Daily Market Analysis from NordFX

[Stan NordFX]

CryptoNews of the Week

- China's Supreme Economic Planning Authority has officially declared crypto mining "obsolete", backing up the government's efforts to eradicate the industry entirely. The National Development and Reform Commission made the announcement on Monday, January 10, explaining along the way that the country's economy is moving towards a model that favors cleaner, less resource-intensive industries. According to business consultancy Dezan Shira & Associate, the "obsolete" label refers not only to mining, but also to other technologies that will be banned from investment and should be phased out.
As a reminder, China had been the world leader in this industry until last year, when government bans drove most of the crypto miners out of the country,

- The global adoption of cryptocurrencies will jump from the current 5% to 20% in 2022. This forecast was given by the CEO of Binance crypto exchange Changpeng Zhao in an article for the Indian version of Fortune. The main drivers, in his opinion, will be the SocialFi, GameFi and NFT sectors.
Regarding India, Zhao noted the importance of government support for blockchain and cryptocurrency innovation, regardless of asset classification. According to the NASSCOM report, it is expected that the crypto market in the country will reach $241 million by 2030 and potentially create 877 thousand jobs. The organization also predicts an increase in the inflow of funds from retail investors in digital assets to $15.6 billion from $6.6 billion currently.
The head of Binance stressed that India is poised to "become a leader in blockchain and cryptocurrencies." "In addition to banking and financial services, DLT technology can improve the efficiency of land transactions, supply chains, agriculture and corporate sustainability," Zhao added.

- According to Bloomberg, only 5% of customers surveyed by JPMorgan believe that the bitcoin price will reach $100,000 by the end of 2022. More than 40% believe that it will only return to the $60,000 level. "I'm not surprised by the bearish sentiment on bitcoin. Our futures-based indicator looks oversold", said the bank's strategist Nikolaos Panigirtzoglou. According to him, the fair value of the cryptocurrency ranges from $35,000 to $73,000.

- Jack Dorsey's Block (formerly Square) payment company has opened a recruitment process to develop a next-generation bitcoin miner and a hardware wallet "for the next 100 million bitcoin users." This is stated in the corresponding section on the company's website. "Our goal is to expand economic opportunities, starting with providing easy-to-use and reliable self-service to a global audience," the announcement says.

- Bitcoin continues to fall in price after it reached an all-time high of $69,000 last November. Galaxy Digital founder Mike Novogratz called this a healthy pullback in a recent interview with CNBC. He believes that the main cryptocurrency will find support around $38,000-40,000, after which it will return to growth, thanks to purchases by institutional investors.
Nigel Green, CEO of the consulting company deVere Group, has also stated that this is the best time in the current cycle to buy bitcoin.

- However, some experts consider such sentiments to be too optimistic. Thus, the ENCRY Foundation predicts that bitcoin may return to growth only after its price drops to $28,000-30,000. "The flows of liquidity to the markets will decrease in the second half of 2022, after the completion of the asset repurchase program in the United States. Then bitcoin may fall to $30,000," the company's specialists believe.
The current levels cannot yet be described as a market bottom. This is indicated by another expert, Viktor Pershikov, a leading analyst at 8848 Invest. According to him, conditions that have not yet been observed must be fulfilled for the formation of the bottom. This is a long flat (at least two months in the current circumstances) with the accumulation of long positions and an increase in open interest, a decrease in BTC sales by market participants as well as clarification of the speed and degree of tightening of monetary policy by world central banks.
"The current state of the crypto market is characterized by emotional selling to a large extent, including at a loss, which is typical for situations when retail participants are shaken out of the market. The current decline does not pose a threat for large BTC holders and is a normal market correction before further growth," Pershikov says. In his opinion, bitcoin will spend most of the year in the price range of $30,000-70,000.

- Bitcoin is classified as a risky asset, and it moves mainly in the same direction as technology stocks. Sometimes the correlation of BTC with such assets weakens, but the overall dependence remains high.
Analysts associate the January fall in cryptocurrency with the retreat of stock indices, which is taking place against the background of the US Federal Reserve's readiness to raise the discount rate this quarter. Correlation between bitcoin and the S&P 500 has increased to its highest level since July 2020, according to Kaiko platform. A similar situation is observed between BTC and the Nasdaq index.

- Up to 50% of all transactions in one form or another will be made through Ethereum in 10-20 years. This was stated by Joey Krug, co-director of investments at Pantera Capital in an interview with Bloomberg.
The top manager is convinced that the second largest cryptocurrency by capitalization will play an important role in global finance, and that the explosive growth of Ethereum killers will not be able to undermine its dominance. "There are many compromises in other blockchains, while Ethereum is in the best position in terms of decentralization, which is extremely important," explained the Pantera Capital Co-Chief Investment Officer.

- Cryptocurrency analyst Justin Bennett said what, in his opinion, awaits Ethereum against the backdrop of a downtrend in the entire market. "One needs to be careful as long as ETH is below $4,000. If ETH returns to this area in the coming weeks and months and can gain a foothold there, then we can talk about the continuation of the strong bullish trend observed in 2021. "Bennett himself does not mind replenishing his leading altcoin stocks at around $3,000.
The analyst also looks at ETH against BTC and believes that the ETH/BTC pair could start a long-term rally to 0.18 BTC ($7.388) for 1 Ethereum, but this would require holding the 0.075 BTC ($3.077) level as support.

- A resident of San Francisco (USA) Siraj Raval uses his 2018 Tesla Model 3 to mine Ethereum. To do this, he launched the corresponding free software on the Apple Mac mini M1, connecting it to the car's center console. Five graphics cards are powered by the Tesla battery.
According to Raval, he was mining for about 20 hours a day on the Tesla battery and was earning from $400 to $800 per month throughout 2021, which made such mining profitable even during the bear market. (The monthly cost of recharging the car was only $30 to $60, despite the fact that he was driving it as well.)
However, another miner who used Tesla, Thomas Somers, doubted that much profit. "The best estimate I would give for a GPU hashrate in Model 3 would be around 7-10 MH/s. Currently, this will generate revenue of about $13 at a rate of 10 MH/s without taking into account any costs," Somers said.


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

https://nordfx.com/

 

[Stan NordFX]

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

EUR/USD: Rumors That Drive the Markets

The weather on the market is quite often determined by rumors which have very little to do with reality. Or nothing at all. But those who spread them can earn good money by speculating on them. Something similar seems to have happened last week.

Recall that the EUR/USD pair has been in a sideways trend since November, fluctuating in the range of 1.1220-1.1385. And most analysts voted for the continuation of such a movement a week ago, with a predominance of bearish sentiment. The US Fed's hawkish intentions to end the emergency stimulus program, raise interest rates, and start normalizing the balance sheet were an argument in favor of the dollar's strength.

Note that neither the head of the Fed, Jerome Powell, nor other officials of the American central bank have ever said or even hinted that the rate could be raised four times during 2022. It is unclear where this figure came from, but rumors about such an opportunity began to be actively exaggerated and, as a result, many investors believed in it.

Speaking in the US Congress on Tuesday, January 11, Jerome Powell just repeated what he had already voiced earlier. He said once again that the Fed is going to raise the refinancing rate at least twice this year in order to combat a record inflation in forty years, and that if necessary, it can be raised three times. That is, nothing new was actually said. But the market was waiting for the number "four" and was disappointed because it did not sound.

As a result, the DXY dollar index went into a deep peak, closing below the 50-day moving average, and the EUR/USD pair, instead of moving south, went north.

Thanks to US inflation data, the euro further strengthened its position the next day, on Wednesday, January 12, and the pair EUR/USD, having broken through the border of the medium-term sideways channel, went further up. The breakdown of resistance in the 1.1385 zone served as a trigger for a correction after the strengthening of the dollar that began in May 2021 and the subsequent month-and-a-half sideways trend. The weekly high was reached on the morning of Friday, January 14 at the height of 1.1482.

US retail sales and consumer confidence data released at the end of the week were much worse than previous figures, confirming the negative impact of the Omicron coronavirus strain on the US economy. It is not yet possible to predict exactly how much they will affect the next steps of the Fed. But, judging by the reaction of the market, investors decided that such statistics would push the regulator to take more decisive action. As a result, the EUR/USD pair finished at 1.1415.

Of course, the dollar may retreat a little more in the short term. However, the difference between the hawkish policy of the Fed and the dovish policy of the ECB should still support the USD. Moreover, the head of the Fed once again stressed in recent comments that the fight against inflation is a top priority for the US regulator, and expressed confidence that the US economy will cope with the rate increase.

Also, according to a number of experts, the increase in rates may occur more often than once a quarter, as was the case in the previous cycle of monetary tightening. However, this is just an opinion so far that can give rise to another wave of rumors and expectations. Investors expect to find out what will happen in reality following the results of the January FOMC (Federal Open Market Committee) meeting of the US Federal Reserve on January 26-27.

At the time of writing, 75% of D1 oscillators are green and 25% are giving signals EUR/USD is overbought. Trend indicators have 65% green and 35% red. Among the experts, the majority (75%) does not exclude the growth of the pair in the coming week. However, the weather vane of opinions turns 180 degrees in the forecast for February, and here it is already 75% of analysts who are in favor of the dollar strengthening. Resistances are located at the levels of 1.1450, 1.1480, 1.1525, 1.1570 and 1.1615. Support levels and zones are 1.1385-1.1400, 1.1300, 1.1275, 1.1220. This is followed by the November 24 low of last year at 1.1185 and the 1.1075-1.1100 zone.

As for the economic calendar for the coming week, we can note the release of data on the consumer market of the Eurozone on Monday January 17 and Thursday January 20. The ECB's statement on monetary policy and the issue of statistics on the US labor market are also expected on Thursday. The head of the ECB, Christine Lagarde, is to speak on Friday, January 21.

GBP/USD: Bank of England vs Fed: a Game to Stay Ahead

Naturally, in addition to the meetings of the FRS and the ECB, the meeting of the Bank of England will also take place in January. It should be borne in mind that, unlike its peers, this regulator started attacking rising prices back in December, and this made a strong impression on the market. After inflation in the UK rose to 5.1%, reaching a 10-year peak, the Central bank of the kingdom raised the rate from 0.1% to 0.25% for the first time in three years. The decision was made despite the worsening epidemiological situation due to a new coronavirus strain. And here the opinion of the head of the Bank of England, Andrew Bailey, coincided with that of Jerome Powell: for both, the No. 1 task was to reduce price pressure on the economy and society. But the position of the former looks more hawkish, although the rate increase by 15 basis points is not significant. But the first step has been taken, and the market expects a second rate hike in February.

