Forex Daily Market Analysis from NordFX

Forex and Cryptocurrencies Forecast for April 04 - 08, 2022​

EUR/USD: Too Much Uncertainty

The movement of major currencies was determined throughout March by reports from the Russian-Ukrainian front, the sanctions-energy war with Russia, and the pace of monetary tightening. The US dollar has strengthened significantly in recent months thanks to a sharp increase in the yield of US government bonds and signals about an increase in the Fed's interest rate. The EUR/USD pair fell to 1.0805 on March 07, its lowest level since mid-May 2020. However, then the growth of the dollar stopped, and the pair moved to a sideways movement along the Pivot Point 1.1000. The hawkish statements of the Fed management pushed the pair down, the hopes for resolving the armed conflict between Russia and Ukraine sent it above this line.

The same factors determined the dynamics of EUR/USD last week as well. The pair rose by 240 points from Monday, March 28 to Thursday, March 31: from 1.0944 to 1.1184. First, the strengthening of the euro was caused by reports in the US media that the ECB may start actively raising the refinancing rate this year. Allegedly, a number of large market participants require the European regulator to raise the rate four times by the end of 2022. As a result, investors began to include in quotes the probability of such a move by the ECB, and the yield on government bonds in Europe went up.

The next day, March 29, hopes dawned for the success of the peace talks between Russia and Ukraine, which took place in Istanbul (Turkey). The success of the EU's energy war with Russia also helped the European currency. Russian President Vladimir Putin signed a decree on the sale of energy carriers to Europe exclusively for rubles a week ago. The goal was clear: to support the ruble exchange rate under the sanctions. However, the main European consumers refused to do so categorically, and the head of Russia was forced to note his decision.

Everything would have been good for the euro, but it turned out in the second half of the week that the rumors about the increase in the EUR rate in 2022 are nothing more than a speculation, and that there was no serious shift in the negotiations in Istanbul. Macroeconomic statistics also helped the dollar a little. As a result, the growth of the EUR/USD pair stopped, it turned south and ended the five-day period not far from Pivot Point 1.1000, at the level of 1.1045.

The outcome of the hostilities in Ukraine is still unclear. The situation with the supply and payment of hydrocarbon raw materials to Europe remains confusing as well. Oil has fallen in price by about 14% since March 24. This is how the market reacted to the plans of President Joe Biden to sell additional volumes of oil from national reserves. The White House intends to sell up to 1 million barrels of oil per day over the next six months. And this could be the biggest sell-off in the nearly 50-year history of the US Strategic Petroleum Reserve. It should be noted here that, despite the smaller volumes, the sale of oil brings Russia more profit than gas currently. And such a decision by the United States should reduce Europe's dependence on Russian energy carriers, causing additional damage to the Russian economy.

Another uncertainty is introduced by the Fed. Recall that forecasts for US GDP have been recently revised. And they have shown that the regulator expects economic growth to slow down in 2022 from 4% to 2.8% due to the sanctions war with Russia. In addition, the forecasts for the interest rate have also changed. It was earlier said that it will reach 0.75-1.00% by the end of the year. This figure has now risen to 1.75-2.00%. Given that there are only six meetings left this year, it turns out that the FOMC (Federal Open Market Committee) will have to raise the rate by 0.25% at each of them.

But this is not all either. The forecast on the rate for the end of 2023 has also been raised from 1.50-1.75% to 2.75-3.00%. Moreover, it seems that we will face several more acts of monetary restriction in 2024. That is, this is not just a revision of forecasts, but a sharp tightening of the US monetary policy, which could deal a serious blow to the labor market and lead to a large-scale recession. The market may receive important signals about the future movement of the dollar on Wednesday, April 6. The minutes of the March FOMC meeting will be published on this day.

At the moment, 50% of analysts vote for the strengthening of the dollar. 40% vote for the growth of the EUR/USD pair and 10% have taken a neutral position. Among the oscillators on D1, the picture is mixed: 30% of them are colored red, 20% are green and the remaining 35% are gray neutral. The trend indicators have an advantage on the side of the red ones: those are 85% against 15% of the green ones.

The nearest target for the bulls is a breakdown of the resistance zone in the area of 1.1100-1.1135, followed by the zones of 1.1185-1.1200, 1.1280-1.1350 and highs on January 13 and February 10 in the area of 1.1485. As for the bears, they will certainly try to break through the support of 1.0950-1.1000 and drop 100 points lower. If successful, the next targets will be the March 07 low at 1.0805 and the 2020 low at 1.0635 and the 2016 low at 1.0325.

Apart from the publication of the minutes of the March FOMC meeting, there will be relatively few events in the coming week. We can highlight the publication of the ISM PMI in the US services sector on Tuesday, April 05, as well as data on retail sales in the Eurozone on Thursday, April 07.

GBP/USD: Trend east, along 1.3100

Statistics from the United Kingdom last week turned out to be rather contradictory. According to the data published on Thursday, March 31, the British economy for the Q4 21 grew by 1.3%, which was higher than both the previous 1.0% and the forecast of 1.0%. The economy grew by 7.5% over the past year, which was the highest since 1941. But it is necessary to take into account here that GDP fell by 9.4% in 2020. So, there has not yet been a final recovery to the pre-pandemic level. In addition, data on the country's current account for the Q4 21 amounted to 7.3 billion pounds against the forecast of 17.6 billion and the previous value of 28.9 billion.

The activity of the manufacturing sector in the UK was also less than expected, which was confirmed by a IHS Markit report on Friday, April 01. The Purchasing Managers' Index (PMI) was 55.2 in March against the forecast of 55.5.

As with the euro and for the same reasons, GBP/USD investors and traders are at a loss. As a result, the pair was moving east along the 1.3100 level in a narrow corridor throughout the week. The low of the week was fixed at 1.3050, the high was 1.3182, the last chord sounded at 1.3112.

Giving a forecast for the coming week, 55% of experts side with the bulls, 35% support the bears and 10% remain neutral. The median forecast still points to the 1.3100 horizon. True, when moving to the forecast for the whole of April, its value rises to the zone of 1.3235. Most trend indicators on D1 point north. Among the oscillators, 55% are colored red, 20% are green and the remaining 25% are gray neutral. Trend indicators, as in the case of EUR/USD, have an overwhelming advantage on the side of the red ones: those are 90%.

The nearest support is located in the area of 1.3080-1.3100, then 1.3050 and the low of March 15 (and at the same time of 2021-2022) - 1.3000, followed by the support of 2020. Resistance levels are 1.3160, 1.3190-1.3215, then 1.3270-1.3325, 1.3400, 1.3485, 1.3600, 1.3640.

Among the events related to the economy of the United Kingdom, we can highlight the speech of the Governor of the Bank of England Andrew Bailey on Monday, April 4, as well as the publication of the Composite PMI and the Business Index UK services activity on Tuesday, April 05, and the Construction PMI on Wednesday, April 06.

USD/JPY: 125.09: No More Anti-Records?

The yen breaks an anti-record after an anti-record. The USD/JPY hit 122.43 on Friday, March 25, and it was already 263 points higher at 125.09 on Monday, March 28. The reason for the continued weakening of the Japanese currency is the same: the Bank of Japan, which does not want to change its super-soft monetary policy. Its head, Haruhiko Kuroda, once again stated on March 22 that it was too early to discuss the possibility of curtailing the quantitative easing (QE) program, as well as raising the interest rate. Recall that it has been at a negative level for a long time, minus 0.1%. In addition, the regulator was actively buying Japanese government bonds (JGB) throughout the past week in a desperate attempt to prevent their yield from breaking through the target level of 0.25%.

Last week's high of 125.09 is already close to the 2015 high of 125.86. And if the pair manages to break higher, then, according to strategists at Credit Suisse, this will open the way for it to 135.20 in the long term, and then even higher, to the zone of 147.00-153.00. However, in their opinion, the correction that has begun now can be continued during the Q2, first to 119.79, then to 119.09, after which the pair will move to trading in the range of 119.00-125.00. Credit Suisse also believes that if the pair breaks through support at 119.09, then the pullback may become deeper, to the zone of 116.35-116.50.

The same high for the Q2 is called by Rabobank specialists, who predict the pair's rise above 125.00 only in the second half of this year. They believe that the tightening of the Fed's policy is already built into the current dollar quotes, and this will hold back the growth of the pair in the coming months. However, the difference in interest rates and Japan's position as an importer of raw materials will play their role in Q3 and Q4, and the yen will continue to gradually weaken. A quick jump in USD/JPY above 125.00 will seriously increase the likelihood that the Bank of Japan will revise its quantitative easing (QE) program.

As for the past week, after the pair rose to 125.09, a correction began. The low was recorded on Thursday, March 31 at 121.27, after which the pair went up again and finished at 122.54.

With 50% of experts giving a bullish outlook for the coming week, it looks very moderate and sees the pair rising to the 124.00-124.50 zone as a target. 25% of analysts, on the contrary, vote for a further decline in the pair, and 25% have taken a neutral position. It should be noted that when switching to a monthly forecast, the vast majority (85%) of experts predict the strengthening of the Japanese currency and expect to see the pair in the 115.00-117.00 zone.

Among the indicators on D1, there is almost complete unanimity after such a powerful breakthrough to the north. 90% of trend indicators and 100% of oscillators are looking up, although 25% of the oscillators are already in the overbought zone. The nearest resistance levels are 123.20, 124.20 and the March 28 high at 125.09. After that, as already mentioned, the bulls may try to reach the 2015 high at 125.86. The nearest support is 122.00, then 121.30. It is followed by zones 120.60-121.40, 119.00-119.40, 118.00-118.35.

There are no expected releases of any important statistics on the state of the Japanese economy this week.

CRYPTOCURRENCIES: What Whales and Short-Term Speculators Do



Investors' risk appetite, which caused the growth of stock indices, continued to pull the crypto market with it at the beginning of last week. Bitcoin gained 28% and ethereum gained nearly 40% in just the second half of March.

The main cryptocurrency reached the powerful resistance level of $45,000 on the evening of Friday, March 25, for the fifth time since the beginning of the year. It failed to gain a foothold above it the previous four times, the BTC/USD pair rolled back down. This time it seemed that the bulls finally achieved the long-awaited victory: the quotes recorded a local high at a height of $48.156 on March 28. However, after that, the pair hit the 200-day SMA and stopped rising. The most logical explanation for this stop is the strengthening of the dollar at the end of the past week.

At the time of writing, April 01, the flagship cryptocurrency first returned to the $45,000 zone, which turned from resistance to support, and then rebounded to $46,500. The total market capitalization rose to $2.140 trillion ($1.995 trillion a week ago). The Crypto Fear & Greed Index has also grown slightly: from 47 to 50 points.

DataDash CEO Nicholas Merten believes that short-term investors and traders with leverage influence bitcoin volatility, and “whales” influence the growth. “There has been a lot of panic around the macro environment over the past couple of months,” Merten writes. The Fed is raising interest rates... The war between Ukraine and Russia, the potential next wave of COVID-19 - all these problems caused pessimism among small investors. At the same time, the “whales”, on the contrary, did not sell cryptocurrency... In fact, we saw how long-term investors continued to either buy more or hold bitcoin.

One such investor was the well-known software developer MicroStrategy. The company has recently received a $205 million loan secured by its own crypto assets. The loan was issued by the American bank Silvergate. The purpose of the loan is to buy bitcoins. According to the Bitcoin Treasuries website, MicroStrategy already owns 125,051 BTC worth nearly $6 billion. And “this loan,” said Michael Saylor, CEO of MicroStrategy, “is an opportunity to strengthen our position as a leader among public companies investing in bitcoin.”

Note that MicroStrategy is not the only company that provides crypto assets as collateral. For this type of loans, Silvergate Bank has a special SEN Leverage program, the total amount of obligations for which has already exceeded $570 million.

Despite numerous macroeconomic and geopolitical challenges, bitcoin is highly likely to enter the second half of a bear market, according to analysts at Glassnode. This is evidenced by the active accumulation of coins in the range of $35,000-42,000 and the absence of significant spending of bitcoins purchased in the Q1 2021. The share of BTC “aged” over a year has grown by 9.4% over the past eight months to close to a record 62.9%. The holders of these coins did not get rid of the asset in the face of two corrections of more than 50% in the last 12 months. The growth rate of this indicator is comparable to the market recovery in 2018-2019. And this may reflect increased investor confidence in bitcoin.

At the same time, analysts at Glassnode warn that the process of bottoming and investor capitulation in a bear market is often lengthy and painful. Therefore, they urge not to rush into ascertaining the end of the bear market.

A number of experts believe that a new strong correction to the south is only a matter of time. There are still no drivers for the rapid growth of quotations, and everything depends on the severity of the geopolitical situation and the dynamics of the global economic recovery. The $30,000 level may become the bearish target for the BTC/USD pair.

Peter Brandt, CEO of Factor Trading, calls for caution in optimistic forecasts. This legendary trader tweeted to his 629,400 followers that BTC’s recent move reminded him of April 2019 when the top cryptocurrency bottomed at $3,500, starting the first phase of its bull cycle. However, the expert emphasizes that even a technical breakthrough does not guarantee that the coin will repeat the 2019 rally.

“Charts DO NOT predict the future. The charts DO NOT even offer probabilities. Charts offer opportunities and are useful for risk management in a trading program. Chart patterns can either work, fail, or transform. If laser eyes reappear and BTC stops, be careful,” Brandt warns.

Crypto analyst alias Dave the Wave posted a comment saying that bitcoin is forming a larger ascending triangle on the weekly timeframe and could rise to its all-time high of $69,000.

We noted in the forecast for the last week of March that the position of ethereum is currently slightly better than that of bitcoin. The above growth figures are clear proof of this. Many investors are now buying ETH with BTC. In addition, the community is waiting for the long-awaited update to the ethereum mainnet. The Merge update is approaching rollout following successful testing on the testnet. Before its launch, more than $5.0 billion in ETH tokens had already been withdrawn from circulation as a result of burning. Since the burning reduces the overall supply of ethereum, this positively affects its price, contributing to the altcoin’s rally. Glassnode analysts have found that the volume of ethereum on exchanges has been declining in recent days. The inflow of this altcoin to the trading floors is 20% lower than its outflow, which creates the conditions for the formation of an ETH deficit.

The growth in the value of the coin is observed against the backdrop of the activation of the ten largest ETH addresses. Whales have accumulated up to 23.7% of the total ethereum supply, according to a new report from analytics firm Santiment. And they are not going to dump their assets, preferring to send ETH to offline storage. A similar trend was observed in the first half of 2017, after which we saw the famous altcoin run during the hype five years ago.

And at the end of the review, another piece of advice in our crypto life hacks section. Recall that we talk in it about the most interesting and unexpected ways to make money in this market.

Have you ever wondered what the toilet is for? We will tell you: to mine cryptocurrency! This is exactly what Gabriel Kozak and Dušan Matuska from Slovakia decided. As a result, they created the AmityAge mining farm, which runs on electricity obtained from human and animal waste. Dušan Matushka, said that "their devices run on methane, which is produced during the biodegradation process." Since there is no shortage of such waste in the foreseeable future, BTC mining on their farm is not dependent on rising global energy prices. Moreover, it takes place in an environmentally friendly way using renewable energy sources, which completely removes all claims against this industry.


NordFX Analytical Group


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

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

 

March 2022 Results: Three Most Successful NordFX Traders Earned Over 215,000 USD​

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

Representatives of Central and South-East Asia took all three steps of the podium in March.
- The highest monthly profit, 128,026 USD, was received by a client, account No.1620XXX, mainly on transactions with gold (XAU/USD). It should be noted that this trader is not new to our rating. So, they occupied second place with a score of 22.046 USD in February.
- This time, the second step has been taken by the owner of account No.1403XXX, who earned 70,910 USD on transactions on BTC/USD, XAU/USD and USD/CAD pairs.
- And, finally, the third place is occupied by a trader, account No.1594XXX, with a profit of 17,791 USD, whose main trading instrument is gold (XAU/USD).

The situation in NordFX passive investment services is as follows:
- CopyTrading still has an active provider under the nickname KennyFxPro. Signal with the complex name KennyFXPRO - Journey of $205 to $5,000 has shown a profit of 225% since March 2021 with a maximum drawdown of 67%. They increased their capital by almost 31% in March alone. As before, almost all trades were made with NZD/CAD, AUD/CAD and AUD/NZD pairs. Such a famous pair as EUR/USD took only 0.21% in their arsenal. Another signal from the same supplier, KennyFXPRO-Prismo 2K, is two months younger than the first one, the profit on it is less - 112%, but the drawdown has also been lower - about 45%.
- The leaders in the PAMM service have not changed over the past month either. Here we mark the manager under the nickname KennyFXPRO once again. True, the aggressiveness of their trading on the PAMM account is much lower than in CopyTrading. They increased their capital on the KennyFXPro-the Multi 3000 EA account by 92% in 432 days with a fairly moderate drawdown of less than 21%. TranquilityFX-The Genesis v3 account, which showed a 67% profit in 330 days with a similar maximum drawdown of less than 21%, and NKFX-Ninja 136, which has generated 54% income since June 11, 2021, with the same drawdown of about 21%, are also among the leaders. The EUR/USD pair is still invisible among trading instruments. The vast majority of transactions were made with NZD/CAD, AUD/CAD and AUD/NZD. It should also be noted that the maximum drawdown showed a slight increase in March: it increased by about 5% for all three listed accounts.

Among the IB partners of NordFX, the TOP-3 also includes representatives of Central and Southeast Asia:
- the largest commission, 8.952 USD, was accrued to the partner with account No.1336XXX, who moved from third place to first in a month and now leads the rating;
- the next is the partner (account No.1229ХХХ), who received 3,881 USD;
- and, finally, the partner with account No. 1336xxx, who received 5,789 USD as a reward, closes the top three.


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

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

 

CryptoNews of the Week



- Miners mined the anniversary 19 millionth bitcoin On Friday, April 01. This event took place at block 730.002. At the time of writing, 90.48% of the total digital gold issue has been mined, which is limited to 21 million BTC.
According to the algorithm laid down by Satoshi Nakamoto, the reward is reduced by 50% every 210,000 blocks. The next halving is expected in 2024. (For reference: the 18 millionth coin was mined on October 19, 2019).

- The trend towards the accumulation of bitcoins among various market participants continued last week. Such well-known companies as Luna Foundation Guard and MicroStrategy are among them. Analysts from the Glassnode company noticed that, in addition to the “whales”, the so-called “shrimp” (addresses with a balance of less than 1 BTC) also contributed to the accumulation. Since the January 22 low, they have accumulated 0.58% of the market supply, bringing their share to 14.26%.
At the moment, miners have already mined 19 million coins out of the 21 million provided by the algorithm, and the accumulation has become many times higher than the emission. Thanks to this, bitcoin may soon become a scarce asset. According to Glassnode, the rate of outflow of coins from centralized platforms has increased to 96,200 BTC per month, which is extremely rare in historical retrospect. Exchange balances fell to the levels of August 2018, breaking through the plateau observed since September 2021. The number of coins in bitcoin addresses that tend to accumulate rose by 217,000 BTC since December 04, 2021, to a record 2,854,000 BTC.
Based on the figures presented, it is possible to obtain a daily accumulation rate of 1800 BTC, which is twice the emission rate. And this is despite the fact that the market has been under the pressure of the bears for most of this period.

- The German Federal Criminal Police confiscated the German servers of the Hydra darknet marketplace. 543 BTC were also seized as part of the international operation with a total value of about 23 million euros. The investigation into the case has been ongoing since August 2021 with the participation of the US authorities. Hydra operators and administrators are suspected of providing opportunities for drug trafficking, fraudulent documents and money laundering.
According to the police, the users of the darknet marketplace included about 17 million customers and more than 19 thousand sellers. Hydra accounted for 75% of all dark web revenue in 2020, at least 1.23 billion euros. The platform entered the top 10 platforms in terms of cryptocurrency turnover, beating the Kraken, OKX and Poloniex exchanges.

- 21% of US residents have traded or invested in cryptocurrencies at least once, according to a survey conducted by NBC News. Only 19% of those surveyed expressed their positive attitude towards digital assets, 56% are neutral or cautious position, and 25% view them in a negative way. The agency explained this distrust by the lack of clear legislative regulation of this industry.

- US Senate Banking Committee member Elizabeth Warren compared the digital asset market to the 2008 economic crisis in an interview with NBC. “The whole digital world is like a bubble. What is the basis for its growth? People tell each other that everything will be fine, as it was with the real estate market before it fell,” Warren explained. The senator added that bitcoin will be regulated by the authorities sooner or later. However, she did not specify how the government plans to achieve such control.

- According to analysts at the investment company VanEck, the price of bitcoin could reach $4.8 million if the cryptocurrency becomes a global reserve asset. Such a forecast was obtained taking into account the M2 money supply, that is, the amount of cash in circulation and all kinds of non-cash funds. There is also a lower range - $1.3 million per 1 BTC, calculated based on the M0 money supply, which does not include non-cash funds.
VanEck analysts warn that their forecast is only intended to serve as a starting point for investors who want to estimate the possible value of bitcoin in one of the unlikely scenarios. At the same time, according to the authors of the forecast, it is not bitcoin at all, but the Chinese yuan that is the primary contender for the status of world reserve currency.

- A report from analytics firm IntoTheBlock says that long-term investors continue to hoard bitcoin. According to the results of Q1 22, the total amount of coins in the wallets of these market participants reached 12 million BTC, worth about $551.37 billion. “Long-term investors now own a record amount. This indicates an accumulation phase, helps ease selling pressure, and may help reinforce faith in bitcoin as a store of value,” IntoTheBlock said.
Bitcoin is now showing an almost complete cyclical correlation with the S&P500, which recently hit 0.9. At the same time, the cryptocurrency with its inherent volatility rises faster and falls just as faster than the stock market. The company's analysts note that "bitcoin has now recovered most of its quarterly losses, while the S&P 500 and Nasdaq 100 ended the first quarter with returns of -3.4% and -7.65%, respectively."

