daily market analysis from nordfx

Forex and Cryptocurrency Forecast for April 29 - May 3, 2024

EUR/USD: Inflation Persists, US GDP Growth Slows

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

CRYPTOCURRENCIES: Where Will Bitcoin Fall?

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

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

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

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

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

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

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

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

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

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

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

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


NordFX Analytical Group


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

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April Results: A British Pound Trade Nets NordFX Client Over $25,000 in Profit

Brokerage firm NordFX has summarized the trading performance of its clients for April 2024. The efficacy of social trading services, PAMM and CopyTrading, as well as the earnings of the company’s IB-partners were also evaluated.

- This month’s highest profit was earned by a client from South Asia, account number 1765XXX, who made $26,757 from trading the GBP/USD pair.
- The second place in the TOP-3 was taken by their compatriot, account number 1751XXX, with earnings of $16,976 from gold trades (XAU/USD).
- The third step of the April podium was claimed by a trader from East Asia, account number 1609XXX, who traded not physical but digital “gold”: bitcoin. It was the BTC/USD pair transactions that enabled them to profit by $14,301.

The passive investment services at NordFX showed the following trends:

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

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

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

***

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


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

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

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CryptoNews of the Week

– Investors may not see a rise in the price of the main cryptocurrency to new historical highs in the coming months. Optimism about the launch of cryptocurrency ETFs in Hong Kong quickly dwindled, and bitcoin began to search for its bottom again. Liquidations of long positions reached $230 million per day, according to CoinGlass monitoring. It seems that bearish sentiments arose because the trading volumes of new ETFs in Hong Kong were significantly lower than expected, which led to a capital outflow from BTC-ETFs on US exchanges.
According to Glassnode analysts, bullish sentiments persist as the market prefers the "buy on the dip" approach. However, they acknowledge that losing support at around $60,000 could lead to a crash in the BTC price to $52,000. Another expert, Alan Santana, believes bitcoin could fall even lower, possibly to $30,000.

– Legendary trader, analyst, and head of Factor LLC, Peter Brandt, has allowed for a 25% probability that bitcoin has already formed another peak (ATH) in the current cycle on March 14 at a high of $73,745. The expert referred to the concept of "exponential decay," which describes a process of decreasing growth by a constant percentage over a specific period. "Historically, bitcoin has traded within approximately four-year cycles often associated with halvings. After the initial bull rally, there were three more, each 80% less powerful than the previous in terms of price growth," the specialist explained. "In my analysis, I estimated the probability [of such a scenario] at 25%. However, I trust the report I published in February more. [...] The 'pre/post-halving' cycle construction suggests that the current bullish trend will reach its peak in the range of $140,000–160,000 somewhere in late summer/early autumn 2025," clarified Peter Brandt.
Giovanni Santostasi, CEO of Quantonomy, questioned the appropriateness of applying the theory of exponential decay in this particular case. "We have three data points if we exclude the period before the [first] halving, and effectively only two when looking at the ratios. This is insufficient for conducting any significant statistical analysis," Santostasi commented on Brandt's assumption. According to his own power-law model, the peak of the fourth cycle is expected around December 2025, at approximately $210,000. It is worth noting that not only Giovanni Santostasi but also many other participants in the crypto market are counting on the continuation of the bull rally and achieving a new ATH. For example, Glassnode analyst James Check hopes that the BTC rate at this stage will reach $250,000. Even Peter Brandt himself mentioned $200,000 as a potential target in the February report he cited.

– The International Monetary Fund (IMF) has examined the first cryptocurrency and its impact on global markets in a new report. The organisation recognises the asset's ability to positively influence the economy. According to the IMF, digital gold is "the key to autonomy" for many countries in difficult financial situations. The report highlights the growing popularity of bitcoin and its acceptance in various jurisdictions, while the tense geopolitical situation has made assets like bitcoin and gold "more relevant."

– According to analysts from Spot On Chain, their forecasting model, developed using an extensive dataset, takes into account halvings, interest rate cycles, ETF factors, venture investor activity, and bitcoin sales by miners. Using the artificial intelligence platform Vertex AI from Google Cloud, Spot On Chain obtained price forecasts for bitcoin for the years 2024-2025. According to calculations, the price of the first cryptocurrency will be in the range of $56,000-70,000 from May to July, characterised by increased volatility. In the second half of 2024, there is a 63% probability that BTC will rise to $100,000. "This forecast signals prevailing bullish sentiments in the market, which will be facilitated by the expected reduction in interest rates [by the US Federal Reserve]. This could increase the demand for risk assets such as stocks and bitcoin," representatives of Spot On Chain explained. According to their data, there is a "convincing probability" – 42% – that in the first half of 2025, digital gold will surpass the $150,000 mark, as the first cryptocurrency typically updates its historical maximum 6-12 months after each halving. If we consider the entire year of 2025, the chances of growth to $150,000 increase to 70%.

– Cathy Wood, CEO of Ark Invest, confirmed her long-term forecast for Ethereum. In her opinion, the main altcoin is capable of catching up with bitcoin. She believes that by 2032, its market capitalization will reach an impressive $20 trillion. Based on current values, the main altcoin should consistently trade above $160,000 by that time. Highlighting her views, Cathy Wood emphasized that technologically, Ethereum is more advanced compared to the flagship cryptocurrency. Moreover, at the moment, it remains the most in-demand platform for deploying smart contracts and decentralized applications of any complexity.
In March, the price of ETH exceeded $4,000, but this was followed by a deep correction coinciding with geopolitical escalation in the Middle East, leading investors to flee from high-risk assets. Instead, they focused on diversification and began investing capital in traditional financial instruments. In light of these events, the key beneficiaries were the dollar and US Treasury bonds, as well as precious metals.

– Mark Yusko, CEO of Morgan Creek Capital, expects a massive inflow of funds into the cryptocurrency market as wealth estimated at $30 trillion from baby boomers seeks to enter digital assets. According to the businessman, capital flows will most likely come from them – those born between 1946 and 1964 – through pension accounts managed by advisors. (According to the Investment Advisor Association, in 2022, US financial advisors managed assets worth more than $114 trillion). Yusko mentioned that the introduction of BTC-ETFs has significantly changed demand. However, the full effect of this is yet to be felt. "I believe that within 12 months, $300 billion will enter this area – this is 1% of the $30 trillion. In fact, this is more money than has ever been converted into bitcoin in 15 years. We've only been working with ETFs for about three months, and we've received about 10% of what I think comes into this area from registered investment advisors who control all the boomers' money," stated Yusko, adding that the inflow could potentially increase the crypto market's capitalization to $6 trillion.

– American regulators, according to the administrator of Bitcoin.org known as Cobra, are preparing to impose a complete ban on self-custody of cryptocurrency. This means that US citizens will have to involve intermediaries who will store digital assets. "If you think the government won't come for your bitcoins, you simply haven't paid attention to this," Cobra scares readers on the X social network page.
Cobra recently assured subscribers that a split might occur within the Bitcoin community. There are those who want the network to remain unchanged and those who would like to add more features to Bitcoin, expanding the network's capabilities. Cobra is confident that these disagreements could negatively affect the ecosystem of the first cryptocurrency.

– American entrepreneur and investor Chris Dixon criticised the tightening measures taken by regulators regarding cryptocurrencies. The US Securities and Exchange Commission (SEC) is increasingly suing crypto companies, claiming they are trading unregistered securities. This has caused Dixon great concern. "The US has an absurd cryptocurrency regulation regime. [...] Major industry companies developing blockchain-based solutions face constant pressure. Existing rules encourage platforms to host only memecoins, which can be freely traded on markets without any restrictions, rather than other more useful crypto assets," stated Dixon.
Further in his forecasts, the administrator of Bitcoin.org under the nickname Cobra believes that the US authorities are preparing to introduce a complete ban on self-custody of cryptocurrency. This means that citizens of the country will have to involve intermediaries who will store their digital assets. "If you think the government won't come for your bitcoins, you just haven't paid attention to this," Cobra scares readers on the pages of social network X.

– The Federal Court of Seattle (USA) has delivered a verdict in the case of the co-founder and former CEO of the largest crypto exchange, Binance, Changpeng Zhao. It is noted that the businessman was accused of crimes related to money transfers without a license. While the prosecution had requested three years of imprisonment, the defense suggested settling for five months of probation. Representatives of the Justice Department insisted that probation for CZ was inappropriate as "such a decision could encourage others to break the law on the largest possible scale." The defence argued the absence of evidence that the defendant was informed of the illegal activities on the exchange. As a result, one of the wealthiest people in the crypto industry got away with four months of imprisonment.
Addressing his final words, Changpeng Zhao acknowledged that he had failed to properly establish a suitable client verification system at Binance and to counteract money laundering during his tenure.
Recall that in November 2023, Zhao reached a settlement with the US government to end a years-long investigation against Binance. As part of the agreement, he stepped down as CEO and agreed to pay a fine of $50 million. However, as we see, the US authorities found this insufficient, and now, in addition to dismissal and a fine, a prison term has been added.


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

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

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Forex and Cryptocurrency Forecast for 06 – 10 May 2024

EUR/USD: What's Wrong with the US Soft Landing?

The headline of our last review stated that inflation remains stubborn, and the US GDP is slowing. Newly arrived data have only confirmed these assertions. A crucial inflation measure that the Federal Reserve follows – the Personal Consumption Expenditures Price Index (PCE) – increased from 2.5% to 2.7% in March. The ISM Manufacturing Sector PMI surpassed the critical level of 50.0 points, dropping from 50.3 to 49.2 points. It is important to remember that the 50.0 threshold separates economic growth from contraction. In such circumstances, neither raising nor lowering the interest rate is advisable, which is exactly what the FOMC (Federal Open Market Committee) of the US Federal Reserve decided. At its meeting on Wednesday, 01 May, the committee members unanimously left the rate unchanged at 5.50%, marking the highest rate in 23 years and unchanged for the sixth consecutive meeting.

This decision matched market expectations. Thus, greater interest was on the press conference and comments from the regulator's leadership after the meeting. The head of the Fed, Jerome Powell, stated that inflation in the US is still too high and further progress in reducing it is not guaranteed as it has not shown signs of slowing in recent months. According to him, the Fed is fully committed to returning inflation to the 2.0% target. However, "I don't know how long it will take," Powell admitted.

The outcomes of the FOMC meeting appear neutral except for one "dovish pill." The regulator announced that from June, it would reduce the amount of Treasury securities it redeems from its balance sheet from $60 billion to $25 billion per month. This tightening of the money supply is not yet a shift to quantitative easing (QE) but a definite step towards reducing the scale of quantitative tightening (QT). It must be noted that this did not make a strong impression on market participants.

Besides fighting inflation, the Fed's other main goal is maximum employment. "If inflation remains persistent and the labour market strong, it would be appropriate to delay lowering rates," Powell stated. Following his remarks, the market anticipated the important US Bureau of Labor Statistics (BLS) report, which was to be released on Friday, 03 May. This document disappointed dollar bulls as the number of people employed in the non-agricultural sector (NFP) in the US only grew by 175K in April, significantly lower than both the March figure of 315K and market expectations of 238K. The employment report also showed an increase in unemployment from 3.8% to 3.9%. The only solace for Powell and other Fed officials was the reduction in wage inflation – the annual growth rate of hourly earnings slowed from 4.1% to 3.9%.

European economy. Consumer Price Index (CPI) in Germany increased from 0.4% to 0.5% on a monthly basis. Retail sales also increased, from -2.7% to +0.3% year-on-year. Germany's GDP also moved into positive territory, rising in Q1 from -0.3% to 0.2%, exceeding the forecast of 0.1%. Regarding the Eurozone as a whole, the economy looks quite healthy – it is growing and inflation is falling. Preliminary data for Q1 shows GDP rising from 0.1% to 0.4% year-on-year and from 0.0% to 0.3% quarter-on-quarter. Core inflation (CPI) fell from 1.1% to 0.7% on a monthly basis and from 2.9% to 2.7% year-on-year, not far from the target of 2.0%.

This suggests that the European Central Bank (ECB) may begin to lower interest rates earlier than the Fed. However, it is still too early to make final conclusions. If based on the derivatives market, the probability of the first rate cut for the dollar in September is about 50%. Some economists, including analysts from Morgan Stanley and Societe Generale, even suggest that the Fed might postpone the first rate cut until early 2025.

After the release of the weak employment report in the US, the week's maximum was recorded at 1.0811. However, everything then calmed down a bit and the last point was placed by EUR/USD at 1.0762. As for the forecast for the near future, as of the evening of 03 May, 75% of experts expect the dollar to strengthen, 25% – its weakening. Among the oscillators on D1, the opposite is true: only 25% are on the side of the reds, 60% – are coloured green, 15% – in neutral gray. Among the trend indicators, there is a balance: 50% for the reds, just as much for the greens. The nearest support for the pair is located in the zone 1.0710-1.0725, then 1.0650, 1.0600-1.0620, 1.0560, 1.0495-1.0515, 1.0450, 1.0375, 1.0255, 1.0130, 1.0000. Resistance zones are located in the areas 1.0795-1.0805, 1.0865, 1.0895-1.0925, 1.0965-1.0980, 1.1015, 1.1050, 1.1100-1.1140.

No events as important as those of the past week are anticipated. However, the calendar still highlights Tuesday, 07 May, when revised retail sales data in the Eurozone will be released, and Thursday, 09 May, when the number of unemployment benefit claims in the US is traditionally made known.

GBP/USD: Will the Pair Fall to 1.2000?

Not the pound but the dollar defined the week for GBP/USD. This is evidenced by the fact that the pair completely ignored the forecast of the Organisation for Economic Co-operation and Development according to which the UK will face the slowest economic growth and the highest inflation among the G7 countries, excluding Germany, this and next year. It is expected that the UK's GDP in 2024 will decrease from 0.7% to 0.4% and in 2025 – from 1.2% to 1%.

Commenting on this rather sad forecast, the UK Finance Minister Jeremy Hunt stated that the country's economy continues to fight inflation with high interest rates, which put significant pressure on the pace of economic growth.

Like other central banks, the BoE faces a tough choice – to prioritize fighting inflation or supporting the national economy. It is very difficult to sit on two chairs at once. Economists from the investment bank Morgan Stanley believe that the divergence in monetary policy between the Bank of England and the Fed could put serious pressure on GBP/USD. In their opinion, if markets decide that the Fed will refrain from lowering the rate this year and the BoE begins a softening cycle (by 75 basis points this year), the pound may once again test the 1.2000 level.