Such expectations continue to support the British currency, thanks to which the GBP/USD pair was able to update the high of the last eleven weeks, reaching the height of 1.3748. However, it failed to break above the 200-day SMA, and the last chord of the five-day week, after the strengthening of the dollar in the second half of Friday, January 14, sounded at 1.3678.

According to 60% of analysts, the GBP/USD pair may make another attempt to rise above the 1.3800 horizon in the coming days. This scenario is supported by 90% of trend indicators on D1 and 80% of oscillators. The remaining 20% signal that the pair is overbought. However, as in the case of EUR/USD, the scales tilt in favor of the bears, when moving from a weekly to a monthly forecast, and here it is already 55% that are waiting for the pair to move down.

Supports are located at 1.3659, 1.3600, 1.3525, 1.3480, 1.3430, 1.3375, the next strong support is 100 points lower. The resistance levels are 1.3700, 1.3750, 1.3835 and 1.3900.

Important macro data from the UK will suffice next week. There will be data on unemployment and the average wages in the country on Tuesday, January 18. Then, the consumer price index will be known the next day. In addition, the Governor of the Bank of England, Andrew Bailey, will speak on Wednesday, January 19, and retail sales for December 2021 will be published on Friday, January 19. This is an important indicator of consumer spending, which also correlates with consumer confidence and is considered as an indicator of the UK economy development pace. According to forecasts, it is expected to fall from 1.4% to minus 0.6%.

USD/JPY: The Yen Strength Is the Weak Dollar

USD/JPY dropped from 116.35 high (high since January 2017) to 113.47 last week on the back of Jerome Powell's speech and lower US Treasury yields. However, the ultra-dove position of the Japanese regulator is unlikely to further strengthen the yen. The dollar seems to be gaining strength again, and the pair went up again at the end of the weekly session, rising to the level of 114.18.

With USD/JPY moving south for the last week and a half, most of the indicators on D1 turned red. Among the oscillators, these are 80% of them, 10% give signals of the pair being oversold, and 10% have already changed their color to green. Among trend indicators, 60% recommend selling, 40% recommend buying. Among experts, 50% vote for the growth of the pair, 40% for its fall, and 10% have taken a neutral position.

Support levels are 113.50, 113.20, 112.55 and 112.70. The nearest resistance zone is 114.40-114.65, then there are levels 115.00, 115.45, 116.00 and 116.35.

The decision of the Bank of Japan on the key interest rate will be announced on Tuesday, January 18. And it will highly likely remain at the same negative level as before, minus 0.1%. As we wrote earlier, according to this regulator, the country does not need a strong currency, and a weak yen is more likely to help the country's economy, as it supports exports and corporate profits.

CRYPTOCURRENCIES: And Here Too, Thank You Jerome Powell

Satoshi Nakamoto launched the bitcoin mainnet by mining the genesis block with 50 BTC in January 2009. Only some 13 years have passed since then, and The National Development and Reform Commission of China declares crypto mining "obsolete" in January 2022. It follows from the official statement of this top economic planning body that preference will now be given to cleaner and less resource-intensive industries, and mining is on the list of "obsolete" technologies that will be banned from investment and must be eliminated.

William Shakespeare was right; nothing lasts forever under the moon. And after digital currencies were declared "persona non grata" in China, the center of influence on the crypto market shifted completely to the United States. Another proof of this was last week, when a few words from Fed Chairman Jerome Powell were enough to stop the fall of bitcoin and turn the trend of the crypto market upwards.

Speaking at the US Senate Banking Committee, Powell said that stablecoins can be used with the Central Bank official digital currencies CBDC (Central Bank Digital Currency is fiat money in digital form, which are issued and provided by the Central Bank). But this is not what allowed crypto quotes to move north, but the general weakening of the dollar and the return of investors' risk appetites.

As mentioned above, Jerome Powell made it clear that the Federal Reserve has not yet decided to reduce its balance sheet by almost $9 trillion, and that there will be no four rate hikes in 2022, but no more than three. As a result, the DXY dollar index went down, while stock indices and cryptocurrency quotes went up.

BTC/USD dropped to $39,660 on January 10. It has not fallen this low since September 2021. However, then, following the growth of the S&P500, Dow Jones and Nasdaq, it rose to $44,300 on January 12, and the total capitalization of the crypto market exceeded the psychologically important level of $2 trillion once again, reaching $2.091 trillion. But the Crypto Fear & Greed Index did not get out of the Extreme Fear zone, although it rose from 15 to 21 points.

It is clear that it is too early to talk about the beginning of a new rally in the crypto market. The BTC/USD pair is 35% below its all-time high, and the total capitalization is still very far from the almost $3 trillion that it reached on November 10, 2021. And, if the dollar starts to gain strength again, we can expect digital assets to return to a downward trend.

Of course, crypto enthusiasts predict as usual that top coins will soon rise to new heights. Changpeng Zhao, CEO of the Binance crypto exchange, claims in an article for Fortune that global adoption of cryptocurrencies will jump from the current 5% to 20% in 2022. And Galaxy Digital founder Mike Novogratz sees the 35% drop as just a "healthy pullback." In his opinion, the main cryptocurrency will find support around $38,000-40,000, after which it will return to growth. Nigel Green, CEO of consulting company DeVere Group, also states that now is the most convenient time to buy bitcoin in the current cycle.

However, some experts consider such sentiments to be too optimistic. Thus, the ENCRY Foundation predicts that bitcoin may return to growth only after its price drops to $28,000-30,000. "The flows of liquidity to the markets will decrease in the second half of 2022, after the completion of the asset repurchase program in the United States. Then bitcoin may fall to $30,000," the company's specialists explain.

The current levels cannot yet be described as a market bottom. This is indicated by another expert, Viktor Pershikov, a leading analyst at 8848 Invest. According to him, conditions that have not yet been observed must be fulfilled for the formation of the bottom. This is a long flat (at least two months in the current circumstances) with the accumulation of long positions and an increase in open interest, a decrease in BTC sales by market participants as well as clarification of the speed and degree of tightening of monetary policy by world central banks.

"The current state of the crypto market is characterized by emotional selling to a large extent, including at a loss, which is typical for situations when retail participants are shaken out of the market. The current decline does not pose a threat for large BTC holders and is a normal market correction before further growth," Pershikov says. In his opinion, bitcoin will spend most of the year in the price range of $30,000-70,000.

It is clear that a serious growth of BTC is possible only with the same growth of interest in it from institutional investors. But they seem to be a problem for now. According to Bloomberg, only 5% of customers surveyed by JPMorgan believe that the bitcoin price will reach $100,000 by the end of 2022. More than 40% believe that it will only return to the $60,000 level. According to bank strategist Nikolaos Panigirtzoglou, the fair value of the cryptocurrency ranges from $35,000 to $73,000.

As for bitcoin's main competitor, ethereum, crypto analyst Justin Bennett believes that "as long as ETH is below $4,000, you need to be careful" against the backdrop of a downtrend in the entire market. If only ETH returns to this area in the coming weeks and months and can gain a foothold there, then we can talk about the continuation of the strong bullish trend observed in 2021."

The analyst also looks at ETH against BTC and believes that the ETH/BTC pair could start a long-term rally to 0.18 BTC ($7.388) for 1 ETH, but this would require holding the 0.075 BTC ($3.077) level as support.

All of the above shows that the situation is currently ambiguous. And then how do you make money on virtual currencies? The answer to this question is given in our humorous crypto life hacks column by San Francisco (USA) resident Siraj Raval, who uses his 2018 Tesla Model 3 car for ethereum mining. To do this, he launched the corresponding free software on the Apple Mac mini M1, connecting it to the car's center console. Five graphics cards are powered by the Tesla battery. According to Raval, he mined for about 20 hours a day this way and earned from $400 to $800 a month during 2021.

The numbers do look attractive. It only remains to find about $50,000 to buy such a car and find out if the Chinese authorities will not consider this method of mining harmful and obsolete.


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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[Stan NordFX]

CryptoNews of the Week

- Canadian entrepreneur and Shark Tank TV star Kevin O'Leary spoke to Anthony Pompliano about how sovereign wealth funds in the Middle East are considering mining possibilities. In his opinion, they can enter this space within the next two to three years focusing on the shares of "environmentally friendly" companies.
The businessman did not rule out the creation of his own mining company. In addition to the approval of his initiative by the authorities, O'Leary would like to enlist the support of the inhabitants of the territory associated with its deployment. The entrepreneur called the creation of opportunities for mining companies to reflect income from cryptocurrency mining in financial statements as another condition. He believes this will create an incentive to invest for O'Leary and other financiers.

- The bubble is deflating, so the bitcoin price may fall to $30,000. This opinion was expressed by specialists from the investment company Invesco in their list of "incredible but possible" results for 2022. "Bitcoin's mass marketing reminds us of stockbrokers' activity leading up to the 1929 crash," they write.
According to the experts, the drop in quotes from highs around $69,000 to $42,000 in early January is exactly in line with the bubble pattern. This trajectory assumes that the asset will lose 45% of its value within 12 months after the peak. That is, the price will fall to $34,000-$37,000 by the end of October and to $30,000 by the end of 2022.
At the same time, Invesco admitted that they made a mistake with the forecast for 2021, when they predicted a fall in the BTC price below $10,000. Analysts explained their mistake by the fact that bitcoin seems to pass not through one, but through a series of bubbles.

- Guido Buehler, CEO of SEBA licensed cryptocurrency bank, gave an opposite forecast. He believes that digital gold could rise to $75,000 by the end of 2022, according to CNBC. "Our internal valuation models point to a price between $50,000 and $75,000. I am quite sure that we will see this level," he said, adding that the volatility of bitcoin will remain high, but the asset will be able to test new record levels, the only question is the timing.