- Galaxy Digital CEO Mike Novogratz has revised his bitcoin outlook. He believes that the arrival of new investors and innovations, developments in politics and the economy, and the acceptance of bitcoin by the authorities improve the forecasts for BTC for 2022. “Initially, I said that bitcoin would have an unstable year, that the price would fluctuate in the range of $30,000 to $50,000. But given how the markets are trading, new investors and innovation, the development of the Web3 and the metaverse, I'm more optimistic. Therefore, I won’t be surprised if cryptocurrencies grow significantly by the end of 2022,” the billionaire said.
In his opinion, the adoption of bitcoin will continue, as everyone understands what an unstable world we live in. “Bitcoin began to write a new history at a time when Europe and the United States blocked Russia's financial flows. The military action in Ukraine creates a lot of inflationary pressure, generates a lot of risks and worries, but adds confidence to crypto investors and accelerates the adoption of digital assets,” the CEO of Galaxy Digital said.

- Raoul Pal, a former Goldman Sachs employee and current Real Vision CEO, shares a similar opinion. He said in the MetaLearn podcast that the world is ready for a new wave of bitcoin adoption, and a further fall in the market will have a beneficial effect on its growth. “Sovereign states, especially wealth funds, will start looking for a long-term asset that will provide some security. Therefore, bitcoin will be studied by them and we will see its further adoption - not necessarily as a currency, but as an asset. I think this is a very interesting solution: the global use of bitcoin as a protective collateral reserve asset."
According to Raul Pal, the macroeconomic situation suggests that the chances of another bitcoin sell-off are slim. Therefore, most market participants are likely to stick to a long-term strategy and not actively trade cryptocurrencies.

- Cryptocurrency analyst and trader Cheds believes that a breakout of the ascending triangle pattern will take bitcoin to $58,000. “We have $46,000... and an ascending triangle,” Chads writes. - It is most logical to consider it as a bullish sign, since such a triangle is usually a bullish continuation pattern. The measured move will be the height of the triangle, which will bring us from $56,000 to $58,000.”
At the same time, the expert advises traders to keep a close eye on the 200-day moving average as this technical indicator is currently acting as resistance. Chads believes that if the bulls manage to keep BTC above $45,000, the cryptocurrency will be ready to storm the SMA-200 resistance for a further 26% gain. Otherwise, the bulls face the risk of a sell-off.


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

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

 

Forex and Cryptocurrencies Forecast for April 11 - 15, 2022​

EUR/USD: Three reasons for the Strengthening of the Dollar

The proponents of a stronger dollar won by a very small margin in the previous forecast. 50% of analysts voted for its growth, 40% were against and 10% took a neutral position. The reason for such uncertainty and disagreement was that the market seemed to have already taken into account the increase in the dollar interest rate in 2022 for the quotes. However, despite this, the US currency has continued its growth. The DXY index has gained about 2% over the last week, and the EUR/USD pair, as predicted by bearish supporters, has broken through the support in the 1.0950-1.1000 zone and is aiming at the March 07 low of 1.0805. True, it has not yet managed to reach it, and the pair finished at 1.0874.

So why is the dollar continuing to gain strength? There are three reasons for this. The first is the Fed's monetary policy, which is becoming increasingly tight. We are now talking about reducing the balance sheet, which the US regulator intends to reduce by more than $1 trillion a year. And this is equivalent to an additional 3-4 increases in the refinancing rate in 2022-23, 25 basis points each. US Treasury yields will also rise, making the dollar more attractive.

The second and third causes are located on the other side of the Atlantic, in Europe. These are the presidential elections in France and new sanctions against Russia because of the armed conflict in Ukraine.

The first round of elections will be held on Sunday 10 April. French opposition leader Marine Le Pen is Eurosceptic. Please note that she almost called for the exit of the country from the Eurozone in 2017. And even if the opposition loses the election, it will still put a spoke in the wheels of European integration. But if Marine Le Pen comes to power, the pan-European currency will certainly not do well. According to some analysts, the EUR/USD pair may fall to the level of 1.0500 or even lower.

As for sanctions, we have repeatedly said that they negatively affect not only the Russian economy, but also the EU. First of all, because of the strong dependence of the European Union on Russian energy resources. In addition, one can add here the risks of Russia using nuclear weapons and the fact that military operations could turn into a catastrophe many times greater than Chernobyl.

The most important event of the coming week will be the ECB meeting and the subsequent press conference of its leadership on Thursday April 14. The probability that the interest rate will remain at the previous zero level is very high. However, investors hope to receive signals on how the European regulator plans to respond to internal and external challenges.

In the meantime, 45% of analysts vote for further strengthening of the dollar. The opposite opinion is shared by 35% and the remaining 20% of experts have taken a neutral position. All trend indicators and oscillators on D1 are colored red, although 25% of the latter give signals that the pair is oversold.

The nearest target for EUR/USD bears will be March 7 low 1.0805. And if they manage to break through this support, they will then aim for the 2020 low of 1.0635 and the 2016 low of 1.0325.

The bulls will try to lift the pair above the level of 1.1000, to overcome the resistance at 1.1050 and, if possible, to reach the zone of 1.1120-1.1137. Their next target is the March 31 high of 1.1184.

In addition to the European Central Bank meeting, next week's economic calendar includes the release of German consumer data on Tuesday, April 12 and US consumer data on April 12 and 14. April 15 in the United States and most European countries is a day off, Good Friday.

GBP/USD: Fed Hawks and Bank of England Doves

The key and very strong support for the pair is the low of March 15 (and at the same time of 2021-2022), 1.3000. The GBP/USD bears went to break through it, reaching 1.2981 on April 08 during the US session. It seems that European traders, including British ones, are hesitant. But the Americans treat European currencies with disdain, to put it mildly, and continue to put pressure on them against the backdrop of the hawkish minutes of the Fed meeting and the comments of the top leaders of this regulator. As for their colleagues from the Bank of England, the latest comments of these officials were very soft, and raised doubts in the market as to whether the Bank will be able to justify the expectations of tightening monetary policy.

The last chord of the week after the rebound sounded at 1.3031. If the GBP/USD pair still manages to consolidate below 1.3000, this will open the way for it to the November 2020 lows around 1.2850, and then to the lows of September 2020 in the 1.2700 zone. This development is supported by only 35% of analysts. The remaining 65% are waiting for a correction to the north, and here the levels 1.3050, 1.3100 and the zone 1.3185-1.3215 will act as resistance, then 1.3270-1.3325 and 1.3400. All indicators on D1, as in the case of EUR/USD, point south, 15% of oscillators signal the pair is oversold.

As for the events concerning the economy of the United Kingdom, we can highlight the publication of data on the country's GDP and industrial production on Monday April 11, as well as on retail sales on Tuesday April 12. We will receive a package of information from the UK labor market on the same day, and we will get information from its consumer market on Wednesday, April 13.

USD/JPY: Japanese Are Against A Weak Yen

We titled our previous review as “125.09: No More Anti-Records?”. After a week, we can say that not yet, there will not be. And although the USD/JPY pair was moving north for a while, it fixed a local maximum at 124.67 this time, and ended the trading session at 124.36.

Recall that due to the super-soft monetary policy of the Bank of Japan, the yen continued to weaken, and the USD/JPY pair reached a record multi-year level of 125.09 on March 28, which is not far from the 2015 high of 125.86.

There are no expected releases of any important statistics on the state of the Japanese economy this week. The only thing that can be noted is the speech of the head of the Bank of Japan, Haruhiko Kuroda, on Wednesday, April 13. But it is unlikely to pull on a sensation. Although here one should take into account the statement of Hideo Hayakawa, the former chief economist of this organization, that against the background of the weakening yen, the Japanese Central Bank may adjust the parameters of monetary policy in July. “While the Bank of Japan has repeatedly said that the weak yen is positive for the economy as a whole, in reality this impact is close to 50/50, and household discomfort will increase further as inflation in Japan rises as well. The vast majority of Japanese do not welcome the weak yen,” Hideo Hayakawa said on April 8. In his opinion, "it is too naive for the Bank of Japan to say that a weak yen is good when the government takes measures to solve the problem of rising prices and limiting gasoline prices."

Strategists at Rabobank also believe that a quick USD/JPY jump above 125.00 increases seriously the likelihood that the Japanese regulator will revise its quantitative easing (QE) program.

At the moment, the probability that the pair will try a second test of resistance in the 125.00-125.09 area is estimated as 50/50. However, when moving from a weekly forecast to a forecast for the second half of April and May, the vast majority (85%) of experts predict the strengthening of the Japanese currency and expect to see the pair in the 115.00-117.00 zone.

Among the indicators on D1, as in the previous two cases, there is complete unanimity: 100% of trend indicators and 100% of oscillators look up, although 25% of the latter are in the overbought zone. Given the high volatility of the pair, the zones 123.65-124.05, 122.35-123.00 and 121.30 can be identified as supports. Then follow the zones 120.60-121.30, 119.00-119.40, 118.00-118.35.

CRYPTOCURRENCIES: Correction or the Beginning of a New Collapse



Miners mined the anniversary 19 millionth bitcoin On Friday, April 01, out of the 21 million provided by the algorithm. That is, less than 10% is left to be mined. And this is it. Thanks to this, bitcoin, as conceived by its creator (or creators), will become a super-scarce asset, which will push its value further and further up. This is what many market participants are counting on.

The trend towards the accumulation of digital gold has continued lately. Analysts from the Glassnode company noticed that, in addition to the “whales”, the so-called “shrimp” (addresses with a balance of less than 1 BTC) also contributed to the accumulation. Since the January 22 low, they have accumulated 0.58% of the market supply, bringing their share to 14.26%.

The volumes of accumulation began to exceed emission many times over. According to Glassnode, the rate of outflow of coins from centralized platforms has increased to 96,200 BTC per month, which is extremely rare in historical retrospect. Exchange balances fell to the levels of August 2018, breaking through the plateau observed since September 2021. The number of coins in bitcoin addresses that tend to accumulate rose by 217,000 BTC since December 04, 2021 to a record 2,854,000 BTC. Based on the figures presented, it is possible to obtain a daily accumulation rate of 1800 BTC, which is twice the emission rate.

This trend is confirmed by the report of the analytical company IntoTheBlock. According to it, the total amount of coins in the wallets of long-term investors reached a record 12 million BTC in Q1 2022 worth more than $551 billion. “This indicates a phase of accumulation, which can help strengthen faith in bitcoin as a store of value,” IntoTheBlock believes.

The most fantastic forecast regarding the future of the main cryptocurrency has been given by analysts from the investment company VanEck. According to their calculations, the price of bitcoin could reach $4.8 million if the cryptocurrency becomes a global reserve asset. Such a forecast was obtained taking into account the M2 money supply, that is, the amount of cash in circulation and all kinds of non-cash funds. There is also a lower range - $1.3 million per 1 BTC, calculated based on the M0 money supply, which does not include non-cash funds.

VanEck analysts warn that their forecast is only intended to serve as a starting point for investors who want to estimate the possible value of bitcoin in one of the unlikely scenarios. At the same time, according to the authors of the forecast, it is not bitcoin at all, but the Chinese yuan that is the primary contender for the status of world reserve currency.

Even the most notorious crypto fans understand that millions of dollars per coin are still infinitely far away. However, as for the foreseeable future, a number of scenarios look quite optimistic here. Thus, Galaxy Digital CEO Mike Novogratz believes that the arrival of new investors and innovations, developments in politics and the economy, and the acceptance of bitcoin by the authorities improve the forecasts for BTC for 2022. “Initially, I said that bitcoin would have an unstable year, that the price would fluctuate in the range of $30,000 to $50,000. But given how the markets are trading, new investors and innovation, the development of the Web3 and the metaverse, I'm more optimistic. Therefore, I won’t be surprised if cryptocurrencies grow significantly by the end of 2022,” the billionaire said.

In his opinion, the adoption of bitcoin will continue as everyone understands what an unstable world we live in. “Bitcoin began to write a new history at a time when Europe and the United States blocked Russia's financial flows. The military action in Ukraine creates a lot of inflationary pressure, generates a lot of risks and worries, but adds confidence to crypto investors and accelerates the adoption of digital assets,” the CEO of Galaxy Digital said.

Raoul Pal, a former Goldman Sachs employee and current Real Vision CEO, shares a similar opinion. He said in the MetaLearn podcast that the world is ready for a new wave of bitcoin adoption, and a further fall in the market will have a beneficial effect on its growth. “Sovereign states, especially wealth funds, will start looking for a long-term asset that will provide some security. Therefore, bitcoin will be studied by them and we will see its further adoption - not necessarily as a currency, but as an asset. I think this is a very interesting solution: the global use of bitcoin as a protective collateral reserve asset."

According to Raul Pal, the macroeconomic situation suggests that the chances of another bitcoin sell-off are slim. Therefore, most market participants are likely to stick to a long-term strategy and not actively trade cryptocurrencies.

However, digital gold stopped rising after reaching a high of $48,156 on March 28. The bulls have not been able to push the BTC/USD pair above the 200-day moving average, and at the time of writing, on the evening of April 08, it is trading around $43,000. The total market capitalization is below the important psychological level of $2 trillion, having fallen from $2.140 trillion to $1.985 trillion during the week. The Crypto Fear & Greed Index also began to feel worse, falling from neutral 50 to 37 points, which are already in the Fear zone.

Renowned analyst and trader Cheds views the ascending triangle that has been forming since January 24 as a bullish sign. Such a triangle, he says, is usually a bullish continuation pattern. And in the event of an upside breakout, “the measurable move will be the height of the triangle, which will bring from $56,000 to $58,000.”

At the same time, the expert advises traders to keep a close eye on the 200-day moving average as this technical indicator is currently acting as resistance. Chads believes that if the bulls manage to keep BTC above $45,000, the cryptocurrency will be ready to storm the SMA-200 resistance for a further 26% gain. Otherwise, the bulls face the risk of a sell-off.

As mentioned, BTC/USD is currently trading at $43,000, below Cheds' support. However, given the volatility of the flagship cryptocurrency, the victory of the bears cannot yet be considered complete. A breakthrough to the south may be false. Moreover, bitcoin has ceased to be independent. It was in 2010, when 10,000 BTC could buy two pizzas, when it lived its own life. Now it has matured and become part of the global economy. Bitcoin is now showing an almost complete cyclical correlation with the S&P 500, which has recently hit 0.9. And it falls after the US stock market. And the latter, in turn, depends on the risk appetites of global investors.

If the craving for risky assets recovers, the crypto market will also go up. Otherwise, according to some experts, we can expect the BTC/USD pair to decline to March lows near $37,000 per coin. The probability of quotes falling even lower, to $30,000, is also quite high.


NordFX Analytical Group


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

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CryptoNews of the Week



- Bitcoin remains hyper volatile, but its turnover is inferior to other assets, which does not allow us to talk about the high “speculativeness” of the first cryptocurrency. This, according to Financial News, was stated by Tom Lee, co-founder of the analytical firm Fundstrat. According to Lee's calculations, the turnover of bitcoins is 2:1, while that of the US dollar is 96:1, and that of a barrel of oil is 31:1. “Today, with […] penetration rates so low, one would expect bitcoin to be hyper volatile. But as 9 out of 10 households invest in the first cryptocurrency, its price fluctuations will weaken,” the specialist explained.

- David Rubenstein, co-founder of the investment fund Carlyle Group, admitted that he had been skeptical about cryptocurrencies, but his opinion changed over time. He emphasized that he did not buy cryptocurrencies, but “invested in companies that serve the industry.” "The genie is out of the bottle, and I don't think the industry is going to disappear anytime soon," the billionaire said.
He also pointed to the crisis in Ukraine as an additional reason for his current optimism. “If you are in Ukraine or Russia and the country is in a lot of trouble, having some crypto will probably make you feel better as you have something out of government control,” Rubenstein noted.

- The cryptocurrency industry will become the twelfth sector of the S&P 500 index in the next decade. This was stated by investor and star of the television show Shark Tank Kevin O'Leary.
Currently, the S&P 500 benchmark includes 11 sectors of the economy, and most experts advise investing no more than 20% of the portfolio in any of them. According to O'Leary, he adheres to this strategy when investing in cryptocurrencies. The millionaire said that he holds 32 positions in the digital asset sector, and none of them takes more than 5% of the prescribed 20%.
O'Leary stressed that investment diversification is one of the founding principles because "you have no idea what might work." In his opinion, even two successful bets out of ten can recoup unprofitable investments.

- According to Bloomberg analysts, the value of the flagship cryptocurrency may soon fall to $26,000. The experts emphasized that if the technical analysis pattern called “bear flag” works, then such a scenario will be inevitable.
In their opinion, the BTC rate is now on its way to testing a key support level around $37,500. If it does not hold above this mark, the market is in for a disaster.
Bloomberg specialists also noted that they took into account the Coinglass report. According to this company, about $439 million worth of crypto positions were liquidated on April 12. At the same time, more than 88% of closed orders accounted for long positions. Bitcoin futures contracts for $160 million were also closed.

- Philosopher and professor of psychology at the University of Toronto Jordan Peterson spoke at at the Bitcoin-2022 conference in Miami and called the first cryptocurrency revolutionary but causing concern. As a sociologist, Peterson worries about getting money out of the control of the political system. According to him, new ideas can bring unforeseen consequences, and not only positive ones.
“I am not suggesting that you do anything as a result of this warning. I'm just saying that the unbridled enthusiasm is based on the assumption that the new system will only do good. It's unreasonable," Peterson said.

- Group-IB specialists identified 36 fraudulent YouTube streams dedicated to investing in cryptocurrencies in the period from February 16 to February 18. They brought the scammers about $1.7 million during these three days.
The attackers edited videos from old speeches by famous representatives of the crypto community and entrepreneurs. More often than others, the images of Vitalik Buterin, Elon Musk, Michael Saylor, Changpeng Zhao and Cathy Wood were used. On average, the audience of one such stream ranged from 3,000 to 18,000 people. And the fake stream with Buterin gathered more than 165,000 viewers. During the broadcast, users were offered to transfer cryptocurrencies to the specified wallet and allegedly receive them back in double. To receive an “additional bonus”, the attackers offered the investor to provide the seed phrase of their crypto wallet. If the victim agreed, the scammers withdrew all the funds on it.
In total, the deceived viewers made 281 transactions. Ethereum turned out to be the most popular among scammers. Most of the domains involved in the broadcasts appeared through the Russian registrar Reg.ru.

- Geoffrey Halley of Oanda stated that the flagship cryptocurrency continues to trade within the established range, the lower limit of which is at $36,500. If BTC falls even more, it can lead to serious losses for traders and investors. However, if the price of bitcoin soars in the near future above the upper limit of the range of $47,500, this will be a prerequisite for reaching a new record high.

- Crypto trader known as Cheds told their 45,100 YouTube followers that the bears are now in control and any bounce is an opportunity to go short on BTC. Cheds also believes that the next rally is likely to be a bear trap rather than a trend reversal.

- One of the by-products of bitcoin mining is the excess heat from the operation of crypto farms, which Jonathan Yuan took advantage of. He has kids who love swimming in the pool. However, they almost did not do this because the water was too cold. Yuan himself is actively involved in mining, and drew attention to the fact that his equipment generates too much heat. He purchased a heat exchanger and used it to install a system for heating water. According to him, thanks to this invention, the temperature in the pool can be maintained at approximately 32° C.
At the same time, the Yuan crypto farm thus received a water-cooling system. However, when the inventor pushed his ASIC miners to the limit, the temperature in the pool rose above 43°C, which also did not please his children.
Jonathan Yuan notes that almost everything can be heated according to this principle: living premises, garages and so on. It is assumed that the heating temperature can reach a maximum threshold of 60°C.

- Well-known writer and investor Robert Kiyosaki fully agrees with the opinion of analysts who believe that the US dollar and other markets are on the verge of collapse due to rising food, oil and energy prices, as well as widespread inflation. The author of the bestselling book Rich Dad Poor Dad assured that what is happening in the world of finance is a sign of a coming crisis, and this process will simply destroy half the US population. He noted that cryptocurrencies in this situation are a good tool to reduce risks, but not all people resort to using this asset class.
Kiyosaki emphasized that now 40% of Americans do not even have $1,000 in their savings. The inflation rate is rising, and this figure will soon exceed 50%. Then, according to the investor, a revolution will begin.

- Michael Saylor, CEO of Microstrategy, a company known for investing in bitcoin, and Cathie Wood, CEO of investment firm Arch Invest, contacted at the Bitcoin 2022 conference in Miami. Both participants of the panel discussion still believe in bitcoin and are waiting for its growth, and the current situation in the market does not upset them at all. In their opinion, the Fed's monetary policy will continue to be inflationary, pushing prices up. In such a situation, according to Cathie Wood, bitcoin, as a means of hedging, has great potential for growth and its price could reach a record $1 million per coin. “It takes quite a bit of effort to do this,” the head of Arch Invest said. "We don't need much. All we need is for 2.5% of all assets to be converted to bitcoin.”
Both panellists believe that regulators are getting better at the flagship cryptocurrency. Treasury Secretary Janet Yellen spoke mostly negatively about bitcoin a year ago, referring to “money laundering, criminals, environmental damage” and so on. However, a lot has changed since then. “Someone whispered in her ear: if you want to lose, and if you want the US to lose, keep saying that. And she changed the record,” Wood shared an "inside info".

- As part of the Bitcoin-2022 conference, Miami Mayor Francis Suarez presented a statue of a “crypto bull”. According to him, the installation symbolizes the transformation of the city into the “world capital of the crypto industry”.
In contrast to its Wall Street's famous Charging Bull sibling, the Miami bull is cybernetically inspired and has the now-famous "laser eyes." The crypto community seems to like the new statue. Morgan Creek Digital co-founder Anthony Pompliano wrote that “the bulls are in control,” while Binance CEO Changpeng Zhao called the installation “pretty cool.”

- Morningstar analysts posted a report claiming that cryptocurrencies are no match for the stock and bond markets in terms of returns. At the same time, they note that bitcoin “is still too risky to be compared to gold.” The authors of the report argue that, despite the prospect of significant profits that the cryptocurrency market can offer its participants, one must be very careful with it.
“Every breathtaking rally has led to an equally brutal crash at the end. Cryptocurrencies lack a fundamental anchor, such as the face value of bonds or the discounted cash flows of stocks,” Morningstar notes.