The pair ended the week at 1.2546. The median forecast of analysts regarding its behaviour in the near future looks maximally uncertain: a third voted for the pair's movement south, a third – north, and just as many – east. Regarding technical analysis, among trend indicators on D1, 35% point south and 65% look north. Among the oscillators, only 10% recommend selling, the rest 90% – buying, although a quarter of them give signals of the pair's overbought.

The pair will encounter resistance at levels 1.2575-1.2610, 1.2695-1.2710, 1.2755-1.2775, 1.2800-1.2820, 1.2885-1.2900. In case of a fall, it will meet support levels and zones at 1.2500-1.2520, 1.2450, 1.2400-1.2420, 1.2300-1.2330, 1.2185-1.2210, 1.2110, 1.2035-1.2070, 1.1960, and 1.1840.

If last week the dynamics of GBP/USD were mainly determined by news from the US, much will depend on what happens in the UK during the upcoming week. Thus, on Thursday, 09 May, a meeting of the Bank of England will take place, where a decision on further monetary policy, including changes in interest rates and the planned volume of asset purchases, will be made. And at the very end of the working week, on Friday, 10 May, data on the country's GDP for Q1 2024 will be released.

USD/JPY: A Truly Crazy Week

At its meeting on 26 April, the members of the Bank of Japan (BoJ) Board unanimously decided to leave the key rate and the parameters of the QE program unchanged. There was no harsh commentary expected by many on the future prospects. Such inaction by the central bank intensified pressure on the national currency, sending USD/JPY to new heights.

A significant part of the previous review was devoted to discussing how much the yen would need to weaken before Japanese financial authorities moved from observation and soothing statements to real active measures. USD/JPY had long surpassed levels around 152.00, where intervention occurred in October 2022 and where a reversal happened about a year later. This time, strategists from the Dutch Rabobank called 155.00 a critical level for the start of currency interventions by the Ministry of Finance and the Bank of Japan. The same mark was mentioned by 16 out of 21 economists surveyed by Reuters. Others forecasted similar actions at levels of 156.00 (2 respondents), 157.00 (1), and 158.00 (2). We suggested raising the forecast bar to 160.00, and as a reversal point, we indicated 160.30. And we were right.

Firstly, on Monday, 29 April, when the country celebrated the birth of Hirohito (Emperor Showa), USD/JPY continued its cosmic epic and updated another 34-year high by reaching 160.22. Thus, in just two days, it rose by more than 520 points. The last time such an impressive surge was observed was 10 years ago.

However, the situation did not calm down there. On the same day, a short powerful impulse sent the pair back down by 570 points to 154.50. Then followed a rebound, and late in the evening on 01 May, when the sun was already rising over Japan the next day, another crash occurred – in just one hour, the pair dropped 460 points, stopping its fall near 153.00. This movement occurred after relatively mild decisions by the Fed, but the cause was clearly not this, as other major currencies at that moment strengthened against the dollar much less. For example, the euro by 50 points, the British pound – by 70.

Such sharp movements in favour of the yen were very similar to the currency interventions of the BoJ in 2022. Although there was no official confirmation of intervention by the Japanese authorities, according to estimates by Bloomberg, this time on the intervention on Monday, 29 April, 5.5 trillion yen was spent, and on 01 May, according to calculations by the Itochu Institute, another 5 trillion yen.

And now the question arises: what next? The effect of the autumn interventions of 2022 lasted a couple of months – already at the beginning of January 2023, the yen began to weaken again. So it is quite possible that in a few weeks or months, we will again see USD/JPY around 160.00.

The BoJ's statement following the latest meeting stated that "the prospects for economic and price developments in Japan are extremely uncertain" and "it is expected that relaxed monetary policy will be maintained for some time." There is currently no need to raise the interest rate as core inflation is significantly and sharply decreasing, it has fallen from 2.4% to 1.6%. Especially since tightening monetary policy could harm the country's economy. The growth rate of GDP remains close to zero. Moreover, the public debt is 264% of GDP. (For comparison: the constantly discussed US public debt is half that – 129%). So the mentioned "some time" in the statement of the regulator may stretch for many months.

It is appropriate to recall BoJ board member Asahi Noguchi, who recently stated that the pace of future rate increases is likely to be much slower than global counterparts, and it is impossible to say whether there will be another increase this year. So a new strengthening of the yen is possible only in two cases – thanks to new currency interventions and thanks to the start of easing monetary policy by the Fed.

According to Japanese MUFG Bank economists, interventions will only help buy time, not initiate a long-term reversal. Bloomberg believes that the intervention itself will be effective only if it is coordinated, particularly with the USA. According to forecasts by analysts of this agency, this year USD/JPY may rise to approximately 165.00, although overcoming the mark at 160.00 may take some time.

After all these crazy ups and downs, the past week ended at a level of 152.96. The experts' forecast regarding its nearest future, as in the case with GBP/USD, gives no clear directions: a third are for its rise, a third – for its fall, and a third have taken a neutral position. Technical analysis instruments are also in complete disarray. Among the trend indicators on D1, the distribution of forces is 50% to 50%. Among the oscillators, 50% point south (a third are in the oversold zone), 25% look north, and 25% – east. Traders should keep in mind that due to such volatility; the magnitude of slippage can reach many dozens of points. The nearest support level is located in the area of 150.00-150.80, then follow 146.50-146.90, 143.30-143.75, and 140.25-141.00. Resistance levels are 154.80-155.00, 156.25, 157.80-158.30, 159.40, and 160.00-160.25.

No significant events regarding the state of the Japanese economy are expected next week. Moreover, traders should keep in mind that Monday, 06 May is another holiday in Japan – the country celebrates Children's Day.

CRYPTOCURRENCIES: BTC-2025 Target – $150,000-200,000

In the last review, we wondered where bitcoin would fall. Now we know the answer: on 01 May, it fell to the mark of $56,566. The last time the main cryptocurrency was valued this low was at the end of February 2024.

Bearish sentiments apparently arose because the trading volumes of new ETFs in Hong Kong turned out to be significantly lower than expected. Optimism in this regard has dried up. Against this backdrop, there began a withdrawal of funds from exchange-traded BTC-ETFs in the USA. Analysts from Fidelity Digital Assets, a leading issuer of one of these funds, noted a growing interest in selling and locking in profits from the side of long-term hodlers. For this reason, Fidelity revised its medium-term forecast for bitcoin from positive to neutral. According to CoinGlass monitoring, liquidations of long positions reached $230 million per day. Another negative factor for the market is called the geopolitical escalation in the Middle East, as a result of which investors began to flee from any high-risk assets. Instead, they began to invest capital in traditional financial instruments. In light of these events, the main beneficiaries in March-April were the dollar and US Treasury bonds, as well as precious metals.

Analysts from Glassnode hope that bullish sentiments will still prevail since the market prefers to "buy on the fall." However, they admit that the loss of support in the area of $60,000 may lead to further collapse of the BTC rate. Co-founder of CMCC Crest Willy Woo called support from short-term holders at the mark of $58,900 critical. After its breach, in Woo's opinion, the market risks transitioning to a bearish phase.

So, last week, both these lines of defense of the bulls were broken. What's next? In Glassnode, as a bottom, they call the level of $52,000. The founder of venture company Pomp Investments Anthony Pompliano believes that the price will not fall below $50,000. Another expert – Alan Santana does not exclude a failure to $30,000. All these forecasts indicate that in the coming months, investors may not see new historical maximums of BTC.

For example, legendary trader, analyst, and head of Factor LLC Peter Brandt with a probability of 25% admitted that bitcoin has already formed another maximum (ATH) within the current cycle. This happened on 14 March at the height of $73,745. The expert referred to the concept of "exponential decay." The latter describes the process of decreasing the amount of growth by a constant percentage over a certain period. "Bitcoin has historically traded within approximately a four-year cycle, often associated with halvings. After the initial bullish rally, there were three more, each being 80% less powerful than the previous one in terms of price growth," the specialist explains.

"In my analysis, I estimated the probability [of such a scenario] at 25%. But I trust more the report that I published in February. […] Building a cycle 'before/after halving' suggests that the current bullish trend will reach its peak in the range of $140,000–160,000 somewhere in the late summer/early fall of 2025," Peter Brandt clarified.

CEO of Quantonomy Giovanni Santostasi doubted the correctness of applying the theory of exponential decay in this particular case. "We have three data points if we exclude the period before [the first] halving and actually only two if we consider the ratios. This is not enough for any meaningful statistical analysis," Santostasi commented on the assumption expressed by Brandt. According to his own model of power dependence, the peak of the fourth cycle falls approximately in December 2025 at the level of ~$210,000.

Note that not only Giovanni Santostasi, but also many other participants in the crypto market, are counting on the continuation of the bull rally and reaching a new ATH. For example, the aforementioned Anthony Pompliano believes that within 12-18 months, the coin is waiting for growth to $100,000 with chances to reach $150,000-200,000. Analyst at Glassnode James Check hopes that at this stage, the BTC rate will reach $250,000. And Peter Brand himself in the mentioned February report called $200,000 as a potential landmark. At the same time, economists from QCP Capital believe that it is necessary to wait at least two months before assessing the effect of the past fourth halving. "The spot price grew exponentially only 50-100 days after each of the three previous halvings. If this pattern repeats this time, bitcoin bulls still have weeks to build a larger long position," their report states.

According to CEO of Morgan Creek Capital Mark Yusko, the appearance of exchange-traded BTC-ETFs has led to a significant change in demand. However, the full effect of this is yet to be felt. According to the businessman, the main capital flows will come from baby boomers, i.e., those born between 1946 and 1964, through pension accounts managed by investment consultants. The capital of baby boomers is estimated at $30 trillion. "I believe that within 12 months, $300 billion will flow into the crypto sphere – this is 1% of 30 trillion dollars. In fact, this is more money than has ever been converted into bitcoins in 15 years," Yusko shared his forecast, adding that the inflow could potentially increase the capitalization of the crypto market to $6 trillion.

Another forecast was given by specialists from Spot On Chain. According to their words, the analytical model developed by them is based on an extensive data set. In particular, it takes into account halvings, interest rate cycles, the ETF factor, venture investors' activity, and sales of bitcoins by miners. Using the artificial intelligence platform Vertex AI from Google Cloud, Spot On Chain obtained forecasts for the BTC price for the years 2024-2025.

During May-July, the price of the first cryptocurrency, according to their calculations, will be in the range of $56,000-70,000. This period is characterized by increased volatility. In the second half of 2024, with a probability of 63%, BTC will rise to $100,000. "This forecast signals the prevailing bullish sentiments in the market, which will be facilitated by the expected reduction in interest rates [by the US Federal Reserve]. This may increase the demand for risky assets such as stocks and bitcoin," representatives of Spot On Chain explained.

According to their words, there is a "convincing probability" of 42% that in the first half of 2025, digital gold will overcome the $150,000 mark, as the first cryptocurrency usually updates the historical maximum within 6-12 months after each halving. If we take the whole of 2025, the chances of growth to $150,000 increase to 70%.

Thus, as follows from the forecasts presented above, the main target range for bitcoin in 2025 is at the height of $150,000-200,000. Of course, these are just forecasts and not at all a fact that they will come true, especially if we take into account the opinion of the "funeral team" consisting of Warren Buffett, Charlie Munger, Peter Schiff, and other ardent critics of the first cryptocurrency. Meanwhile, at the time of writing this review, on the evening of Friday, 03 May, BTC/USD, taking advantage of the weakening dollar, grew to $63,000. The total capitalization of the crypto market is $2.33 trillion ($2.36 trillion a week ago). The Bitcoin Fear & Greed Index showed a serious drop – from 70 to 48 points and moved from the Greed zone to the Neutral zone.


NordFX Analytical Group


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

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NordFX Named Best ECN/STP Forex Broker 2024

NordFX received its first award nearly 15 years ago, back in 2010. Since then, it has been honoured with more than 70 professional prizes and titles for achievements and innovations across various sectors of the financial industry. However, only once before, in 2015, were NordFX's merits in organizing ECN trading specifically recognized. Now, the esteemed international online portal FXDailyInfo has once again acknowledged the company as the Best ECN/STP Forex Broker.

FXDailyInfo is one of the leading resources providing daily news and analysis on the financial markets, including broker reviews, educational materials, and other useful information for traders. The portal also annually recognizes the best representatives of the financial industry with its awards. Winners of the FXDailyinfo Awards are determined through open voting by visitors to the website, which makes these awards particularly valuable as they objectively reflect the opinion of the professional community. This time, the high rating was given for the services NordFX offers its clients on Zero accounts on popular platforms such as MetaTrader 4 and 5.

A key feature here is direct access to interbank liquidity. The Electronic Communication Network (ECN) used on MT4 Zero and MT5 Zero accounts directs trader orders directly to liquidity providers, bypassing any additional intermediation. This reduces order processing time and provides the opportunity to trade at the most favourable prices with minimal commissions and spreads. On most popular pairs such as EUR/USD, GBP/USD, and USD/JPY, typical spreads are 0 pips. In addition to currency pairs, traders can also conduct transactions with cryptocurrencies, stocks, and exchange indexes, as well as oil, gas, and precious metals on these accounts. Notably, the spread for the gold pair XAU/USD is also zero. This pair is particularly favored by traders in NordFX's top three, largely thanks to which they were able to earn an impressive total of nearly $2.5 million USD in the previous year, 2023.


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

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CryptoNews of the Week

– Anthony Pompliano, founder of Pomp Investments, asserts that bitcoin is "stronger than ever." This conclusion is based on the 200-day moving average (200 DMA) reaching its all-time high above $56,000. "In the long term, digital gold continues to appreciate. It is misleading to comfort oneself with the idea of a sideways trend. The long-term thesis is stronger than ever," the expert stated.

– Willy Woo, analyst and co-founder of CMCC Crest, has highlighted the activity of so-called crypto 'dolphins' and 'sharks.' "There has never been such vigorous coin accumulation by wealthy holders as in the last two months, with prices fluctuating between $60,000 and $70,000. These are individuals who hold between 100 BTC and 1,000 BTC, or approximately $6.5 million to $65 million," he explained. Willy Woo anticipates that bitcoin will continue to penetrate various aspects of daily life, thereby increasing the number of users. "By 2035, we expect the fair value of bitcoin to reach $1 million. This forecast is based on the user growth curve, and I am talking about fair value, not the peak during a bull market frenzy. Bitcoin was not traded until the thousandth user appeared, and only after the launch of the cryptocurrency exchange Bitstamp in 2011 did global platforms for asset valuation emerge. Since 2012, the BTC price has largely matched the growth in user numbers," noted the analyst.