- TV presenter, filmmaker and former trader Max Kaiser still believes that bitcoin will hit $220,000 this year. He explained in another interview why his forecast was not realized last year. "As for 2021, I said we would get to $220,000 per coin, which is a typical four-year cycle. What we had in 2021 was a massive mining collapse in China, the hash rate fell by 50%. We have recovered since then and are about to reach a new all-time record hash rate. That's why I'm moving my goal from 2021 to 2022."
"There is a price, there is a hash rate and there is a complexity setting: these are three things you need to keep in mind," Max Keiser explains. "I have always said that the price lags behind the hash rate, so once we see its new all-time highs, new all-time highs of the bitcoin price will follow."

- Another cryptocurrency analyst, Justin Bennett, believes that bitcoin is in for a decent rally in the near future. He reviewed BTC historical price movement models that show that the asset is expected to rise by 20-30%. "You can see since the beginning of 2021 that when bitcoin finds a low below the liquidation level, it makes a move up. The average rate of such movement is about 63%, and the lowest was in April, about 27%. – says the expert. "If you take this data and look at the low around $40,000, then a minimum move of around 27% would take the market to around $50,000. This is highly likely given that the $50,000-53,000 range is very important, and sellers will defend this range as resistance. But bitcoin first needs to break the $45,600 mark to start the rally."

- The number of vacancies related to the cryptocurrency industry in the US increased by 395% in 2021. Such data is provided by the LinkedIn social network. The sample has included ads containing the words "bitcoin", "ethereum", "blockchain" and "cryptocurrency". At the same time, the number of vacancies in the technology sector increased by 98% over the year.
LinkedIn noted that while most jobs were posted by companies specializing in software and finance, interest in crypto-related candidates was also shown in other areas. We are talking about consulting, accounting, hardware and recruiting.

- The owners of the fake YouTube channel of the head of MicroStrategy Michael Saylor lured 26 BTC (about $1.1 million) from one of the users. The scheme of fraud was common and widespread: they promised on behalf of Saylor to "double" any amount sent to the specified address in cryptocurrency. No matter how much is written about this type of scam, there are still those who fall for this bait, driven by greed.
"489 of these scam channels were launched on YouTube last week. We complain about them every 15 minutes, they are blocked after a few hours, but scammers launch new ones," the real Saylor wrote in his verified Twitter account.

- According to Peter Brandt, a Wall Street trader with 45 years of experience, he expects a further decline in the price of ethereum. To date, this altcoin has already fallen in price by 36% from its all-time high of $4,878 recorded on November 10, 2021. Brandt is pessimistic as he believes that from a technological standpoint, ethereum is "a very complex, costly, and user-inconvenient platform in terms of its use for NFTs, special tokens, and its involvement in the metaverse." Based on this, Brandt concludes that ETH will lose points in the eyes of investors, giving way to competitors.

- Data from the Glassnode platform shows that investors are buying up ethereum, despite the fall in its value. As mentioned above, this digital currency has lost 36% of its value in two months. At the same time, the number of ETH wallets with a non-zero balance reached a new high of 73,025,019. Network activity is also increasing, which indicates the desire of investors to take advantage of the correction and buy as many tokens as possible. The average daily number of transactions on the blockchain exceeds 1.2 million at the moment.
According to Glassnode analysts, ETH will trade in a narrow range until a clear vector of movement for the US stock market is formed. If the capital goes into risky assets again, then the ethereum will resume the rise along with bitcoin.

- Popular analyst PlanB is considered one of the main supporters of the theory that BTC will grow to $100,000 in 2021. He developed a forecasting model for the behavior of the bitcoin price (S2F), the signals of which indicated the prospects for such a rise.
Despite the fact that the S2F forecast did not come true, PlanB continues to stick to his theory. He is confident that bitcoin has not yet realized the potential laid in it by the 2020 halving. According to the analyst, the coin is now near local lows and is preparing to renew all-time highs in March. According to the analyst, the peak value of bitcoin within the current cycle can be recorded in July-August 2022.
Analysts of the Twitter channel Root largely agreed with PlanB's opinion. They also believe that bitcoin's growth cycle is not yet complete and is ready to resume growth.

- Umar Farooq, Head of the Cryptocurrency Division at JPMorgan Onyx, compared the current level of development of the cryptocurrency market with the music streaming industry in the 90s. "There was a thing called Napster in the 90s. It was clumsy. Not everyone could use it. And 20 years later, you have Apple Music and Spotify. We live in the era of Napster. We just don't know what Spotify looks like. So I think cryptocurrencies will remain. I just don't know in what form," Umar Farooq said. According to him, the industry has already survived the era of the "Wild West" and has now become an established industry, attracting more and more users.
Earlier, the JPMorgan analyst opined that reduced volatility would enable bitcoin to reach $73,000 in 2022, and the "promised" $146,000 in the long term.


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

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.

https://nordfx.com/

 

[Stan NordFX]

Forex and Cryptocurrency Forecast for January 24 - 28, 2022​

EUR/USD: FOMC Meeting: the Day the Markets Are Waiting For

The main event not only of the next week, but of the whole month will certainly be the meeting of the FOMC (Federal Open Market Committee) of the US Federal Reserve on January 26. Will the regulator raise interest rates now? Or in March? Or will it postpone the curtailment of incentives indefinitely? These questions remain unanswered.

Recall that the roadmap includes three main points at the moment: 1) curtailing the emergency stimulus program in March, 2) three increases in the key rate in 2022, the first of which may also occur in March, after which 3) the regulator will begin to normalize the balance. However, nothing lasts forever under the moon, the monetary policy of the Federal Reserve either. So, these points are not constant at all and can be changed.

Even ECB President Christine Lagarde said last week that the European Central bank has already begun to react and is ready to adjust its policy if facts and figures require it. Although it is not yet very clear what "it has already begun to react" is. And "ready" is a very loose concept.

According to the same Ms. Lagarde, a too rapid rate increase could slow down the growth of the Eurozone's GDP. So why then reduce monetary stimulus and raise the key rate, especially since, according to the bank's management, the surge in inflation is a temporary phenomenon? And inflation in the US is growing faster than in the Eurozone. So let the Fed have a headache about how to stop it. And the ECB can wait until 2023 to raise rates, and at the same time see how things go overseas.

A clear difference between the US Central Bank's hawkish stance and its European counterpart's dovish stance is a strong support for the dollar, pushing the EUR/USD down. However, there are times when the actions of investors are determined not by real economic and political factors, but by rumors spread by speculators.

Something similar seems to have happened on January 11th. Speaking in the US Congress that day, Jerome Powell stated once again that in order to combat the record for forty years inflation, the Fed is going to raise the refinancing rate at least twice this year, and that if necessary, it can be raised three times. That is, nothing new was actually said. But, thanks to rumors, the market for some reason was waiting for the number "four" and was disappointed because it did not sound. As a result, the DXY dollar index went into a deep peak, and the EUR/USD pair went north instead of moving south.

Due to inflation data in the US, the euro strengthened its positions even more the next day, January 12, and the EUR/USD pair went further up having broken through the border of the medium-term side channel 1.1220-1.1385. A nine-week high was reached on the morning of January 14 at 1.1482. After that, everything went back to normal. The market realized that there were no real reasons for the euro to strengthen, and the pair found itself within the 1.1220-1.1385 channel once again on Tuesday, January 18, reaching the local bottom at 1.1300 on January 21. The final chord was played at 1.1343.

At the time of writing, most (55%) of the D1 oscillators are red, 20% are green and 25% are neutral gray. Trend indicators have 90% red and only 10% green. Among experts, the majority (55%) support the strengthening of the dollar, 45% are for its fall. The nearest resistance zone is 1.1370-1.1385, then 1.1400-1.1435, 1.1480 and 1525. The nearest support zone is 1.1300-1.1315, then 1.1275 and 1.1220. This is followed by the November 24 low of last year at 1.1185 and the 1.1075-1.1100 zone.

As for the economic calendar for the upcoming week, besides the FOMC meeting of the US Federal Reserve and the subsequent press conference of its management, we can note the release of data on business activity in Germany and the Eurozone (Markit index) on Monday, January 24. Preliminary data on US GDP will be released on Thursday, January 27, as well as the volume of orders for capital goods and durable goods. (Since the purchase of such goods usually involves large investments, these data reflect the economic situation in the United States, including the inflationary component.) And, finally, data on German GDP will be published at the end of the working week, on January 28.

GBP/USD: Rate Up Bet

The dollar strengthened its position against the pound slightly over the past week. If the GBP/USD pair was at the height of 1.3748 on January 13, it fell to 1.3545 on the evening of January 21. According to some experts, it's all about he British currency being generally overbought. After the December decision of the Bank of England to raise the interest rate from 0.1% to 0.25% for the first time in three years, the pair showed an increase of about 575 points. So the current fall of 200 points may not mean a medium-term trend reversal, but only a temporary correction.

The pound has a lot of chances to return to growth, even despite the hawkish position of the US Federal Reserve. The CPI published on January 19 showed that inflation in the UK rose to its highs in more than 15 years, reaching 5.4% (previous reading 5.1%, forecast 5.2%). The continuing growth of inflationary pressure may force the regulator to raise the key rate as early as at the next meeting on February 03. It is possible that at the same time, against the backdrop of a moderate impact of the omicron strain on the economy of the United Kingdom, plans to reduce monetary stimulus (QE) introduced during the COVID-19 pandemic may also be revised.

A survey conducted by Reuters among 45 experts showed that most of them (65%) expect the Bank of England to raise rates again on February 03, to 0.5% this time. If this happens, then, according to Scotiabank strategists, the GBP/USD pair may return to levels around 1.3800.

More than 75% of analysts expect the rate to be raised to 0.5% by the end of March. Also, according to the median forecast, the British regulator will raise the rate by another 25 basis points in the Q3 (up to a quarter earlier than expected). After that, another increase will follow, up to 1.0%, approximately at the beginning of 2023.

However, as for the forecast for the next few days, 60% of experts side with the bears, expecting the pair to fall at least to the 1.3450-1.3500 zone. Most of the indicators on D1 agree with this forecast: 60% of oscillators point to sell (although 10% are already in the oversold zone), 20% recommend buying and 20% remain neutral. Among trend indicators, 40% look up, 60% look down.