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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Forex and Cryptocurrencies Forecast for April 18 - 22, 2022​

EUR/USD: Fed's Apples and ECB's Oranges

The dollar continues to strengthen, while the EUR/USD pair moves down. A week's low was recorded at 1.0757 after the ECB meeting on Thursday, April 14. After correction, the final chord, sounded at around 1.0808.

We named three reasons for the growth of the US currency in the previous forecast. The first is the difference between the monetary policies of the Fed and the ECB. Now, the probability of further tightening the position of the US Central bank has increased even more against the background of the latest data on inflation in the United States: the consumer price index has exceeded the forty-year high and reached 8.5%. Such an acceleration of inflation may force the regulator to act more vigorously and to revise its plans to raise the key rate and reduce the balance sheet in May.

New York Fed President John Williams, who is also vice chairman of the FOMC (Federal Open Market Committee), said in an interview with Bloomberg that it makes sense for the Fed to bring interest rates to a neutral level as soon as possible, which, not stimulating, it does not hinder economic growth, and is in the range from 2% to 2.5%. Therefore, a 0.5% increase in federal borrowing costs at the May FOMC meeting looks quite realistic.

In contrast to the Fed's hawks, their European counterparts remain extremely dovish. The ECB left the interest rate unchanged at 0% at its meeting on April 14, which, in fact, was expected. Moreover, the Bank's representatives have already said earlier that the growth in the cost of lending in the context of continuing economic uncertainty could do more harm than good.

The head of the regulator, Christine Lagarde, confirmed at a press conference that followed the meeting that the ECB is moving more slowly than the Fed, and that the Eurozone will be hit harder by the military actions in Ukraine. The American and European economies, according to Ms. Lagarde, are as incomparable as apples and oranges. Such a fruity allegory made a strong impression on the market, as a result of which the EUR/USD pair collapsed to the zone of two-year lows.

Indeed, the current economic situation in the euro area does not inspire optimism and, according to many experts, will continue to worsen in the future. The German economic sentiment index published last week fell to a new multi-month low: minus 41.0 (minus 39.3 a month earlier). The index of current economic conditions of this locomotive of the European economy also fell to minus 30.8 in April (minus 21.4 in March). Against this background, the German GDP growth forecast for 2022 was lowered from 4.5% to 2.7%.

The situation may become even more complicated, as the President of the European Commission Ursula von der Leyen and the head of EU diplomacy Josep Borrell announced their intention to include restrictions on the export of hydrocarbons from Russia in the next package of anti-Russian sanctions. Thus, the risk of stagflation in Europe remains at a fairly high level.

We mentioned another reason for the pressure on the euro - the presidential elections in France in the previous review. Their first round took place on Sunday April 10. So far, the incumbent President Emmanuel Macron is leading with 27.84% of the vote. Marine Le Pen, head of the far-right National Rally Party, gained 23.15%. The gap is not very large and there is still a possibility that the opposition may win in the second round on April 24. Its leader Marine Le Pen is a Eurosceptic. Please note that she called for almost the exit of the country from the Eurozone back in 2017. And if this lady comes to power, the EUR/USD pair, according to a number of analysts, may fall to the level of 1.0500, or even lower.

There is another factor pushing the pair south, which is the deterioration of global risk appetite. The S&P500 stock index has been falling for the third week in a row, while demand for safe-haven assets such as the dollar and US Treasuries, on the contrary, is growing.

At the moment, 50% of analysts vote for further strengthening of the dollar. The opposite opinion is shared by 40% and the remaining 10% of experts have taken a neutral position. All trend indicators and oscillators on D1 are colored red, although 15% of the latter give signals that the pair is oversold.

The nearest support is located at the level of 1.0800. The nearest target for EUR/USD bears will be April 14 low at 1.0757. And if they manage to break through this support, they will then aim for the 2020 low of 1.0635 and the 2016 low of 1.0325. The bulls will try to lift the pair above the 1.1000 level and, if possible, reach the 1.1050 zone. But to do this, they first need to overcome the 1.0840 and 1.0900-1.0930 resistances.

The upcoming week's calendar includes speeches by Fed and ECB heads Jerome Powell and Christine Lagarde on Thursday April 21. Data on unemployment and manufacturing activity in the US will also be published on this day. As for the indicators of business activity in Germany and the Eurozone as a whole, they will become known on Friday, April 22.

GBP/USD: Battle for 1.3000

In the previous forecast, most experts (65%) supported the correction of the GBP/USD pair to the north and were absolutely right. It seemed at the beginning of the week that the victory was on the side of the bears: they managed to overcome the support in the 1.3000 zone and lower the pair to 1.2972.

Recall that 1.3000 is a key support/resistance level as it is not only the March 15 low, but also the 2021-2022 low. The bulls managed to seize the initiative on Wednesday, April 13, break through this resistance, reach the height of 1.3147 and complete the week also above it, at around 1.3060.

The pound was supported by a possible tactical victory of the Bank of England over the FRS in the fight for raising interest rates. Inflation in the UK increased from 6.2% to 7.0%. The Bank of England predicted that it would peak in April, accelerating to 7.2%. However, a number of banks did not agree with the regulator's opinion, believing that inflation will not stop at this point, reaching 9.0% in April, and then its growth will continue. Therefore, the Bank of England will have to do something about it. And this “something” is, of course, another increase in interest rates. It was this prospect that pushed the British currency to growth.

We can expect the battle for 1.3000 to continue next week. If the victory is on the side of the bears, they will try to update the April 13 low of 1.2972 and open the way to the November 2020 lows around 1.2850, and then to the September 2020 lows in the zone 1.2700. The nearest support is 1.3050. 30% of analysts vote for the victory of the bears, while the majority (70%) side with the bulls. The resistance levels are 1.3100, 1.3150 and the zone 1.3190-1.3215, then 1.3270-1.3325 and 1.3400. Among the indicators on D1, the advantage of the reds is evident. Among the oscillators, 75% are colored in this color, another 15% are green and 10% are neutral gray. Trend indicators have 100% on the red side.

Among the events concerning the economy of the United Kingdom, we can highlight the speeches of the Governor of the Bank of England Andrew Bailey on April 21 and 22. Data on business activity in the manufacturing and services sectors of the UK will also be published on Friday, April 22.

USD/JPY: Do We Expect New Anti-records from the Yen?



It seems that nothing can stop the fall of the yen and the growth of the USD/JPY pair. The Japanese currency sets an anti-record after an anti-record, and the pair recorded another high at 126.67. The last time it climbed so high was on May 01, 2002, that is, 20 years ago.

We noted in the last review that the majority of Japanese people are against the weak yen. However, despite this, the Bank of Japan still refuses to raise the key rate and reduce monetary easing. The regulator believes that maintaining economic activity is much more important than fighting inflation. And this divergence with the US Federal Reserve's monetary policy is pushing the USD/JPY further north.

The pair closed the week's trading session at 126.37. 45% of analysts vote for maintaining the uptrend next week. A little more, 55%, remembering a powerful correction to the south after a similar rally in the last week of March, expect something similar now. It should be noted here that when switching to the forecast for may-June, the number of supporters of the dollar strengthening increases to 80%. We have already cited Rabobank strategists who believe that a quick USD/JPY jump above 125.00 will seriously increase the likelihood that the Japanese regulator will revise its quantitative easing (QE) program. And this jump took place last week.

There is complete unanimity among the indicators on D1: 100% of trend indicators and 100% of oscillators look up, although 35% of the latter are in the overbought zone. Without a doubt, the main support in the coming days will be the levels of 126.00 and 125.00. Then, taking into account the high volatility of the pair, we can single out the zones 123.65-124.05, 122.35-123.00 and 120.60-121.30. As for the plans of the bulls, they will try to update the high of April 15, and rise above 127.00. An attempt to designate their subsequent goals, focusing on the levels of 20 years ago, will rather look like fortune telling.

There are no expected releases of any important statistics on the state of the Japanese economy this week.

CRYPTOCURRENCIES: April 12: Space Flight Day. But not for bitcoin.

It is impossible to call the first half of April successful for the crypto market. And if bitcoin was still trying to jump over the 200-day SMA two weeks ago, on April 04, then the bulls completely capitulated and a local low was recorded at $39.210 on April 12. It is noteworthy that Cosmonautics Day is celebrated on this day: Yuri Gagarin went into space and circled the planet Earth on April 12, 1961, for the first time in the world. The BTC/USD pair did not make a breakthrough to the stars. Rather, we observed a fall from orbit.

As of this writing, on the evening of Friday, April 15, the pair is trading around $40,440. The total market capitalization has slightly decreased and is still below the important psychological level of $2 trillion, at the level of $1.880 trillion. The Crypto Fear & Greed Index did not stay in the previous orbit either: it fell from 37 to 22 points and returned to the Extreme Fear zone.

We wrote earlier that bitcoin has become a part of the global economy and now demonstrates a strong correlation with stock indices. Therefore, its quotes chart is largely congruent, first of all, with the S&P500 chart. So, as of March 2022, according to Arcana Research, the correlation coefficient between BTC and S&P500 was 0.497. The main cryptocurrency falls and rises after the stock market. And that, in turn, falls or rises depending on the actions of the US Federal Reserve. There is no longer any question of bitcoin's independence.

As we have already mentioned, there has recently been a clear trend towards the accumulation of digital gold. The volumes of accumulation began to exceed emission many times over. According to Glassnode, the rate of outflow of coins from centralized platforms has increased to 96,200 BTC per month, which is extremely rare in historical retrospect. In addition to the “whales”, the so-called “shrimps” (addresses with a balance of less than 1 BTC) also contributed to the accumulation. So why doesn't hodle sentiment lead to higher prices?

The answer is simple: no new investors. The old ones either go into the state of long-term holders of coins, or get rid of them. Approximately $439 million worth of crypto positions were liquidated on April 12 alone, according to Coinglass. At the same time, more than 88% of closed orders accounted for long positions. Bitcoin futures contracts for $160 million were also closed. But there is no strong inflow of new investments into the crypto sector.

Investors have lost their appetite for risk since the end of March, the DXY dollar index and US 10-year bond yields reach new highs on a regular basis. Due to rising inflation, which reached 8.5% in the US in March, the markets are waiting for the US Central Bank to raise interest rates again at the May meeting, and not by 0.25%, but immediately by 0.5%. This is the reason why interest from high-risk assets flows to more conservative instruments.

According to Bloomberg analysts, the value of the flagship cryptocurrency may soon fall to $26,000. The experts emphasized that if the technical analysis pattern called “bear flag” works, then such a scenario will be inevitable. In their opinion, the BTC rate is now on its way to testing a key support level around $37,500. If it does not hold above this mark, the market is in for a disaster.

Analyst Jeffrey Halley's forecast sounds slightly more optimistic. He believes that the flagship cryptocurrency continues to trade within the established range, the lower limit of which is at $36,500. If BTC falls even more, it can lead to serious losses for traders and investors. However, if the price of bitcoin soars in the near future above the upper limit of the range of $47,500, this will be a prerequisite for reaching a new record high.

There are also influencers who are not worried or upset by the current market situation at all. These include Michael Saylor, CEO of Microstrategy, a company known for its investments in bitcoin, and Cathie Wood, head of investment company Arch Invest, who still believe in bitcoin and look forward to its growth.

Saylor and Wood spoke at the Bitcoin 2022 conference in Miami and concluded that the Fed's monetary policy will continue to be inflationary, pushing prices up. In such a situation, according to Cathie Wood, bitcoin, as a means of hedging, has great potential for growth and its price could reach a record $1 million per coin. “It takes quite a bit of effort to do this,” the head of Arch Invest said. "We don't need much. All we need is for 2.5% of all assets to be converted to bitcoin.”

Well-known writer and investor Robert Kiyosaki has a similar opinion, he believes that the US dollar and other markets are on the verge of collapse due to rising food, oil and energy prices, as well as widespread inflation. The author of the bestselling book Rich Dad Poor Dad assured that what is happening in the world of finance is a sign of a coming crisis, and this process will simply destroy half the US population. He noted that cryptocurrencies in this situation are a good tool to reduce risks, but not all people resort to using this asset class. Kiyosaki emphasized that now 40% of Americans do not even have $1,000 in their savings. The inflation rate is rising, and this figure will soon exceed 50%. Then, according to the investor, a revolution will begin.

Morningstar analysts posted a report claiming that cryptocurrencies are no match for the stock and bond markets in terms of returns. At the same time, they note that bitcoin “is still too risky to be compared to gold.” The authors of the report argue that, despite the prospect of significant profits that the cryptocurrency market can offer its participants, one must be very careful with it. “Every breathtaking rally has led to an equally brutal crash at the end,” Morningstar notes.

It is difficult to argue that speculation or investment in digital assets is quite risky. But there are certain things in this business, as in any other, that allow you to get additional benefits. It is about them that we regularly talk about in our crypto life hacks section. This time it's about heat energy and a man named Jonathan Yuan who has kids who love to swim in the pool. However, they almost did not do this because the water was too cold.

Yuan himself is actively involved in mining and drew attention to the fact that his equipment generates too much heat. He purchased a heat exchanger and used it to install a system for heating water. According to him, thanks to this invention, the temperature in the pool can be maintained at about 32° C, and the crypto farm receives a water cooling system. Jonathan Yuan notes that almost everything can be heated according to this principle: living premises, garages and so on. It is assumed that the heating temperature can reach a maximum threshold of 60°C.

There are nuances here, however. When the inventor pushed his ASIC miners to the limit, the temperature in the pool rose above 43°C. His children did not like it either and they stopped swimming again. So, the ancient Greek “father” of medicine, Hippocrates, was right, saying “good things in small doses”.


NordFX Analytical Group


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

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CryptoNews of the Week



- According to Arcane Research, the correlation between bitcoin and the Nasdaq Composite Index has reached its highest since July 2020. The similar indicator (30-day moving average) between the first cryptocurrency and gold has fallen to a historical low, the one between the first cryptocurrency and the dollar - to a minimum since March 2020.
Experts have explained such dynamics by tightening the monetary policy of the US Federal Reserve. An increase in interest rates leads to a strengthening dollar and a fall in high-tech stocks. Accordingly, the growth in the price relationship between bitcoin and the Nasdaq Composite index reflects that digital gold belongs to the category of risky assets.
Physical gold is currently acting as a hedge against inflation, while bitcoin ETPs are recording an outflow of funds. If the current pace is maintained, the historical anti-record of July 2021 when investors withdrew 13,849 BTC will be updated by the end of the month. Recall that BitMEX co-founder Arthur Hayes has predicted a drop in bitcoin to $30,000 by the end of the second quarter due to the decline in the Nasdaq index.

- The Cybersecurity and Infrastructure Protection Agency (CISA), the FBI and the US Treasury have issued a joint warning regarding North Korean hackers. The authorities have said they are seeing attacks targeting the cryptocurrency and blockchain sectors, including exchanges, DeFi protocols, venture capital funds, individual large crypto asset holders and NFTs.
According to a report by Chainalysis, North Korean hackers carried out at least seven cyberattacks on cryptocurrency platforms last year, stealing about $400 million worth of digital assets.

- Analyst software provider MicroStrategy intends to “strongly pursue” its strategy and continue to build up bitcoin reserves. This was stated by CEO Michael Saylor in a letter to the US Securities and Exchange Commission.
MicroStrategy is the first public company to invest part of its own capital in digital gold. According to the entrepreneur, this decision increased the value of the company for customers and shareholders. According to Bitcoin Treasuries, the software provider holds 129,218 BTC worth $5.17 billion in reserves. MacroStrategy made its last $190.5 million purchase in early April. For comparison, Tesla, which is in second place after MicroStrategy, owns 43,200 BTC worth about $1.7 billion.

- The price of the first cryptocurrency may rise above $100,000 over the next 12 months. This forecast was given by Antoni Trenchev, CEO of the Nexo crypto-landing platform, in an interview with CNBC. At the same time, he noted that he was “concerned” about the short-term prospects for bitcoin. In his opinion, the rate may fall along with traditional stock markets as a result of the US Central Bank curtailing the monetary stimulus program.
Trenchev stated in January 2020 that the cryptocurrency would “easily reach” $50,000 by the end of the year. He recalled that everyone laughed at him then. However, the forecast came true, albeit with some delay: the price of digital gold reached the designated mark in February 2021.

- Paolo Ardoino, CTO of Bitfinex, predicts similar dynamics of the flagship cryptocurrency. This specialist believes that bitcoin will be “much higher” than $50,000 by the end of 2022. However, he admits a sharp drop in prices in the near future. “At the moment, we are living in conditions of, I would say, global uncertainty in the markets, not only cryptocurrencies, but also stock markets,” Ardoino said.

- Cryptocurrency analyst Nicholas Merten believes that BTC could set new record highs as early as next year. According to him, the bulls still have not lost control despite the current market fluctuations: “The market is currently far from impressing investors, but this situation is always observed during the beginning of accumulation. This is how the structure of the trend begins to form.”
According to Merten, the fact that bitcoin has begun to make higher lows and higher highs confirms that the bulls are at the helm, no matter how things look at the moment. The analyst believes that since this situation persists, then the BTC rate has every chance of reaching $150,000 and even $200,000 within the next year.

- A well-known analyst aka PlanB has identified two catalysts that could cause the next bitcoin rally. “It is definitely difficult to say what will help move to the qualitatively next level of implementation. But if we draw logical conclusions, then the second or the third El Salvador can really change the situation. If little El Salvador were not alone in introducing bitcoin in Latin America, and Mexico, Brazil or Argentina joined it, then the situation would be different, and it would be much more difficult for the IMF to put pressure on countries.”
The second catalyst is the everyday adoption of cryptocurrencies by ordinary people, especially if the process is supported by institutional market participants.

- “The NFT bubble is starting to burst,” said Nassim Nicholas Taleb, best-selling author of the "Black Swan", who predicted the approach of the financial crisis of 2007-2008. Speaking to Fortune, Taleb cited the recent NFT (non-fungible token) sale of Twitter co-founder Jack Dorsey as an example. His first online tweet was sold as an NFT last year for nearly $3 million. Today, it costs only a few thousand, more precisely, a little over $18,000.
Taleb's theory of "black swans" is associated with the appearance of ultra-rare events (like a black swan in nature), for which the market is not ready. In 2007, such an event was a sharp drop in house prices, and in 2022, the end of the era of low interest rates and “easy” money that had formed the basis of monetary policy during the pandemic.

- According to a new survey by Engine Insights, children aged 13 to 17 will spend their money differently than their parents. If they had money to invest, their first choice would be stocks (39%) followed by cryptocurrencies (29%) and real estate (29%).
At the same time, more than half of teenagers (51%) admitted that they do not understand the cryptocurrency industry as well as they would like to. The main source of information for 51% of respondents is online video. This is followed by relatives (32%) and websites of investment companies (32%). Parents are only in fourth place: they act as a source of information for 30% of adolescents. However, the school's position is even worse: only 21% of teenagers have learned about investments from their teachers.

- Cryptocurrency market expert Ali Martinez analyzed the price chart of bitcoin and stated that its value could fall to $27,000. It is important for the bulls to stay above the critical support level in order to prevent this from happening. According to the Fibonacci levels, this support is in the $38,530 area. If a breakdown occurs, then the rate of digital gold will fall to $32,853 or even $26,820. Martinez also believes that one should not focus only on technical analysis and discard the fundamental one. A lot depends on the geopolitical situation in the world currently, so it is very difficult to give accurate price forecasts.
Cryptocurrency analyst and trader Michael van de Poppe believes that bitcoin could drop to a record low below $30,000 amid geopolitical tensions in eastern Europe before starting to rise again.

- Cryptocurrency analyst Benjamin Cowen believes that bitcoin is approaching “the point of choosing the direction of the trend.” Cowen elaborates that this has happened before: “In 2013, bitcoin made a low, then a second, then a third, and eventually began to rise. And then in 2018, when there were higher lows, we thought that the same thing would happen as in 2013, but in the end, bitcoin fell to a new low.”
According to the analyst, in order to restore the bullish trend and reduce the likelihood of a bearish one, bitcoin needs to rise above the 200-day SMA, which at the time of writing is at about $47,500. “If bitcoin can muster the courage to rise above its 200-day SMA and move to the $50,000 level, then that would look pretty optimistic. But what happens if the market drops to $30,000 and then bitcoin goes up again? There's a good chance we'll get back to $40,000 or maybe $43,000,” said Benjamin Cowen.

- According to Coincub specialists, Germany has displaced Singapore from the position of the most crypto-friendly country. Authors of the report for the Q1 2022 have ranked 46 countries based on a range of factors, including new categories such as the number of initial coin offerings (ICOs) in each country, the prevalence of fraud and the availability of cryptocurrency education courses, etc. Germany's rise in the rankings comes after crypto exchange KuCoin released a report showing that 16% of the country's population aged 18 to 60 own or have traded crypto in the past six months. 41% of these investors intend to increase their investments in the crypto industry in the next six months. Interestingly, Germany was only in fourth place on the Coincub list last year.

- Strike payment service CEO Jack Mallers believes that payment services must constantly improve, and bitcoin does it best. In his opinion, the use of bitcoins as a payment network "is superior to the systems of traditional payment services and banks." In addition, the head of Strike compared the first cryptocurrency with the Internet, saying that they provide freedom: anyone can use both. Jack Mallers also advises cryptocurrency holders not to spend bitcoin as the asset is meant to be a long-term investment.


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

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

 

Forex and Cryptocurrencies Forecast for April 25 - 29, 2022​

EUR/USD: Words Drive Trends

The main drivers of the past week were statements by important ECB and FRS officials. However, the beginning of the five-day period was relatively calm: the Easter weekend had its effect. Unlike the United States, Europe rested not only on Friday April 15, but also on Monday 18. The dollar was slightly supported on Monday by the comments from the representatives of the American regulator. According to Rafael Bostic, President of the Federal Reserve Bank of Atlanta, the base interest rate may be about 1.75% by the end of 2022, and Chicago Fed President Charles Evans believes that it will reach 2.25-2.50%. And the head of the Federal Reserve Bank of St. Louis, James Bullard, announced a possible rise in the key rate by 0.75% immediately at the May meeting of the FOMC (Federal Open Market Committee).

