alleviate pressure on the Japanese currency. For example, economists at BNP Paribas write that "although we have revised our USD/JPY forecasts upwards considering the higher terminal rate of the Fed and a later expansion of the Bank of Japan's YCC, we continue to forecast a downward trend in USD/JPY". They target levels of 130.00 by the end of this year and 123.00 by the end of 2024.

Having fixed a local high at 141.89, the pair ended the past five-day period at 141.82. 70% of analysts expect that the weakening DXY will soon cause a correction of the pair to the south, while the remaining 30% set their goal to reach the height of 143.00. 100% of trend indicators on D1 also look up. Among the oscillators, 90% are also pointing up (a third signals the pair's overbought condition), the remaining 10% are painted in a neutral grey color. The nearest support level is located in the 1.4140 zone, followed by 140.90-141.00, 1.4060, 139.45,1.3875-1.3905, 137.50. The nearest resistance is 142.20, then the bulls will need to overcome barriers at levels 1.4300, 143.50 and 144.90-145.10. And from there it's not far to the October 2022 high of 151.95.

No significant economic information related to the Japanese economy is expected to be released in the upcoming week. The release of the report on the last Bank of Japan meeting on Wednesday, June 21, could be an exception, but market participants are unlikely to find anything new in it: everything has already been said at the press conference on June 16.

continued below...

 

[Stan NordFX]

CRYPTOCURRENCIES: The Fed and ECB Prevent Bitcoin Catastrophe

BTC/USD climbed to the $30,989 mark on April 14, its highest value since June 2022. Since then, the market has been dominated by bearish sentiment for nine weeks in a row. The past week was no exception and did not bring joy to investors. As noted by Michael Van De Poppe, founder of venture company Eight, "this is not the situation you would want to see." The expert noted that breaking support in the form of the 200-week moving average (200WMA) indicates a continuation of the downtrend.

This scenario seemed obvious after the U.S. Securities and Exchange Commission (SEC) filed lawsuits against Binance and Coinbase, accusing the platforms of selling unregistered assets. Meanwhile, in court documents, the SEC named more than a dozen tokens as securities. According to experts, a victory for the regulator could lead to the delisting of these coins and limit the potential development of their blockchains. In total, over 60 coins have already made it onto the regulator's blacklist.

The court rejected the SEC's request to freeze the assets of Binance's American division last week. However, as some observers believe, the battle is far from over. It's worth noting that Gary Gensler, the head of the regulator, has recently stated that cryptocurrencies, in essence, are not needed at all. Quote: "We don't need more digital currency. We already have digital currency. It's called the U.S. dollar. It's called the euro or the yen. Now they are all digital.".

According to strategists at JPMorgan, US bitcoin exchanges are highly likely to be forced to register with the SEC as brokers, and all cryptocurrencies will be classified as securities. While many see this as the beginning of the end for the entire industry, there are optimists. For instance, JPMorgan believes that new rules "will free the industry from bad practices and dishonest players, which in turn is necessary for the industry to mature and see more active institutional participation."

Adam Back, the CEO of Blockstream, tried to calm market participants. Considered one of the leading figures in modern cryptography and the crypto industry, his argument was directly opposed to JPMorgan's. This prominent expert stated that the crypto market is like water, flowing and finding detours when encountering obstacles. So, if any major crypto exchange operating in the US stops servicing its clients due to regulatory pressure, the industry will ultimately find a way out. Bitcoin traders will simply move to other jurisdictions and start trading in other currencies. And it seems that Adam Back is right: the exodus from the US is already underway. According to data from the analytical platform Glassnode, the share of American players has dropped by 11% since mid-2022. At the same time, it has grown by 9.9% in the Asian region.

It's worth noting that many influencers, while predicting a dismal end for cryptocurrencies, often exclude bitcoin from their projections. For instance, Into The Cryptoverse founder Benjamin Cowen stated that liquidity in the crypto market has long since dried up, and altcoins are "due for a reckoning, while bitcoin's dominance will continue to grow." A similar sentiment was expressed by well-known trader Gareth Soloway, who said he has always compared the crypto market to the dotcom bubble. According to him, the collapse that occurred in the early 2000s will repeat in this industry. He assured that "the system needs to be cleared of trash" to flourish, stating that 95% of all tokens "will be striving towards zero."

Peter Brandt, often called the "Mysterious Wizard of the Market," also joined the chorus praising bitcoin. This legendary trader and analyst also metaphorically "buried" all coins, with the exception of bitcoin. "Bitcoin is the only cryptocurrency that will manage to finish this marathon. All others, including ethereum, are fakes or scams," he wrote. Many members of the crypto community were unsettled by the respected analyst's grouping of ethereum, the second-largest cryptocurrency by capitalization, together with fraudulent projects. In response, Brandt stated that "ETH will likely survive, but the true legacy is BTC."

ARK Invest CEO Cathy Wood has doubled down on her bitcoin forecast, stating that the target of $1 million per coin will be realized. According to Wood, the current global economic environment increases her confidence in the flagship cryptocurrency. She stated, "The more uncertainty and volatility there is in the global economy, the more our confidence in bitcoin grows, which has been and remains a hedge against inflation."

CEO and founder of Galaxy Digital, Mike Novogratz, also expects support from the global economy. Specifically, the billionaire predicts that the Federal Reserve will begin lowering interest rates in October, leading to a sharp increase in liquidity inflows into the crypto market. Dan Tapiero, co-founder of 10T Holdings and Gold Bullion International, expressed a more specific outlook, forecasting an "explosive" rally. He stated, "We will likely see new highs in the second half of 2024 and in 2025. And I think during this bull phase, the overall market capitalization of the crypto market will reach $6-8 trillion."

Despite optimistic long-term forecasts, the outlook for the near future does not inspire investors. Bloomberg strategist Mike McGlone does not rule out a significant decline in the Bloomberg Galaxy Crypto Composite Index, which reflects the performance of leading digital currencies. In an analytical note prepared for investors, he warned of a dominant bearish trend for at least the next few months. Fiona Cincotta, a strategist at City Bank, also cautioned that a drop in the price of bitcoin below the strong support level of $25,000 could further activate sellers and trigger a more pronounced decline in prices.

PlanB, an analyst and the author of the well-known Stock-to-Flow (S2F) forecasting model, asked his 1.8 million followers to provide their Bitcoin price predictions for the end of June. Many responded that Bitcoin would close the first month of summer near the $24,000-25,000 levels. Only a small portion of respondents indicated the potential for further growth above $30,000. Another expert with the username PROFIT BLUE believes that BTC will not be able to sustain itself in the $25,000 range, and the next target for the cryptocurrency will be the $23,700 level. The most pessimistic forecast came from analyst WhaleWire, who did not rule out the coin revisiting its cyclical low. According to WhaleWire, BTC is preparing for a move towards $12,000. The breakthrough of the $15,000 level, WhaleWire is confident, will occur during this summer.

The minimum for the past seven days and the last three months was recorded at $24,791. The main cryptocurrency was saved from further decline by the weakening US dollar, following the decisions of the Federal Reserve and the European Central Bank regarding interest rates. At the time of writing the review, on the evening of Friday, June 16, BTC/USD recovered all of its losses for the week and is trading at around $26,400. The total market capitalization of the crypto market stands at $1.064 trillion ($1.102 trillion a week ago). The Crypto Fear & Greed Index has remained in the Neutral zone, although it has decreased from 50 to 47 points over the past seven days.


NordFX Analytical Group


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

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