The supports are located at 1.3525, 1.3480, 1.3430, 1.3375, the next strong support is 100 points lower. The levels and resistance zones are 1.3570-1.3600, 1.3640, 1.3700, 1.3750, 1.3835 and 1.3900.

The Bank of England meeting will only take place in early February, and there won't be much important macro data from the UK next week. The publication of the Markit business activity index may cause increased volatility on Tuesday, January 24. Although, most likely, investors will not pay much attention to it on the eve of the US Federal Reserve meeting.

USD/JPY: Yen as a Safe Haven

The meeting of another central bank, Japan, took place last week, on January 18. As expected, the key rate remained at the same negative level, minus 0.1%. As we wrote earlier, according to this regulator, the country does not need a strong currency, and a weak yen is more likely to help the economy, as it supports Japanese exports and corporate profits.

In general, last week's results for the USD/JPY pair can be assessed as neutral. First, it went up and rose to the height of 115.05 on Tuesday, January 18. Then the trend changed to a downtrend, and the pair dropped to where it was trading a week ago, to the zone of 113.60-114.00 by the end of the five-day period.

The Japanese currency was supported by the weakening of the risk appetite of the market. Investors began to abandon risky assets once again in favor of the yen, which plays the role of a "safe haven". The reasons for this change in sentiment were forecasts for rising inflation, uncertainty about the monetary policy of world central banks and the growth of geopolitical tensions.

The USD/JPY pair finished last week at 113.66, that is, within the trading range 113.40-114.40, where it has regularly been in the last three months. And although 60% of analysts vote for its growth, 25% for a fall and 15% for a sideways trend, the median forecast suggests that it will stay within this channel. Of course, provided that the US Federal Reserve does not present any surprises at its meeting. And you should not forget about the international political situation, there are also possible surprises, and very unpleasant ones at that.

Among the oscillators on D1, 100% are facing south, although 25% of them are already giving signals that the pair is oversold. Among trend indicators, 65% recommend selling, 35% recommend buying. Support levels are 113.50, 113.20, 112.55 and 112.70. The nearest resistance zone is 114.00-114.25, 114.40-114.65, then there are levels 115.00, 115.45, 116.00 and 116.35.

CRYPTOCURRENCIES: It Is Not Just Winter in the Crypto Market, It Is Polar Cold

Quotes of risky assets remain under strong pressure in anticipation of the US Federal Reserve meeting. The Dow Jones, S&P500 and Nasdaq stock indices have been losing their positions for almost the entire month of January. But as for the top cryptocurrencies, they have been quite successful in repulsing bear attacks for the last two weeks. If we talk about bitcoin, buyers did their best to keep the BTC/USD pair quotes from reaching the psychologically important horizon of $40,000. However, the bears managed to break through the defense on Friday, January 21 and lower the pair to $36,160. The total capitalization of the crypto market flew down as well, falling to $1.72 trillion, and the Crypto Fear & Greed Index was firmly stuck in the Extreme Fear zone, dropping to 19 points.

The situation, according to a number of experts, does not bode well for cryptocurrencies at the moment. The bubble is deflating, so the bitcoin price may fall to $30,000. This opinion was expressed by specialists from the investment company Invesco, drawing an analogy with the crash of 1929.

The decline from the $69,000 highs is exactly in line with the bubble pattern, analysts say. This trajectory assumes that the asset will lose 45% of its value within 12 months after the peak. That is, according to their calculations, the price will fall to $34,000-$37,000 by the end of October and to $30,000 by the end of 2022.

At the same time, Invesco admitted that they made a mistake with the forecast for 2021, when they predicted a fall in the BTC price below $10,000. Analysts explained their mistake by saying that bitcoin seems to be going through not one, but a series of bubbles. (Although, perhaps, Invesco experts were just in a hurry, and this forecast will come true this year).

Popular analyst PlanB had made a mistake with his forecast for the past year as well. Recall that he developed a model for predicting the behavior of the bitcoin rate (S2F), the signals of which indicated the prospects for BTC to rise to $100,000 in 2021. Despite the fact that the S2F forecast did not come true, PlanB continues to stick to his theory. He is confident that bitcoin has not yet realized the potential laid in it by the 2020 halving. According to the analyst, the coin is now near local lows and is preparing to renew all-time highs in March. According to the analyst, the peak value of bitcoin within the current cycle can be recorded in July-August 2022.

Another unsuccessful predictor was TV presenter and former trader Max Kaiser. He explained In another interview why his forecast of $220,000 for bitcoin was not realized last year. "As for 2021, I said we would get to $220,000 per coin, which is a typical four-year cycle. What we had in 2021 was a massive mining collapse in China, the hash rate fell by 50%. We have recovered since then and are about to reach a new all-time record hash rate. That's why I'm moving my goal from 2021 to 2022."

"There is a price, there is a hash rate and there is a complexity setting: these are three things you need to keep in mind," Max Keiser explains. "I have always said that the price lags behind the hash rate, so once we see its new all-time highs, new all-time highs of the bitcoin price will follow."

Guido Buehler, CEO of SEBA cryptocurrency bank, calls a three times more modest goal. He believes that digital gold could rise to $75,000 by the end of 2022. "Our internal valuation models point to a price between $50,000 and $75,000. I am quite sure that we will see this level," he said, adding that the volatility of bitcoin will remain high, but the asset will be able to test new record levels, the only question is the timing.

Cryptocurrency analyst Justin Bennett's forecast can also be classified as optimistic, although the numbers here are even smaller. Bennett reviewed BTC historical price movement models that show that the asset is expected to rise by 20-30%. "It can be seen that starting from early 2021, bitcoin, finding the minimum below the liquidation level, then makes an upward movement. The average rate of such movement is about 63%, and the lowest was in April, about 27%. - the expert says. "If you take this data and look at the low around $40,000, then a minimum move of around 27% would take the market to around $50,000. This is highly likely given that the $50,000-53,000 range is very important, and sellers will defend this range as resistance.

There is no clear opinion on the future of ethereum either. Some still hope that the ETH/USD pair will meet 2023 around $7,000-10,000, while others expect the coin to crash after bitcoin. For example, Peter Brandt, a Wall Street trader with 45 years of experience, expects a further decline in the price of ethereum. In his opinion, from a technological point of view, this altcoin is "a very complex, costly, and user-inconvenient platform in terms of its use for NFTs, special tokens, and its involvement in the metaverse." Based on this, Brandt concludes that ETH will lose points in the eyes of investors, giving way to competitors.

Peter Brandt's forecast is quite controversial. Indeed, the slow protocol has led to delays in transactions and a significant increase in fees. Sometimes a transaction costs more than $50, which is very expensive compared to the competition. For example, the commission is less than a cent in Solana. However, due to its high decentralization, ethereum is still the first in terms of the use of smart contracts. At the moment, this altcoin dominates the rest of the blockchains in the DeFi sector with $157 billion of blocked funds or 66% of the total market. Its lead is even greater in the NFT sector: here ETH is almost a monopoly as its share exceeds 90%.

It is possible that its share will decrease over time due to competition, but many experts still promise a bright future for this altcoin. The transition to the proof-of-stake protocol and the subsequent network scaling should help it maintain its leading position. The "X hour" for these steps is scheduled for the Q2 2022 at the moment. However, there is a certain risk that the date will be postponed again. This does not seem to scare investors much though. According to the Glassnode platform, they are buying up coins despite the drop in their value.

Ethereum has already lost about 50% of its value in two months. At the same time, the number of ETH wallets with a non-zero balance has reached a new high of 73,025,019. Network activity is also increasing, which indicates the desire of investors to take advantage of the correction and buy as many tokens as possible. The average daily number of transactions on the blockchain exceeds 1.2 million at the moment.

According to Glassnode analysts, ETH will trade in a narrow range until a clear vector of movement for the US stock market is formed. If the capital goes into risky assets again, then the ethereum will resume the rise along with bitcoin.

But when will this happen?

And will it happen at all?



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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[Stan NordFX]

CryptoNews of the Week

- McDonald's fast-food chain has trolled crypto investors amid the fall of the crypto market. McDonald's joked that the owners of digital assets have to get a job in the catering industry during the bearish trend. The post was liked by the community and gained almost 100,000 likes.
In response to the fast-food joke, the CEO of the technology company MicroStrategy Michael Saylor posted his photo wearing a cap with the McDonald's logo and the caption: "Doing my best to buy more bitcoins".
Salvadoran President Nayib Bukele also reacted to the joke about bankrupt crypto investors who are forced to cook burgers. Like Michael Saylor, he tweeted a photo of himself wearing a McDonald's cap. This tweet was immediately commented on by a Shibetoshi Nakamoto, who wrote: "Welcome to the McDonald's family, sir."

- But the well-known economist and critic of bitcoin, Nouriel Roubini called on the government of El Salvador in all seriousness to impeach President Nayib Bukele because of his investments in the first cryptocurrency. According to Roubini, the country is on the verge of bankruptcy. "El Salvador's bitcoin experiment is a real disaster: BTC holders have lost 50% [of the portfolio]," he wrote, calling Bukele a "clown" and a "criminal president" along the way.

- McDonald's trolling has not been ignored by other influencers either. So, the director of the Gemini crypto exchange Tyler Winklevoss wrote that he considers the current fall as an excellent opportunity to buy coins on the Big McBottom. And Elon Musk promised to eat the Happy Meal during the TV broadcast "if McDonald's starts accepting Dogecoin."

- The collapse of bitcoin creates an opportunity to become richer, says Robert Kiyosaki. Rich Dad Poor Dad bestselling author and entrepreneur said he would buy more digital gold if its price dropped to $20,000. "Profits are made when you buy, not when you sell. Bitcoin is crashing. Great news. I bought BTC for $6,000 and $9,000. I will buy more if the price tests $20,000. The time to get rich is coming."
Recall that Kiyosaki predicted a "giant stock market crash" last October and warned that the same fate awaits gold, silver and bitcoin. This is exactly what we are seeing now.

- Goldbug and bitcoin skeptic Peter Schiff allowed the collapse of bitcoin below $10,000. In response, Galaxy Digital founder Mike Novogratz offered Schiff a $1 million bet. He promised to send these funds to charity or another purpose of the opponent's choice if BTC trades below $35,000 in a year. At the same time, Novogratz believes that the bear market will be long enough, and therefore does not advise buying on drawdowns now. "It will be difficult for cryptocurrencies to start a rally until the stock market bottoms out. Nevertheless, digital assets have already experienced a significant sell-off and are beginning to receive support from buyers," he explained.