– According to analysts at CryptoQuant, whales holding between 1,000 and 10,000 BTC, unlike dolphins and sharks, behave quite passively. Meanwhile, Michael Van De Poppe, founder of MN Trading, has pointed out the "absence of retail investors." He predicts that in the event of another correction, the coin could drop to around $55,000. "However, this range is quite acceptable as long as bitcoin remains above $60,000. Altcoins are slowly awakening," he added.

– Trader and analyst known as Rekt Capital reported that the first cryptocurrency has exited the post-halving "danger zone" and entered a phase of reaccumulating. According to this expert, in 2016, after the halving, BTC demonstrated a long red candle on the weekly chart, decreasing by 17%. This time, however, the pattern repeated with a correction of just 6%. The price reached a local bottom at around $56,500 but then increased by 15% and re-entered the "reaccumulating range." The analyst warned that technically, the "danger zone" will continue until the end of this week when the third post-halving weekly candle closes. From a price perspective, the "reversal effect" has already occurred.

– Robert Kiyosaki, bestselling author of "Rich Dad Poor Dad" and entrepreneur, has declared a crash in the currency market. "Bad news: the crash has already begun. It will be severe. Good news: a crash is the best time to get rich," he wrote, offering several recommendations on how to act during a crisis. The first recommendation is: "Find an additional source of income. Artificial Intelligence will destroy millions of jobs. Start a small business and become an entrepreneur rather than an employee who fears losing their job." The second advice from Kiyosaki is: "Do not save fake money (US dollars, euros, yen, pesos) which are declining in value. Save gold, silver, and bitcoin – real money whose value increases, especially in market crash conditions."

– Over the last decade, the main cryptocurrency has risen by an astonishing 12,464%, surpassing tech giants such as Amazon, Alphabet, and Netflix. However, according to a study by WuBlockchain, Nvidia shares took the lead, showcasing an even more impressive growth of 17,797%. This was facilitated by the company's cutting-edge graphics processors and semiconductor devices. The fact that bitcoin secured the second place, being a representative of a highly volatile market, is a true achievement. The impressive growth trajectory of BTC over the last decade demonstrates its resilience and potential as a viable investment vehicle. Given that investors are actively diversifying their portfolios and seeking ways to achieve potentially high returns, the analysis conducted by the WuBlockchain team serves as a valuable reference point that highlights the impressive dynamics not only of traditional tech company stocks but also of modern digital assets.

– According to data from Clark Moody, more than 1 billion transactions have already been processed in the bitcoin network. Comparing network indicators with the international payment system Visa, it is notable that the first cryptocurrency's blockchain reached the billion milestone in just 15 years, while Visa required almost a quarter of a century. The average number of daily transactions in the BTC network, as detailed by The Block, is around 505,000, which is a sign of growing recognition for "digital gold." It should be noted that bitcoin is not the record holder in this indicator: the Ethereum network currently has around 2.4 billion transactions.

– On May 1, bitcoin updated the minimum from April 17-19, which has heightened investor concerns. Amid such fluctuations, Michael Saylor, CEO of MicroStrategy, has become a symbol of bullish optimism. In his latest message, he urged investors to "run with the bulls." It should be noted that with 205,000 BTC on its balance sheet, Saylor must exude optimism to prevent his company from incurring losses. However, analysts note that in reality, the fate of bitcoin depends not only on the sunny calls of the CEO of MicroStrategy. If buyer support weakens, BTC may return to key support levels at $61,000 and $56,000, where significant liquidity is concentrated.

– American and British scientists have published a study titled "The Impact of Cryptocurrency-Generated Wealth on Purchasing and Investment in Private Residences." The researchers examined financial transaction data for more than 60 million residents of the USA conducted from 2010 to 2023 and found that the rise in cryptocurrency prices causes a significant increase in real estate prices. In states such as California, Nevada, and Utah, where many residents became wealthy in 2017 due to the multiple increase in BTC prices, the value of real estate increased by an average of $2,000 annually, and every dollar earned from cryptocurrencies increased property prices by 15 cents.


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

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Forex and Cryptocurrency Forecast for 13 – 17 May 2024

EUR/USD: Medium-Term Outlook Favours the Dollar

Throughout the past week, EUR/USD exhibited mixed dynamics, primarily driven by expectations concerning potential interest rate cuts by the US Federal Reserve (Fed) and the European Central Bank (ECB). Statements by officials from both central banks, as well as economic macro-statistics, either heightened or lowered these expectations.

The EUR/USD bullish rally commenced on 16 April from the 1.0600 mark, reaching a peak of 1.0811 on 3 May, after which growth stalled, starting the past week at 1.0762. On Monday, 6 May, statistics from the Eurozone provided some support to the common European currency. In April, the Services Purchasing Managers' Index (PMI) rose from 52.9 to 53.3, exceeding the forecast of 52.9. The Composite PMI, which includes the manufacturing sector and services, increased from 51.4 to 51.7. Germany's Composite PMI also showed positive dynamics, rising from 50.5 to 50.6. Consequently, business activity in the Eurozone reached its highest level in almost a year. Moreover, retail sales in the region showed significant growth, rising from -0.5% to +0.7% year-on-year.

This news backdrop suggests potential inflation growth, which in theory could deter the ECB from initiating a monetary policy easing. However, ECB Chief Economist Philip Lane stated that the Executive Board of the bank has compelling arguments for a rate cut at the 6 June meeting. Another ECB representative, Lithuanian Central Bank head Gediminas Simkus, indicated that rate cuts should not be limited to June, suggesting it could happen thrice by the end of the year. However, while the likelihood of easing (QE) in June is near 100%, there is some uncertainty regarding further steps. ECB Vice President Luis de Guindos admitted that the regulator is cautiously forecasting any trends beyond June.

In addition to ECB officials' statements supporting easing, statistics released on Tuesday, 7 May, also contributed. They showed that manufacturing orders in Germany, the locomotive of the European economy, decreased by 0.4% in March after a 0.8% decline in February. As a result, the EUR/USD pair's growth halted, pulling back to 1.0723.

The pair made another attempt to break through the strong resistance zone of 1.0790-1.0800 on Thursday, 9 May, when US initial jobless claims data was unexpectedly reported at 231K, much worse than the expected 210K. This coincided with a widespread negative session for US yields along the curve. The situation worsened as the unemployment data confirmed concerning statistics released on 3 May. According to the US Bureau of Labor Statistics (BLS), non-farm payrolls (NFP) rose by just 175K in April, significantly below the March figure of 315K and market expectations of 238K. The employment report also showed an increase in unemployment from 3.8% to 3.9%.

Besides combating inflation, the Fed's other declared main goal is maximum employment. "If inflation remains stable and the labor market strong, it would be appropriate to delay rate cuts," stated Fed Chair Jerome Powell. Now, the strength of the labour market is in question. However, the Fed is likely to focus on fighting inflation, which is still far from the 2.0% target.

A key inflation indicator tracked by the Fed, the Personal Consumption Expenditures (PCE) Price Index, rose from 2.5% to 2.7% in March. However, the ISM Manufacturing PMI fell below the key 50.0 mark, dropping from 50.3 to 49.2 points. Remember, a level of 50.0 separates economic growth from contraction. In such a situation, raising the interest rate is inadvisable, but lowering it is also not an option. This is exactly what the FOMC (Federal Open Market Committee) of the Fed did. At its meeting on Wednesday, 1 May, its members unanimously left the rate unchanged at 5.50%. This is the highest rate in 23 years, and the US central bank has kept it unchanged for six consecutive meetings.

The main scenario foresees the Fed beginning to review the rate towards a decrease no earlier than autumn, likely in September, with another cut by year-end. However, if US inflation does not decline or, worse, continues to rise, the regulator may abandon monetary policy easing until early 2025. Thus, considering the above, many analysts believe the medium-term advantage remains with the dollar, and EUR/USD is still attractive for sales with a horizon of several months.

The final point of the week for EUR/USD was at 1.0770, making the weekly result almost zero. Regarding the forecast for the near term, as of the evening of 10 May, it is maximally neutral: 50% expect dollar strengthening, and 50% expect its weakening. Trend indicators on D1 are equally divided: half are on the side of the reds, and half are on the side of the greens. Among oscillators, only 10% voted for the reds, another 10% remained neutral, and 80% voted for the greens (although a quarter of them are already signalling overbought conditions). The nearest support for the pair is located in the 1.0710-1.0725 zone, followed by 1.0650, 1.0600-1.0620, 1.0560, 1.0495-1.0515, 1.0450, 1.0375, 1.0255, 1.0130, and 1.0000. Resistance zones are in the regions of 1.0795-1.0810, 1.0865, 1.0895-1.0925, 1.0965-1.0980, 1.1015, 1.1050, and 1.1100-1.1140.

In the coming week, on Tuesday, 14 May, consumer inflation data (CPI) in Germany and the Producer Price Index (PPI) in the US will be released. Also scheduled for this day is a speech by Fed Chair Jerome Powell. The next day, Wednesday, 15 May, important indicators such as Consumer Price Index (CPI) and retail sales volumes in the United States will be published. On Thursday, 16 May, the traditional number of initial jobless claims in the US will be announced. And at the very end of the working week, on Friday, 17 May, we will learn the Eurozone CPI as a whole, which may influence the ECB's decision regarding the euro interest rate.

GBP/USD: Pound Remains Under Pressure but Holds On

At its meeting on Thursday, 9 May, the Bank of England’s (BoE) Monetary Policy Committee maintained the interest rate at 5.25%, the highest in 16 years. Economists polled by Reuters mostly expected borrowing costs to remain unchanged, with a committee vote ratio of 8 to 1. However, the vote was 7 to 2. During discussions, two committee members supported a rate cut to 5.0%, which market participants interpreted as a step towards the beginning of a policy easing cycle.

At the post-meeting press conference, BoE Governor Andrew Bailey expressed optimism, stating that the UK economy is moving in the right direction. Bailey also noted that “a rate cut next month is quite possible,” but he intends to wait for data on inflation, activity, and the labour market before making a decision. Chief Economist Huw Pill, although he joined the majority in voting to keep the rate unchanged, also expressed growing confidence that the time for a reduction is approaching. He added that “focusing only on the next Bank of England meeting [20 June] is somewhat unreasonable” and that “medium-term inflation forecasts do not necessarily signal rate movements at the next or subsequent meetings.”

Overall, the movement of the GBP/USD pair last week resembled that of the EUR/USD pair. The chart shows a distinct surge on Thursday, 9 May, triggered by data indicating a cooling US labour market. The pound was also supported by optimistic GDP data for the UK for Q1 2024 and manufacturing sector data for March.

GDP (quarter-on-quarter) rose by +0.6% after a decline of -0.3% in the previous quarter (forecast +0.4%). Additionally, the GDP grew by +0.2% year-on-year, recovering from a fall of -0.2%.

As with the euro, the pound is under pressure from the prospect of earlier monetary policy easing by the BoE compared to the Fed. However, the British currency ended the past week above the key 1.2500 level, at 1.2523. Moreover, 65% of analysts expect the pair not only to hold above this horizon but also to continue its growth. The remaining 35% voted for the pair's movement south. As for technical analysis, trend indicators on D1 are split 50-50. Among oscillators, only 10% recommend selling, 40% took a neutral position, and 50% recommend buying (10% of them signal overbought conditions). If the pair rises, it will encounter resistance at levels 1.2575-1.2610, 1.2695-1.2710, 1.2755-1.2775, 1.2800-1.2820, and 1.2885-1.2900. In case of a fall, it will face support levels and zones at 1.2490-1.2500, 1.2450, 1.2400-1.2410, 1.2300-1.2330, 1.2185-1.2210, and 1.2070-1.2110, 1.2035.

The upcoming week's calendar highlights Tuesday, 14 May, when data from the UK labour market will be released. Also of interest is the Inflation Report hearing scheduled for Wednesday, 15 May.

USD/JPY: $50 Billion Interventions Wasted?

It seems that until the Bank of Japan (BoJ) takes confident and clear steps to tighten its monetary policy, nothing will help the yen. At its meeting on 26 April, the board members of this regulator unanimously decided to leave the key rate and QE program parameters unchanged. Expectedly tough comments on the outlook were also absent. This inaction increased pressure on the national currency, sending the USD/JPY pair to new heights. It continued its cosmic saga, reaching a new 34-year high of 160.22. Following this, Japan's financial authorities finally decided on a double currency intervention. Although there was no official confirmation, experts estimate its total volume at $50 billion.

Did it help? Judging by the USD/JPY chart, not really. The pair headed north again last week. Unlike the euro and the British pound, the yen barely reacted even to weak US labour market data on Thursday, 9 May, only slowing its decline.

All this occurs amid endless statements from the Japanese Central Bank and Ministry of Finance about their readiness to take necessary measures to reduce speculative pressure on the national currency. The published minutes of the BoJ meeting show that most board members took a "hawkish" stance, calling for a rate hike. However, many analysts believe that the Bank of Japan will take only one such step in the second half of the year.

The last chord of the past five days sounded at 155.75. Economists at Singapore’s United Overseas Bank Limited (UOB) expect the USD/JPY pair to trade in the 154.00-157.20 range in the next 1-3 weeks. UOB also believes that the chances of it falling to 151.55 have significantly diminished. Overall, most experts (70%) simply shrug their shoulders in uncertainty. The remaining 30% persistently expect the yen to strengthen. As for technical analysis, 100% of trend indicators on D1 look north. Among oscillators, 50% are such, 15% point south, and 35% point east. Regarding support/resistance levels, traders should note that with such volatility, the slippage can reach many tens of points. The nearest support level is around 155.25, followed by 154.70, 153.90, 153.10, 151.85-152.25, 151.00, 150.00, after which come 146.50-146.90, 143.30-143.75, and 140.25-141.00. Resistance levels are 156.25, 157.00, 157.80-158.00, 158.60, 159.40, and 160.00-160.25.

Events of the upcoming week include the release on Thursday, 16 May, of preliminary GDP data for Japan for Q1 2024. No other significant publications regarding the Japanese economy are expected in the coming week.

CRYPTOCURRENCIES: A Week of Reflection and Uncertainty

What will happen to bitcoin in the foreseeable future? It seems there is no clear answer to this question. Experts and influencers often point in opposite directions: some shoot for the stars, while others keep their eyes on the ground.