The situation changed dramatically on Tuesday: the EUR/USD pair reversed and, having soared by 175 points, reached the height of 1.0935 on Thursday, April 21. It was not the dollar but the euro that was supported this time by hawkish comments from the members of the European Central Bank Governing Council. Thus, the head of the Central Bank of Latvia, Martins Kazaks, said on Wednesday that an increase in the ECB rate is possible as early as July. His colleague, the head of the National Bank of Belgium, Pierre Wunsch, gave an interview to Bloomberg the next day, in which he noted that interest rates could become positive this year. ECB Vice-President Luis de Guindos confirmed this possibility, according to him the quantitative easing (QE) program may be completed in July, after which the path to raising rates will be open.

An additional impetus to the pair was given by the improvement in risk sentiment and the decline in the yield of American Treasuries. This sent the DXY dollar index down 1% after hitting a two-year high on Tuesday.

The situation changed for the third time on Thursday afternoon. The dollar went on a new offensive, assisted by a rise in the yield on 10-year US Treasury bonds, which rose to 2.974%, the highest level since December 2018. This happened thanks to Jerome Powell. Speaking at a meeting within the framework of the International Monetary Fund spring session, the head of the Fed confirmed the high probability of raising the interest rate by 0.5% at the next FOMC meeting on May 3-4. Such a move is under consideration, Powell said, as the U.S. job market is already "overheated." He did not rule out either that the rate could be increased by another 0.5% in June.

As for the head of the ECB, Christine Lagarde, speaking at the same IMF event, she refused to comment on the likelihood of an increase in the euro rate in July. “This will depend on the economic performance,” Ms. Lagarde said vaguely, after which the EUR/USD pair flew down.

The head of the ECB decided to slightly tighten her position on the last day of the working session, April 22. Ыhe did not deny at this point that the European Central Bank's purchase program could end at the beginning of Q3 and added that interest rates could rise as early as 2022. Her words sounded more hawkish compared to Thursday's, but that didn't help the euro. The pair found its bottom only at 1.0770, after which there was a slight correction to the north and a finish at 1.0800.

The euro was slightly supported by the results of the televised debate between French President Emmanuel Macron and opposition leader Marine Le Pen. As the poll data showed, 56% of respondents considered that the incumbent president was more convincing in the debate than his rival.

The second round of the presidential elections in France will be held on Sunday 24 April. Emmanuel Macron won 27.84% of the vote in the first round. Marine Le Pen, head of the far-right National Rally Party, received 23.15%. Recall that she belongs to the Eurosceptics, and had called for almost the exit of the country from the Eurozone back in 2017. And if this lady comes to power, the EUR/USD pair, according to a number of analysts, may fall to the level of 1.0500, or even lower.

At the time of writing the review, the results of the election are still unknown, so the majority of analysts (50%) did not make any forecasts. 35% believe that the dollar will continue to strengthen. The opposite opinion is shared by only 15%. All trend indicators and oscillators on D1 are colored red, although 15% of the latter give signals that the pair is oversold. The nearest support is located at the level of 1.0770. The next EUR/USD bear target will be the April 14 low at 1.0757. And if they manage to break through this support, they will then aim for the 2020 low of 1.0635 and the 2016 low of 1.0325. Immediate resistance zone is 1.0830-1.0860, followed by 1.0900, the April 21 high of 1.0935 and 1.1000.

As for the release of macro data, the volume of orders for capital goods and durable goods in the US will be known on Tuesday, April 26. Data on GDP and the state of consumer markets in Germany and the Eurozone will be received on Thursday, April 28 and Friday, April 29. In addition, preliminary annual data on US GDP will be released on Thursday.

GBP/USD: The Battle for 1.3000 Is Lost. Will there be a counterattack?

We assumed in the previous review that we are in for the continuation of the battle of bulls and bears, and the front line will pass in the zone of 1.3000. Recall that 1.3000 is a key support/resistance level as it is not only the March 15 low, but also the 2021-2022 low.

And now we must say that the bulls have lost this battle. Having raised the GBP/USD pair to the height of 1.3090, they finally weakened, and it flew down. The local bottom was fixed at 1.2822 on Friday, and the final chord sounded a little higher, in the zone of 1.2830.

The reasons for this collapse of the pound lie on both sides of the Atlantic Ocean. On the one hand, this is the hawkish position of the US Federal Reserve and the growth of US Treasury yields. On the other hand, there are cautious comments from the Bank of England (BoE) and weak macro statistics from the UK.

Commenting on the state of the economy on Thursday, the head of the British regulator, Andrew Bailey, said that the inflationary shock in the United Kingdom has more in common with the Eurozone than with the US. "We shouldn't be complacent about inflation expectations," Bailey added, reiterating that they were dealing with "a very tight line between fighting inflation and the impact of a shock on real incomes."

The day after the speech of the head of the Bank of England, the UK Office for National Statistics dealt another blow to the pound. It reported that retail sales fell 1.4% in March. This indicator followed the February decline of 0.5% and turned out to be much worse than the forecast, according to which the fall should have been only 0.3%.

Such a massive failure will most likely send investors into a shock and it will take time to restore their appetite for British currency purchases. The bears will try to build on their success and push the GBP/USD pair further down. 65% of analysts vote for this development, the remaining 35% expect the pair to correct to the north.

There is a total advantage of the red ones among the indicators on D1: 100% both among trend indicators and oscillators. True, as for the latter, a third is in the oversold zone. The immediate goal of the bears is to overcome the support of 1.2800, update the October 2020 lows around 1.2760 and open their way to the September 2020 lows in the zone 1.2685-1.2700. More distant targets for the pair's decline are located at the levels of 1.2400, 1.2250, 1.2085 and 1.2000. As for the bears, they will try to regain the initiative and fight again for 1.3000. However, they will need to overcome the resistances of 1.2860 and 1.2915 on this way. In case of a successful assault on 1.3000, resistance levels 1.3100, 1.3150 and the zone 1.3190-1.3215 will follow.

There are no significant data releases on the UK economy for the coming week. The only thing that can be noted is the release of data on the housing market of this country on Friday, April 29.

USD/JPY: Will the Bank of Japan Stand Its Ground?

The Japanese currency is hitting one anti-record after another, and the expectation that the past week would bring another one proved to be absolutely correct. The USD/JPY pair recorded another high at 129.39 on Wednesday, April 20. The last time it climbed this high was in May 2002, that is, 20 years ago.

The reasons for the fall of the yen are the same: divergence from the monetary policy of the US Federal Reserve. Despite the fact that the majority of the Japanese are against the weak yen, the Bank of Japan still refuses to raise the key rate even to zero and does not want to cut monetary stimulus. The regulator believes that maintaining economic activity is much more important than fighting inflation.

The regular meeting of the Japanese Central Bank will take place next week, on Thursday, April 28. According to strategists of Singapore's UOB Group (United Overseas Bank), the regulator will once again leave the parameters of its monetary policy unchanged. “We are confident,” write UOB economists, “that the BOJ will maintain its current loose monetary policy unchanged throughout 2022, and will also maintain massive stimulus, possibly until fiscal year 2023 at least.”

The yen received some support from reports that Treasury Secretary Shunichi Suzuki discussed the idea of coordinated foreign exchange intervention with his counterpart, US Treasury Secretary Janet Yellen. And it seems that "the American side sounded as if it would positively consider this idea." However, a source from the Japanese Ministry of Finance dampened hopes for a joint effort between the two countries, refusing to comment on the details of the conversation between Suzuki and Yellen.

Having renewed a multi-year high, the pair USD/JPY bounced back a little in the second half of the five-day period and ended it at the level of 128.53. 40% of experts vote for the bulls to storm new heights, 30% have taken the opposite position and 30% adhere to neutrality. Among indicators on D1, 100% of trend indicators look north, among oscillators, these are 90% of them (a third are in the overbought zone), the remaining 10% point south. The nearest support is located at 127.80-128.00, followed by 127.45, 126.30-126.75 zone and levels 126.00 and 125.00. The resistances are located at levels 128.70, 129.10 and 129.39. An attempt to designate the subsequent targets of the bulls will rather be like fortune telling. The only thing we can assume is that they will set a high of January 01, 2002, 135.19, as a distant target. Taking into account the fact that the pair has risen by 1400 points over the past 7 weeks, it can reach this height in a month and a half if this pace is maintained.

Aside from the BOJ meeting and its monetary policy report, there is no other important information on the state of the Japanese economy expected this week.

CRYPTOCURRENCIES: BTC from $30,000 to $200,000



Throughout 2022, bitcoin has been moving along the Pivot Point around $40,000, trying to either reach $50,000 or fall to $30,000. The reason for such fluctuations, of course, is the US Federal Reserve. Investors cannot finally decide how to behave in the face of tightening monetary policy and rising dollar interest rates. As a result, their appetite for risk falls and flares up again. First of all, this applies to the stock market, along with which digital gold fluctuates as well.

We have repeatedly considered the correlation of the BTC/USD pair with the shares of technology companies. So, according to Arcane Research, the correlation between bitcoin and the Nasdaq Composite index reached its high since July 2020. The same indicator between the first cryptocurrency and gold has fallen to a historic low. It is physical gold that has recently been acting as a hedge against inflation, and its price came close to its historical maximum, reaching $2.070 per ounce on March 08 (the maximum price of $2.075 was recorded on August 2, 2020).

Bitcoin-ETP (Exchange Traded Product) shows an outflow of funds. If the current pace is maintained, the historical anti-record of July 2021 will be updated by the end of the month, when investors withdrew 13,849 BTC. The number of active addresses on the bitcoin network has dropped to 15.6 million, about 30% less than the January 2021 high. Many short-term (less than 155 days) holders and speculators have already parted with their BTC holdings, according to Glassnode data.

The market is currently supported by long-term holders (LTH). As we already wrote, there has recently been a trend towards the accumulation of digital gold among them. The volumes of accumulation began to exceed emission many times over. According to Glassnode, the rate of outflow of coins from centralized platforms has increased to 96,200 BTC per month, which is extremely rare in historical retrospect. In addition to the “whales”, the so-called “shrimp” (addresses with a balance of less than 1 BTC) also contributed to the accumulation, bringing their share to 14.26% of the market supply.

At the moment, about 15% of long-term holders are losing, but they not only continue to store coins, but also acquire new ones, counting on their growth in the future. For example, analytics software provider MicroStrategy intends to “strongly pursue” its strategy and continue to build up reserves in bitcoin. This was stated by CEO Michael Saylor in a letter to the US Securities and Exchange Commission. According to Bitcoin Treasuries, MicroStrategy holds 129,218 BTC worth $5.17 billion in reserves. The company's division made its last purchase of $190.5 million in early April. For comparison, Tesla, which is in second place after MicroStrategy, owns 43,200 BTC worth about $1.7 billion.

At the time of this writing, Friday evening, April 22, the total crypto market capitalization is still below the important psychological level of $2 trillion, at $1.850 trillion ($1.880 trillion a week ago). The Crypto Fear & Greed Index slightly improved its readings: it rose from 22 to 26 points and returned from the Extreme Fear zone to the Fear zone.

The BTC/USD pair is trading around $39,700. The chart of the past four months, with its rising highs and lows, gives investors hope for a further rise in price. However, everything will depend on the May Fed meeting and investor risk sentiment. Recall that BitMEX co-founder Arthur Hayes has predicted a drop in bitcoin to $30,000 by the end of the second quarter due to the decline in the Nasdaq index. The same figure of $30,000 is also mentioned by cryptocurrency analyst and trader Michael van de Poppe, although he points to another reason: geopolitical tensions in Eastern Europe due to Russia’s military invasion of Ukraine.

Many other experts do not expect anything good from the BTC/USD pair in the near future either, although they build optimistic forecasts for the medium and long term. So, according to Anthony Trenchev, CEO of the Nexo crypto-landing platform, the price of the first cryptocurrency may rise above $100,000 over the next 12 months. However, he is "worried" about the short-term outlook for bitcoin. In his opinion, the rate may fall along with traditional stock markets as a result of the US Central Bank curtailing the monetary stimulus program.

Paolo Ardoino, CTO of Bitfinex, predicts similar dynamics of the flagship cryptocurrency. This specialist believes that bitcoin will be “much higher” than $50,000 by the end of 2022. However, he admits a sharp drop in prices in the near future. “At the moment, we are living in conditions of, I would say, global uncertainty in the markets, not only cryptocurrencies, but also stock markets,” Ardoino said.

Cryptocurrency market expert Ali Martinez analyzed the price chart of bitcoin and said that its value could fall to $27,000. It is important for the bulls to stay above the critical support level in order to prevent this from happening. According to the Fibonacci levels, this support is in the $38,530 area. If a breakdown occurs, then the rate of digital gold will fall to $32,853 or even $26,820. Like most analysts, Martinez also believes that one should not focus only on technical analysis and discard the fundamental one, since much depends on the geopolitical situation in the world now.

Cryptocurrency analyst Benjamin Cowen is confident that bitcoin is approaching "the point of choosing the direction of the trend." Cowen elaborates that this has happened before: “In 2013, bitcoin made a low, then a second, then a third, and eventually began to rise. And then in 2018, when there were higher lows, we thought that the same thing would happen as in 2013, but in the end, bitcoin fell to a new low.”

According to the analyst, in order to restore the bullish trend and reduce the likelihood of a bearish one, the BTC/USD pair needs to rise above the 200-day SMA, which is at around $47,440 at the time of writing. “If bitcoin can muster the courage to rise above its 200-day SMA and move to the $50,000 level, then that would look pretty optimistic. But what happens if the market drops to $30,000 and then bitcoin goes up again? There's a good chance we'll get back to $40,000 or maybe $43,000,” said Benjamin Cowen.

Most likely, the prospect of the return of the flagship cryptocurrency from $30,000 back to $40,000 in the current situation will not please investors very much, since the coin is currently trading in the region of $40,000. Therefore, to cheer them up, we will quote another specialist, Nicholas Merten from DataDash, who believes that BTC can set new record highs as early as next year. According to him, the bulls still have not lost control despite the current market fluctuations: “The market is currently far from impressing investors, but this situation is always observed during the beginning of accumulation. This is how the structure of the trend begins to form.”

According to Merten, the fact that bitcoin has begun to make higher lows and higher highs confirms that the bulls are at the helm, no matter how things look at the moment. The analyst believes that since this situation persists, then the BTC rate has every chance of reaching $150,000 and even $200,000 within the next year.


NordFX Analytical Group


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

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

 

CryptoNews of the Week



- The financial company Fidelity Investments plans to provide customers with the opportunity to accumulate bitcoins on pension savings. The Wall Street Journal writes about it. The option will become available this summer to employees of the 23,000 companies that use Fidelity to manage their $2.7 trillion retirement plans. The addition of other cryptocurrencies is not ruled out in the future, but the share of digital assets in the portfolio should not exceed 20%.

- The innovative strategy of using bitcoin as the main reserve asset will bring a “bright future” to the software provider MicroStrategy for the coming years. Michael Saylor, CEO of the company, said this in a letter to shareholders. “As of April 14, 2022, MicroStrategy remains the largest bitcoin holder among publicly traded companies. Together with affiliates, it owns 129,218 BTC, purchased for $3.97 billion at an average price of about $30,700,” the head of the firm said. According to him, the company's cryptocurrency strategy not only increased its value, but also led to greater recognition, helping to attract customers.

- The price of bitcoin will be $65,185 by the end of 2022. This forecast was given by financial experts interviewed by Finder. According to them, bitcoin will cost $179,280 on December 31, 2025, and $420,240 at the end of 2030. More than two-thirds of those surveyed believe that now is the time to buy the first cryptocurrency. Only 9% were in favor of exiting the asset.
Half of the experts believe that bitcoin will be eventually displaced from the position of the most popular cryptocurrency by a more advanced blockchain. 38% are sure that digital gold will stay on the throne.
Experts were asked to name the top five most effective cryptocurrencies. 87% of respondents included ethereum in it. Bitcoin was in second place with 71%, and Solana was third with 55%. Avalanche and Terra close the top 5 with 31% and 30%, respectively.

¬- Businesses will turn to cryptocurrencies as a neutral financial instrument due to rising geopolitical tensions. This opinion was expressed by Binance CEO Changpeng Zhao. He noted that the world is becoming more and more fragmented, and the US is using the dollar for sanctions pressure. "The dollar is one of the strongest instruments the US has," Zhao said.
According to him, the resulting geopolitical situation will lead to greater acceptance of cryptocurrencies. Companies and even countries will start using them because of the risk of freezing accounts and other obstacles due to sanctions. As a result, this will reduce the dollar's global influence, as the rest of the world is likely to switch to cryptocurrency, albeit in the long run.

- Hollywood film company Scott Free Productions intends to film the book The Infinite Machine, dedicated to ethereum and Vitalik Buterin. It was written by Camilla Russo, a well-known journalist in the crypto industry. The book was published in 2020 and tells how the 19-year-old Buterin rallied a group of developers around the idea of creating a “world computer”. The book tells the story of the team's challenges, from increased regulatory scrutiny to the rise of Wall Street interest.
Ridley Scott who is known for his blockbusters Alien, Gladiator, Blade Runner and The Martian will co-produce the movie. Camilla Russo and Francisco Gordillo, co-founder of the cryptocurrency hedge fund Avenue Investment, will help him with this.

- Cryptocurrency trader and analyst Tony Weiss has updated his forecast. According to him, bitcoin has broken support levels, so the risks of another strong fall are high. The coin needs to hold around $39,500 for this not to happen. “If bitcoin closes below $39,500, I will be extremely bearish for the next week and month. This is a very bad signal because the 4-day and the week charts will be completely bearish,” Weiss said.

- Cryptocurrency trader nicknamed Kaleo also believes that bitcoin has not yet reached the level that can be considered a bottom with confidence. According to him, the main cryptocurrency is preparing to retest the lows last seen in mid-2021. bitcoin is currently inside the “big wedge” pattern, and it will be broken in the coming weeks, the asset itself is expected to fall by about 28%. In addition, Kaleo warned that a break of the $38,500 level could trigger another round of bitcoin's decline and a bounce above $41,000 would not change the situation much.

- Kevin O'Leary, entrepreneur and star of the reality show Shark Tank, believes that the global tightening of mining regulation will force companies to switch to green energy. “The old ways of mining, the era of ignoring politicians, governments, the Securities and Exchange Commission, is over,” O'Leary said. He stated in an interview with First Mover that nuclear and hydropower could take an important place in the crypto mining industry in the future.

- According to analyst Kevin Swenson, one should follow the weekly volume of bitcoins on the Coinbase crypto exchange in order to accurately predict trend reversals. This indicator has correctly pointed him to the price peaks and bottom of bitcoin since 2017. “Weekly volumes on Coinbase are my favourite, and this indicator has almost never let me down before.” says the specialist.
Swenson noted that investors need to see a significant increase in volume after the correction to be completely sure of a bottom: “There is a small chance that large volumes will be observed when the rate bounces. It takes time to form a bullish trend. The bulls work together to raise the price, while the bear is usually alone.”

- Another analyst, Jason Pizzino, explained under what conditions the bitcoin rate will reach $1 million. At the same time, the expert expressed confidence that this will happen sooner or later. To do this, firstly, the flagship cryptocurrency needs to get rid from the dependence on the Nasdaq index. If this dependence continues, bitcoin and ethereum will lose value. In addition, it is important for bitcoin to stop associating itself with the blockchain. This cryptocurrency must be more like gold than part of the technology sector in order to become a global reserve asset.
The specialist said that he fully agrees with the opinion of the head of ARK Invest Catherine Wood and CEO of MicroStrategy Michael Saylor, who believe that the flagship cryptocurrency will definitely reach the $1 million price mark. According to their forecasts, this will happen closer to 2030. Pizzino emphasized that the growth in the value of the flagship cryptocurrency by 25 times looks fantastic at the moment. However, the asset price increased 22 times between December 2018 and November 2021, so nothing is impossible in such a rally.

- According to Chainalysis, crypto investors worldwide earned $162.7 billion in 2021, up 400% from the previous year ($32.5 billion), as the prices of the two main cryptocurrencies, bitcoin and ethereum, rose to record levels. In terms of profitability, ethereum is ahead of bitcoin with $76.3 billion, which brought investors $74.7 billion. At the same time, American investors earned the most, making a profit of $47 billion, which is more than their colleagues from the UK, Germany, Japan and China. For comparison, British investors earned "only" $8.2 billion.

- Former stockbroker Jordan Belfort has reconsidered his attitude to the cryptocurrency market. Recall that this American entrepreneur pleaded guilty to stock market fraud and stock scams in 1999, for which he served 22 months in prison. He published a memoir in 2007, The Wolf of Wall Street, which was adapted into a film of the same name in 2013.
Now Belfort has said he is a firm believer in cryptocurrencies and blockchain, despite once making a YouTube video in which he called bitcoin a collective delusion. He changed his attitude towards cryptocurrency because he learned how it works. However, he is somewhat distressed by the problem of fraud in this industry. The financier admitted that he himself was robbed of about $300,000 worth of crypto assets. He saw the transfer of funds, but could not cancel the transaction, which was very frustrating. And that's why he now actively advocates for tighter regulation of the crypto industry.


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

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

 

New NordFX Super Lottery: 202 Prizes in 2022​

The NordFX brokerage company started a new super lottery, which will give away 200 cash prizes of 250, 500 and 1,250 USD, as well as 2 two super prizes of 10,000 USD each. The total prize fund will be 100,000 USD. Draws will take place on July 04, October 04, 2022, and January 04, 2023.

It is very easy to take part in the lottery and get a chance to win one or even several of these prizes. It is enough to have a Pro account in NordFX (and for those who do not have it - register and open a new one), top it up with $200 and... just trade.