- Ton Weiss, a well-known trader, analyst and former vice president of JP Morgan Chase, does not rule out the completion of the bitcoin correction in the near future. According to him, the cryptocurrency has reached the 20-month moving average (MA), which is at the level of $34,000. Weiss claims that this is a "perfect opportunity" for a trend reversal and the asset's return to growth. According to the specialist, in the event of a rebound, the price of bitcoin will quickly return to the $40,000 level and consolidate above it.

- Another cryptocurrency analyst, Nicholas Merten predicts that despite the current market conditions, bitcoin could rise almost 7 times to $200,000 by the end of the year. Merten stated on his DataDash YouTube channel (502,000 subscribers) that if bitcoin's capitalization stays above $600 billion, it will set the stage for the coin's bull run in the coming months.
The expert recalled that all rallies occur after corrections and are often spurred on by BTC purchases at heavily discounted prices. Understanding how big players buy is the key to navigating the highly volatile cryptocurrency markets, Merten says.

- According to many market participants, bitcoin can go to the $30,000 area, and then it is likely to turn around. Charles Edwards, the founder of the crypto investment company Capriole, wrote that the signal of the NVT (Network Value to Transaction ratio) indicator shows that BTC is oversold: this situation is rare in the market. "We have entered an open buying zone," Edwards commented on the current situation.
Recall that this indicator was proposed and is actively used by the well-known analyst Willy Woo. NVT is calculated by dividing bitcoin's market capitalization by its transaction volume (in USD) and is a popular metric to assess whether the coin is overbought or oversold.

- Scott Melker, a trader, analyst, and podcast host, reminded his subscribers that there is nothing unusual about what is happening in the market now. "People have short memories. Bitcoin fell from $60,000 to $30,000 in 10 days in May. 10 DAYS!!! All this has already happened. And that was only 8 months ago. So why be so scared?" he wrote.

- The flagship cryptocurrency has captured the mind of Eric Adams, who is now the mayor of New York. It was last Friday, during an epic price drop, that he received his first paycheck in bitcoin and ethereum, which cut his US dollar pay by 15%. However, Adams did not express any regret about this, apparently believing that he would win in the end anyway. "My goal is to send a message that New York is open to technology and encourage our young people to participate in new emerging markets," says the 110th mayor of the US's largest city.

- Michael Saylor, founder of MicroStrategy, named two reasons for the current correction in the cryptocurrency market. The first of these is the non-transparent regulation and regulatory uncertainty of the crypto industry. The second problem is the imperfection and immaturity of the crypto industry. At the same time, the businessman believes that the current market conditions provide "an excellent entry point for institutional investors interested in cryptocurrencies, who have been on the sidelines so far."
According to Saylor, a lot of institutional investors are now watching bitcoin and see that it is 40% below the all-time high and that it is consolidating. At the same time, they understand that bitcoin is supported by such serious investors as Bill Miller, regulators, senators, and congressmen, as well as large public companies.
As for MicroStrategy itself, this software developer owns 124,391 BTC. The company has spent about $3.7 billion on the acquisition of cryptocurrency. Thus, the average purchase price is $30,100 per 1 coin.


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

https://nordfx.com/

 

[Stan NordFX]

Forex and Cryptocurrency Forecast for January 31 - February 04, 2022​

EUR/USD: Surprises from the US Federal Reserve

The meeting of the US Federal Reserve FOMC (Federal Open Market Committee) and the subsequent press conference of its management was certainly the main event of the last week. JP Morgan analysts called the speech of Jerome Powell, the head of the US central bank, the most "hawkish" of all during his tenure.

As for the first increase in the federal funds rate this year, there were no surprises: it is likely to take place in March, as planned. True, Jerome Powell did not answer the question of how much it will be increased, 25 or 50 basis points (bp). But at the same time, he made it clear that the Fed will be quite "agile" and "intractable" from now on. Apparently, the regulator will no longer pay attention to either the coronavirus omicron strain or the stock indices collapse and will focus on controlling inflation.

The number of possible increases in the refinancing rate in 2022 was a real surprise for the markets. Powell's speech led to the market upgrading the probability of three increases by June from 45% to 60%. In total, there can be five or six of them this year. For example, Deutsche Bank experts forecast a 25 bp rate hike in March, May, and June, and two more acts of monetary restriction before the end of the year. And their colleagues from BNP Paribas have set their sights on six raises. There may even be seven of them If inflation continues to be at a high level in the second half of the year. After all, the head of the Fed has made it clear that the main tool to fight inflation will be the federal funds rate.

In addition, the US Central bank has decided to double the pace of rolling back its quantitative easing (QE) program. The volume of government bonds repurchases will decrease by $20 billion per month from next month (now $10 billion), and of mortgages by $10 billion (now $5 billion).

All of these hawkish signals have shown that the regulator's stance has become much tighter and have made a huge impression on the derivatives market. The direct correlation between government bond yields and the DXY dollar index was restored, and the index jumped above 97.35.

Recall that the euro is the basis of the basket of 6 world currencies that form the DXY, with a share of 57.6%. Therefore, the European currency played a leading role in the growth of the index and the strengthening of the dollar in the current situation. The difference between the Fed's hawkish stance and the ECB's dovish stance has been repeatedly spoken about. The European Central Bank intends to only start raising the rate in 2023, while its counterpart overseas will already be completing this program. And such a divergence does not bode well for the Old World currency.

The EUR/USD pair lost more than 220 points at its high in the past week alone, which was a record for the last seven months. The local bottom was found on Friday, January 28 at the level of 1.1121, followed by a slight correction and a finish at 1.1148.

Of course, if the US Federal Reserve conducts an ultra-aggressive tightening of its monetary policy, it can lead to a sharp reduction in consumer demand, with all the ensuing problems. But this is not happening so far. And it will always be possible to soften the position even if it ever happens. Therefore, the probability of the pair falling towards 1.1000 is very high. This is the figure that sounds both in the forecasts of strategists and the Internationale Nederlanden Groep, as well as the Canadian Imperial Bank of Commerce.

At the time of writing, 100% of trend indicators and 100% of oscillators on D1 are red, though 30% of the latter are in the oversold zone. Among experts, the majority (60%) are in favor of further strengthening of the dollar, 40% believe that everything is not lost for the euro yet, and the pair will be able to temporarily return to the boundaries of the medium-term side channel 1.1220-1.1385. The nearest resistance zone is located at 1.1185, followed by 1.1220, 1.1275, 1.1355-1.1385 and 1.1485. The nearest support zone is 1.1075-1.1100 and then 1.0980-1.1025.

As for the calendar of the upcoming week, the attention of the market will be mainly focused on the ECB meeting on Thursday, February 03. It is not likely to present any special surprises, and the interest rate will remain the same, at the level of 0%. However, certain changes in the monetary policy of the European regulator are still possible. And investors expect to learn about them at the final press conference.

In general, the week will be full of macro-economic statistics. There will be data on the GDP of the Eurozone and the consumer market in Germany on Monday, January 31. The volumes of retail sales in Germany, the ISM business activity index in the US manufacturing sector, as well as the results of a study of the European banking sector will be announced on Tuesday. There will be statistics on the Eurozone consumer market and the level of employment in the private sector in the US on Wednesday. The value of the ISM business activity index in the US services sector will become known on Thursday. And in addition to data on retail sales in the Eurozone, we are traditionally waiting for a portion of statistics from the US labor market, including the number of new jobs created outside the agricultural sector (NFP) on the first Friday of the month, February 04.

GBP/USD: How Will the Bank of England Respond?

The Markit Services PMI for the UK released on January 24 came in below the forecast at 53.3 versus the expected 55.0. Further, the expected active increase in rates by the Fed, and then preliminary data on US GDP for the fourth quarter of 2021, played on the side of the dollar. They showed an increase that no one expected: 6.9% against the forecast of 5.5% and the previous value of 2.3%. Apparently, the US economy has not only recovered from the COVID-19 attack but has recovered so much that economic growth has even surpassed the 2019 figures.

All this has not benefited the British currency of course. And then there are the demands for the resignation of British Prime Minister Boris Johnson, which the market regarded as another bearish factor. As a result, the GBP/USD pair fixed a low at 1.3357, falling by almost 400 points in two weeks.

Can the pound return to growth even despite the US Fed's hawkish stance? We are likely to get an answer to this question soon enough. After all, in addition to the ECB meeting, there will also be a meeting of the Bank of England on Thursday, February 03. How can it respond to the Americans? Of course, by a faster rate increase: according to a number of forecasts, the pound rate may be increased by another 0.25 bp, up to 0.50%.

For how long will the British currency have such support? Many analysts doubt that the actions of the Bank of England will meet market expectations, and that the regulator will act as aggressively as the Fed this year. Based on this, economists at Rabobank, the second largest bank in the Netherlands, do not exclude that the GBP/USD pair may fall below 1.3000 by the middle of the year.

As for the current situation, the level 1.3400 (range 1.3360-1.3415 to be exact) is a very strong support/resistance zone and can serve as a springboard for the pair to bounce up. This development is supported by 30% of experts. The next resistances are waiting for the pair at levels 1.3440, 1.3500-1.3525, 1.3575, 1.3650, 1.3700 and 1.3750.

70% of analysts vote for the further fall of the pair. Supports are located at 1.3360, then 1.3275, 1.3200, followed by a strong December trend reversal zone 1.3160-1.3185.

The indicators on D1 look like this: only 10% of the oscillators point to the north, the remaining 90% point to the south, of which 20% give signals that the pair is oversold. Among trend indicators, all 100% look down.

In addition to the Bank of England meeting, we should pay attention to data on business activity (PMI) next week: in the manufacturing sector on Feb. 01, in the services sector on Feb. 03 and in the UK construction sector on Feb. 04.

USD/JPY: Yen Has Nothing to Answer

If the Bank of England has something to respond to the US Federal Reserve, nothing like this can be expected from the Bank of Japan with its forever negative (minus 0.1%) rate. The yen, as a safe-haven currency, is usually supported by investors running away from risky assets. But now the rising dollar and US Treasury bonds are a powerful obstacle in their way. And the Bank of Japan does not really need a strong national currency.