For instance, according to the founder of Pomp Investments, Anthony Pompliano, bitcoin is "stronger than ever." He concluded this based on the 200-day moving average (200 DMA) reaching its ATH (All-Time High) of $57,000. Michael Saylor, CEO of MicroStrategy, is also optimistic. In his latest message, he urged investors to "run with the bulls." (It should be noted here that MicroStrategy holds 205,000 BTC on its balance sheet, so Saylor's bullish calls are quite understandable. He simply has to do this for his company to profit rather than incur losses).

However, analysts note that bitcoin's fate depends not only on the rosy calls of the MicroStrategy CEO. And if buyer support weakens, BTC could break through the key support level of $61,000, falling to the $56,000 zone, where significant liquidity is concentrated. MN Trading founder Michael Van De Poppe does not rule out another correction to around $55,000. However, the specialist quickly reassures investors, stating that this is quite acceptable as long as bitcoin holds above $60,000. Anthony Pompliano believes that the price will not fall below $50,000, and another expert, Alan Santana, does not rule out a drop to $30,000.

Trader and analyst Rekt Capital believes that the first cryptocurrency has exited the post-halving "danger zone" and entered the initial phase of re-accumulation. According to this expert, in 2016, BTC demonstrated a long red candle after the halving, falling by 17%. This time, the pattern repeated, with the difference between the post-halving maximum and minimum being 16%. The price reached a local bottom at around $56,566 but then rose to $65,508, on which Rekt Capital concluded that it re-entered the "re-accumulation range." However, there is one "but" - after this, we again observed a drop to $60,175. Overall, it seems that BTC/USD is in a descending channel, which increases investor concern.

In general, the forecasts are quite diverse. Information on the activity of various categories of traders and investors also varies. Analyst and CMCC Crest co-founder Willy Woo noted the activity of so-called crypto dolphins and sharks. "There has never been such a rapid purchase of coins by wealthy holders as in the last two months when the price fluctuated between $60,000-70,000. We are talking about those who hold from 100 BTC to 1000 BTC or approximately $6.5-65 million," he explained. On the other hand, according to CryptoQuant analysts, whales holding from 1000 to 10000 BTC, unlike dolphins and sharks, have behaved quite passively. Michael Van De Poppe, for his part, notes the absence of retail investors.

All this suggests that we may not see new all-time highs for BTC in the coming months. We wrote about this in the previous review, citing, among other things, the opinion of such a Wall Street legend as Factor LLC head Peter Brandt. With a 25% probability, he assumed that bitcoin had already formed another ATH within the current cycle.

As for long-term forecasts, nothing has changed here - most of them predict a powerful bull rally for bitcoin. Anthony Pompliano writes about this. Willy Woo expects bitcoin to continue increasing its penetration into various spheres of everyday life, meaning the number of users will grow. "By 2035, we expect bitcoin's fair value to reach $1 million. This forecast is based on the user growth curve. And I'm talking about fair value, not a peak during a bull market frenzy," the analyst notes.

The author of the bestseller "Rich Dad Poor Dad," entrepreneur Robert Kiyosaki, once again included bitcoin in the TOP-3 ways to save and increase capital. "Bad news: the [currency market] crash has already begun. It will be severe. Good news: a crash is the best time to get rich," he wrote, offering several recommendations on how to act in a crisis. Let's note two of them. The first reads: "Find an additional source of income. Artificial Intelligence will destroy millions of jobs. Start a small business and become an entrepreneur, not an employee afraid of losing a job." "Don't hoard fake money (US dollar, euro, yen, peso) that is losing value. Hoard gold, silver, and bitcoin - real money whose value increases, especially in a market crash," is Kiyosaki's second recommendation.

Regarding bitcoin's growth, Kiyosaki is absolutely right; it's even pointless to argue. According to a study by Colin Wu, better known as WuBlockchain, over the past decade, the price of the leading cryptocurrency has grown by an astonishing 12,464%, outpacing giants like Amazon, Apple, Google, Meta, Tesla, and Netflix. BTC was second only to Nvidia (+17,797%). But the fact that bitcoin took second place, being a representative of a relatively new and volatile market, is a real achievement. BTC's impressive growth trajectory over the past decade demonstrates its resilience and potential as an essential component in investors' portfolios.

At the time of writing this review, on the evening of Friday, 10 May, the BTC/USD pair is trading at $60,470. The total market capitalization of the crypto market is $2.24 trillion ($2.33 trillion a week ago). The Crypto Fear & Greed Index has risen from the Neutral zone (48 points a week ago) to the Greed zone, now standing at 66 points.


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CryptoNews of the Week

– Billionaire Mark Cuban stated that if Joe Biden loses the upcoming presidential election, the crypto community will have a chance to "thank" the SEC (Securities and Exchange Commission) and its head, Gary Gensler. According to Cuban, the conflict between the SEC and the digital industry could negatively impact the support for the current US President. The billionaire remarked, "Gensler has not protected a single investor from fraud." "All he has accomplished is making it nearly impossible for legitimate crypto companies to operate, destroying countless enterprises and bankrupting unknown numbers of entrepreneurs," he added.
Cuban's tweet came in response to an article in Politico. The article mentions that Biden's competitor, Donald Trump, became the first presidential candidate to openly try to attract crypto users to his side. At an event promoting his own NFT collection, Mugshot Edition, he announced the acceptance of donations in digital assets. Additionally, his team, together with Bitcoin Magazine, developed a project to regulate the crypto sphere. Trump promised to protect the industry if elected, emphasizing that the current President "doesn't even know" what cryptocurrency is.

– The analytical platform Arkham Intelligence published a list of well-known personalities with more than 1 million followers on X (formerly Twitter) who have invested in cryptocurrency. The top 3 in the audience size ranking are Canadian singer Justin Bieber, Donald Trump, and Brazilian footballer Neymar. According to the provided data, the former US President and Republican Party candidate owns a crypto portfolio estimated at around $7 million. His wallet was last active in December 2023 when 250 ETH were sent to the Coinbase exchange.

– The current bitcoin lull may continue until early summer, but in Q3–Q4, a return to a growth trajectory is expected. Experts from the crypto exchange Bitfinex stated this. "We expect the market to remain uncertain in the short term, with low volatility until the actual winding down of the US Fed's QT [quantitative tightening programme]," the specialists believe. In their opinion, this will favour risky assets like cryptocurrencies. The fall of the US dollar from a six-month peak after the May Fed meeting and a weak employment report marked a turning point in the trend. The weakening USD could support the next phase of the digital assets rally.

– According to Capriole Investment founder Charles Edwards, bitcoin is in the "bored to death" stage. He stated that the current consolidation period could last from one to six months, during which quotes will remain in a low volatility range. This will happen until traders lose patience.
Sentiments will be most negative just before the sideways movement ends, Edwards believes. "When you get tired of the sideways movement, general symptoms will include thoughts that the halving is already priced in and the bull market is over. [...] Your symptoms and shorts will peak just before the mega rally," predicts the Capriole Investment head.

– By 2030, the first cryptocurrency will reach and surpass $1 million. This forecast was made by Twitter (now X) co-founder and Block head Jack Dorsey. The entrepreneur noted that the most interesting aspect of digital gold is the nature of its ecosystem and how it stimulates collective efforts to improve the network. "Besides the founding story, the most amazing thing about bitcoin is that everyone [...] who makes even the smallest effort to make it better improves the entire ecosystem, causing the price to rise. It's an amazing movement. [...] It has taught me a lot," he explained.

– One of the crucial questions for investors is choosing between bitcoin and ethereum. The roles of these two cryptocurrencies differ, and this can significantly impact their profitability. Bitcoin is increasingly seen as digital gold, providing stability in times of economic uncertainty. This concept is supported by the post-halving volatility reduction, which is now even lower than many companies in the S&P 500 index (Fidelity data).
Ethereum continues to push the boundaries of the possible through technological innovations, including the recent Dencun update aimed at reducing fees and increasing scalability. However, these changes have made the network inflationary again, nullifying the deflationary trend established after "The Merge" in 2022. Consequently, ETH volatility remains significantly higher than BTC despite the overall market calm.
According to ChatGPT, an artificial intelligence by OpenAI, the choice between these assets largely depends on individual investment strategy and risk tolerance. Bitcoin is generally better suited for investors seeking a relatively safe store of value. It attracts risk-averse individuals or those new to cryptocurrencies. On the other hand, Ethereum is more suitable for those who believe in the future of blockchain technology. The main cryptocurrency offers gradual growth, while the main altcoin offers potentially higher rewards but also higher risk.

– Investor and Eight founder Michaël van de Poppe has already made his choice. He admitted to selling all his bitcoins to buy altcoins. According to him, capital inflow and outflow in ETFs mainly influence BTC price movement, which depends on the dollar exchange rate and the Fed's policy. Additionally, the problems crypto companies face with US regulators affect bitcoin quotes.
Regarding altcoins, Van de Poppe believes many of them are undervalued. Once ETH quotes start rising, other alternative tokens will also go up. The specialist believes that the altcoins he selected will likely grow earlier and faster than the market flagship, allowing for greater profit than investing in digital gold.

– Former CEO of the largest crypto exchange Binance, Changpeng Zhao, is to serve four months in an American prison by court order. He wrote on social media X that during his upcoming "solitude," he would focus on writing, although he did not specify the nature of his creative work. The hint at writing a book sparked curiosity among Zhao's followers, as he is one of the key figures in the crypto community. There are speculations that Zhao's future book may cover his experience in the crypto business and share insights that would be interesting to both ordinary traders and industry executives.
In April, Changpeng Zhao was sentenced to four months in prison. This punishment followed his resignation as CEO of Binance in November when Zhao pleaded guilty to money laundering charges. Binance agreed to pay a $4.3 billion fine. Despite regulatory issues, Zhao stated that his departure from Binance does not mean he has lost interest in cryptocurrencies, and he will continue to contribute to the industry's development. For instance, in March, the former CEO launched the free educational initiative Giggle Academy to teach finance and blockchain to underprivileged youth.

– The analyst known as Rekt Capital noted that the threat of a bitcoin price drop after the halving has already passed. Drawing an analogy with the situation six years ago, he suggested that on May 1st, the bitcoin price hit a bottom around $56,000. The asset will remain in the accumulation zone until autumn. During this time, the market will likely stay calm, and the BTC price will fluctuate between $60,000 and $66,500. After that, Rekt Capital forecasts an exponential growth phase, during which the coin's value will reach new heights.

– Galaxy Digital head Mike Novogratz also noted in an interview with Bloomberg that the cryptocurrency market is in a consolidation phase. The market's growth stalled three months after the launch of spot bitcoin ETFs in the US. In his opinion, the first cryptocurrency will trade between $55,000 and $75,000 until new circumstances or events in the market trigger growth.
At the same time, Novogratz noted increased activity in sectors like crypto lending on the blockchain. "Six months ago, this was impossible, and now people are willing to lend us cryptocurrency for the long term without collateral," the businessman said. "The number of counterparties is growing, and overall involvement in the crypto space is at an entirely new level."

– Usually, fraudsters try to withdraw stolen coins through mixers within weeks or months and then transfer them to secret bank accounts or convert them into various currencies. However, there are unique cases. According to crypto security experts from the Cyvers platform, one of the criminals waited seven years before starting to sell stolen virtual assets. Only now has he sent 3,050 ETH to a cryptocurrency mixer.
Cyvers specialists calculated that the hacker still has over 83,000 Ethereum, currently valued at $240 million. At the time of the theft, this cryptocurrency was worth only $33 million. Such long-term patience indicates that the hacker is an experienced market participant and accurately predicts price dynamics in the short, medium, and long term.


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Forex and Cryptocurrency Forecast for 20 – 24 May 2024

EUR/USD: Weak Inflation = Weak USD

The American currency suffered two significant blows last week. Although these were not knockdowns, let alone knockouts, these minor shocks pushed the DXY Dollar Index down from 105.26 to 104.20 points, and EUR/USD up from 1.0766 to 1.0895.

The first blow came on Tuesday, 14 May, from Federal Reserve Chairman Jerome Powell. Surprisingly, after his comments, the dollar should have strengthened, but instead, it faltered. Powell stated that the regulator's monetary policy is currently tight enough to eventually reduce inflation. However, he also mentioned that the Fed is not confident that inflation is rapidly decreasing and that it may take more time to reach the target level of 2.0%. One could conclude from this that the regulator is not planning to either raise or lower the interest rate.

The dollar's weakening at this moment is even more peculiar because Powell's comments were made against the backdrop of strong data on the US Producer Price Index (PPI), indicating industrial inflation growth. In April, this indicator increased by +0.5% on a monthly basis after falling by -0.1% in March (forecast +0.3%). The core index, excluding food and energy, showed growth from 2.1% to 2.4% (y/y).

We can only explain the dollar's decline in this situation with one reason. Market participants were possibly expecting that the Fed Chairman would at least hint that if inflation rises, they need to consider another rate hike. But since he did not say this, disappointment ensued.

What happened the next day seemed 100% logical. The report from the US Bureau of Labor Statistics (BLS) on Wednesday, 15 May, showed that the US Consumer Price Index (CPI) fell from 0.4% to 0.3% (m/m) against a forecast of 0.4%. On an annual basis, inflation also dropped from 3.5% to 3.4%. Retail sales showed an even stronger decline, from 0.6% to 0.0% on a monthly basis (forecast 0.4%). These data indicated that although inflation in the country is resisting in some areas, it is generally declining.

As a result, talks about a possible Fed rate cut this year resurfaced. "These are the first weaker CPI data that the central bank [US] needs to lower rates this year," said Jason Pride, Glenmede's Director of Investment Strategy and Analysis. The likelihood that the rate will remain unchanged until the end of 2024 fell from 35% to 25%, according to the CME's FedWatch Tool. As a result, the DXY continued to fall, and the EUR/USD pair rose. Stock markets rallied, with the S&P 500 and Nasdaq reaching record levels. There were 43 new 52-week highs and no new lows in the S&P 500, while the Nasdaq had 153 highs and 25 lows.

The dollar's weakening was halted by comments from Fed representatives at the end of the week. Minneapolis Federal Reserve Bank (FRB) President Neel Kashkari stated that he is not confident that the current "tight monetary policy is having a dominant effect on inflation, so interest rates need to be maintained." New York FRB President John Williams said that one positive inflation report is not enough to neutralize the negative impact of the previous two, so it's not yet time to expect the Fed to start lowering rates soon.