Having made a trading turnover of only 2 lots in Forex currency pairs or gold (or 4 lots in silver), the trader will automatically receive a virtual lottery ticket. The number of such lottery tickets for one participant is not limited. The more deposits and the greater the turnover, the more lottery tickets the participant will have, and the greater their chances of becoming a winner.

Another advantage is that lottery winners receive their winnings not as bonuses, but as real money, which, if they wish, can be either used in further trading or withdrawn without any restrictions.

Visit the NordFX website for more details. You can become a participant of the Super Lottery 2022 and start receiving lottery tickets right now.


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

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

 

Forex and Cryptocurrencies Forecast for May 02 - 06, 2022​

EUR/USD: Euro Updates Five-Year Low, We Are Waiting for the Fed (FOMC) Meeting



The DXY index that measures the US dollar against a basket of six other major currencies updated its 20-year high on Thursday, April 28. The reason for this growth is still the same, and we have repeatedly written about it: the Fed began to tighten its monetary policy earlier than other major central banks. It is expected that the FOMC (Federal Open Market Committee) may raise the key interest rate by 0.5% at the next meeting on May 4. This is the minimum. For example, James Bullard, the head of the Federal Reserve Bank of St. Louis, did not rule out that the rate could be raised by 0.75% straight away.

Other national regulators are moving much more slowly (or not at all) amid the US Fed's hawkish activity. Their economies are showing weaker recovery from the crisis caused by the COVID-19 pandemic, and this does not allow central banks to quickly curtail monetary programs incentives (QE) and increase borrowing costs.

Of course, this applies to the European Union as well, which also suffers additional economic losses caused by the sanctions imposed on Russia due to the military invasion of Ukraine. Recall that the dependence of the EU countries on Russian energy resources is very high.

Against this background, the dollar continued to push the European currency, and the EUR/USD pair rewrote the five-year low, falling to 1.0470 on April 28. Thus, the losses of the European currency has exceeded 700 points in April alone. There was a slight rebound at the very end of the five-day period and a finish at the level of 1.0545.

The level of 1.0500 plays the role of a support, which may lead to a reduction in the volume of short positions and, as a result, to a fairly strong correction to the north. If this does not happen, then the next target for the bears will be the 2016 low of 1.0325. It is possible that we will see the parity of the euro and the dollar 1:1 soon. However, much depends on what happens to the interest rate at the US Federal Reserve meeting on May 4, and what will be said by the management of this regulator at the subsequent press conference.

At the time of writing, analysts' votes are almost evenly divided. 35% are confident that the dollar will continue to strengthen, 30% have the opposite opinion, the remaining 35% have taken a wait-and-see attitude. Not surprisingly, with the current dynamics of the pair, 100% of the trend indicators and oscillators on D1 are colored red, although 25% of the latter give signals of the pair being oversold. The nearest support is located at 1.0500, followed by the April 28 low of 1.0470, and the bears' further goals for EUR/USD are described above. The nearest resistance zone is 1.0550-1.0600, 1.0750-1.0800, 1.0830-1.0860, 1.0900-1.0935 and 1.1000.

As for the coming week, in addition to event No. 1, the Fed meeting, the calendar includes the release of data on retail sales in Germany and business activity in US manufacturing sector (ISM) on Monday, May 02. ECB President Christine Lagarde is expected to speak the next day. We will find out the volume of retail sales in the European Union as a whole on Wednesday, May 04. The ADP report on US private sector employment will be published on this day as well. Another portion of data from the US labor market will arrive on Friday, May 06, including such an important indicator as the number of new jobs outside the agricultural sector (NFP).

GBP/USD: The Pound Updates its Two-Year Low, We Are Waiting for the Meeting of the Bank of England

We stated in the previous review that the bulls' battle for 1.3000 is lost. Answering the question whether there will be a counteroffensive, the majority of experts (65%) answered that no, there won't be, and the pound will continue to fall. This forecast turned out to be absolutely correct, and despite the oversold signals, the GBP/USD pair reached a local bottom at 1.2410 on Thursday, April 28. The last time it was at this level was in June 2020. As for the last chord of the week, it sounded in the 1.2575 zone.

Next week will see not only the meeting of the US Federal Reserve, but also that of the Bank of England. According to forecasts, the regulator of the United Kingdom may raise the interest rate from 0.75% to 1.0%. However, since its meeting will be held on May 5, that is, a day later than the Fed, the nine members of the MPC (Monetary Policy Committee) of the Bank will have time to adjust their position depending on the decision of their overseas colleagues.

In the meantime, the vast majority of experts (70%) remain neutral ahead of both meetings. 15% of them have taken the liberty of predicting a further weakening of the British pound, the same amount expects the pair to correct to the north. There is still a total advantage of the red ones among the indicators on D1: 100% among both trend indicators and oscillators. The immediate target of the bears is to overcome the support at 1.2500, further targets for the pair's decline are located at the levels of 1.2400, 1.2250, 1.2075 and 1.2000. As for the bulls, if they manage to seize the initiative, they will face resistance in the zones of 1.2600, 1.2700-1.2750, 1.2800-1.2835 and 1.2975-1.3000.

Regarding the release of statistics on the economy of the United Kingdom, the PMI (Purchasing Managers Index) in the manufacturing sector will be published on Tuesday, May 3. The Composite PMI and the PMI in the services sector will be announced the next day, a little ahead of the Bank of England meeting. The publication of PMI in the UK construction sector on Friday 06 May will complete the picture of business activity.

USD/JPY: The Yen Updates a 20-Year low. What else to expect?

A new anti-record for the Japanese currency was fixed at 131.25 yen per dollar. The USD/JPY pair made a correction to the south in the first half of the week: up to the level of 126.92. But then, following the meeting of the Bank of Japan, we witnessed a new rally of 433 points. This was followed by a rather powerful bounce by 190 points and a finish at 129.75.

Some experts expected that the Japanese regulator might step back a bit from its ultra-soft monetary policy. Moreover, before that, various government officials had talked a lot about the fact that Japanese households are unhappy with the surge in inflation, and that, given the actions of the US Federal Reserve, it would be time to adjust their monetary policy. But the Bank of Japan remained true to itself, leaving the negative interest rate (-0.1%) unchanged and declaring its readiness to buy an unlimited number of bonds each session as needed.

According to many analysts, the Central Bank will maintain its soft monetary policy unchanged throughout 2022, and will also maintain massive incentives, perhaps at least until fiscal year 2023.

The yen was further hit by rising US 10-year Treasury yields, which rose 48 bp to 2.83% in April alone, widening the gap with similar Japanese securities. And here is the result: if the pound fell to a two-year low, the euro - to a five-year low, the yen fell to the lowest values in the last twenty years!

35% of experts vote for the fact that the bulls will storm new heights, 50% have taken the opposite position. The remaining 15% are neutral, waiting for the May meeting of the Fed. Among trend indicators and oscillators on D1, 100% are looking north, but among oscillators, 15% signal that the pair is overbought.

The nearest support is located at 129.00-129.40, followed by 127.80-128.00, 127.45, 126.30-126.75 zone and levels 126.00 and 125.00. Resistances are located at the levels of 130.00-130.35 and 131.00-131.25. An attempt to designate the subsequent targets of the bulls will rather be like fortune telling. The only thing that can be assumed is that they will set the January 01, 2002 high of 135.19 as their goal. If the pair's growth rate is maintained, it can reach this height as early as in June.

No important information regarding the state of the Japanese economy is expected to be released this week. Traders also need to keep in mind the two upcoming holidays: Japan celebrates Constitution Day on Tuesday, May 03, and the Greenery Day on Wednesday May 04.

CRYPTOCURRENCIES: Trends, Forecasts and Hollywood

Bitcoin has been moving along the Pivot Point around $40,000 throughout 2022, trying to either reach $50,000 or fall to $30,000. The fight between bulls and bears continued last week as well. Looking at the chart of the BTC/USD pair, it is clear that the bears have had a clear advantage over the past five weeks. Bulls, of course, are making attempts to turn the tide, but no success is yet to be seen.

At the time of writing, Friday evening, April 29, the total crypto market capitalization is still below the important psychological level of $2 trillion: at $1.752 trillion ($1.850 trillion a week ago). The Crypto Fear & Greed Index has slightly worsened its readings: it has dropped from 26 to 23 points and has returned from the Fear zone to the Extreme Fear zone. The BTC/USD pair is trading around $38,700.

The correlation of the flagship cryptocurrency with stock indices such as the S&P500 and Nasdaq Composite is still very strong. The correction in US tech companies began late last year, and many of the industry's stocks are currently trading 50-70% below their highs. Investors, anticipating a sharp rise in interest rates by the Fed, switched to the US dollar, losing their appetite for risk assets, which hit the stock and cryptocurrency markets. The high risk of stagflation in many developed countries, the new coronavirus outbreak in China, the escalation of the armed conflict between Russia and Ukraine, and other processes affecting the global economy do not add optimism. So, there are many chances for bitcoin to go down to $30,000 per coin.

According to trader and analyst Tony Weiss, the main cryptocurrency has broken support levels, so the risks of another big fall are high. The coin needs to hold around $39,500 for this not to happen.

Cryptocurrency trader nicknamed Kaleo also believes that bitcoin has not yet reached the level that can be considered a bottom with confidence. According to him, the cryptocurrency is preparing to retest the lows last seen in mid-2021. (Recall that the BTC/USD pair found a bottom at $29.066 on June 22, 2021). Bitcoin is currently inside a big wedge pattern and according to Kaleo, it will be broken in the coming weeks, with the asset itself expected to fall by about 28%. In addition, the expert warned that even if we see a bounce above $41,000, it will not change the situation much.

Analyst Kevin Swenson has suggested a way to accurately predict trend reversals. According to him, it is necessary to monitor the weekly volume of bitcoins on the Coinbase crypto exchange. This indicator has correctly pointed for Swenson to the price peaks and bottom of bitcoin since 2017. Swenson noted that investors need to see a significant increase in volume after the correction to be completely sure of a bottom: “There is a small chance that large volumes will be observed when the rate bounces. It takes time to form a bullish trend. The bulls work together to raise the price, while the bear is usually alone.”

But, despite the current bearish trend, not everything is so sad. The price of bitcoin may reach $65,185 by the end of 2022. This forecast was given by financial experts interviewed by Finder. According to them, bitcoin will cost $179,280 on December 31, 2025, and $420,240 at the end of 2030. More than two-thirds of those surveyed believe that now is the time to buy the first cryptocurrency. Only 9% were in favor of exiting the asset.

87% of respondents included ethereum in the list of the most effective cryptocurrencies. Bitcoin was in second place with 71%. Half of the experts believe that bitcoin will be eventually displaced from the position of the most popular cryptocurrency by a more advanced blockchain, 38% are sure that digital gold will stay on the throne.

Recall that giving a long-term forecast, the head of ARK Invest, Katherine Wood, and CEO of MicroStrategy, Michael Saylor, expressed the opinion that the flagship cryptocurrency will definitely reach the price mark of $1 million. According to them, this will happen closer to 2030.

The same figure of $1 million was voiced by another specialist, Jason Pizzino last week, who explained under what conditions the coin will reach this mark. To do this, firstly, the flagship cryptocurrency needs to get rid from the dependence on the Nasdaq index. If this dependence continues, bitcoin and ethereum will lose value. In addition, it is important for bitcoin to stop associating itself with the blockchain. This cryptocurrency must be more like gold than part of the technology sector in order to become a global reserve asset.

Pizzino emphasized that the growth in the value of the flagship cryptocurrency by 25 times looks fantastic at the moment. However, the asset price increased 22 times between December 2018 and November 2021, so nothing is impossible in such a rally.

Chainalysis experts indirectly confirmed Jason Pizzino's bullish sentiment. According to them, crypto investors earned $162.7 billion in 2021, which is 400% more than in the previous year, 2020 ($32.5 billion). This happened because the prices of the two main cryptocurrencies, bitcoin and ethereum, rose to record levels. At $76.3 billion, ethereum outperformed bitcoin, which brought in $74.7 billion to investors. American investors earned the most, making a profit of $47 billion, which is more than their colleagues from the UK, Germany, Japan and China. By comparison, British savers earned "only" $8.2 billion.

And at the end of the review, some news from the world ... of books and movies. Firstly, the film company Scott Free Productions intends to film the book The Infinite Machine, dedicated to ethereum and Vitalik Buterin. It was written by Camilla Russo, a well-known journalist in the crypto industry. The movie will be co-produced by such a Hollywood luminary as Ridley Scott, known for his work on the blockbusters Alien, Gladiator, Blade Runner and The Martian.

Another newsmaker of the week was former stockbroker Jordan Belfort. Recall that this American entrepreneur pleaded guilty to stock market fraud and stock scams in 1999, for which he served 22 months in prison. He published a memoir in 2007, The Wolf of Wall Street, which was adapted into a film of the same name in 2013. And now this financial “wolf” admitted that he himself was recently robbed of about $300,000 worth of crypto assets. He saw the transfer of funds, but could not cancel the transaction. The irony of fate...


NordFX Analytical Group


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

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

 

CryptoNews of the Week



- Kenneth Griffin, CEO of Citadel hedge fund, said his company will enter the digital asset market as a liquidity provider. According to Griffin, despite his skepticism about cryptocurrencies, he is forced to recognize their value. The billionaire compared these digital assets to his collection of American abstract paintings, noting that bitcoin is only worth what people are willing to pay for it. “Why is a painting worth $10 million? This is oil on canvas. So, the value is in the eye of the beholder,” he explained.

- Another billionaire, Warren Buffett, said he sees no value in bitcoins, CNBC reports. “What would I do with them? One way or another, I would have to sell them back to you. It won't do anything. Apartments will bring rent, and farms will produce food. Assets must produce something, bring real benefits,” the legendary investor explained.
Buffett is known for his negative attitude towards bitcoin. In February 2020, he called the first cryptocurrency "complete zero" with no value. The billionaire had earlier predicted the collapse of the crypto industry. When talking about bitcoin, he used terms like “rat poison squared” and “illusion without unique value.”

- One of the largest banks in Argentina, Banco Galicia, has opened access to cryptocurrencies for its clients. Users can purchase bitcoin, ethereum, ripple and USDC stablecoin on its platform. The organization explained this initiative by demand from the clients. Another Argentine bank, Brubank, also announced the launch of a cryptocurrency service.

- Bitcoin will test the $28,000 level, according to Peter Brandt, trader and head of Factor LLC. The expert drew attention to the pattern that the price of the first cryptocurrency has formed since the beginning of the year, and the breakdown of its lower border. “The completion of a bearish channel usually results in a decline equal to its width. In this case, in a hard test of $32,000 or so, but I think $28,000,” Brandt commented. At the same time, he stressed that the negative outlook does not make him a “bitcoin hater”.

- Arthur Hayes, former CEO and co-founder of BitMEX, predicted in April that bitcoin would fall to $30,000 at the end of the first half of the year. He attributed this to a possible decline in the Nasdaq-100 index, with which digital gold is highly correlated. Analysts at Arcane Research confirmed that this statistical relationship is at its highest since July 2020.
However, fintech experts who took part in the Finder survey expect quotes of the leading cryptocurrency to be above $65,000 at the end of the year with subsequent growth. Hayes himself does not doubt the prospects of bitcoin, predicting a rise in the price of the coin to $1 million by the end of the decade.

- Cryptocurrency trader Benjamin Cowen also believes that there should be a major capitulation of bitcoin before the bullish reversal begins. According to him, it will spur another round of a bullish rally.
As the BTC price dropped below the $40,000 level again, Cowen outlined a scenario for a possible fall. The trader noted the three most important long-term moving averages that keep BTC at the level of support for a multi-year uptrend: 300-, 200- and 100-week SMA. A drop below the 100-week SMA has historically been a great opportunity for bulls: “The 100-week SMA is around $36,000 now, and there is an optimal time to buy BTC every time it goes below it,” Cowen said. But if the fall gains strength, the BTC rate, in his opinion, may collapse even more and test the level of the 200-week moving average, $21,600. “Many people do not believe that this can happen,” the trader says, “but it is possible. I used to buy BTC at $6,000 and then the rate fell to $3,000. Then I bought BTC at $7,000 and $10,000 and the rate fell again to $3,800. So this has happened before and can happen now.”
Bitcoin’s 300-week moving average was briefly touched only once during the COVID-19-driven market crash in March 2020. Cowen doesn't expect a repeat, but notes that its mark is currently around $21,400.

- Unlike Arthur Hayes and Benjamin Cowen, analyst Michael van de Poppe thinks the network data hints at a possible bullish reversal in bitcoin. According to him, “BTC hash rate has reached another all-time high, although there is a tightening in the cryptocurrency space. Thus, the demand for BTC mining is growing, the network is becoming safer, and the asset price should respond to this.”
According to van de Poppe, a serious impulsive wave can be expected due to a possible correction in the US dollar index (DXY). “In my opinion, a serious move up is quite possible, especially if the US dollar shows weakness,” the analyst said. “In the event that the Fed abandons a strong tightening of monetary policy, the dollar will weaken, and this will become the impetus for the upward movement of bitcoin.”

- Bloomberg Intelligence senior analyst Mike McGlone believes that a sharp correction in the stock market will force the US Federal Reserve to change its position on tightening monetary policy, which will provoke bullish runs in high-risk assets such as cryptocurrencies. “The Fed will continue its policy until the stock market drops enough to force the Fed to pause. That's when I think we'll see the rise of bitcoin, ethereum and maybe Solana."
“If you want a good downside indicator for bitcoin and altcoins, these are Fed Funds futures. This is what the market expects from the Fed in a year. They are valued at 3% right now, maybe more, and the actual rate is 1%. As soon as this forward expectation starts to decrease, I think that bitcoin will hit the bottom,” the analyst said.

- Brian Armstrong, speaking at the Milken Institute conference, stated that despite the rather unstable state of the crypto market since the beginning of 2022, he remains optimistic about the future of the industry. Armstrong added that the number of cryptocurrency users will increase 5 times over the next 10-20 years and reach more than 1 billion people.
Armstrong noted a significant increase in the adoption of cryptocurrencies in the United States. According to him, “it is increasingly difficult to meet a real crypto-skeptic in the District of Columbia” and added that more than 50% of the population of Washington support cryptocurrency currently.

- A recently published report by the analytical company DappRadar demonstrates the growth of crypto activity in the US, Russia and Ukraine. And if the increase in demand for digital assets is due to sanctions and a humanitarian catastrophe in the last two states, respectively, the global acceptance of virtual money in the United States is the result of an increase in the number of traders and crypto companies.
According to the results of the study, a record number of new companies related to the blockchain, metaverse, NFT and digital assets was recorded in the United States only in the first quarter of this year. The document says that even the fall of bitcoin does not affect the overall mood in the market.
DappRadar analysts note that the popularity of cryptocurrencies has increased not only in the above countries, but it has also happened all over the world. For example, against the background of the threat of global inflation, the demand for virtual money in Brazil and India has increased by 40% and 45%, respectively.

- The identity and whereabouts of Satoshi Nakamoto, the creator of the first digital currency, is considered one of the greatest mysteries of the cryptocurrency community. Eleven years after Nakamoto last reported to colleagues, the circumstances and reasons for his disappearance continue to concern the community. Another version is that the CIA is behind this.
The editor of Bitcoin magazine Pete Rizzo has recently said that he had established a possible link between Nakamoto's disappearance and former lead crypto developer and current Bitcoin Foundation chief scientist Gavin Andresen's visit to a CIA meeting in June 2011. Andersen was concerned about the attention of the secret service, which has the ability to influence the development of the project and force the developers to do what they do not want. And now Rizzo claims that it was after this visit that Nakamoto was “never seen again.”


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

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

 

April Results: NordFX TOP-3 Traders' Earnings Exceed 230,000 USD​

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

The highest profit this month was received by a client from Southeast Asia, account No.1620XXX, who earned 146,396 USD on gold (XAU/USD) trades.

The second place on the podium was taken by a trader from South Asia, account No.1621XXX, with a result of 64,004 USD, which was achieved thanks to transactions with the British pound (GBP/USD).

The third place belongs to the owner of account No. 1619XXX. Having chosen gold (XAU/USD), silver (XAG/USD) and euro (EUR/USD) as trading instruments, they made a profit of 21,184 USD.

The situation in NordFX passive investment services is as follows:

- CopyTrading still has an active provider under the nickname KennyFxPro. Signal with the complex name KennyFXPRO - Journey of $205 to $5,000 has shown a profit of 225% since March 2021 with a maximum drawdown of 67%. As before, almost all trades were made with NZD/CAD, AUD/CAD and AUD/NZD pairs. Such a famous pair as EUR/USD got only 0.19% in their arsenal. Another signal from the same supplier, KennyFXPRO-Prismo 2K is two months younger than the first one. The profit on it is less, 128%, but the drawdown was also lower, about 45%.

Among the newcomers, we can note the Darto Capital signal, which showed a yield of 197% in just 17 days with a maximum drawdown of 25%. This result is, of course, impressive. However, this is a fairly aggressive trading style, so subscribers should be as careful as possible and not forget about risk management.

- The TOP-3 in the PAMM service has not changed over the past month. The leader is still the same manager under the nickname KennyFXPRO. They increased their capital on the KennyFXPro-the Multi 3000 EA account by 100% in 462 days with a fairly moderate drawdown of less than 21%. TranquilityFX-The Genesis v3 account, which showed a 72% profit in 393 days with a similar maximum drawdown of less than 21%, and NKFX-Ninja 136, which has generated 60% income since June 11, 2021, with the same drawdown of about 21%, are also among the leaders. As in CopyTrading, the vast majority of trades here were made with the NZD/CAD, AUD/CAD and AUD/NZD pairs.

The Ultimate.Duo-Safe Haven account, which started relatively recently, at the end of February, attracted attention. During this time, it brought not the biggest profit of 17%, but the maximum drawdown on it did not exceed 20%.

Among the IB partners, NordFX TOP-3 is as follows:
- the largest commission, 4,683 USD, was credited to a partner from South Asia, account No.1582ХXХ;
- the next is their compatriot, account No.1565XXX, who received 4,529 USD;
- and, finally, a partner from East Asia, account No.1336XXX, who received $4,031 as a reward, closes the top three.