As a result, as most experts (60%) expected, the USD/JPY pair rushed north again. True, it failed to reach the high on January 04 at 116.35, but the rise still looks very impressive. If the pair was at the level of 113.46 on Monday, January 24, it reached the height of 115.68 by the end of the working week. The last chord of the five-day period was set at the level of 115.22.

At the time of writing, most indicators on D1 point north. Among the oscillators, there are 90% of them (10% of them give signals that the pair is overbought), the remaining 10% are colored red. Among the trend indicators, 100% recommend buying. Experts agree with the indicators: 70% of them side with the bulls, 20% with the bears, 10% are neutral. Support levels are 115.00, 114.45, 114.00, 113.75, 113.45, 113.20, 112.55 and 112.70. The nearest resistance zone is 115.50-115.70, the nearest serious target of the bulls is a new five-year high at 116.35.

Any serious macroeconomic statistics from Japan is not expected this week.

CRYPTOCURRENCIES: The Calm After the Storm

If we talk about cryptocurrencies, nothing terrible happened for them at the January meeting of the Fed. It had long been known that the regulator would tighten monetary policy and reduce monetary injections into the economy. As well as the fact that it will raise interest rates. Yes, this will hit risky assets, but it will draw money from the stock market in the first place. It is possible that things will not reach cryptocurrencies, as a super-speculative asset at all: the volumes are too small.

The crypto market grew by leaps and bounds as the Fed flooded the fires of the pandemic with trillions of brand new freshly minted dollars. There will be no more inflow of this money, and it is probably not worth counting on a new crypto boom. Institutional investors will behave much more calmly, but they will not be in a hurry to part with their bitcoins and ethereums either. Everyone who wanted to sell them has already sold. Those who wanted to keep them, kept them as a long-term investment.

Of course, any surprises are possible in this industry: both pleasant and not so much so. In the meantime, the crypto market is recovering from the panic that arose before the Fed meeting. Having fallen on Monday, January 24 to $32.945, the BTC/USD pair grew a little and it is trading in the $37,000 zone on the evening of Friday, January 28 at the moment of writing this. The total market capitalization has risen from $1.51 trillion to $1.70 trillion, and the Crypto Fear & Greed Index has grown to only 24 points (11 points at the low of January 23), being stuck firmly in the Extreme Fear zone. So it is clearly premature to talk confidently even about the beginning of a recovery and a trend reversal. Moreover, the BTC/USD chart shows that the strong support that the pair relied on both in 2020 and 2021 is located in the $29,000-30,000 zone. So there is room to fall.

Goldbug and bitcoin skeptic Peter Schiff allowed the collapse of bitcoin below $10,000. But Mike Novogratz, the founder of the Galaxy Digital crypto bank, stood up for the flagship currency immediately, offering Schiff a $1 million bet. The banker promised to send these funds to charity or another purpose of the opponent's choice if BTC trades below $35,000 in a year.

At the same time, Novogratz believes that the bear market will be long enough, and therefore does not advise buying on drawdowns now. "It will be difficult for cryptocurrencies to start a rally until the stock market bottoms out. Nevertheless, digital assets have already experienced a significant sell-off and are beginning to receive support from buyers," he explained.

Robert Kiyosaki, author of the best-selling book "Rich Dad Poor Dad", also recommends waiting with purchases, saying that he will buy more digital gold only if its price drops to $20,000. "Profits are made when you buy, not when you sell. Bitcoin is crashing. Great news. I bought BTC for $6,000 and $9,000. I will buy more if the price tests $20,000. The time to get rich is approaching," he wrote.

Recall that Kiyosaki predicted a "giant stock market crash" last October and warned that the same fate awaits gold, silver, and bitcoin. This is exactly what we are seeing now.

Ton Weiss, a well-known trader, analyst and former vice president of JP Morgan Chase, does not rule out the completion of the bitcoin correction in the near future. According to him, the cryptocurrency has reached the 20-month moving average (MA), which is at the level of $34,000. Weiss claims that this is a "perfect opportunity" for a trend reversal and the asset's return to growth. According to the specialist, in the event of a rebound, the price of bitcoin will quickly return to the $40,000 level and consolidate above it.

Another cryptocurrency analyst, Nicholas Merten predicts that despite the current market conditions, bitcoin could rise almost 7 times to $200,000 by the end of the year. Merten stated on his DataDash YouTube channel (502,000 subscribers) that if bitcoin's capitalization stays above $600 billion, it will set the stage for the coin's bull run in the coming months.

The expert recalled that all rallies occur after corrections and are often spurred on by BTC purchases at heavily discounted prices. Understanding how big players buy is the key to navigating the highly volatile cryptocurrency markets, Merten says.

According to other market participants, bitcoin can visit the $30,000 area, and then it is likely to turn around. Charles Edwards, the founder of the crypto investment company Capriole, wrote that the signal of the NVT (Network Value to Transaction ratio) indicator shows that BTC is oversold: this situation is rare in the market. "We have entered an open buying zone," Edwards commented on the current situation.

Recall that this indicator was proposed and is actively used by the well-known analyst Willy Woo. NVT is calculated by dividing bitcoin's market capitalization by its transaction volume (in USD) and is a popular metric to assess whether the coin is overbought or oversold.

Michael Saylor, founder of MicroStrategy, named two reasons for the current correction in the cryptocurrency market. The first of these is the non-transparent regulation and regulatory uncertainty of the crypto industry. The second is the imperfection and immaturity of the crypto industry. At the same time, the businessman believes that the current market conditions provide "an excellent entry point for institutional investors interested in cryptocurrencies, who have been on the sidelines so far."

According to Saylor, a lot of institutional investors are now watching bitcoin and see that it is 40% below the all-time high and that it is consolidating. At the same time, they understand that bitcoin is supported by such serious investors as Bill Miller, regulators, senators and congressmen, as well as large public companies.

As for MicroStrategy itself, this software developer owns 124,391 BTC. The company has spent about $3.7 billion on the acquisition of cryptocurrency. Thus, the average purchase price is $30,100 per 1 coin. And if it falls below this level, it will result in multi-million or even billions in losses for the owners of MicroStrategy.

And now, a couple of soothing statements to conclude the review. The first is from Scott Melker, a trader, analyst and podcast host, who reminded his subscribers that there is nothing unusual about what is happening in the market now. "People have short memories. Bitcoin fell from $60,000 to $30,000 in 10 days in May. 10 DAYS!!! All this has already happened. And that was only 8 months ago. So why be so scared?" he wrote.

The second is from McDonald's fast-food chain, which offered owners of digital assets to get a job in the catering industry during the bearish trend. This is a joke of course. But, as they say, there is some truth in every joke. The McDonald's tweet was liked by the community and quickly gained almost 100,000 likes.



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

https://nordfx.com/

 

[Stan NordFX]

CryptoNews of the Week

- According to Bloomberg, the residents of Russia possess a huge amount of digital assets worth about $214 billion. This estimate was obtained by analysing the IP addresses of users of the largest crypto exchanges. In addition, according to the University of Cambridge, Russia became the third country in the world in bitcoin mining (11.23%) in the summer of 2021, after the USA (35.4%) and Kazakhstan (18.1%), where many miners migrated after the ban in China.
The Central Bank of Russia took the initiative to impose a total ban on everything related to this area on January 20, including the circulation and mining of cryptocurrencies, as well as organizing these operations in the country.
However, President Vladimir Putin, instead of a complete ban, supported the proposal of the Ministry of Finance, which provides not for a ban on cryptocurrencies, but for the regulation of their circulation. The President expressed the opinion that the Central Bank should not stand in the way of technological progress. Moreover, Russia has certain competitive advantages, especially in mining, which include a surplus of electricity and well-trained personnel.

- Bitcoin is perceived as a "monetary good" and no altcoin can challenge that status for the foreseeable future. Fidelity Digital Assets analysts came to these conclusions. Experts called the first cryptocurrency not only a technology, but also a perfect form of money in their study "Bitcoin First". It is the most "secure, decentralized form of assets. Bitcoin has the scarcity and longevity of gold combined with the ease of use, storage and transportation of fiat," they explained.

- The persistence of high volatility limits the adoption of bitcoin by institutions. This is how JPMorgan analysts justified the decline in the fair, in their opinion, valuation of the first cryptocurrency from $150,000 to $38,000. The specialists noted that the current 50% pullback from the all-time high has highlighted the nature of the boom-bust cycle, which is an obstacle to adding BTC to the portfolios of large investors.
The JPMorgan model assumed that the volatility of bitcoin would converge with the volatility of gold and the alignment of their shares in investment portfolios. And now, bank analysts have admitted that their previous forecast that the bitcoin-to-gold volatility ratio would drop to around 2/1 by the end of 2022 was unrealistic. Therefore, they lowered the fair value of the first cryptocurrency to $38,000, writes Business Insider.
JPMorgan did not rule out a further decline in bitcoin quotes, even in the absence of signs of buyer surrender. "Open interest in futures and the volume of exchange balances indicates less panic or liquidation of positions than last May, especially in relation to large crypto investors," the specialists concluded in their report.

- Arizona (USA) Senate Member Wendy Rogers introduced a bill that would approve bitcoin as a transactional currency or a means of payment. According to the bill, the first cryptocurrency will be accepted to pay debts, taxes and government fees as well as other obligations. Rogers has also been noted for other initiatives. One of them suggests the possibility of the authorities paying salaries to their employees in cryptocurrency. The senator has also proposed not to levy taxes or fees for "the use of blockchain technology."
All of these bills must be approved by the Arizona House of Representatives and Senate to be adopted.

- Bitcoin could soar to a high of $93,717 this year and is expected to be worth $76,360 by the end of 2022 and close to $193,000 by the end of 2025. This is the average forecast made by industry representatives during a roundtable discussion organized by the analytical website Finder.
The discussion was attended by 33 fintech experts, half of whom do not expect the cryptocurrency price to fall even against the backdrop of the upcoming increase in US interest rates. Vanessa Harris, director of the cryptocurrency startup Permission, was among the most optimistic participants in the discussion. She predicts that BTC will peak at $220,000 this year. A much more modest figure was voiced by the founder of the CoinFlip bitcoin ATM network, Daniel Polotsky. In his opinion, the cryptocurrency is unlikely to exceed $60,000 in 2022 as the bubbles created by the US Federal Reserve during the pandemic are now deflating.