As for the common European currency, Reuters writes that it is resisting a fall to parity with the dollar (1:1) due to a favourable economic backdrop and the monetary measures of the European Central Bank (ECB). The six-month low for EUR/USD was recorded on 16 April at 1.0600, against the backdrop of the Eurozone's fragile economy and in sharp contrast with the stable US economy. But gradually, business activity in Europe began to recover, and according to the April report, it grew even faster than on the other side of the Atlantic. This contributed to the positive dynamics of the euro. Reuters experts noted that the gap between economic indicators in Europe and the US is narrowing, providing some support to the euro.

EUR/USD closed the week at 1.0868. As for the analysts' forecast for the near future, as of the evening of 17 May, the majority (65%) expect the dollar to strengthen, 20% foresee further weakening, and the remaining 15% took a neutral stance. All trend indicators and oscillators on D1 are 100% coloured green, with a quarter of them signalling that the pair is overbought. The nearest support for the pair is located in the zones of 1.0815-1.0835, then 1.0710-1.0725, 1.0665-1.0680, 1.0600-1.0620, 1.0560, 1.0495-1.0515, 1.0450, 1.0375, 1.0255, 1.0130, 1.0000. Resistance zones are found at 1.0880-1.0915, 1.0965-1.0980, 1.1015, 1.1050, and 1.1100-1.1140.

The schedule of the most important events for next week is as follows. On Tuesday, 21 May, US Treasury Secretary Janet Yellen is scheduled to speak. On Wednesday, 22 May, the publication of the minutes from the last FOMC (Federal Open Market Committee) meeting of the US Fed is of particular interest. The next day, as usual, we will learn about the number of initial jobless claims in the US, as well as receive preliminary data on business activity (PPI) in Germany, the Eurozone, and the United States. At the very end of the workweek, on Friday, 24 May, we will learn the GDP data of Germany for Q1 2024.

CRYPTOCURRENCIES: Weak USD = Strong BTC

"A week of reflection and uncertainty": this is how we described the previous review. On Wednesday, 15 May, this uncertainty was resolved in favour of the crypto market. As often happens, the reason for this was the Fed's monetary policy. The released inflation data in the US influenced market expectations regarding a rate cut. As a result, the American currency weakened, the DXY index went down, and investors' risk appetites increased. Stock indices reached historical highs, with the daily gain for BTC/USD exceeding 8%. ETH/USD also rose by 4.5%. However, this is not yet the long-awaited Bull Rally, and it is quite possible that once the situation with the dollar calms down, the growth of bitcoin and leading altcoins will cease. At least, this is the scenario many crypto market specialists predict.

According to Capriole Investment founder Charles Edwards, bitcoin is in a "deathly boring" stage. He believes that the current consolidation period may last from one to six months, during which the quotes will remain in a low-volatility range. This will continue until traders lose patience.

Sentiment will be most negative just before the end of the flat period, Edwards believes. "When you get tired of the sideways movement, common symptoms will include thoughts that the halving is already priced in and the bull market is over. […] Your symptoms and shorts will peak just before the mega-rally," predicts the head of Capriole Investment.

Galaxy Digital head Mike Novogratz also spoke about the consolidation of the crypto market, whose growth dried up three months after the launch of spot BTC-ETFs. In his opinion, until new circumstances or events lead to growth, the first cryptocurrency will trade in the range of $55,000 to $75,000.

Analyst Rekt Capital expressed a similar point of view. He believes that the threat of a bitcoin price drop after the halving has already passed. Drawing an analogy with the situation six years ago, he suggested that on 01 May, BTC hit a bottom around $56,000, and now calm will likely prevail until autumn, with the asset remaining in the accumulation zone. According to Rekt Capital's forecast, the exponential growth phase will begin in the autumn, during which the coin's value will reach new heights.

Bitfinex crypto exchange experts are somewhat more optimistic. They believe that the current lull may last only until the beginning of summer, and in Q3–Q4, growth will return. But everything depends on the actions of the US Fed. Bitfinex notes that the decline of the US currency from a six-month peak after the May meeting of the regulator and a weak employment report became a turning point in the trend. Now, the reduction in inflationary pressure in the US has been added. As a result, the weakening of the US currency could stimulate a rally in digital assets.

Where will this rally lead in the medium and long term? There are many answers to this question. Some predict the complete collapse and oblivion of bitcoin, while others insist on a price of $1 million per coin. Recently, Jack Dorsey, co-founder of Twitter (now X) and head of Block, joined the "millionaires' club" after CMCC Crest co-founder Willy Woo. He also expects bitcoin to surpass the $1 million mark by 2030, after which it will continue to grow, challenging traditional fiat currencies. The entrepreneur noted that a very interesting aspect of digital gold is the nature of its ecosystem and how it stimulates collective efforts to improve the network. "Aside from the founding story, the most amazing thing about bitcoin is that everyone [...] who makes any effort to improve it makes the whole ecosystem better, which drives the price up. This is an incredible movement. [...] It has taught me a lot," he explained.

Businessman, writer, and founder of Edelman Financial Services Ric Edelman believes that traditional international investors will do everything possible to diversify their portfolios. And if they all invest at least 1% of their funds in the first cryptocurrency, the bitcoin market volume will reach an unprecedented $7.4 trillion, and the asset price will soar to $420,000. The growth of the market capitalization will be facilitated by spot BTC-ETFs. According to Edelman, they cover a much broader investor base than traditional assets. "In addition, crypto ETFs are incredibly cheap. They are 20-25% cheaper than assets on Coinbase or other crypto exchanges. Plus, they are held in brokerage accounts. Bitcoin ETFs allow for traditional investment strategies such as rebalancing and dollar-cost averaging. There are also tax advantages," Edelman lists the advantages of such funds. "I am confident that bitcoin and ethereum ETFs will have a significant impact on the market in the long run," he stated.

However, this last assertion can be disputed. While BTC-ETFs are a reality, the situation with ETH-ETFs is not so simple. Many expected the SEC (Securities and Exchange Commission) to approve applications for the launch of ethereum funds in May. But this has not happened yet. Moreover, Bloomberg analyst Eric Balchunas and securities lawyer Scott Johnson believe that the chances of approving spot ETH-ETFs are almost zero. In their opinion, the SEC is now considering the possibility of rejecting these funds' launch based on the fact that the applications were submitted with violations, as the fund shares are securities, not exchange-traded commodities.

The question of choosing between bitcoin and ethereum confronts many investors. The roles of these two cryptocurrencies differ, and this can significantly affect their profitability. Bitcoin is increasingly seen as digital gold, providing stability during times of economic uncertainty. This concept is supported by the observed post-halving volatility decrease, which was even lower than that of many companies in the S&P 500 index (Fidelity data).

Ethereum continues to push the boundaries of what is possible through technological innovations, including the recent Dencun update aimed at reducing fees and increasing scalability. However, these changes have once again made the network inflationary, nullifying the deflationary trend established after The Merge in 2022. As a result, ETH's volatility remains higher than BTC's.

According to ChatGPT, the artificial intelligence from OpenAI, the choice between these assets largely depends on individual investment strategy and risk tolerance. Bitcoin is generally better suited for investors seeking a relatively safe store of value and those new to cryptocurrencies. In contrast, Ethereum is better for those who believe in the future of blockchain technology. The main altcoin potentially offers higher rewards but also higher risks.

Investor and Eight founder Michaël van de Poppe has already made his choice. He admitted to selling all his bitcoins to buy altcoins. Van de Poppe believes that many of them are undervalued. And as soon as ETH prices start to rise, other alternative tokens will also go up. The expert believes that the altcoins he has chosen are likely to start growing earlier and faster than the market leader, allowing for greater profit than from investments in digital gold.

At the time of writing this review, the evening of Friday, 17 May, BTC/USD is trading at $66,835, and ETH/USD at $3,095. The total market capitalization of the crypto market is $2.42 trillion ($2.24 trillion a week ago). The Crypto Fear & Greed Index has risen from 66 to 74 points but remains in the Greed zone.


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

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NordFX's New Mega Super Lottery: 202+4 Prizes in 2024

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CryptoNews of the Week

– On 20-21 May, bitcoin surged sharply for the first time since 9 April, approaching $72,000. This rally was triggered by data showing a sharp increase in investments in BTC-ETFs, reaching a nine-week high. According to CoinShares, investments in crypto funds rose by $932 million last week, following an inflow of $130 million the previous week, marking the highest level in nine weeks. Additionally, Grayscale's ETF saw its first-ever inflow of $18 million. Analysts believe this surge in digital asset investments was a response to the May Consumer Price Index (CPI) report in the United States.

– After bitcoin rose above $71,000, its price hit new all-time highs in the local currencies of several Asian and South American countries. According to CoinMarketCap, BTC reached a record level of 11.2 million yen at the start of trading on 21 May in Japan, marking the first time the flagship asset's value exceeded 11 million yen. Bitcoin also hit a peak in Argentina, reaching 63.8 million Argentine pesos, slightly above the 14 March high. In the Philippines, bitcoin briefly climbed to 4.18 million pesos, the highest level since mid-March 2024. BTC prices in several other countries, including the UK, Australia, Canada, Chile, Colombia, Egypt, Israel, Norway, India, South Korea, Taiwan, and Turkey, also matched or were very close to their mid-March peak prices.

– Santiment noted that bitcoin had not shown positive dynamics due to small traders selling off. According to The Block Research, the rate of new BTC wallet openings fell to a six-year low post-halving, reflecting a general decline in enthusiasm after the failed April Bull Rally. However, whales started actively buying BTC from small players, driving the growth at the beginning of the current week.

– Kyle Schneps, Foundry's director, believes that the introduction of a 30% tax on the electricity used by BTC miners could collapse the industry in the US. Darin Feinstein, founder of Core Scientific, shares a similar view. He believes the proposed energy tax legislation by the current White House administration could significantly damage the US economy. Schneps predicts mining companies will seek new regions to continue their operations, with the Middle East becoming a preferred location. In 2023, Russia ranked second in mining volumes after the US. BitRiver's calculations showed Russian miners produced about 54,000 BTC (around $3.5 billion) last year, with an average of 22 GW of mining capacity (compared to 1 GW in 2022). In the US, 143,000 BTC were mined over the same period, using 5.3 GW of power (up from 3-4 GW in 2022).

– Haseeb Qureshi, managing partner at Dragonfly Capital, expects the Biden administration to soften its policy towards the digital asset industry soon. He believes US authorities do not want to lose the votes of cryptocurrency users in the upcoming presidential elections. While a complete policy reversal is unlikely, some easing of the stance is expected. According to former CFTC chairman Chris Giancarlo, “Donald Trump could reasonably claim the title of the first US cryptocurrency president due to the launch of regulated bitcoin futures in his first year in office”.

– The leading altcoin surged even more than bitcoin on 20-21 May. Bloomberg analysts reported that the SEC (US Securities and Exchange Commission) had changed its stance on the launch of spot ETFs for Ethereum. The regulator requested expedited updates to applications for such funds, with the first decision (from VanEck) expected on 23 May. Following this news, Ethereum's price soared by over 25%, reaching a peak of $3833. According to Coinglass, the total amount of liquidations and forced closures of short positions on crypto exchanges at that time amounted to $340 million. A total of 78,800 positions were liquidated, with the largest individual liquidation occurring on the HTX exchange, amounting to $3.1 million for the ETH/USDT pair.

– QCP Capital analysts believe that if spot ETH-ETF applications are approved, Ethereum's price could surpass $5,000 by the end of the year. Standard Chartered expects capital inflows into such funds to reach $15-45 billion (2-9 million ETH) in the first year. This influx would drive the asset's price to $8,000 with bitcoin at $150,000. Bold forecasts from the bank's analysts suggest that if market dynamics remain positive, Ethereum could reach $14,000, and bitcoin could rise to $200,000 by 2025.

– Markus Thielen, an analyst at 10x Research, predicted that bitcoin's breakthrough of the $68,300 resistance on 20 May could catalyse a powerful rally. QCP Capital expects the main cryptocurrency to reach $74,000 in the coming months. The company's economists believe that institutional acceptance of cryptocurrency is accelerating, and improving global economic conditions create a favourable environment for capital inflows into risky assets. The approaching US presidential elections also improve investor sentiment.

– The latest version of the GPT-4o artificial intelligence from OpenAI predicts that bitcoin's price on 1 August 2024 will be in the range of $76,348 to $89,108, considering current market factors and historical trends. The Anthropic AI model, Claude 3 Opus, offers an even more optimistic forecast, indicating a range between $105,072 and $167,808 by the specified date.

– Linus Torvalds, creator of the Linux operating system, is highly sceptical of digital assets. He expresses bewilderment and regret over claims of cryptocurrencies' long-term value and the omnipotence of AI technologies. Torvalds believes cryptocurrencies are excellent tools for fraud and are widely used in various Ponzi schemes. "I don't believe in cryptocurrencies and see them as a tool for taking money from naive and impressionable users, just as I don't believe in Santa Claus, the Tooth Fairy, or the Easter Bunny," he stated.

– Peter Schiff, a well-known financier and advocate of physical gold, has once again declared bitcoin a "dead cryptocurrency." Like Linus Torvalds, his negative comments aim to prevent potential investors from making a serious mistake by investing in this "pseudo-asset." However, the "gold bug" Schiff promised that if bitcoin enthusiasts stop comparing the cryptocurrency to gold, he would cease publicly criticising it.

– The court found Craig Wright guilty of perjury. "Dr Wright's attempts to prove he was/is Satoshi Nakamoto represent the most severe abuse of procedure [...]" the court's decision stated. "It is evident that Wright deliberately created fake documents to support false claims and used the courts as a means of fraud." "Wright's testimony was at best unreliable [...] and at worst fabricated," the judge declared, expressing complete confidence that Wright repeatedly lied to the court in his testimony. These perjury facts may now be referred to the British prosecutor's office. However, in a tweet on 20 May, Wright announced his intention to appeal the decision.

– Controversial blogger and former kickboxer Andrew Tate announced his intention to completely abandon fiat and invest over $100 million in bitcoin. He aims to break free from "banks, their money, and other scams." Tate promised to provide evidence of his actions. It is noteworthy that Andrew Tate, a millionaire and former MMA fighter, is also known for his misogynistic statements. All his channels on YouTube, TikTok, and Instagram are blocked.
It is known that Tate and his brother had been arrested in Romania on charges of human trafficking and rape. According to Romanian police, Andrew and Tristan recruited women for pornography. Romania TV reported in late 2022 that Swedish eco-activist Greta Thunberg might have been involved in their arrest.