***

Summing up the results of the month, it should be reminded that traders have received another great opportunity to earn money. Another super-lottery for NordFX clients has started this year. There will be 200 cash prizes of 250, 500 and 1,250 USD, as well as 2 super prizes of 10,000 USD each. The total prize pool is exactly 100,000 USD.

It is very easy to take part in the lottery and get a chance to win one or even several of these prizes. All the details are available on the NordFX website.


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

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

 

Forex and Cryptocurrencies Forecast for May 09 - 13, 2022​

EUR/USD: A week of Many Multi-Year Records

Although some hotheads, such as James Bullard, the head of the Federal Reserve Bank of St. Louis, believed that the interest rate could be raised by 0.75% straight away, everything happened as the market expected. Following the May 4 meeting, the FOMC (Federal Open Market Committee) raised the federal funds rate by 0.5% to 1.0%. This increase was the largest since May 2000, as the US Central Bank has been changing the rate in steps of 0.25% for the last 22 years.

According to the US Federal Reserve, the key interest rate will continue to rise, as the labor market remains quite strong, and inflation is high, reaching its highest levels in 40 years. The regulator also decided to start a “quantitative tightening” from June 1. The pace of the Fed's balance sheet drawdown could rise from $35 billion in June to $65 billion in July, and then to a maximum of $95 billion per month starting in August.

At the same time, Fed Chairman Jerome Powell said in his comments that the Central Bank is not considering an active increase in interest rates by 0.75% at the upcoming meetings. These words eased concerns about the accelerated pace of monetary tightening, which pushed Treasury yields off their highs. The market felt that the Fed was not aggressive enough, and trading on US stock exchanges on Thursday, May 05 ended with a rise, pulling cryptocurrency quotes along with it.

However, the jubilation of risk asset advocates was short-lived. The very next day, on the morning of May 06, the DXY dollar index reached a multi-year high, rising above 104.00. The last time it climbed this high was 20 years ago.

A massive, wide-ranging sell-off began in the stock and treasury bond markets. Technology stocks were particularly hard hit. The S&P 500 fell 4% to its lowest level since May 2021, while the NASDAQ Composite lost over 5%. At the same time, 10-year Treasury yields rose to their highest level since 2018, rising above 3%.

Some experts called the event "a tug of war between the bond market, which wants more aggressive action by the Fed, and the stock market, which wants the Fed to act more moderately."

Despite the growth of the DXY Index, the EUR/USD pair behaved quite calmly. It has been moving in the side channel 1.0470-1.0640 since April 27, which periodically narrowed to 1.0500-1.0580. In addition to the expected results of the Fed meeting, which had already been included in the quotes, and Jerome Powell's comments, data from the US labor market, received on Friday, May 06, could have brought some revival. However, such an important indicator as the number of new jobs outside the US agricultural sector (NFP) remained unchanged at the level of the previous month, 428K. As a result, the pair hesitated a bit and ended the five-day period in the central zone of the named channel: at the level of 1.0540.

A former senior US Central Bank official suggested earlier that the federal funds cost rate could eventually reach 5.0% after a series of increases. If the market decides it will, the dollar's bullish rally will continue and it could reach 1:1 parity with the euro. In the meantime, analysts' voices are divided as follows: 75% are sure that the dollar will continue to strengthen, while only 25% have the opposite opinion. 90% of trend indicators and 85% of oscillators on D1 which are colored red side with the dollar, respectively, 10% and 15% are colored green. Immediate support is at 1.0500, followed by the April 28 low at 1.0470, the next bearish target for EUR/USD could be the 2016 low of 1.0325. The nearest resistance zone is 1.0570-1.0600, then there are zones 1.0750-1.0800, 1.0830-1.0860, 1.0900-1.0935 and 1.1000.

There will be few significant economic events next week. The calendar could mark Wednesday May 11 and Friday May 13 when the data for the German and US consumer markets come in. Also, changes in the number of applications for unemployment benefits in the United States will become known at the very end of the working week. And we should not forget about the active hostilities that are taking place in Ukraine, in the immediate vicinity of the EU borders, and the “surprises” that the Kremlin may present in response to sanctions imposed on by the European Union.

GBP/USD: Score 1.0-1.0 What's Next?

It was not only the Fed, but also the Bank of England that set a record last week. It raised the interest rate by 25 basis points to 1.0% at its meeting on Thursday, May 04, which is the highest level since 2009. Moreover, 3 out of 9 MPC (Monetary Policy Committee) members of the Bank voted for raising the rate to 1.25% straight away. The number of votes against the rate hike is 0. In addition, it became known that the regulator of the United Kingdom is working on a plan to sell government bonds purchased after the crisis, which currently stand at just under £850 billion.

The Bank of England also sharply raised its inflation forecast for 2022, from 5.75% to 10.25%. (Recall that in March, inflation peaked since 1992 and amounted to 7% (y/y) with a target level of 2%). The main reason is the rise in fuel and transport prices. In April alone, fuel bills in the UK skyrocketed by 54%, and this is not the limit. In addition to the consequences of Brexit and the COVID-19 pandemic, the situation is aggravated by sanctions against Russia due to its invasion of Ukraine, and new coronavirus lockdowns in China. Inflation forecast for 2023 was also changed for the worse: from 2.5% to 3.5%.

Economic forecasts did not please investors either. And although the Bank of England left its forecast for GDP growth for the current year (+3.75%) unchanged, a recession is expected starting from the Q4. British Central Bank expects GDP contraction by 0.25% In 2023 instead of the previously planned growth of 1.25%. According to the new forecast, GDP will grow not by 1.0%, but by only 0.25% in 2024.

The interest rates of the US Federal Reserve and the Bank of England have reached the same level of 1.0% at the moment. However, if the dollar rate may reach 3.0-3.5% at the beginning of next year, or even higher, the British regulator suggests an increase in the pound rate to 2.5% by mid-2023. and its decline to 2.0% by the end of the forecast 3-year period. Such a difference in the pace of monetary tightening is likely to continue to put pressure on the British pound. However, the Fed should also update its inflation forecasts in June, and things could change.

In the meantime, the GBP/USD pair continued to fall, returning to June 2020 levels and reaching a local bottom at 1.2275. As for the final chord, it sounded at the height of 1.2340;

55% vote for further weakening of the British currency, 30% expect the pair to correct to the north and 15% - to move to the east. As for the indicators on D1, there is still a total advantage of the red ones: 100% both among the trend indicators and among the oscillators look down, although 10% of the latter are in the oversold zone. The nearest targets of the bears are to overcome the support at 1.2250, then at 1.2075, a strong point of support for the pair is at the psychologically important level of 1.2000. As for the bulls, if they manage to seize the initiative, they will face resistance in the zones of 1.2400, 1.2470-1.2570, 1.2600-1.2635, 1.2700-1.2750, 1.2800-1.2835 and 1.2975-1.3000.

Among the statistics related to the economy of the United Kingdom, the most interesting are the data on the country's GDP, which will be released on Thursday May 12.

USD/JPY: Bulls' Target Is 135.00

The correlation between 10-year US Treasury bills and the USD/JPY currency pair has not been canceled. If the yield of these securities grows, the dollar rises against the Japanese yen. We have seen confirmation of this in the past week. The pair reached a high of 130.80 on May 06 and is now aiming for a new 20-year high of 1.3125. Strategists of the international financial group Nordea expect that it may reach 135.00 by the end of the year. The strengthening of the yen and the fall of the pair, in their opinion, can only be expected in the second half of 2023.

Japanese consumer prices excluding fresh food, a key indicator monitored by the Bank of Japan, rose 2.1% in April, surpassing the 2.0% target for the first time in many years. And if the yen breaks through the level of 140 per $1, inflation in Japan may reach 3.0%, according to BNP Paribas experts. However, the head of the Bank of Japan, Haruhiko Kuroda, has repeatedly stated that the Japanese regulator, despite the dissatisfaction of the population with rising prices, will remain faithful to the soft monetary policy.

If the Central Bank does decide to tighten it, this will make it difficult for the country to stabilize and reduce the ratio of public debt to GDP, according to Fitch Ratings. According to Fitch Ratings, this ratio reached 248% in fiscal year 2021, which is the highest among all investment-grade states and is the main credit weakness Japan. (For comparison, Italy, which is in second place, has a figure of about 150%).

The report on the latest meeting of the Monetary Policy Committee of the Japanese regulator will be published next week, more precisely on Monday May 09. However, it is unlikely to affect the balance of power between the dollar and the yen. The scenario in which the USD/JPY pair will continue its movement to the north is supported by 65% of experts, 35% are waiting for movement to the south. 100% of trend indicators and oscillators on D1are looking north, but 15% oscillators signal that the pair is overbought. The nearest support is located at 129.70-130.15, followed by zones and levels 128.60-129.30, 127.80-128.00, 127.00, zone 126.30-126.75 and levels 126.00 and 125.00. The bulls' target is to renew the April 28 high at 131.25. An attempt to designate the subsequent targets of the bulls will rather be like fortune telling. The only thing that can be assumed is that they will set the January 01, 2002 high of 135.19 as their goal. If the pair's growth rate is maintained, it can reach this height as early as in June.

CRYPTOCURRENCIES: It All Depends on the Fed



A recently published report by the analytical company DappRadar demonstrates the growth of crypto activity in the US, Russia and Ukraine. And if the increase in demand for digital assets is due to sanctions and a humanitarian catastrophe in the last two states, respectively, the global acceptance of virtual money in the United States is the result of an increase in the number of traders and crypto companies. At the same time, DappRadar analysts note that the popularity of cryptocurrencies has increased not only in the above countries, it has happened all over the world. For example, against the background of the threat of global inflation, the demand for virtual money in Brazil and India has increased by 40% and 45%, respectively. According to some experts, the number of cryptocurrency users will increase 5 times over the next 10-20 years and reach more than 1 billion people.

The specialists note that it is the activity of small investors who continue to believe in the future rise of bitcoin that saves it from a deep drawdown at the moment. Thus, the owners of wallets from 0.1 BTC to 10 BTC doubled their positions in April alone, bringing the total stock to 2.5 million BTC.

As for institutional investors (with investments of more than $1 million), the dynamics here are the opposite and it is primarily due to the actions of the US Federal Reserve. The Central bank has printed more than a third of the new dollars since spring 2020, and its balance sheet has doubled to $9 trillion. While the Fed flooded the market with cheap money, a huge amount of it was invested by investors in risky assets, supporting the stock and cryptocurrency markets. the time has come now to tighten monetary policy, which could not but affect these assets. As a result, the net outflow of investments from crypto funds has reached an all-time high of 14,327 BTC. Moreover, American investors are most active in getting rid of bitcoins, having reduced the volume of investments by 11% in a month. (And this despite the fact that the number of traders and crypto companies in the US is growing).

At the time of writing this review, Friday evening, May 06, the total crypto market capitalization is at $1.657 trillion ($1.752 trillion a week ago). The Crypto Fear & Greed Index has slightly worsened its readings: it dropped by 1 point, from 23 to 22 points, gaining a foothold in the Extreme Fear zone. The BTC/USD pair is trading around $36.100, the week low was fixed at $35.280.

A further rise in interest rates, along with unloading the Fed's balance sheet, the growth of the DXY dollar index and the yield of treasuries, continue to put pressure on the quotes of risky assets. If about 50% of all BTC coins in circulation were profitable for their owners in the middle of the week, this figure will become smaller as quotes continue to fall. So, only 40% of the coins will remain profitable at the level of $33,000, which can cause an avalanche increase in panic.

Trader and Factor LLC CEO Peter Brandt predicts that bitcoin will test the $28,000 level. The expert drew attention to the pattern that the price of the first cryptocurrency has formed since the beginning of the year, and the breakdown of its lower border. “The completion of a bearish channel usually results in a decline equal to its width. In this case, in a hard test of $32,000 or so, but I think $28,000,” Brandt commented.

Another reputable cryptocurrency trader, Benjamin Cowen, also believes that there should be a major capitulation of bitcoin before a bullish reversal begins. According to him, it will spur another round of a bullish rally. Drawing a possible downside scenario, Cowen noted the three most important long-term moving averages that keep BTC at the level of support for a multi-year growth trajectory: 300-, 200- and 100-week SMA. A drop below the 100-week SMA has historically been a great opportunity for bulls: “The 100-week SMA is around $36,000 now, and there is an optimal time to buy BTC every time it goes below it,” Cowen said. But if the fall gains strength, the BTC rate, in his opinion, may collapse even more and test the level of the 200-week moving average, $21,600. “Many people do not believe that this can happen,” the trader says, “but it is possible. I used to buy BTC at $6,000 and then the rate fell to $3,000. Then I bought BTC at $7,000 and $10,000 and the rate fell again to $3,800. So this has happened before and can happen now.”

Bitcoin’s 300-week moving average was briefly touched only once during the COVID-19-driven market crash in March 2020, and Cowen doesn’t expect a repeat of the same.

Arthur Hayes, former CEO and co-founder of BitMEX, predicted in April that bitcoin would fall to $30,000 at the end of the first half of the year. He attributed this to a possible decline in the Nasdaq index, with which digital gold is highly correlated. Analysts at Arcane Research confirmed that this statistical relationship is at its highest since July 2020.

However, fintech experts who took part in the Finder survey expect quotes of the leading cryptocurrency to be above $65,000 at the end of the year with subsequent growth. Hayes himself does not doubt the prospects of bitcoin, predicting a rise in the price of the coin to $1 million by the end of the decade.

Unlike Arthur Hayes and Benjamin Cowen, analyst Michael van de Poppe thinks the network data hints at a possible bullish reversal in bitcoin. According to him, “BTC hash rate has reached another all-time high, although there is a tightening in the cryptocurrency space. Thus, the demand for BTC mining is growing, the network is becoming safer, and the asset price should respond to this.”

According to van de Poppe, a serious impulsive wave can be expected due to a possible correction in the US dollar index (DXY). “In my opinion, a serious move up is quite possible, especially if the US dollar shows weakness,” the analyst said. “In the event that the Fed abandons a strong tightening of monetary policy, the dollar will weaken, and this will become the impetus for the upward movement of bitcoin.”

Mike McGlone, Senior Analyst at Bloomberg Intelligence, has similar hopes. He hopes that a sharp fall in the stock market will force the US Federal Reserve to change its position on tightening monetary policy, which will provoke bullish runs in high-risk assets. “The Fed will continue its policy until the stock market drops enough to force the regulator to pause. That's when I think we'll see the rise of bitcoin, ethereum and maybe Solana."

“If you want a good downside indicator for bitcoin and altcoins, these are Fed Funds futures. This is what the market expects from the Fed in a year. They are valued at 3% right now, maybe more, and the actual rate is 1%. As soon as this forward expectation starts to decrease, I think that bitcoin will hit the bottom,” the analyst said.


NordFX Analytical Group


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CryptoNews of the Week



- The number of “whales” among bitcoin holders, whose capital exceeds 1000 BTC, is rapidly declining. This figure has already reached its lows since the beginning of the year. At the same time, the volume of cryptocurrency on the exchanges, on the contrary, is at its maximum over the past three months. According to Glassnode analysts, the average volume of coin inflows to centralized exchanges is now hovering around 1755 BTC.
All this is happening against the backdrop of a rapid fall in the price of the coin: BTC set a new local low at $29,730 on May 10. This is the lowest result in 2022 and is more than 54% below the all-time high. The pressure on the market is exerted by the coin holders themselves, who, due to panic, are ready to get rid of them even at a loss. Crypto Fear & Greed Index has fallen to 10 points out of 100 possible, firmly entrenching itself in the Extreme Fear zone.

- The next few quarters will be volatile for the market due to the negative situation on Wall Street, which will jeopardize the support levels of $30,000 for bitcoin and $2,000 for ethereum. This point of view was expressed by Galaxy Digital founder Mike Novogratz.
As of March 31, Galaxy Digital had $2.7 billion in assets under management, down 5% from its December 31 estimate. Galaxy Digital's net cumulative loss was $111.7 million for January-March, compared with a profit of $858.2 million for the same period last year. This is largely due to losses on digital assets.
“Until we reach a new equilibrium, digital assets will continue to trade in close correlation with the Nasdaq. My intuition tells me that there will still be a drawdown ahead, and this will occur in a very unstable, volatile and complex market,” Mike Novogratz explained. He warned that the negative scenario could be realized if the Nasdaq index fell below 11,000 (12,500 at the time of writing).

- ARK Invest CEO Cathie Wood believes that the growing correlation between cryptocurrencies and traditional assets indicates that the bearish trend will end soon. The businesswoman opined that the depreciation of bitcoin along with the traditional market is a temporary phenomenon: “Cryptocurrency is a new asset class that should not follow the Nasdaq, but that is what is happening. We are currently in a bearish trend where all assets are moving in the same way and we are seeing one market after another capitulate, but cryptocurrencies may be close to completing it.”
The head of ARK Invest believes that the cryptocurrency market will grow exponentially as traditional assets collapse. “The current recession in the stock and bond markets, commodities and cryptocurrency markets is causing negative sentiment among investors. But look at our research… I can’t even tell you how confident we are that our products will change the world and are already on an exponential growth trajectory.” According to Wood, blockchain is in a technology sector that will grow more than 20 times in the next seven to eight years.

- The first cryptocurrency can be very successful, but it can also fail, so betting solely on it is risky. This opinion was expressed by a veteran of the bitcoin industry, a 2020 US presidential candidate, billionaire Brock Pierce in an interview with Fox Business. “Bitcoin could drop to zero. This is a binary result. Either there will be $1 million per BTC, or zero,” he said.
Pierce believes that the current “cryptocurrency landscape” is very similar to the history of the tech companies' bubble. “The situation is very similar to 1999. The market is now in the same phase. So what happened then? After the dot-com bubble, eBay, Amazon and other interesting companies appeared, but a lot of businesses went bankrupt. But this does not mean that digital assets are unrealistic and will not play an important role in our collective future,” the billionaire said.
Pierce admitted that he diversified his portfolio, primarily through ethereum. He also placed a “nine zeros” bet on EOS, converting all of his Block.one shares into cryptocurrency.

- Self-proclaimed creator of the main cryptocurrency, Australian computer scientist Craig Wright has sued cryptocurrency exchanges Coinbase and Kraken. This was reported by the law firm Ontier. He claims that these platforms misrepresent information by offering Bitcoin Core asset to customers under the guise of Bitcoin. According to Wright, the only digital asset “that remains true to the original bitcoin protocol” is Bitcoin Satoshi Vision.
“These and other exchanges have encouraged investors and consumers to trade and invest in Bitcoin Core, passing off this asset as bitcoin, despite it being created in 2017 as a software implementation that is different from the bitcoin protocol established by Dr. Wright when creating the electronic money system more than 13 years ago,” Ontier said in a statement.
Recall that Craig Wright himself claims that he is Satoshi Nakamoto, the mysterious inventor of bitcoin. According to Wright, he helped create the first cryptocurrency with his friend, the late computer security expert Dave Kleiman.

- BTC is a good insurance against inflation, but not a full-fledged alternative to gold. This position was expressed by the founder of the hedge fund Bridgewater Associates, Ray Dalio. The billionaire pointed to the obstacles to making bitcoin a reserve asset: “Transactions can be traced. They can be controlled, canceled and made illegal.” At the same time, the businessman expressed optimism about the prospects for the digital industry in the next ten years.

- Bank Of America, on the contrary, questioned bitcoin as a means of escape from inflation. The first cryptocurrency correlates well in its price behavior with the dynamics of the stock market since July 2021. Bitcoin's correlation with the S&P 500 hit an all-time high on January 31. The new all-time high was also close in correlation with the Nasdaq 100. In contrast, the price relationship between bitcoin and gold has been gradually weakening since 2021 and has turned negative in the last two months. The bank’s specialists emphasized that this trend “became obvious”, so bitcoin is not a full-fledged replacement for gold.

- The crypto community celebrated another mini-anniversary on May 5: bitcoin has overcome exactly half of the way to its next halving. It happened on block 735,000. Halving is reducing mining rewards by half. The event takes place every 210,000 blocks, or approximately every four years. At the same time, the rules of this procedure are written in the cryptocurrency code, which means that it is impossible to influence it without the consent of the majority of blockchain users. There are a little less than 105 thousand blocks left until the next such event.
Halving cycles are one of the main mechanisms of the bitcoin network, which involves halving the BTC reward for miners. Accordingly, the issue of bitcoins is also halved since miners' rewards are the only source of issuing new coins.
From the inception of bitcoin to the first halving, miners were rewarded with 50 BTC per block. Then the amount in bitcoins was reduced to 25 BTC, and in the next cycle to 12.5 BTC. Currently, miners receive 6.25 BTC for mining a block.
The halving date can be predicted to within a couple of days, because the block production time fluctuates around 10 minutes. The previous halving took place on May 11, 2020, and the next one will take place approximately in April 2024.
Halvings are considered very important events for another reason: as observations show, the explosive growth in the price of BTC is associated with them. So, before the first halving, BTC cost about $127, before the second, its price rose to $758, and before the third, to $10,943.


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



- Due to the speculative nature of cryptocurrencies, investors need more protection, otherwise they may lose confidence in the markets. This was stated by the head of the US Securities and Exchange Commission (SEC) Gary Gensler. As a rule, buyers of cryptocurrencies do not receive the amount of information that is typical for other asset classes, the official said. For example, this applies to the trading platforms they use or whether users actually own funds in their digital wallets.
According to him, cryptocurrency markets are considered decentralized, but in reality, most of the activity takes place on a few large trading platforms. Regarding crypto platforms, he recalled the need to comply with the basic principles of the market, such as “fighting fraud, countering manipulation and insider practices, ensuring a real, not fictitious, order book.” Gensler noted that the SEC will continue to work to cover all types of cryptocurrencies with supervision. “There is a lot to be done here, and investors are not so well protected so far,” he concluded.