- Crypto analyst Jason Pizzino believes that despite a solid rebound from its 90-day low of $32,950, the first cryptocurrency is facing a strong resistance. When the price approaches $38,000, it stops because the resistance becomes too strong.
At the same time, according to Pizzino, bitcoin will still enter an accumulation period in the medium term, when whales and investors with smart money will begin to invest in cryptocurrency, waiting for its next bullish trend. This may take a whole year, during which the BTC rate will rise. According to Pizzino's forecast, bitcoin is able to reach a new price high in the second half of 2022, but this will not be a sharp upward movement but a series of ascents.

- American Express, one of the most recognizable credit card operators, has lost ground in processed transaction volumes to the bitcoin network. This is evidenced by the data of the latest NYDIG report.
While the BTC network processed transactions for $3.0 trillion in 2021, for American Express the figure was $1.28 trillion, and this is the best figure in the history of the American corporation. Discover, the 4th largest card operator, posted a result of $0.504 billion, which is also an absolute maximum for the company.
Only two famous brands are ahead of bitcoin: Mastercard and VISA. Their result is $7.72 trillion and $13.5 trillion, respectively. However, the gap between them and the bitcoin is steadily shrinking.

- Global adoption of bitcoin will certainly contribute to the growth of bitcoin to $1 million. This opinion was expressed by the head of Circle, Jeremy Aller in an interview with Business Insider. He admits that he himself is not a "bitcoin maximalist", but he still believes in new cryptocurrency highs. At the same time, the businessman prefers not to compare bitcoin with gold, believing that the digital asset is much more efficient than precious metals. According to the head of Circle, gold as money is simply useless in modern society.

- But analysts at Goldman Sachs, one of the world's largest investment banks, do not share Aller's scenario. In their opinion, the mass adoption of cryptocurrency may, on the contrary, worsen the chances of its long-term growth. Experts argue that the global popularity of digital assets will increase their correlation with traditional ones. This, in turn, will reduce the volatility of cryptocurrencies, as well as reduce their advantage as a diversifying asset in an investor's portfolio.
Moreover, according to Goldman Sachs, cryptocurrencies are unlikely to be able to avoid the influence of macroeconomic forces, such as the monetary policy of the US Federal Reserve.

- Peter Brandt, a well-known Wall Street trader with 45 years of experience, notes that most crypto enthusiasts are now in an extremely bearish mood. Most of the participants in the Laser Eyes flash mob are confident that the price of bitcoin will fall below $30,000 in the near future. According to the expert, this may be a signal to buy the first cryptocurrency. "When the bulls wear laser eyes, it's time to sell. When bulls become bears, is it time to buy?" Brandt asks.
Recall that the "Laser Eyes" flash mob started on Twitter in February 2021, when bitcoin reached a local high of $58,300. After that, many supporters of the first cryptocurrency, in anticipation of its growth to $100,000, posted photos with "laser eyes" as their profile avatar. Co-founder of Morgan Creek Digital Anthony Pompliano, TV presenter Max Kaiser, CEO of Binance crypto exchange Changpeng Zhao, Tesla CEO Elon Musk and other influencers were among the participants in the flash mob.
However, instead of rising to $100,000, the flagship cryptocurrency collapsed to $29,000 by June. So, the current remark of Peter Brand is clearly not devoid of logic.


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

https://nordfx.com/

 

[Stan NordFX]

January 2022 Results: Leaders Ignore Trading on EUR/USD

NordFX brokerage company has summed up the performance of its clients' trade transactions in the first month of 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 maximum profit in January was received by a client from Vietnam, account No.1467xxx, whose profit amounted to 49.180 USD. This solid result was achieved thanks to transactions with gold (XAU/USD).

The second place in the ranking of the most successful traders of the month was taken by a client from China, account No. 1589XXX, who earned 39.151 USD on transactions primarily with the British pound (GBP/AUD, GBP/USD, GBP/JPY), as well as with such pairs as EUR /NZD, EUR/AUD, AUD/JPY.

The third place on the January podium went to another representative of Vietnam (account No. 1605XXX), whose result 36.880 USD was also achieved through operations with gold (XAU/USD).

The NordFX passive investment services:

- CopyTrading still has an active supplier under the nickname KennyFxPro. Signal with the complex name KennyFXPRO - Journey of $205 to $5,000 has shown a profit of 138% since March 2021 with a maximum drawdown of 67%. Their second signal, KennyFXPRO Prismo 2K, started two months later, while its profitability has been 55% with a drawdown of 37%. All trades in both cases were made with NZD/CAD, AUD/CAD and AUD/NZD pairs.

We can also note the Hada signal this time, which has shown a profit of 53% in just 70 days of life with a drawdown of 21%.

The lifetime of the above-named signals is short, less than a year. In combination with a fairly serious maximum drawdown, this allows them to be classified as a group with a high degree of risk. But, of course, there are long-livers in the CopyTrading service. For example, signal MF989923. It has existed for almost 7 years, and it has shown an increase of 517% during this time. Note that this signal had serious drawdowns several times as well, reaching 66%. True, the last time this happened a long time ago, almost two years ago: in March 2020. But trading has since become much less aggressive and less profitable.

- As for the PAMM service, we have to mention the manager under the nickname KennyFXPRO again. They increased their capital on the KennyFXPro-the Multi 3000 EA account by 67% in exactly 1 year with a fairly moderate drawdown of less than 16%.

Among PAMM accounts, the TranquilityFX - The Genesis v3 account attracts attention as well. It exists for 303 days and has brought a profit of 47% during this time with a drawdown of 16%. NKFX - Ninja 136 is similar to the two previous accounts as well. Its lifespan is just over 200 days, growth is 36%, maximum drawdown is less than 15%.

It should be noted that in most cases, both traders and signal providers and PAMM managers ignored such a popular pair as EUR/USD in their work, making transactions either with gold (XAU/USD), or with pairs GBP/CAD, GBP/JPY, NZD/CAD, AUD/CAD and AUD/NZD.

Among the IB partners, NordFX TOP-3 is as follows:
- the largest amount of commission, 7.716 USD, was accrued in January to a partner from China, account No. 1336xxx;
- next is a partner from India, account No.1593xxx, who received 5.256 USD;
- and, finally, a partner from Vietnam, account No. 1371ХХХ, who received 3.913 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

https://nordfx.com/

 

[Stan NordFX]

Forex and Cryptocurrency Forecast for February 07 - 11, 2022​

EUR/USD: Another Surprise, from the ECB This Time

It's hard to resist when you're attacked from both sides. The dollar received two powerful blows last week: one from the Bank of England, the second from the ECB, and could not resist them. The USD DXY index flew down. While it was at the level of 97.36 on January 28, it dropped to 95.14 on February 04. This is not a knockout of course, but a knockdown from which it will be difficult for the US currency to recover quickly.

So, the Bank of England raised the interest rate by another 25 basis points (bp) to 0.50%, which was expected. But what shocked the markets was a shift in the direction of the ECB's monetary policy. The market was waiting for the regulator to start discussing such changes towards the end of the year. But it turned out that this could happen much earlier. Maybe already in the spring.

The data on unemployment in the Eurozone exceeded all wildest expectations: its level fell to 7.0%. But this is not all either. The growth of consumer prices in January accelerated from 5% to 5.1% and renewed its historical high. This is despite the fact that many expected the opposite. For example, Bloomberg experts predicted a slowdown in inflation to 4.4%.

It is known that unemployment and inflation are the main factors that determine the monetary policy of regulators in the current environment. And if the head of the ECB, Christine Lagarde, stated until recently that her bank would not copy the actions of the Fed, she was forced to admit at a press conference on Thursday, February 03 that "the situation has really changed."

"Inflation is likely to remain high longer than initially expected," said Ms Lagarde. "Compared to our December estimates, current inflation risks are biased upwards. especially in the short term".

The head of the ECB did not repeat the mantra about the "extremely low probability" of a rate hike in 2022. And, although the key rate remained unchanged at 0% at the last meeting, it became known from informed sources that the bank's officials are already discussing the possibility of raising it at the end of this year. According to some experts, it could rise by as much as 40 or even 50 bp.

So, apparently, the European regulator is abandoning the policy of patience and, together with the US Federal Reserve and the Bank of England, joins the "hawk" race to tighten monetary policy. It is appropriate to draw an analogy between Christine Lagarde's current statement and what her American colleague Jerome Powell said in June 2021. The head of the Fed said something similar then, after which the dollar began to sharply gain strength and won 1135 points back from the euro, lowering the EUR/USD pair from 1.2255 to 1.1120. Now it seems that it is time for the euro to recoup its losses.

In addition to the frontal blows from the Bank of England and the ECB, the US currency also received backstabs from the "native" Fed. At least six representatives of the US Central bank made comments last week, and none of them mentioned that the FOMC (Federal Open Market Committee) could immediately raise rates by 50 bp at its meeting in March (although the market was waiting for this).

The result of all the events of the week, so painful for the dollar, was an impressive strengthening of the European currency. The EUR/USD pair has shown an active growth, which has not been seen since the beginning of the pandemic: it rose by 343 points in a week, from 1.1140 to 1.1483.

True, the dollar was slightly supported by statistics from the US at the very end of the working week, on Friday, February 04. Such an important indicator as the number of new jobs created outside agriculture (non-farm payrolls) was fixed at 467K, while the market expected it to fall to 150K. As a result, the dollar strengthened slightly, and the pair set the last chord at 1.1453.

Most of the indicators on D1 turned up by the end of the five-day period. Among the trend ones, there were 85% of them (15% are still colored red), among the oscillators - 80%, the remaining 20% took a neutral position. Among the experts, opinions are divided almost evenly, although the bulls have still got a slight advantage: 45% are in favor of continuing the uptrend, 35% are for moving down and 20% are for the sideways trend.