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

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Forex and Cryptocurrency Forecast for 27 – 31 May 2024

EUR/USD: The Battle of Europe and US PMIs

Overall, the past week favoured the dollar, but the advantage over the European currency was minimal. If you look at where the EUR/USD pair was on 15 May, it returned to this zone on 24 May, regaining the losses of recent days. Recall that the report from the US Bureau of Labor Statistics (BLS) released on 15 May showed that the Consumer Price Index (CPI) decreased from 0.4% to 0.3% month-on-month (m/m), against a forecast of 0.4%. On an annual basis, inflation also fell from 3.5% to 3.4%. Retail sales volume demonstrated an even more significant decline, from 0.6% to 0.0% month-on-month (forecast 0.4%). These data indicated that inflation in the country, though resistant in certain areas, is still on the decline. At that moment, there were renewed discussions in the market about a possible rate cut by the Fed as early as this autumn. As a result, the Dollar Index (DXY) went down, and EUR/USD went up. Stock indices S&P 500 and Nasdaq reached record highs.

The most volatile day of the past week was Thursday, 23 May. Preliminary business activity data in the Eurozone exceeded expectations, strengthening the euro and lifting the pair to 1.0860. In Germany, the main locomotive of the European economy, the Manufacturing PMI rose from 42.5 to 45.4 points (forecast 43.2). This is still below the 50.0-point threshold separating decline from growth, but the trend is clearly positive. The Services PMI reached its highest level since June last year, hitting 53.9 against a forecast of 53.5 and a previous value of 53.2.

Germany's Composite PMI increased from 50.6 to 52.2 (market expectations were 51.0). Overall, business activity statistics in the Eurozone were also positive. The Composite PMI updated multi-month highs and, with a forecast of 52.0, actually reached 52.3 points (previous value 51.7).

However, the euro bulls' joy was short-lived. Later on Thursday, similar preliminary data on the US economy were released. They showed that business activity in the country's private sector grew at the highest rate in the past two years. The Manufacturing PMI rose from 50.0 to 50.9 points, and the Composite PMI jumped from 51.3 to 54.8 in a month. Market expectations were much lower, at the previous level of 51.3, so such a sharp rise signalled a surge in the DXY to 105.05 and a fall in the EUR/USD pair to 1.0804, as the likelihood of a rate cut in September decreased.

But the bears' joy was also short-lived. The GDP data released on Friday, 24 May, for Q1 2024 in Germany showed that the country's economy is saying goodbye to recession and moving into the growth zone. After a decline of -0.3%, GDP increased by 0.5%, resulting in a net growth of +0.2%.

In the end, after all these fluctuations, EUR/USD returned to the Pivot Point of the past one and a half weeks, closing at 1.0845. As for analysts' forecasts for the near future, as of the evening of 24 May, most (65%) expect the dollar to strengthen, 20% expect it to weaken, and the remaining 15% are neutral. All trend indicators on D1 are green, while 60% of oscillators are also green. Another 15% are red, and 25% are neutral grey. The nearest support for the pair is in the zones of 1.0830-1.0840, 1.0800-1.0810, then 1.0765, 1.0710-1.0725, 1.0665-1.0680, and 1.0600-1.0620. Resistance zones are located at 1.0880-1.0895, 1.0925-1.0940, 1.0980-1.1010, 1.1050, and 1.1100-1.1140.

The following week's calendar highlights Tuesday, 28 May, when the US Consumer Confidence Index will be announced. On the next day, 29 May, data on consumer inflation (CPI) in Germany will be released. On Thursday, 30 May, preliminary US GDP data for Q1 2024 will be published. The last working day of the week and the month might be quite eventful. On Friday, 31 May, Germany's retail sales volumes, preliminary inflation indicators (CPI) in the Eurozone, and the US Core Personal Consumption Expenditure Price Index will be announced. Traders should also note that Monday, 27 May, is a public holiday in the US, as the country observes Memorial Day.

GBP/USD: Uncertain Times for the Pound

The prospects for the British currency, as well as the national economy as a whole, are ambiguous. Additional uncertainty is brought by the fact that early parliamentary elections are scheduled for 4 July. As Prime Minister Rishi Sunak stated, "economic instability is just the beginning. [...] The time has come for Britain to make a choice. [...] Uncertain times require a clear plan and bold actions." However, what these "bold actions" will be remains unknown.

The macro statistics released last week did not add clarity. The preliminary Services PMI in the UK decreased from 55.0 to 52.9 points in May, against expectations of 54.7. And although in the manufacturing sector, this figure increased from 49.1 to 51.3, the Composite PMI stood at 52.8, below both the previous value of 54.1 and market expectations of 54.0.

As the latest data from the Office for National Statistics (ONS) showed, published on Friday, 24 May, retail sales in the country fell by -2.3% (m/m) in April, against a forecast of -0.4% and a result of -0.2% in March. The annual retail sales volume decreased by -2.7% compared to the previous result of -0.4%, and core retail sales fell by -3.0% (y/y) against 0% a month earlier, with all figures significantly below forecasts.

In such a situation, experts' opinions regarding the timing of the Bank of England's (BoE) rate cut also do not provide clear guidance. Analysts at JP Morgan (JPM) stick to their previous forecast of a rate cut in August but are cautious, citing still high consumer price inflation (CPI). "We adhere to our forecast [...] but believe that the risks have clearly shifted towards a later cut. Now it is a question of whether the Bank of England will be able to ease its policy at all this year." Strategists at Goldman Sachs, Deutsche Bank, and HSBC have also shifted their rate cut forecasts, moving the date from June to August for now. But this is only "for now"...

The maximum of the past week for GBP/USD was recorded at 1.2760. According to economists from Singapore's United Overseas Bank (UOB), the pair's upward momentum has slowed, and the likelihood of the pound rising to 1.2800 is decreasing. UOB believes that in the next 1-3 weeks, the British currency will trade in the range of 1.2685 to 1.2755.

The week ended at 1.2737. The median forecast of analysts for the near future is as follows: 60% voted for the pair's movement to the south, 20% for the northern direction, and 20% preferred neutrality. As for technical analysis, all trend indicators and oscillators on D1 point north, but a third of the latter signal overbought conditions. In case of further decline, the pair will encounter support levels and zones at 1.2695, 1.2635, 1.2575-1.2600, 1.2540, 1.2445-1.2465, 1.2405, 1.2300-1.2330. In case of growth, the pair will meet resistance at levels 1.2760, 1.2800-1.2820, 1.2885-1.2900.

No significant economic data releases for the United Kingdom are scheduled for the coming week. However, it should be noted that Monday, 27 May, is a bank holiday in the UK.

USD/JPY: Calmness, Ladies and Gentlemen, Just Calmness!

For such a super-volatile pair as USD/JPY, the past week was surprisingly calm. There were no currency interventions, and verbal interventions were as usual – lots of words, little action. Thus, Japan's Finance Minister Shunichi Suzuki once again expressed concern about rising prices caused by the weak national currency. According to Suzuki, one of the main goals of monetary authorities is to achieve wage growth exceeding inflation. "On the other hand," the minister added, "if prices remain high, achieving this goal will be difficult." In general, as usual, the government is closely monitoring the situation, understanding that everything is complicated, and therefore ... will continue to monitor.

Based on this contemplative policy, despite the GDP decline in Q1, on Thursday, 23 May, the Bank of Japan (BoJ) announced that it left the issuance volumes of Japanese government bonds (JGB) at the previous level. According to BoJ Governor Kazuo Ueda, "the economic outlook has not changed." The BoJ's view of the global economy has also not changed significantly. In general, calmness, ladies and gentlemen, just calmness!

Against this positive background, USD/JPY pair reacted only to the yield of US Treasury bonds and the dynamics of the Dollar Index (DXY). As a result, starting the five-day period around 155.70, it gradually moved up and ended it at 156.96. Analysts at United Overseas Bank (UOB) believe that given the weak upward pressure, the pair's growth in the next 1-3 weeks will be slow, and the barrier at 157.50 may prove to be a tough nut to crack. In their opinion, a price breakthrough above 157.00 is possible, but the pair is unlikely to consolidate above this level. The next resistance at 157.50 is unlikely to be threatened. UOB estimates that support is at 156.40, followed by 156.10. If USD/JPY falls below 155.60, it will indicate that the slight upward pressure has weakened, write the bank's economists.

Speaking of the average forecast, only 20% of analysts point south, 40% north, and another 40% east. Technical analysis tools are clearly devoid of such disagreements. Therefore, all 100% of trend indicators and oscillators on D1 point north, with 20% of the latter already in the overbought zone. It should be noted that while the green/north color of indicators regarding the British pound indicates its strengthening, in relation to the yen, it signals its weakening. Therefore, we advise paying attention to the GBP/JPY pair, whose dynamics have been very impressive lately.

The nearest support level is around 156.25, followed by zones and levels of 155.25-155.45, 154.60, 153.60-153.90, 153.00-153.15, 151.85-152.35, 150.80-151.00, 149.70-150.00, 148.40, 147.30-147.60, and 146.50. The nearest resistance is in the zone of 157.20, followed by 157.80-158.00, 158.45, 159.40, and 160.20-160.30.

From the events of the upcoming week, we recommend noting the speech of the Bank of Japan Governor Kazuo Ueda on Monday, 27 May, as well as the publication of consumer inflation (CPI) data in the Tokyo region on Friday, 31 May.

CRYPTOCURRENCIES: A Week Under the Ethereum Flag

In 2024, the crypto community began gradually forgetting the term "crypto winter." However, there was no talk of a "crypto spring" either. After the halving on 12 April, in the absence of a bull rally, small traders and speculators began selling off their coin reserves. According to The Block Research, the rate of opening new BTC wallets fell to a six-year low. However, the whales buying digital gold for the future prevented a complete collapse in prices.

And finally, at the end of the calendar spring, it seems spring has come to the crypto market. And it was awakened by the Federal Reserve System (Fed) of the USA with its monetary policy. According to analysts, the surge in investments in digital assets was a response to the May consumer inflation (CPI) report in the US, which positively impacted the risk appetites of institutional investors.

According to CoinShares, investments in crypto funds increased by $932 million from 13 to 17 May, after an inflow of $130 million the previous week. For the first time, there was an inflow of $18 million into Grayscale's ETF. This sharp increase in BTC-ETF investments, the highest in the last nine weeks, triggered a sharp rise in bitcoin on 20-21 May, approaching $72,000 for the first time since 09 April.

After bitcoin rose above $71,000, its price updated historical highs in the local currencies of several Asian and South American countries. According to CoinMarketCap, in Japan, BTC reached a record level of 11.2 million yen at the start of trading on 21 May. This is the first case where the flagship asset's price exceeded 11 million yen. Digital gold prices also peaked in Argentina, where the leading cryptocurrency reached 63.8 million Argentine pesos, slightly above the maximum on 14 March.

In the Philippines, one bitcoin briefly rose to 4.18 million pesos, the highest since mid-March 2024. In several other countries, BTC prices also equalled or were very close to mid-March's maximum prices: in the UK, Australia, Canada, Chile, Colombia, Egypt, Israel, Norway, India, South Korea, Taiwan, and Turkey.

However, the Fed and American macro statistics, having awakened the markets, also calmed them. After strong business activity data in the US, BTC/USD returned to the support zone of $67,000. Another (and probably the main) reason why bitcoin could not update its historical high was its main competitor, ethereum, which drew investors' attention. (More on this below).

QCP Capital expects bitcoin to reach $74,000 and update its ATH (All-Time High) in the coming months. According to the company's economists, institutional acceptance of cryptocurrency is accelerating, and improving conditions in the global economy create conditions for capital inflows into risky assets. The US presidential election, scheduled for 5 November 2024, is also starting to have a strong positive impact on the cryptocurrency market.

Cryptocurrency themes continue to strengthen in the pre-election rhetoric of candidates seeking to gain the votes of the crypto community, which, according to NYDIG, numbers more than 46 million citizens in the US, or 22% of the adult population. Haseeb Qureshi, Managing Partner of Dragonfly Capital, believes that in such a situation, the administration of President Joseph Biden will soon be forced to ease its policy regarding the digital asset industry. A complete turnaround is not to be expected, but a softening of the position will still occur, Qureshi said.

CNN has recently reported on upcoming debates between Biden and his competitor, Donald Trump. The incumbent president will have to answer a number of uncomfortable questions about the harsh policy towards the crypto industry, which led to the outflow of cryptocurrency capital, the closure of large companies, and high-profile lawsuits. From Donald Trump, who turned the topic of cryptocurrency into a weapon against his opponent, in addition to attacks for the current state of affairs, loud pre-election promises can be expected, which could lead to significant volatility in the crypto market. Possible participation of Elon Musk, who expressed willingness to become a moderator, and independent candidate Robert Kennedy Jr., should enliven the debates, the first round of which is scheduled for 27 June, and the second for 10 September.

The main beneficiary of the past week was not bitcoin but ethereum. On Monday, 20 May, news reached the media that the US Securities and Exchange Commission (SEC) asked companies to update Form 19b-4 in applications for launching spot Ethereum ETFs in an accelerated manner. After these news, the financial agency Bloomberg immediately raised the chances of such funds being approved from 25% to 75%. Against this background, the leading altcoin quickly outpaced the flagship cryptocurrency in terms of growth rates.

The deadline for the first two applications from VanEck and Grayscale was Thursday, 23 May. Shortly before the X hour, ETH/USD reached $3,947, showing a growth of almost 30% in three days. According to Coinglass, the amount of liquidations and forced closures of short positions on crypto exchanges amounted to $340 million. A total of 78.8 thousand positions were liquidated, and the largest individual liquidation occurred on the HTX exchange for the ETH/USDT pair for $3.1 million.

The SEC did not disappoint expectations and on 23 May approved not two but a total of eight applications for the issuance of spot ETFs based on Ethereum and gave the go-ahead for trading and listing these funds on exchanges. According to Variant Investments Chief Legal Officer Jake Chervinsky, this step signals a "significant shift in US crypto policy, possibly more important than the ETFs themselves." This may also mean that recognizing ethereum as a commodity, the regulator will not categorize many other altcoins as securities. According to Rekt Capital, the market is already on the verge of an altcoin rally, the peak of which is expected in July.

Experts expect significant capital inflows after the listing of ETH-ETFs and believe that billions of dollars will be invested in derivatives in the first week after trading starts. Analysts from QCP Capital believe that the altcoin rate in the short term can rise to $4,000 and exceed $5,000 by the end of the year.