- FTX CEO Sam Bankman-Fried questioned bitcoin's ability to become a popular payment system due to the inefficiency and high environmental costs of its blockchain. This is reported by the Financial Times. The top manager pointed out that it is not possible to scale the network “to millions of transactions” [per second]. “Blockchain must be extremely efficient, lightweight and have low energy costs. We should not scale bitcoin to such an extent that the consumption of electricity by miners has increased a hundred times,” he explained. The CEO of FTX, who is already being called the “new Zuckerberg”, stressed that the first cryptocurrency can remain in the status of an asset, a commodity and a store of value.

- Rich Dad Poor Dad bestselling author and entrepreneur Robert Kiyosaki called the bitcoin crash “great news” and predicted a test of the $17,000 level. “As I said earlier, I expect bitcoin to fall to $20,000. Then we will wait for the bottom test, which may be $17,000. Once that happens, I'll go big. Crises are the best time to get rich,” he said.
Earlier, Robert Kiyosaki explained sarcastically why he is confident in the long-term success of digital gold: “Bitcoin will win because America is led by three puppets.” He ranked US President Joe Biden, Treasury Secretary Janet Yellen and Fed Chairman Jerome Powell among them.

- Crypto strategist known as DonAlt believes that after breaking the key psychological support area of $30,000, Bitcoin is ready to show a serious move. “Over the next 3 months, we will either see the capitulation that everyone is waiting for, or bitcoin will close the range and start moving up to $58,000,” the expert writes. – In my opinion, the probability of going down is higher. According to my calculations, the next support is at $14,000, after which a recovery of more than 2 times to the high of the range is possible.”
DonAlt noted that the current structure of the bitcoin market may hint that the bottom has already been reached. However, he fears the strong correlation of BTC with the stock market and the possibility of a collapse in the S&P 500 index.
The trader known as Rekt Capital agreed with the opinion that bitcoin is expected to fall further. The specialist believes that the coin needs to lose another 25% of its value before the expected local minimum.

- One of the main critics of bitcoin, president of Euro Pacific Capital Inc. Peter Schiff believes that the cryptocurrency has an opportunity for a further strong fall. The businessman drew attention to the fact that bitcoin has lost an important support level near $33,000. And the cryptocurrency will have to fall to $8,000 to touch the next level. “The support line has been broken. There is a high probability of movement to the lower support line. The chart shows two patterns at once: a double top and a head-shoulders pattern. This is an ominous combination. We have a long way down,” Peter Schiff wrote on his blog.

- But an analyst nicknamed Pentoshi expects a bitcoin rally soon, as the situation, in his opinion, is in favor of the bulls. According to Pentoshi, the bears are making serious efforts to lower the price of bitcoin, but they are not succeeding in achieving the desired result. “A lot of coins change hands with a lot of effort. But do the sellers receive appropriate remuneration? It doesn't look like it.
As an example, he looked at an inverted chart of bitcoin, which shows extremely high trading volume, coupled with a small exchange rate movement. As Pentoshi believes, the failure of the bears to depreciate BTC despite strong selling pressure suggests that the momentum is about to turn in favor of the bulls.

- During a discussion of the impact of cryptocurrencies on the country's economy, the Reserve Bank of India (RBI), said that they could lead to dollarization, as well as have a negative impact on the banking system. Bank Governor Shaktikanta Das stated that "this seriously undermines the RBI's ability to control the country's monetary policy."
The official fears that cryptocurrencies can become a medium of exchange and replace the national currency in financial transactions both domestically and abroad. “Almost all cryptocurrencies are denominated in dollars and are issued by foreign individuals. This, in the end, can lead to the dollarization of part of our economy, which is contrary to the sovereign interests of the country,” Shaktikanta Das said.
According to various estimates, there are from 15 to 20 million cryptocurrency investors in India with a total volume of crypto assets of about $5.34 billion.

- The cryptocurrency market has recently been actively selling coins, as investors get rid of risky assets amid global economic turmoil. Cryptocurrency billionaires have suffered the most.
According to the Bloomberg Billionaires Index, Coinbase CEO Brian Armstrong's net worth has decreased from $13.7 billion to $2.2 billion. This was not only due to the fall in digital asset prices, but also due to the fall in Coinbase shares, the price of which fell by more than 80%.¬ The capital of the CEO of the FTX crypto exchange Sam Bankman-Fried has halved and now stands at $11.3 billion. The well-known founders of the Gemini cryptocurrency trading platform, the brothers Cameron and Tyler Winklevoss, have individually lost more than $2 billion, which is equivalent to almost 40% of their total fortune.

- American billionaire investor Bill Miller announced in January that half of his capital was invested in the largest cryptocurrency by capitalization. And now some of his coins were sold on a margin call.
In an interview with CNBC, the head of Miller Value Partners said he still remains bullish for the long term. According to him, for the first time he bought an asset in the range of $200-300 and during this time he went through at least three drops in BTC by more than 80%. Despite this, he still views bitcoin as an insurance policy against financial disaster.

- The US Department of State, the Treasury Department and the Federal Bureau of Investigation (FBI) have issued a joint warning stating that North Korean IT professionals are trying to get jobs in cryptocurrency projects by posing as citizens of other countries. The authorities have noticed that coders from the DPRK pretend to be citizens of the United States very often.
The statement emphasizes that many of them receive income that contributes to the creation of weapons of mass destruction and the military buildup of North Korea in circumvention of the sanctions imposed on it. In addition, the document says that for the same purpose, some IT professionals from the DPRK have developed virtual currency exchangers or have created analytical tools and applications for cryptocurrency traders.


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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Forex and Cryptocurrencies Forecast for May 23 - 27, 2022​

EUR/USD: Growth of the Pair as a Result of DXY Correction

The DXY dollar index hit a multi-year high of 105.05 on Friday, May 13 after a six-week rise. The last time it climbed this high was 20 years ago. However, a reversal followed, and the DXY was below the 103.00 horizon on May 19-20. According to a number of analysts, such a drop is more likely the result of a technical correction, and not a consequence of changes in fundamental factors. The latter still remain on the side of the American currency. However, there are already some alarming signals here, as the sharp tightening of the Fed's monetary policy increases concerns about the growth of the US economy and increases the likelihood of a recession.

But, once again, the fundamental factors are still on the side of the dollar. Thus, data on retail sales in the US released on May 17 showed an increase in consumer activity in April by 0.9%, which is higher than the forecast of 0.7%. Industrial production exceeded the forecast as well: it grew by 1.1% instead of the expected 0.5%.

Last week, the head of the Federal Reserve Jerome Powell once again confirmed his intention to raise the key rate by 0.5% at the FOMC (Federal Open Market Committee) meetings in June and July. Recall that the US regulator has already raised the rate twice this year. This, of course, led to an increase in costs for various types of loans not only for industry, but also for the population, including mortgage lending, consumer loans, interest on credit cards etc.

However, on Tuesday May 17, Jerome Powell stated unequivocally that the Fed would continue to tighten and back off from aggressive rate hikes only when it received "clear and compelling evidence" of a slowdown in inflation. And if the rate of inflation decline does not suit the Central Bank, it may not limit itself to a rate of 3.0%, but increase it to 4.0% within 12-15 months. That will give the dollar additional advantages over other currencies in the DXY basket, including the euro.

Unlike the US economy, investors are much more concerned about the prospects for the European economy. This concern is primarily due to the strong dependence of the European Union on Russian energy resources. On Monday, May 16, EU countries started negotiations on the sixth package of sanctions against Russia due to its invasion of Ukraine. It is known that we are talking, among other things, about the introduction of an embargo on the purchase of Russian oil and gas. It is not yet clear whether such an embargo will be total or partial, when it will be introduced and what exceptions there will be, but it is already clear that it will create serious problems not only for the Russian, but also for the European economy. And this cannot but cause concern for investors.

US Treasury Secretary Janet Yellen added additional uncertainty to this complex situation. She stated that the G7 countries are discussing the idea of establishing the maximum possible duties on energy from Russia. On the one hand, it makes no sense to impose an embargo on their supplies in this case. But on the other hand, this will hit hard on the pockets of European consumers who want to avoid energy hunger.

The situation with inflation in the Eurozone remains unclear. According to data published on Wednesday May 18, it remains at a record level of 7.4%, that is, 3.7 times the ECB's target level of 2.0%. The head of the Central Bank of Finland, Olli Rehn, said that in such a situation, members of the ECB Governing Council agree on the need for a “fairly quick” move away from negative interest rates. Recall that the deposit rate in the euro area is now minus 0.5%, and has been negative for 8 years, since 2014. However, "fairly quick" exit is a very vague wording, in contrast to the specific decision of the US Federal Reserve to raise the dollar rate by another 1.0% in the next two months.

This divergence between the specifically hawkish monetary policy of the Fed and the vaguely dovish ECB suggests that the US currency will continue to strengthen its position. Although the opposite happened last week: the dollar lost about 150 points to the euro from May 16 to May 20 and the EUR/USD pair ended the trading session at 1.0557. However, according to some experts, what happened is a consequence of the general correction of the DXY index and fits into the medium-term downtrend of the pair.

At the time of writing, on the evening of May 20, the opinions of experts are divided as follows: 45% of analysts are sure that the EUR/USD pair will return to the movement to the south, the same number is waiting for the continuation of the correction to the north, and the remaining 10% have taken a neutral position. There is a certain discrepancy in the readings of indicators on D1 caused by a correction. Among the trend indicators, 40% side with the reds, 60% side with the greens. The oscillators have a clearer picture: 70% are colored green, 20% red and 10% neutral gray. The nearest resistance is located in the zone 1.0600, if successful, they will try to break through the resistance 1.0640 and rise to the zone 1.0750-1.0800. For the bears, task number 1 is to break through the support in the 1.0500 area, then 1.0460-1.0480, and then update the May 13 low at 1.0350. If successful, they will move on to storm the 2017 low of 1.0340, there is only support from 20 years ago below.

As for the calendar for the coming week, it will be useful to pay attention to the publication of data on business activity (Markit) in Germany and the Eurozone as a whole on Tuesday, May 24. US orders for capital and durable goods will be released on Wednesday. The minutes of the last FOMC meeting of the Fed will be published on the same day, and preliminary US GDP indicators for the Q1 2022 will be known on Thursday, May 26.

GBP/USD: Inflation Continues to Rise

Of course, the dynamics of the GBP/USD pair was dominated by what happened to the DXY dollar index last week. However, certain adjustments were also made by specific factors related to the economy of the United Kingdom.

The Bank of England published a forecast about two months ago that inflation should have peaked in April. The data published on Wednesday, May 18, confirmed this forecast, with the exception of one very big “but”. The regulator predicted that the peak would be reached at 7.2%, but it turned out to be 9.0%, which is the highest over the past 40 years. And in this case, to paraphrase the great English playwright William Shakespeare, it is time to exclaim: “Is this a peak or not a peak? That's the question!". Apparently, there is no talk of any slowdown in inflation yet, and it is precisely this that is the main “toothache” of the UK economy.

GBP/USD hit 1.2524 at a weekly high. Two pieces of news kept the pound from weakening. First, according to the UK Office for National Statistics, retail sales in the country unexpectedly rose by 1.4% in April, while the market expected a fall of 0.2%. And in addition, the British currency was supported by the chief economist of the Bank of England Hugh Pill, who said that the regulator has yet to continue tightening monetary policy, as bullish risks for inflation still prevail, and it is projected to rise to double digits in 2022.

As a result, the pair ended the five-day period at 1.2490 where it traded in late April - early May, and where it has already been in 2016, 2019, and 2020. Will it continue to fall? 20% of experts answered this question positively, 25% answered negatively. The majority (55%), not knowing how to react to the words of the chief economist of the Central Bank, shrugged their shoulders. As for the indicators on D1, then, as in the case of EUR/USD , their opinions are divided. Among the trend indicators, 50% point to the growth of the pair, exactly the same number points to the fall, among the oscillators the balance of forces is somewhat different: only 20% are looking south, 80% are looking north, although a quarter of them are already in the overbought zone. Supports are located at 1.2435, 1.2400, 1.2370, 1.2300, 1.2200, then 1.2154-1.2164 and 1.2075. A strong point of support for the pair is at the psychologically important level of 1.2000. In case of further correction to the north, the pair will have to overcome the resistance in the zone 1.2500-1.2525, then there are zones 1.2600-1.2635, 1.2700-1.2750, 1.2800-1.2835 and 1.2975-1.3000.

UK economic developments in the coming week include a speech by Bank of England Governor Andrew Bailey on Monday May 23 and the release of the PMI Composite and Markit Manufacturing and Services PMIs on Tuesday May 24.

USD/JPY: Why the Yen Is Strengthening



According to officials from the International Monetary Fund (IMF), "in general, the depreciation of the yen is helping Japan." The same could be repeatedly heard from the leaders of the Bank of Japan. The IMF also believes that the control over the yield curve applied by the Japanese regulator is quite effective, and the dynamics of the yen "are in line with medium-term fundamentals."

However, contrary to the statements of high officials, we have seen not weakening, but strengthening of the Japanese currency over the past two weeks. And on May 20, it is exactly where it was on April 20: at the level of 127.85, without having updated the maximum of May 09 at 131.34. According to a number of experts, the strengthening of the Japanese currency was due to the increased craving of investors for the most risk-free assets. However, this is not the only reason.

Inflation in the country continues to grow, which causes discontent among the population. The rise in consumer prices is recorded for the eighth month in a row. In April, they increased by 2.5% compared to the same month a year earlier, showing the highest growth rate since October 2014. As noted by Dow Jones, inflation has exceeded the 2.0% mark for the first time since September 2008, and this is without taking into account the effect of the consumption tax increase. It was 1.2% in March. Naturally, all this causes discontent among the citizens of the country, to which politicians are already actively reacting. But at some point, there should be a reaction from the Central Bank of Japan. Many investors, especially foreign ones, expect that, despite the regulator's assurances of its commitment to an ultra-soft monetary policy, it will still be forced to increase the interest rate. And, apparently, it is this expectation that provides the yen with additional support.

At the moment, 55% of analysts vote for the yen to continue to strengthen and USD/JPY to continue moving south, 40% vote for the resumption of the uptrend to the north, and 5% expect movement in the sideways. At the same time, supporters of technical analysis pay attention to the fact that a classic figure has formed on the chart: a "double top" (or "head - shoulders"). Among the indicators on D1, the alignment of forces is as follows. Oscillators have 80% red, 10% green, and 10% neutral gray. Among trend indicators, the parity is 50% to 50%. The nearest support is located at 127.50, followed by zones and levels at 127.00, 126.30-126.75, 126.00 and 125.00. The goal of the bulls is to rise above the horizon of 128.00, then overcome the resistances of 129.00, 129.60, 130.00, 130.50 and renew the high of May 09 at 131.34. The high of January 01, 2002, 135.19, is seen as the ultimate goal.

Of the upcoming week's events, one can pay attention to the speech of the Bank of Japan Governor Haruhiko Kuroda on Wednesday, May 25, although it is unlikely to bring any surprises and at least somehow affect market sentiment. But what if something does happen? Markets remember 2016, when Haruhiko Kuroda first categorically denied the possibility of changing rates, and then suddenly decided to take such a step…

CRYPTOCURRENCIES: End of the Digital Gold Rush?

The BTC/USD bulls have been desperately trying to hold the line in the $30,000 zone since May 11. The struggle took place in the $28,650-31,000 zone all last week. And even though the S&P500, Dow Jones, and Nasdaq stock indices rebounded on May 18, putting additional pressure on bitcoin, it continued to resist.

In general, decoupling bitcoin from stock indices, primarily from the S&P500, is the dream of many supporters of the first cryptocurrency. On the other hand, these same people dream that as many institutions as possible will come to the crypto market, and that bitcoin, along with stocks, will take its rightful place in their investment portfolios. But in order to become a full-fledged participant in financial markets, a cryptocurrency must obey the rules and laws established on it. And if large investors get rid of risky assets, one should not expect that, by dumping shares of Microsoft, Apple or Amazon, they will invest the dollars received not in treasuries, but in bitcoin or ethereum.

Another dream is for bitcoin to establish itself as a store of value on par with physical gold. However, the concept of "digital gold" at the moment is nothing more than a compliment towards the first cryptocurrency. Or a marketing ploy to increase its value in the eyes of small investors. But the importance of the precious metal for humanity has been confirmed for thousands of years, while the history of bitcoin is not even 15 years old. And its value lies only in its limited emission and thirst for profit.

Back in 2010, BTC was worth 5 cents, and its price reached $69,000 at its peak in November 2021. It is clear that the prospect of quickly and easily turning $100 dollars into $138,000,000 attracted a huge mass of people willing to get rich quickly. So what happened in the last 10-12 years can be called the “Digital Gold Rush”, by analogy with the Gold Rush in the USA in the second half of the 19th century. But then many, instead of getting rich, on the contrary, lost their money. The same can be observed now: bitcoin, having fallen to $26.579 on May 12, updated the low of the current year and returned to the values of December 2020, having lost about 60% of its value in just 6 months.

According to the Bloomberg Billionaires Index, Coinbase CEO Brian Armstrong's net worth has decreased from $13.7 billion to $2.2 billion. This was not only due to the fall in digital asset prices, but also due to the fall in Coinbase shares, the price of which fell by more than 80%. The capital of the CEO of the FTX crypto exchange Sam Bankman-Fried has halved and now stands at $11.3 billion. The well-known founders of the Gemini cryptocurrency trading platform, the brothers Cameron and Tyler Winklevoss, have individually lost more than $2 billion, which is equivalent to almost 40% of their total fortune. Well, what means of "savings and hedging" can we talk about in such a situation?

Another advantage of bitcoin that its proponents like to talk about is its decentralized nature and the anonymity of its holders. However, it seems that this is just a fake. The head of the US Securities and Exchange Commission (SEC), Gary Gensler, explained that although cryptocurrency markets are considered decentralized, in reality, most of the activity takes place on a few large trading floors. Regulators and law enforcement officers are closely watching them. And the fact that the wallets belonging to the Russians were blocked after the imposition of sanctions against Russia, says a lot.

Finally, the fourth opportunity to raise the value of BTC is its widespread use as a means of payment. Although not everything is so smooth here. For example, Sam Bankman-Fried, CEO of the FTX crypto exchange, has recently expressed doubts about the ability of bitcoin to become a popular payment system. The top manager pointed to the lack of the ability to scale the network "to millions of transactions" per second due to the inefficiency and high environmental costs of his blockchain.

Returning from wishful thinking to reality, we must state that the total capitalization of the crypto market continues to fall. At the time of writing this review, Friday evening, May 20, it is at $1.248 trillion ($1.290 trillion a week ago). The Crypto Fear & Greed Index is firmly entrenched in the Extreme Fear zone and is at around 13 points. Moreover, it fell to 8 points on Tuesday, May 17, the lowest level since March 28, 2020. The BTC/USD pair is hardly kept in the "war zone", at the level of $29.325.

Gold advocate, president of Euro Pacific Capital Inc. Peter Schiff believes that bitcoin has already lost an important support level near $33,000. And the cryptocurrency will have to fall to $8,000 to touch the next level. “The support line has been broken. There is a high probability of movement to the lower support line. The chart shows two patterns at once: a double top and a head-shoulders pattern. This is an ominous combination. We have a long way down,” this “gold bug” wrote in his blog.

Rich Dad Poor Dad bestselling author and entrepreneur Robert Kiyosaki called the bitcoin crash “great news” and predicted a test of the $17,000 level. “As I said earlier, I expect bitcoin to fall to $20,000. Then we will wait for the bottom test, which may be $17,000. Once that happens, I'll go big. Crises are the best time to get rich,” he said.

But according to the crypto strategist nicknamed DonAlt, the question of where bitcoin will move after breaking the key support area of $30,000, has not yet been resolved. “Over the next 3 months, we will either see the capitulation that everyone is waiting for, or bitcoin will close the range and start moving up to $58,000,” the expert writes. In his opinion, the probability of going down is higher, and the next support is at $14,000. DonAlt notes that the current structure of the bitcoin market may hint that the bottom has already been reached. However, he fears the strong correlation of BTC with the stock market and the possibility of a further collapse of the S&P500 index.

The trader known as Rekt Capital agreed with the opinion that bitcoin is expected to fall further. The specialist believes that the coin needs to lose another 25% of its value before the expected local minimum.

Analyst nicknamed Pentoshi, on the other hand, expects a bitcoin rally soon, as the situation, in his opinion, is in favour of the bulls. According to Pentoshi, the bears are making serious efforts to lower the price of bitcoin, but they are not succeeding in achieving the desired result. “A lot of coins change hands with a lot of effort. But do the sellers receive appropriate remuneration? It doesn't look like it.

As an example, he looked at an inverted chart of bitcoin, which shows extremely high trading volume, coupled with a small exchange rate movement. As Pentoshi believes, the failure of the bears to depreciate BTC despite strong selling pressure suggests that the momentum is about to turn in favor of the bulls.

American billionaire investor Bill Miller also looks optimistic. According to him, he survived at least three bitcoin drops by more than 80%. And despite the fact that some of his coins have been currently sold on a margin call, he remains bullish in the long term.

As follows from the above, there is no consensus among influencers and experts at the moment. What to do in such a situation? Of course, you can sit and wait with your hands down. Or you can, for example, engage in active trading. Moreover, trading on the CFD principle, you can earn both on the growth and fall of the crypto market. Moreover, you do not need to have a real cryptocurrency for this: in the NordFX brokerage company, in order to open a transaction of 1 bitcoin, you will only need $150, and $15 for a transaction of 1 ethereum. Why is this not a crypto life hack?


NordFX Analytical Group


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

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World Confederation of Businesses Presents NordFX with Business Excellence Award for the Second Time​

For the second time, NordFX has received the BIZZ AWARDS, an award that the World Confederation of Businesses annually awards to companies that have achieved outstanding business success.

The World Confederation of Businesses (WORLDCOB) has been playing a leading role as an international business organization for over 15 years, promoting business development in over 130 countries and encouraging the growth of companies and entrepreneurs through THE BIZZ AWARDS. NordFX received its first such award in 2020, and now there is a new success.

“On behalf of the World Confederation of Businesses,” the organization's president, Jesus Moran, wrote in their letter, “we extend our most sincere congratulations to you and your team NORDFX, for being selected as a winner of of this important business excellence award.