An even bolder forecast is given by Standard Chartered Bank economists. They expect capital inflows into such funds in the first year to range from $15 to $45 billion (2-9 million ETH). In this case, the fund's demand will lead to the asset's rate rising to $8,000 at a bitcoin rate of $150,000. Moreover, if market dynamics are positive, by 2025, the price of Ethereum will reach $14,000, and bitcoin's rate will increase to $200,000.

As of the evening of Friday, 24 May, BTC/USD is trading at $69,900, and ETH/USD at $3,735. The absence of an immediate pump and some drawdown of this pair on 23-24 May can be explained by the fact that everyone who wanted to has already managed to buy ethereums ahead of the SEC's historic decision. The total cryptocurrency market capitalization is $2.55 trillion ($2.42 trillion a week ago). The Bitcoin Fear & Greed Index (Crypto Fear & Greed Index) has not changed and remains in the Greed zone at 74 points.

And in conclusion of the review, forecasts from Artificial Intelligence. The latest version of GPT-4o from OpenAI believes that the price of bitcoin on 1 August 2024 will be in the range of $76,348 to $89,108 "considering current market factors and historical trends." GPT-4o's competitor, the anthropic AI model Claude 3 Opus, has formed an even more optimistic vision, designating the range between $105,072 and $167,808 by the indicated date.


NordFX Analytical Group


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

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CryptoNews of the Week

– On May 23, the U.S. Securities and Exchange Commission (SEC) approved form 19b-4 applications from eight issuers of spot Ethereum exchange-traded funds (ETFs). However, trading of ETH ETFs will only commence after the SEC signs the form S-1 statements. According to Bloomberg analyst James Seyffart, this could take "weeks or months." Before trading begins, the price of Ethereum could rise to $4500, as predicted by Arthur Cheong, founder and CEO of DeFiance Capital. Commenting on the approval of spot Ethereum ETFs, JPMorgan referred to this regulatory move as a political decision ahead of the U.S. presidential elections.

– The theme of cryptocurrency continues to strengthen in the pre-election rhetoric of U.S. presidential candidates seeking votes from the crypto community, which, according to NYDIG, comprises over 46 million U.S. citizens or 22% of the adult population. Former President and Republican candidate Donald Trump reiterated his support for the industry, this time in a post on Truth Social. "I am very positive and open to crypto companies, and everything related to this new and growing industry. Our country must be a leader in this field. No second place. Dishonest Joe Biden, on the other hand, the worst president in our country's history, wants [the crypto industry] to die a slow and painful death. This will never happen under my watch!" Trump wrote.

– On May 24, the Shiba Inu dog named Kabosu, the meme hero and symbol of Dogecoin, passed away. In November, Kabosu would have turned 19 (approximate birth year - 2005). Kabosu first gained attention in 2010 when her owner posted photos of the dog on her blog. It was Kabosu who inspired programmers Billy Markus and Jackson Palmer to create the meme cryptocurrency Dogecoin in 2013. Memes featuring Doge also became popular on Reddit, where a dedicated section now boasts over 330,000 users. American politicians used the meme in their social media, and one of its most famous fans, businessman Elon Musk, even temporarily changed the logo of the social network X (formerly Twitter) to the most famous image of Kabosu used in Dogecoin.

– In one of his recent posts on the social network X, popular analyst Lark Davis forecasted bitcoin's growth to $150,000 and ethereum's to $15,000, explaining this sharp increase by the emerging market dynamics. According to Davis, the main reason for the rapid growth of these coins will be the inflow of funds already observed in spot BTC ETFs, which attract hundreds of millions of dollars daily. Spot ETH ETFs will further fuel the crypto market's enthusiasm, resulting in billions of dollars flowing daily into exchange-traded funds based on the two leading cryptocurrencies. Currently, spot bitcoin ETFs hold 2,343 coins (≈ $70 billion), about 5% of the flagship asset's circulating supply. This significant figure, according to Davis, clearly indicates the growing recognition of cryptocurrency and the interest from institutional investors, especially from the U.S.

– Strike payment service CEO Jack Mallers predicts that during the ongoing bull rally, bitcoin could reach $250,000 and potentially grow to $1 million. In a podcast with Pomp Investments founder Anthony Pompliano, Mallers explained his bold forecast by stating that bitcoin is still in its early development stage. He noted that the bond market is facing issues, so central banks might introduce a significant amount of liquidity into the financial system to stabilize it. Such an influx of liquidity will provoke a rise in the value of risky assets, including the leading cryptocurrency. Jack Mallers disagrees with the notion that bitcoin is a bubble or a speculative tool. The asset is becoming increasingly popular among financial giants on Wall Street, and its limited supply of 21 million coins makes BTC highly resistant to inflation, unlike government currencies and gold. "Bitcoin can be considered the hardest form of money – thanks to its fixed issuance schedule and halving events every four years. The rate of new coin issuance gradually decreases, thus increasing bitcoin's long-term value," argued the Strike CEO. The Lightning Network, created for instant and cheap transactions, a second-layer solution based on the BTC blockchain, can further increase demand for the first cryptocurrency. Thanks to this, Mallers believes, bitcoin can be used for everyday purchases, such as paying for a cup of coffee in a bar.

– Analysts from the financial investment company Motley Fool suggested similar figures. They hypothesized that bitcoin's rate could rise to $400,000 and might even reach $1 million. This will happen due to money inflows from institutional investors through spot BTC ETFs. Motley Fool analysts noted that more pension funds and hedge funds, managing multi-billion-dollar sums, are entering the bitcoin market. Thanks to cryptocurrency ETFs, they can seamlessly include bitcoin in their investment portfolios.
According to analysts, about 700 investment companies have already invested in such funds. Nevertheless, institutional investors currently make up only about 10% of the total number of bitcoin ETF holders. Motley Fool estimates that if financial institutions invest approximately 5% of their assets in bitcoin, the first cryptocurrency's market capitalization could exceed $7 trillion, explaining its forecasted rate of $400,000.

– On the contrary, Cardano founder Charles Hoskinson expressed an opposing viewpoint. He equated bitcoin to a religion and stated that the industry has outgrown its dependence on it. According to Hoskinson, "the industry no longer needs bitcoin to survive." The Cardano founder pointed out critical threats to the leading cryptocurrency, including insufficient adaptability and dependence on the Proof-of-Work algorithm. Franklin Templeton analysts, on the other hand, considered L2 protocols, along with Ordinals, Runes, and DeFi primitives, as one of the main drivers of innovation resurgence in bitcoin. Former BitMEX crypto exchange CEO Arthur Hayes called the native token of the Cardano blockchain (ADA) "dog shit" due to its low usage in protocols.

– Bloomberg senior analyst Mike McGlone believes bitcoin's volatility makes it less attractive for investment compared to gold and the U.S. dollar. He also thinks that stocks will soon crash amid the anticipated recession, but BTC will suffer even more than the stock market.
The expert emphasized that the U.S. dollar-pegged stablecoin Tether (USDT) is usually traded twice as much per day as bitcoin. "I can access U.S. dollars anywhere in the world at any time from my phone with Tether. Tether is the number one trading token. It's the number one cryptocurrency for trading. It's the dollar. The whole world has switched to the dollar. Why? Because it's the least bad of all fiat currencies," McGlone argued.

– Unlike the optimism of many experts, Wall Street legend Peter Brandt felt it necessary to warn investors about a catastrophe that could arise from the launch of spot ETFs on Ethereum. "The biggest disasters in the cryptocurrency sector that are yet to come will be related to staking," Brandt believes, emphasizing the likelihood of significant financial losses and bankruptcies in the future. Staking is a way of earning cryptocurrency by "freezing" a certain number of coins in a wallet on the Proof-of-Stake (PoS) algorithm to support the network's operation. In return, the user receives rewards in the form of additional coins. Brandt noted that such assets as Ethereum are often rented out to earn this kind of income, often in the form of interest, and this reminds him of collapsed financial pyramids. As staking becomes more widespread, Brandt warned, it might attract increased attention from central banks, government treasuries, and other authorities. This will lead to stricter regulation, significantly changing the crypto space and potentially ending staking and bankrupting those involved.

– A criminal case on the largest bribes has been initiated in Russia. The former head of the Investigation Department of the police in one of Moscow's districts, a 35-year-old major, and one of his subordinate officers are accused of 10 counts of receiving bribes amounting to more than $1.5 million and 2,718 BTC ($180 million). In total, flash drives and hard drives with crypto wallets containing 5,213 BTC (about $350 million) were seized during the operation.


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

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

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Forex and Cryptocurrency Forecast for 03 – 07 June 2024

EUR/USD: Awaiting a Turbulent Week

Recall that Monday, 27 May was a holiday in the US. However, on Tuesday, dollar bulls took control, and the DXY Index started to rise, bolstered by a significant increase in the US Consumer Confidence Index (from 97.5 to 102.0 against a forecast of 96.0). Consequently, EUR/USD moved southward.

Pressure on the euro was also due to expectations that the European Central Bank (ECB) is likely to cut the key interest rate by 25 basis points (bps) from 4.50% to 4.25% at its meeting on 06 June. This intention was confirmed by the head of the Bank of Finland, Olli Rehn, who stated on Monday that he considered it timely to transition to dovish rhetoric in June. Similar opinions were expressed by his colleague François Villeroy de Galhau, head of the Bank of France, and on Tuesday, 28 May, by Robert Holzmann, head of the Bank of Austria.

Unlike the dovish stance of European officials, representatives of the Federal Reserve (Fed) take a more stringent position and want to ensure that US inflation is steadily moving towards the 2.0% target.

Recall that the report released on 15 May by the US Bureau of Labour Statistics (BLS) showed that the Consumer Price Index (CPI) decreased from 0.4% to 0.3% month-on-month (m/m) against a forecast of 0.4%. Year-on-year, inflation also fell from 3.5% to 3.4%. Retail sales demonstrated an even stronger decline, dropping from 0.6% to 0.0% m/m (forecast was 0.4%). These data indicated that although inflation is resisting in some areas, it is generally declining. If previously market participants expected the first rate cut at the end of 2024 or even early 2025, after the publication of this data, talks about a possible Fed rate cut already this autumn resumed. Before the release of the preliminary US GDP data, the probability of a rate cut in September was 41%.

The report published on Thursday, 30 May by the Bureau of Economic Analysis showed that, according to preliminary data, US economic growth in Q1 slowed significantly to an annualized rate of 1.3%, below the forecast of 1.6% and Q4 2023's figure of 3.4%.

Experts attribute the weak GDP growth at the beginning of this year mainly to the dynamics of consumer spending. In Q1, consumer spending increased by 2.0%, not the previously expected 2.5%. The US Department of Commerce's revised data also changed the assessment of the Core Personal Consumption Expenditures (PCE) index, which excludes energy and food prices. At the end of Q1, the figure was 3.6%, not 3.7%. Analysts believe that this decline in all indicators was caused by a combination of factors: the depletion of funds accumulated by the population during the COVID-19 pandemic, the Fed's cycle of monetary tightening, and restrained income growth.

Against this backdrop, the dollar weakened slightly, and EUR/USD moved north. It received another bullish impulse after Eurostat presented on Friday, 31 May, a preliminary estimate of inflation in the Eurozone, which accelerated for the first time this year. Thus, the annual growth rate of consumer prices (CPI) in May was 2.6% compared to 2.4% in April, the lowest since November last year. The consensus forecast expected inflation to accelerate only to 2.5%. Core inflation (CPI Core), which excludes energy and food prices, also increased from 2.7% in April to 2.9% in May (forecast was 2.8%). This was a wake-up call for investors who had hoped that the ECB would not only cut rates once this year but continue to do so.

Towards the end of the working week, market attention focused on US consumer market data. According to the Bureau of Economic Analysis, inflation in the country, measured by the Personal Consumption Expenditures (PCE) Price Index, remained stable in April at 2.7% y/y. The Core PCE, which excludes volatile food and energy prices, rose by 2.8% y/y, matching the forecast. Other report details showed that personal incomes rose by 0.3% m/m in April, while personal spending increased by 0.2%.

After these data, the DXY Dollar Index was under slight pressure, and EUR/USD received a third bullish impulse. However, it did not last long, and ultimately, after all these fluctuations, EUR/USD returned to the Pivot Point of the last two and a half weeks, finishing at 1.0848. Regarding the analysts' forecast for the near future, as of the evening of 31 May, all of them (100%) voted for the dollar to strengthen. This forecast is understandable given the expected ECB decision on a rate cut on 06 June. But what if it doesn't happen? Or perhaps this forecast has already been priced into the market? In that case, instead of the dollar strengthening, we could see the opposite reaction.

All trend indicators on D1 are 100% green, while only 50% of oscillators are green, with 15% red and 35% neutral-grey.

The nearest support for the pair lies in the 1.0830-1.0840 zone, followed by 1.0800-1.0810, 1.0725-1.0740, 1.0665-1.0680, 1.0600-1.0620. Resistance zones are in the regions of 1.0880-1.0895, 1.0925-1.0940, 1.0980-1.1010, 1.1050, 1.1100-1.1140.

The upcoming week seems to be very eventful and volatile. On Monday, 03 June, and Wednesday, 05 June, the US Manufacturing and Services PMI data will be released. On 04, 06, and 07 June, there will be a slew of statistics from the US labour market, including Friday's crucial data on the unemployment rate and the number of new non-farm jobs (NFP). The most turbulent day of the week, however, is likely to be Thursday, 06 June. On this day, retail sales data for the Eurozone will be released first, followed by the ECB meeting. The market will be focused not only on the ECB's rate decision but also on the subsequent press conference and comments on future monetary policy.

GBP/USD: Foggy Times, Foggy Forecasts

We've previously written that the prospects for the British currency, as well as the national economy, look rather foggy. The Business Activity Index (PMI) showed a decline, and not just it. Much of the pessimism is related to the sharp drop in retail sales in April, which fell by 2.7% y/y compared to the previous growth rate of 0.4%. Additional uncertainty comes from the fact that snap parliamentary elections are scheduled for 04 July. Prime Minister Rishi Sunak stated that "economic instability is just the beginning." This sounds frightening, doesn't it? If this is just the beginning, what lies ahead? Surprisingly, despite this situation, the pound has been strengthening since 22 April. During this period, GBP/USD rose by 500 points and on 28 May recorded a local maximum at the round figure of 1.2800.

Regarding the timing of the Bank of England's (BoE) interest rate cut, everything also seems as foggy as the Thames mist. JP Morgan (JPM) analysts, while adhering to their forecast for a rate cut in August, warn that "the risks have clearly shifted towards a later reduction. The question now is whether the Bank of England will be able to ease its policy at all this year." Goldman Sachs, Deutsche Bank, and HSBC strategists have also adjusted their rate cut forecasts, moving the date from June to August.

GBP/USD ended the week at 1.2741. Economists at Singapore's United Overseas Bank (UOB) believe that the current strengthening of the British currency has ended. UOB considers that over the next 1-3 weeks, "the pound is likely to trade with a downward bias, but a more significant pullback would require breaking below 1.2670. On the other hand, if the pound breaks above 1.2770 (the 'strong resistance' level), it would indicate that it will likely trade within a range rather than pulling back lower."

The median forecast of analysts for the near term is as follows: 75% voted for the pair to move south, while the remaining 25% voted for a northward movement.

As for technical analysis, unlike the experts, all 100% of trend indicators and oscillators on D1 point north, although 15% of the latter signal overbought conditions. If the pair continues to fall, support levels and zones are at 1.2670-1.2700, 1.2575-1.2600, 1.2540, 1.2445-1.2465, 1.2405, 1.2300-1.2330. If the pair rises, it will encounter resistance at levels 1.2760, 1.2800-1.2820, 1.2885-1.2900.

No significant economic statistics are scheduled to be released in the UK next week.

USD/JPY: A Very Calm Week

The past week was surprisingly calm for the yen. USD/JPY moved within a super-narrow sideways channel of 156.60-157.00 for the first half of the week, but then, amid US data and Japanese macro statistics, the trading range expanded slightly to 156.36-157.70. Compared to the price swings at the end of April and early May, it's hard to believe this is the same currency pair. Interestingly, Japanese financial authorities have not officially confirmed whether they conducted intensive yen purchases on 29 April and 1 May to support its exchange rate. However, Bloomberg reports that comparing deposits at the Bank of Japan suggests that around ¥9.4 trillion ($60 billion) might have been spent on these currency interventions, a new monthly record for such financial operations.

However, if this $60 billion helped, it was only slightly – the dollar has already recovered half of its losses. Since interest rates in the US and Europe have not yet decreased, and the yen rate remains extremely low at 0.1%, officials from the Ministry of Finance and the Bank of Japan (BoJ) are trying to buy time until this gap starts to narrow. Comments from BoJ board member Seiji Adachi, who stated on 30 May that the Japanese central bank leaders could raise the interest rate, provided some support for the yen. However, the question of when this might happen remains open, and officials are reluctant to answer. In his traditional speech on Friday, 31 May, Japan's Minister of Finance, Shunichi Suzuki, reiterated that exchange rates should reflect fundamental indicators and that he would respond appropriately to excessive movements.

On Friday, 31 May, a block of important macroeconomic statistics on the state of the Japanese economy was released. The Consumer Price Index (CPI) in Tokyo showed that inflation rose to 2.2% y/y in May. In April, this figure was at 1.8%, matching a 26-month low. Core inflation in Tokyo also rose to 1.9% from 1.6% y/y, and the CPI excluding volatile food and energy prices increased from 1.8% to 2.2% y/y. (It should be noted that inflation in Tokyo is usually higher than the nationwide figures, which are published three weeks later. Therefore, the Tokyo CPI is a preliminary but not final indicator of inflation dynamics at the national level.)

The current rise in inflation could increase confidence in future BoJ monetary policy tightening. However, the fear of low inflation and a sharp yen appreciation deters the BoJ from raising the interest rate and narrowing the gap with other major global currencies' rates. A strong yen would harm national exporters. The decline in industrial production, which fell by -0.1% in April both month-on-month and year-on-year, does not encourage borrowing costs to rise.

The last note of the week for USD/JPY was struck at 157.25. United Overseas Bank (UOB) analysts believe that in the next 1-3 weeks, "the dollar has the potential for growth, but given the weak upward momentum, any advancement is likely to be slow. The 157.50 level might be difficult to overcome, and resistance at 158.00 is unlikely to be reached in the near future."

Speaking of the average forecast of experts, only 20% indicate a southward direction, while the remaining 80% adopt a neutral position and look east. Technical analysis tools show no such doubts or disagreements. Thus, 100% of trend indicators and oscillators on D1 point north, with 15% already in the overbought zone. It should be noted that if the green/north color of the indicators for the euro and the British pound indicates their strengthening, in the case of the yen, it conversely indicates its weakening. Therefore, traders may find it interesting to pay attention to the EUR/JPY and GBP/JPY pairs, whose dynamics have been impressive lately.

The nearest support level is in the area of 156.25-156.60, followed by zones and levels at 155.50-155.90, 153.10-153.60, 151.85-152.35, 150.80-151.00, 149.70-150.00, 148.40, 147.30-147.60, 146.50. The nearest resistance is in the 157.40 zone, followed by 157.70-158.00, 158.60, and 160.00-160.20.

No significant events or publications regarding the state of the Japanese economy are expected next week.

CRYPTOCURRENCIES: Bullish and Bearish Ethereum Prospects

For the second week, market participants' attention has been focused on the main altcoin. On 23 May, the US Securities and Exchange Commission (SEC) approved 19b-4 applications from eight issuers of spot exchange-traded funds based on Ethereum. (According to JP Morgan experts, this was dictated not by a desire to support digital assets but by a political decision aimed at supporting Joe Biden ahead of the US presidential elections.) Whatever the true reason for this regulatory move, everyone is now interested in where Ethereum prices will go.

The newborn ETH-ETFs can only start trading after the SEC approves the S-1 applications. According to Bloomberg analyst James Seyffart, this could take "weeks or months," although it is very likely to happen in mid-June. According to DeFiance Capital CEO Arthur Cheong, Ethereum's price could rise to $4,500 even before trading begins. CCData analysts believe that within 100 days of the launch of ETH-ETFs, the price could reach $5,000 per coin. This forecast is based on linear regression and the price statistics of bitcoin after the launch of spot BTC-ETFs. CCData's analysis assumes that inflows into similar Ethereum funds will be at least 50% of inflows into Bitcoin-ETFs, which means about $3.9 billion over a 100-day period.

Popular analyst Lark Davis has forecasted future growth for bitcoin to $150,000 and Ethereum to $15,000, explaining such a sharp price increase by the emerging market dynamics. The main reason for growth, Davis also cites spot BTC-ETFs, to which ETH-ETFs will now join. This will further fuel the cryptocurrency market's enthusiasm. Currently, spot BTC-ETFs hold 1,002,343 coins (≈ $68 billion), which is about 5% of the circulating supply of the flagship asset. Davis believes this impressive figure clearly indicates growing recognition of cryptocurrency and interest from institutional investors, especially from the US.

Strike CEO Jack Mallers predicts that during the ongoing bull rally, bitcoin could reach $250,000 and possibly rise in price to $1 million. On a podcast with Pomp Investments founder Anthony Pompliano, Mallers explained his bold forecast by stating that bitcoin is still at an early stage of development. According to him, the bond market is currently facing problems, so central banks may inject a significant amount of liquidity into the financial system to stabilize it. This liquidity influx will trigger an increase in the value of risky assets, including the leading cryptocurrency.

Jack Mallers disagrees with the notion that bitcoin is a bubble or a tool for speculation. The asset is becoming increasingly popular among financial giants on Wall Street, and its limited supply of 21 million coins makes BTC highly resistant to inflation, unlike fiat currencies and gold. "Bitcoin can be called the hardest form of money – thanks to the fixed issuance schedule and halvings every four years. The release rate of new coins gradually decreases, thereby increasing bitcoin's long-term value," argued the Strike CEO.

Analysts from financial investment company Motley Fool also target a six-figure number. They suggested that bitcoin's rate could rise to $400,000 and possibly even reach $1 million. The reason, which has been mentioned many times, is the influx of money from institutional investors through spot ETFs. Motley Fool analysts noted that more and more pension funds and hedge funds, managing multi-billion dollar sums, are entering the bitcoin market. Thanks to cryptocurrency ETFs, they can easily include bitcoin (and soon Ethereum) in their investment portfolios.

According to analysts, around 700 investment companies have already invested in such funds. Nevertheless, the share of institutional investors in bitcoin-ETFs is currently only about 10% of the total. Motley Fool estimates that if financial institutions invest about 5% of their assets in bitcoin, the market capitalization of the first cryptocurrency could exceed $7 trillion, which explains its forecasted rate of $400,000.

Considerably less optimism was heard in the forecast of Bloomberg senior analyst Mike McGlone. According to him, bitcoin's volatility leaves it trailing gold and the US dollar in investment appeal. Furthermore, he believes that stocks will soon crash amid the expected recession, but BTC will suffer even more than the stock market. McGlone emphasized that the Tether (USDT) stablecoin, pegged to the US dollar, typically trades twice as much per day as bitcoin. "I can access the US dollar anywhere in the world from my phone using Tether. Tether is the number one trading token. It's the number one cryptocurrency for trading. It's the dollar. The whole world has moved to the dollar. Why? Because it's the least bad of all fiat currencies," the Bloomberg expert stated.

While Mike McGlone merely downgraded bitcoin's attractiveness, Cardano founder Charles Hoskinson simply buried it. He equated bitcoin to a religion and stated that the industry has outgrown its dependence on it. According to Hoskinson, "the industry no longer needs bitcoin to survive." He pointed out critical threats to the leading cryptocurrency, including insufficient adaptability and dependence on the Proof-of-Work algorithm.

Franklin Templeton analysts, on the contrary, consider L2 protocols, along with Ordinals, Runes, and DeFi primitives, as one of the main drivers of bitcoin's innovation revival. Strike CEO Jack Mallers defended the first cryptocurrency. According to him, the Lightning Network, created for instant and cheap transactions, a second-layer solution based on the BTC blockchain, can further increase the demand for the first cryptocurrency. Mallers believes that thanks to this, bitcoin can be used for everyday purchases, such as paying for a cup of coffee. Former BitMEX CEO Arthur Hayes called the native token of the Cardano blockchain (ADA) "dog shit" due to its low use in protocols.

As of the time of writing this review on the evening of Friday, 31 May, ADA is trading at 0.45 USD per coin, while bitcoin and Ethereum are faring significantly better: BTC/USD is trading at $67,600, and ETH/USD at $3,790. The total cryptocurrency market capitalization is $2.53 trillion ($2.55 trillion a week ago). The Bitcoin Fear & Greed Index remained almost unchanged over 7 days, staying in the Greed zone at 73 points (74 a week ago).

It should be noted that ETH/USD failed to break through the $4,000 resistance this past week. The local maximum was recorded on Monday, 27 May, at $3,974. The lack of an immediate pump is explained by the fact that everyone who wanted to buy Ethereum in anticipation of the SEC's historic decision already did so. Meanwhile, according to some analysts, there is a high probability that immediately after the launch of the long-awaited spot exchange funds, Ethereum will enter a deep drawdown, similar to what happened in January with bitcoin. Then, over 12 days, it fell by 21%.

One of the key reasons for BTC's drawdown at that time was the unlocking of GBTC fund assets from Grayscale, which was converted into a spot fund from a trust. It began losing investments daily at a rate of $500 million. It is possible that something similar could happen with Ethereum, where Grayscale's ETHE fund holds $11 billion worth of ETH. As soon as this fund is converted into a spot fund and its assets are unlocked, short-term investors might start taking profits, potentially causing ETH/USD to fall to the strong support zone of $2,900-3,200.

Pessimists among bearish factors also cite the uncertain legal status of the altcoin, as the SEC has not yet clearly defined whether ETH is a commodity or a security. Additionally, the regulator has many complaints about the staking program.

Staking is a way to earn cryptocurrency by "locking" a certain amount of coins in a wallet on the Proof of Stake (PoS) algorithm to support the network. In return, the user receives rewards in the form of additional coins. According to Wall Street legend Peter Brandt, "the biggest disasters in the cryptocurrency sphere that are yet to happen will be related to staking." The expert noted that such assets as Ethereum are often rented out to earn such income, often in the form of interest, which strongly reminds him of collapsed financial pyramids. As staking becomes more widespread, Brandt warned, it could attract increased attention from central banks, treasuries, and other authorities. This could lead to tighter regulation, significantly altering the crypto space and potentially resulting in the cessation of staking and bankruptcies for those involved.


NordFX Analytical Group


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

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May Results: Top 3 NordFX Traders' Monthly Profit Approaches $200,000

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

- The leading trader for the month is from Western Asia, account No. 1773XXX, with a profit of $86,999. This impressive result was achieved through gold (XAU/USD) transactions.
- The second place goes to another trader from Western Asia, account No. 1771XXX, who earned $78,556 not only from gold (XAU/USD) but also from EUR/USD trades.
- In third place is a trader from Southeast Asia, account No. 1734XXX, who earned $30,640 in May through transactions involving XAU/USD, EUR/JPY, and USD/JPY.

The following situation has developed in NordFX's passive investment services:

- In the PAMM service showcase, we continue to monitor the activity of the manager under the nickname KennyFXPRO. Their account, KennyFXPRO-The Multi 3000 EA, can be considered a veteran, having been opened in January 2021. Over 1,223 days, it has faced many serious challenges. A critical date was November 15, 2022, when the manager decided to close loss-making positions. The drawdown then was almost 43%, but the account was saved, and the profit now exceeds 100% again.

- In CopyTrading, we have repeatedly highlighted the signal yahmat-forex, which has shown a 353% return over 344 days with a maximum drawdown of 47%. Another signal, NordFXSrilanka, reached a 36% profit over 145 days. Although not as high, it significantly exceeds bank deposit rates. This signal stands out for its maximum drawdown, which has not exceeded 10% throughout its duration. Among startups in CopyTrading, the signal copyfx1 is noteworthy. In 49 days of operation, specifically since April 11, 2024, it has shown a 98% profit with a very moderate drawdown of less than 16%. Despite these impressive achievements, it is important to remind that past results do not guarantee future performance and that trading in financial markets is risky. Therefore, market participants should exercise extreme caution and always adhere to money management principles to avoid losing funds.

Among NordFX IB partners, the TOP-3 is as follows:

- The highest commission of the month, amounting to 22,795 USD, was awarded to a partner from Western Asia, account No. 1645XXX;
- The second place was taken by a partner from Southern Asia, account No. 1718XXX, who received 8,362 USD;
- Completing the top three is their compatriot, account No. 1682XXX, who earned 8,233 USD in May.


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

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

https://nordfx.com/