Your company has been selected for consistently exceeding the evaluation criteria noted in our Business Excellence Questionnaires: Business Leadership, Quality of Products and Services, Management Systems, Innovation and Creativity, Corporate Social Responsibility, and Results Achieved. For this reason, we would like to extend our congratulations once more in recognition of this outstanding achievement. WORLDCOB wishes you to continue the excellent work your team is doing."


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



- The collapse of LUNA and the general weakening of the market affected the expectations of crypto derivatives market participants. According to Glassnode, the ratio of open puts and calls in bitcoin has increased from 50% to 70%, indicating an increased desire of investors to secure positions from continued negative dynamics.
The largest open interest (OI) in call contracts with expiration at the end of July this year is concentrated around the $40,000 mark. However, participants give the greatest preference to put options, which will bring profit in case of price reduction to $25,000, $20,000 and $15,000. In other words, until the middle of the year, the market focuses on hedging risks and/or speculating on a further price reduction.
Optimists predominate over the longer distance. Contracts maturing at the end of the year have the most open positions in the range of $70,000 to $100,000. In the put option, the largest OI is concentrated between $25,000 and $30,000, that is, it is in the zone of current values.

- The rate of burning ethereum through EIP-1559 fell to a record low. 2,370 ETH was withdrawn from circulation Last week, which is 50% less than in early May. The share of coins not subjected to this procedure reached a record 81.6%, which has also put pressure on the price.

- Most Americans consider digital assets as an investment tool, not a means of payment. This is stated in the annual Fed report on the state of US households. According to the document, 12% of adult citizens of the country have owned or interacted with cryptocurrencies. But only 2% have used them for purchases, and only 1% have used them to send funds.

- Against the background of the increase in the key interest rate and the tightening of the monetary policy of the US Federal Reserve, the price of bitcoin may fall below $8,000. Guggenheim Partners investment director Scott Minerd said this in an interview with CNBC. “When you “break through the $30,000 level, $8,000 is the ultimate bottom. So, I think we still have a lot of room to decline, especially with the Fed acting tough,” he said.
The investment director of the Guggenheim compared the situation in the crypto market to the dot-com bubble. According to him, most digital assets are “junk”, but bitcoin and ethereum will survive the crypto winter.
Minerd emphasized that the digital asset industry has not yet come to the right design for cryptocurrencies. In his opinion, the currency should store value, be a means of exchange and a unit of account. “There is nothing like that, they [cryptocurrencies] have not even come to a single basis,” he concluded.

- The PayPal payment company is making every effort to implement “all possible” integrations with blockchain and cryptocurrencies into its services. This was stated by PayPal's Vice President Richard Nash during the World Economic Forum in Davos. “We are looking to work with other [projects] to cover everything we can, whether it be the coins we have today in PayPal digital wallets, private digital currencies or CBDCs in the future,” Nash said.
The payments giant’s VP also hinted that he has also invested in crypto assets: “I have a lot of things that I work on at PayPal and I enjoy using the services myself, so I think it’s natural.”

- Unidentified people hacked into the Twitter account of Mike Winkelman, an artist known under the pseudonym Beeple, posting phishing links on it. Users were invited to a website purporting to be Beeple's partnership with Louis Vuitton fashion house.
Clicking on this link resulted in an unauthorized withdrawal of funds from the user's wallet. The cybercriminals got 135 ETH and 45 NFTs worth about $438,000. The hackers retained control of the artist's account for approximately five hours before he managed to get it back.

- The crypto strategist aka Credible believes that, despite the general bearish mood in the markets, BTC is ready to take off. According to him, bitcoin has been in a bull market for the last decade, and the bear markets of 2014 and 2018 became periods of correction: “After the peaks of 2013 and 2017, there were major bear markets and it took 3 years to return to the highs. The current corrections are somewhat smaller, and this will be proven when BTC soars to new all-time highs in a few months.”
Credible uses the Elliott wave theory for technical analysis, which predicts the behavior of the rate based on the psychology of the crowd, which manifests itself in the form of waves. This theory assumes that a bull market cycle goes through 5 impulse waves, with the asset correcting during the 2nd and 4th waves and rallying during the 1st, 3rd and 5th waves. In addition, each major wave consists of 5 smaller sub-waves.
According to the analyst, bitcoin is now in the middle of the main 5th wave that began at the start of 2019. In addition, BTC is currently still in the 5th sub-wave, which can push the asset to a new all-time high above $100,000. “I understand that my approach is controversial,” says Credible. “Most do not expect a new record high until the next halving in 2024, and I expect it sooner.”

- According to another crypto analyst nicknamed Rager, given the length of BTC’s bearish cycles in 2014 and 2018, the asset has a long way to go to the bottom, from 6 to 8 months. “If BTC is declining and rebounding from the 200-week moving average, as in past bearish cycles, then this is a good sign. There will be a decline of only 68% from the maximum, although it had reached 84% in the past. If we take the current realities, a pullback of 84% will lead to the rate of $11,000.”
Rager believes that the price of bitcoin will depend on the strength or weakness of the US stock market in the short term: “You should not look at the bitcoin chart, it is better to watch the chart of the S&P 500 index. There is limited upside potential for BTC right now, but it won’t get stronger until the stock markets turn around.”

- Rekt Capital, one of the most followed analysts on Twitter with over 300,000 followers, has warned that bitcoin could briefly drop 28% below its 200-week moving average. He explained that this SMA is playing the role of an ever-growing latest support. Bitcoin has fallen below this line in the past, but these periods of capitulation were very short-lived. The weekly candlestick has never closed below this SMA yet, but its shadows were as high as 28%. If this happens again now, the cryptocurrency rate will be at the level of $15,500. The 200-week moving average is currently in the $22,000 zone.

- Galaxy Digital CEO and bitcoin proponent Mike Novogratz believes that even despite a significant drop from their all-time highs, altcoins risk losing more than half of their value.
Novogratz defines the outlook for the entire financial market as bleak, which means that a further decline in crypto assets should be expected. However, despite the bearish macroeconomic background, the head of Galaxy Digital remains optimistic and believes in the recovery of the crypto market in the future: “Cryptocurrency is not going away. The number of new users is not decreasing, the pace of creating decentralized infrastructure is not slowing down, the GDP of projects in the metaverse is growing. The crypto community is resilient, it believes in innovation and believes that the markets still provide early entry opportunities.”

- The analytical company Santiment has published the data of its Weighted indicator, which calculates negative and positive comments on an asset in social networks. Based on this information, a kind of mood of the crypto community is determined. According to the readings of this instrument, bitcoin has already reached the global bottom and can be expected to rise in the coming weeks.
“History shows that prices most often rise when investor sentiment is low. Now is the moment when bitcoin has every chance of a limited strengthening,” analysts at Santiment believe.


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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Forex and Cryptocurrency Forecast for May 30 - June 03, 2022​

EUR/USD: Fed's "Boring" FOMC Protocol

The DXY dollar index hit a multi-year high of 105.05 on Friday, May 13, after a six-week rise. The last time it climbed this high was 20 years ago. However, a reversal followed, and it was already at the level of 101.50 exactly two weeks later. Following the general trend, the EUR/USD pair has also been growing since May 13, reaching the height of 1.0764 on May 27. The euro has pushed the dollar by 415 points during this time. And this is not at all the European currency that did it, but the American one. More specifically, the US Federal Reserve.

The minutes of the last Federal Open Market Committee (FOMC) meeting released on Wednesday May 25 did not bring any surprises. It had only what everyone already knew about. The content of the document simply confirmed the intention of the regulator to raise the refinancing rate by 0.5% at each of the next two meetings. Fed officials also unanimously approved a plan to start reducing the asset portfolio, which currently stands at $9 trillion, from June 1. The absence of any surprises in the FOMC protocol hurt the dollar, but it helped the shares: the stock indices S&P500, Dow Jones and Nasdaq went straight up.

The Eurozone macroeconomic calendar remained almost empty last week. As for the statistics from the US, it came out rather multidirectional. Initial jobless claims for the week fell to 210K, which is less than the expected 215K. Orders for durable goods rose by 0.4%, indicating further growth in consumer activity, which is the main driver of economic growth. However, on the other hand, US GDP for the Q1 was revised down to negative -1.5%, which is worse than both the previous estimate of -1.3% and the forecast of -1.4%.

Among medium-term factors, the aggressive policy of the US Central Bank continues to play on the side of the dollar. Its head, Jerome Powell, has repeatedly confirmed his intention to raise interest rates in order to curb inflation and prevent the economy from overheating. US annual inflation (CPI) hit 8.3% in April, more than four times the target of 2%. At the same time, according to analysts, a record rise in energy prices will continue to push inflation further upward in the coming months. And this, in turn, may push the Fed to further tighten monetary policy.

The US currency also continues to be supported by its status as a protective asset. As the armed conflict between Russia and Ukraine is expected to escalate, demand for it will continue to grow, as investors are concerned about the threat of stagflation in Europe. Rising tensions between China and Taiwan have increased craving for safe haven assets as well.

EUR/USD completed the past week at 1.0701. At the time of writing the review, on the evening of May 27, the voices of experts were divided as follows: 30% of analysts are sure that the pair will return to the movement to the south, 50% of analysts are waiting for the continuation of the ascent to the north, and the remaining 20% have taken a neutral position. There is no unity in the readings of the indicators on D1. Oscillators are 80% green, 10% red, and 10% neutral gray. At the same time, a quarter of the "green" is already in the overbought zone. There is parity among the trend indicators: 50% vote for the growth of the pair, 50% vote for its fall. The nearest resistance is located in zone 1.0750-1.0800. If successful, the bulls will try to break through the resistance of 1.0900-1.0945, then 1.1000 and 1.1050, after which they will meet resistance in the 1.1120-1.1137 zone. For the bears, task number 1 is to break through the support at 1.0640, then 1.0480-1.0500, and then update the May 13 low at 1.0350. If successful, they will move on to storm the 2017 low of 1.0340, there is only support from 20 years ago below.

A lot of statistics on consumer markets in Germany (May 30 and June 01) and the EU (May 31 and June 03) will be released this week. The publication on Wednesday, June 01 of the ISM business activity index in the US manufacturing sector is also noteworthy. On the same day, the ADP report on US non-farm employment will be published, and another piece of data from the US labor market will arrive on Friday, October 08, including such important indicators as the unemployment rate and the number of new non-farm payrolls (NFP).

GBP/USD: "Not Boring" Decision of the UK Government

The main factor behind the strengthening of the pound and the growth of the GBP/USD pair, as in the case of the euro, was the general weakening of the US currency. The two-week drop in the DXY dollar index was its worst losing streak since December 2021. However, unlike the euro, the British currency was helped by two more factors. The first is strong labor market data. The second is inflation in April, which peaked in four decades and gave investors hope for further tightening of monetary policy and higher interest rates by the Bank of England.

British Prime Minister Boris Johnson expressed his concern about the country's economic prospects last week. He said in an interview with Bloomberg TV on May 27 that he "expects a difficult period ahead" and "doesn't want to see a return to the 1970s-style wage-price spiral."

A day earlier, the decision of the government of the United Kingdom, in contrast to the "boring" of the Fed's protocol, greatly surprised the markets. UK Finance Minister Rishi Sunak announced a one-off payment of £650 to the lowest income households to help them with rising prices. The total amount of this fiscal bailout will be £15bn. And although Sunak argued that the support package would have a “minimal impact” on inflation, many analysts thought that this injection could prompt the Bank of England to revise its economic forecasts for this and next year. It is possible that the regulator will decide to take a more hawkish stance in order to limit inflationary pressure on the country's economy.

At the same time, for now, growth prospects for the UK economy remain significantly lower than on the other side of the Atlantic. And this causes many experts to doubt that the pound, together with the GBP/USD pair, can continue to grow steadily in the medium term. Especially if the tension around the Northern Ireland Protocol increases. Recall that this document is an addition to the Brexit Agreement, which regulates special trade, customs and immigration issues between the UK, Northern Ireland and the European Union.

The last chord of the past week sounded at 1.2628. 55% of experts vote for further growth of the pair, 35% for its fall, and the remaining 10% are for a sideways trend.

The situation with indicators on D1 is similar to their readings for EUR/USD. Among the trend indicators, 50% indicate the growth of the pair, and the same number indicate the fall. Among the oscillators, the balance of power is somewhat different: only 10% are looking south, another 10% are neutral, 80% are pointing north, although a quarter of them are already in the overbought zone. Supports are located at 1.2600-1.2620, 1.2475-1.2500, 1.2400, 1.2370, 1.2300, 1.2200, then 1.2154-1.2164 and 1.2075. A strong pivot point for the pair is at the psychologically important level of 1.2000. In case of further movement to the north, the pair will have to overcome the resistance 1.2675, then there are zones 1.2700-1.2750, 1.2800-1.2835 and 1.2975-1.3000.

Among the events of the upcoming week concerning the economy of the United Kingdom, we can note Wednesday, June 01, when the May value of the index of business activity in the manufacturing sector (PMI) will be published. Thursday 02 June and Friday 03 June are bank holidays in the UK.

USD/JPY: Japan Has Its Own Way. But which one?

Japanese Prime Minister Fumio Kishida has recently said that "the recent movements of the yen are driven by various factors" and has added that the government's priority is to help ease the pressure on households and businesses through various policy measures.

It is interesting to know what lies behind the wording "the recent movements of the yen". Is it the fact that USD/JPY has soared from 102.58 to 131.34 since January 2021, and the Japanese currency has weakened by 2,876 points? So this is not just some kind of “movement”, but a real collapse, about which the country's households are moaning.

Inflation in the country continues to grow, which eventually causes dissatisfaction among the population. The rise in consumer prices is recorded for the eighth month in a row. They increased by 2.5% in April compared to the same month a year earlier, showing the highest growth rate since October 2014. As noted by Dow Jones, inflation has exceeded the 2.0% mark for the first time since September 2008, and this is without taking into account the effect of the consumption tax increase. But how do the leaders of the country react to this?

Whereas US and UK regulators fight inflation by tightening monetary policy, the opposite is true in Japan. According to the aforementioned Prime Minister Fumio Kishida, the authorities are aiming to meet the inflation target through the government's structural reforms, fiscal policy, and easing of the Bank of Japan's monetary policy. (Recall that the interest rate on the yen has been at a negative level of -0.1% for a long time).

Bank of Japan Governor Haruhiko Kuroda, in turn, explained that if energy prices do not show a sharp drop, Japan's core consumer price index (CPI) is likely to remain near the 2% mark for about the next 12 months.

At the same time, if we analyze the statements of both officials, certain discrepancies in their assessment of the economic situation become noticeable. On the one hand, Fumio Kishida says that the government's priority is to alleviate inflationary pressure, including by raising the wages of citizens. On the other hand, Haruhiko Kuroda says that against the background of such wage increases, a steady increase in inflation is possible. As a result, it is not yet clear at what point a compromise will be reached between the Government and the Central Bank of Japan, and what the country's economic policy will look like in the coming months.

Many investors, especially foreign ones, expect that, despite the regulator's assurances of its commitment to an ultra-soft monetary policy, it will still be forced to increase the interest rate. And, apparently, this expectation, along with the fall of DXY, provides support to the yen: the USD/JPY pair ended the last week at 127.11.

At the moment, 60% of analysts side with the bears, expecting further movement of the pair to the south, 15% vote for the resumption of the medium-term uptrend, and 25% expect movement in the sideways.

Among the indicators on D1, the alignment of forces is as follows. For oscillators, 60% are colored red, among which a third gives signals that the pair is oversold, 10% are colored green, and 30% are neutral gray. Among trend indicators, the parity is 50% to 50%. The nearest support is located at 126.35, followed by zones and levels 126.00 and 125.00 and 123.65-124.05. The goal of the bulls is to rise above the horizon of 127.55, then overcome the resistances of 128.00, 128.60 129.40-129.60, 130.00, 130.50 and renew the high of May 09 at 131.34. As the ultimate goal, the January 01, 2002 high of 135.19 is seen.

No important information regarding the state of the Japanese economy is expected to be released this week.

CRYPTOCURRENCIES: The Background Is Negative, but There Is Still Hope



We have two pieces of news for you: good and bad. Let's start with the good one. Many experts, such as ARK Invest CEO Katherine Wood, literally dreamed that bitcoin would “get rid” of the S&P500, Dow Jones and Nasdaq stock indices, stop following them in the tail and take on a life of its own. And finally, we have seen something similar over the past two weeks. Despite the volatility in the stock markets, the bulls are desperately trying to keep the defense in the $30,000 zone from May 13 to May 27, preventing the BTC/USD pair from falling below the $28,620 support. This is where the good news ends. Let's move on to the bad one. More precisely, to the bad ones, because there are quite a lot of them.

Cryptocurrency No. 1 is trading in the negative zone for the first time in its history for the eighth week in a row. An important role in these dynamics was played by the direct correlation of BTC with stock indices, which was broken only in the last two decades of May.

Experts from Goldman Sachs noted in April that the Fed's aggressive policy could provoke recessionary phenomena in the US economy. Such expectations led to the flight of institutional investors from risky assets, including cryptocurrencies.

The overall trading activity is declining. The outflow of funds from cryptocurrency investment funds in the past two weeks has reached its highest levels since July 2021. The total amount in fund management has fallen to $38 billion. The number of transactions is also falling. The total volume of coins on crypto exchanges has decreased to 2.5 million BTC, bitcoin flows to cold wallets.

Against this background, negative statements about the main cryptocurrency are heard more and more often. The head of the ECB, Christine Lagarde, said on May 22 that the cryptocurrency does not have any security that could serve as stability. The next day, she was joined by the head of the Bank of England Andrew Bailey, according to whom bitcoin has no intrinsic value and is not suitable as a means of payment.

Scott Minerd, Investment Director of Guggenheim Partners, agrees with the heads of the Central Banks. “Currency should store value, be a means of exchange and a unit of account. There is nothing like it, they [cryptocurrencies] have not even come to a single basis,” he concluded and compared the situation on the crypto market with the dot-com bubble. According to him, most digital assets are “junk”, but bitcoin and ethereum will survive the crypto winter, which will be long. “When you break $30,000, $8,000 is the ultimate bottom. Therefore, I think we still have a lot of room to decline, especially with the Fed acting tough,” Scott Minerd predicted.

Galaxy Digital CEO Mike Novogratz also sees the outlook for the entire financial market as grim. He believes that even despite a significant drop from their all-time highs, altcoins risk losing more than half of their value. However, despite the bearish macroeconomic background, the head of Galaxy Digital remains optimistic and believes in the recovery of the crypto market in the future. According to the head of Galaxy Digital, “The crypto community is resilient and believes that the markets still provide early entry opportunities.”

Indeed, if you analyze social networks, you can see that their users, unlike institutional ones, have much more faith in a better future. Thus, the analytical company Santiment published the data of its Weighted indicator, which calculates negative and positive comments on an asset in social networks. Based on this information, a kind of mood of the crypto community is determined. According to the readings of this instrument, bitcoin has already reached the global bottom and can be expected to rise in the coming weeks. "Now is the moment when bitcoin has every chance of a limited strengthening,” analysts at Santiment believe.

One of the most respected social media analysts aka Credible also believes that, despite the general bearish mood in the markets, BTC is ready to take off. Credible uses the Elliott wave theory for technical analysis, which predicts the behavior of the rate based on the psychology of the crowd, which manifests itself in the form of waves. This theory assumes that a bull market cycle goes through 5 impulse waves, with the asset correcting during the 2nd and 4th waves and rallying during the 1st, 3rd and 5th waves. In addition, each major wave consists of 5 smaller sub-waves.

According to the analyst, bitcoin is now in the middle of the main 5th wave that began at the start of 2019. In addition, BTC is currently still in the 5th sub-wave, which can push the asset to a new all-time high above $100,000. “I understand that my approach is controversial," writes Credible. “Most do not expect a new all-time high until the next halving in 2024, but I expect it sooner, in a few months.”

Rekt Capital, which has over 300,000 Twitter followers, has warned that bitcoin could briefly drop 28% below its 200-week moving average. He explained that this SMA is playing the role of an ever-growing latest support. Bitcoin has fallen below this line in the past, but these periods of capitulation were very short-lived. The weekly candlestick has never closed below this SMA yet, but its shadows were as high as 28%. If this happens again now, the cryptocurrency rate will be at the level of $15,500. The 200-week moving average is currently in the $22,000 zone.

According to another cryptanalyst named Rager, “If the price of BTC declines and bounces off the 200-week moving average, as in past bearish cycles, this is a good sign. There will be a decline of only 68% of the maximum.” However, according to his calculations, such declines were as high as 84% in the past, and "in the current realities, an 84% pullback would lead to $11,000." That being said, given the length of BTC’s bearish cycles in 2014 and 2018, it could take 6 to 8 months before bottoming out.

Rager believes that in the short term, the price of bitcoin will continue to depend on the strength or weakness of the US stock market: “BTC has limited upside right now, but it will not strengthen until the stock markets turn around.”

According to Glassnode, the ratio of open put- and call-options for BTC has increased from 50% to 70%, which indicates an increased desire of investors to secure positions from continued negative dynamics.

The open interest (OI) in call contracts with expiration at the end of July this year is concentrated around the $40,000 mark. However, participants give the greatest preference to put options, which will bring profit in case of price reduction to $25,000, $20,000 and $15,000. In other words, until the middle of the year, the market focuses on hedging risks and/or speculating on a further price reduction.

Optimists predominate over the longer distance. Contracts maturing at the end of the year have the most open positions in the range of $70,000 to $100,000. In the put option, the largest OI is concentrated between $25,000 and $30,000, that is, it is in the zone of current values.

We complete the review of good and bad news for today on this note. We only note that at the time of writing the review, on the evening of Friday May 27, the total capitalization of the crypto market is at the level of $1.194 trillion ($1.248 trillion a week ago). The Bitcoin Fear & Greed Index is firmly entrenched in the Extreme Fear zone and is at around 12 points. (Recall that it fell to 8 points on May 17, the lowest level since March 28, 2020). The BTC/USD pair is struggling to stay in the war zone, trading at $28,800.


NordFX Analytical Group


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

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