The nearest resistance is the highs of January 13 and February 04 in the zone of 1.1480, followed by 1.1525, 1.1560 and 1.1625. Supports are in zones and at levels 1.1365-1.1385, 1.1275, 1.1220, 1.1185 and Jan 28 low 1.1120.

As for the events of the upcoming week, the most important of them are related to inflation and will concern the consumer market. So, the values of the US Consumer Price Index (excluding food products and energy carriers) will become known on Thursday, February 10, and the values of the Harmonized Consumer Price Index of Germany and the Consumer Confidence Index of the University of Michigan USA will be published on Friday, February 11.

GBP/USD: The Bank of England: Not a Dove Yet, No Longer a Hawk

Of course, the general weakening of the dollar affected the GBP/USD pair as well, which recorded the weekly high at 1.3627. However, as mentioned above, the increase in the interest rate by the Bank of England did not come as a surprise to anyone and had already taken into account by the market in quotations. In contrast to the statement of the head of the ECB, Christine Lagarde, which produced the effect of a bombshell. As a result, the European currency gained a significant advantage over the British one, and the EUR/GBP pair rose by more than 2.2%, from 0.82843 to 0.84650. As for GBP/USD, it finished well below the local high, at 1.3528 for the same reason.

The bulls on the pound were also disappointed by disagreements among members of the Bank of England committee. Only 4 out of 9 voted to raise the rate by 50 bps. The majority, including the head of the bank, Andrew Bailey, decided to raise rates by only 25 basis points, citing a slowdown in economic growth.

This regulator will apparently continue to act in an extremely balanced manner, which was confirmed by the chief economist of the Bank of England, Hugh Pill. He said in an interview with Reuters that the bank expects "further moderate tightening in the coming months if everything goes as planned" and that "you need to be careful in setting the rate level."

Strategists at Japan's MUFG Bank say this sneaky stance limits the prospects for a stronger British currency. MUFG does not expect a steady growth of the pound and believes that if the movement of GBP/USD to 1.4000 continues, the pair will encounter many pits and bumps along the way. And their colleagues from Scotiabank look in the opposite direction at all. In their opinion, due to the inability to gain a foothold above 1.3600, the British currency is now at risk of falling to 1.3400 initially and possibly to 1.3200 in a relatively short term.

The majority of experts (55%) are still set for further growth of the GBP/USD pair at the moment, the remaining 45% have taken the opposite position. The indicators on D1 look like this: 45% of oscillators point north, 10% point south, the remaining 45% remain neutral. Among trend indicators, 40% look up, 60% look down. Supports are located at 1.3500, 1.3425, 1.3365, next strong support is 100 pips lower. Levels and resistance zones: 1.3570-1.3600, 1.3640, 1.3700, 1.3750, 1.3835 and 1.3900.

Highlights of the coming week include a speech by Bank of England Governor Andrew Bailey on Thursday, February 10, and the release of UK GDP and industrial production data on Friday, February 11.

USD/JPY: Calm, and Calm Again

While most G10 Central banks are either raising rates or becoming more aggressive (like the ECB), the BOJ's slogan is still "calm and calm again". Safe haven should remain as quiet as possible with its perpetually negative (minus 0.1%) interest rate.

It is already clear that, since inflation in Japan does not show signs of approaching the target level of 2% set by the Japanese regulator, its actions will lag behind the actions of other Central banks. And this, according to analysts at CIBC Capital Markets, will continue to put pressure on the yen.

At some point, rumors began circulating in the market that the Bank of Japan could move to normalize its monetary policy this year. However, the Bank's statement released after the January meeting made it clear that this is nothing more than speculation. Since central bank Governor Haruhiko Kuroda keeps saying that it is far from reaching the inflation target of 2.0%, his organization is quite comfortable with the weak yen.

What has been happening to the USD/JPY pair over the past four months can be considered a sideways trend with a predominance of bullish sentiment. So the general weakening of the dollar practically did not help the Japanese currency last week: having fallen on February 02 to the level of 114.14, the pair returned to the same place where it started, to the zone of 115.20, by the end of the week.

At the time of writing, the majority of experts (55%) expect the USD/JPY pair to continue moving towards a multi-year high of 116.35, recorded on January 04. The remaining 45% believe that the weakened dollar will still put downward pressure on it. All 100% of the indicators are green, although 15% of the oscillators give signals of the pair being overbought.

Support levels and zones are 115.00, 114.55-114.80, 114.15, 113.75, 113.45, 113.20, 112.55 and 112.70. The nearest resistance zone is 115.50-115.70, the nearest serious target of the bulls is a new five-year high at 116.35.

No serious macroeconomic statistics from Japan are expected either last or next week. We only note that Friday, February 11 is a day off in Japan. The country celebrates Kenko Kinen No Hi, the National Foundation Day. It is believed that the first emperor of Japan, Jimmu, ascended the throne on this day in 660 BC and founded the Imperial Dynasty of Japan and the State of Japan.

CRYPTOCURRENCIES: Who Is in Charge in the BTC/USD Pair? Answer: US Federal Reserve

Whatever crypto enthusiasts say, bitcoin has long ceased to be an independent asset. And the decisive factor intheBTC/USD pair is the dollar. And the strength or weakness of the US currency depends, in turn, on the policy of the US Federal Reserve (and partly on the actions of other Central banks).

The same crypto enthusiasts crave an inflow of funds from institutional investors like manna from heaven. And the latter are waiting for the regulators to establish clear rules governing the work with digital assets. Therefore, the movement of quotes of leading cryptocurrencies will depend (and already depends) not on the mood of millions of small players, but on the mood of just a few governments and Central banks. Just look at the correlation between the cryptocurrency and stock markets. This link is becoming more and more rigid and is determined by the risk sentiment of large investors.

Of course, short-term fluctuations in BTC/USD can be affected by events such as bad weather that has suspended miners in Texas. But the main trends are set not by them, but by the actions of regulators.

Bitcoin is now perceived as a "money commodity". Analysts of Fidelity Digital Assets came to this conclusion, calling the first cryptocurrency not only a technology, but also a perfect form of money. And what kind of government will allow the flow of "perfect" money to pass it by? And there may be two solutions: either to ban them completely, as in China, or to take them under strict control.

The Central Bank of Russia wanted to follow the Chinese version. But Russia's President Vladimir Putin supported the proposal of the Ministry of Finance not to ban, but to regulate the cryptocurrency market, including their circulation and mining. This is a very serious decision, because, according to Bloomberg, residents of Russia possess a huge number of digital assets worth about $214 billion. In addition, according to the University of Cambridge, Russia became the third country in the world in bitcoin mining (11.23%) in the summer of 2021, after the USA (35.4%) and Kazakhstan (18.1%), where many miners migrated after the ban in China.

MicroStrategy founder Michael Saylor also believes that the current problems in the cryptocurrency market are caused, first of all, by the non-transparent regulation and regulatory uncertainty of the crypto industry. According to Saylor, many institutional investors are now tracking bitcoin, however, they are in no hurry to invest in it.

According to JPMorgan analysts, the persistence of high volatility, which limits the adoption of bitcoin by institutions, is also an obstacle.

Interestingly, analysts at another major investment bank, Goldman Sachs, agree that cryptocurrencies are unlikely to escape the influence of macroeconomic forces, such as the monetary policy of the US Federal Reserve. However, they believe that the mass adoption of cryptocurrency may not improve, but, on the contrary, worsen the chances for its long-term growth. Experts argue that the global popularity of digital assets will further increase their correlation with the traditional ones. This, in turn, will reduce the volatility of cryptocurrencies and reduce both their speculative attractiveness and their advantages as a diversifying asset in investor portfolios.

As for the current situation, despite a solid bounce off its 90-day low of $32,950, the main cryptocurrency has been unable to overcome the strong resistance in the $38,000-39,000 zone for a long time. However, the BTC/USD pair went on a breakthrough and reached $40,880 at the time of writing the review, on the evening of Friday, February 04.

The total market capitalization for the week has grown slightly: $1.85 trillion compared to $1.70 trillion seven days ago, and the Crypto Fear & Greed Index has deepened even more into the zone of Extreme Fear, falling from 24 to 20 points.

The latest JPMorgan report notes that "open interest in futures and the volume of exchange balances indicate less panic or liquidation of positions than in last May, especially in relation to large crypto investors". At the same time, the bank's specialists do not exclude a further decrease in bitcoin quotes, even in the absence of signs of capitulation of buyers. They seriously lowered the fair value of the first cryptocurrency from $150,000 to $38,000.

According to Business Insider, JPMorgan's model assumed that bitcoin's volatility would converge with gold's volatility and equalize their shares in investment portfolios. Now, the bank's analysts have acknowledged that their previous forecast that the bitcoin-to-gold volatility ratio would drop to around 2/1 by the end of 2022 proved to be unrealistic, leading to the downgrade.

Peter Brandt, a well-known Wall Street trader with 45 years of experience, notes that most crypto enthusiasts are now in an extremely bearish mood. Most of the participants in the Laser Eyes flash mob are confident that the price of bitcoin will fall below $30,000 in the near future. According to the expert, this may be a signal to buy the first cryptocurrency. "When the bulls wear laser eyes, it's time to sell. When bulls turn bears, is it time to buy?" Brandt asks.

Recall that the "Laser Eyes" flash mob started on Twitter in February 2021, when bitcoin reached a local high of $58,300. After that, many supporters of the first cryptocurrency, in anticipation of its growth to $100,000, posted photos with "laser eyes" as their profile avatar. Co-founder of Morgan Creek Digital Anthony Pompliano, TV presenter Max Kaiser, CEO of Binance crypto exchange Changpeng Zhao, Tesla CEO Elon Musk and other influencers were among the participants in the flash mob.

However, instead of rising to $100,000, the flagship cryptocurrency collapsed to $29,000 by June. So, Peter Brand's current remark about "laser eyes" in bears clearly deserves attention.

It is also worth paying close attention to the results of the round table organized by the Finder analytical website. The discussion was attended by 33 fintech experts, half of whom do not expect the cryptocurrency price to fall even against the backdrop of the upcoming increase in US interest rates. The average forecast given by the participants of the table says that bitcoin could soar to a high of $93,717 this year and is expected to be worth $76,360 by the end of 2022 and close to $193,000 by the end of 2025.

Vanessa Harris, director of the cryptocurrency startup Permission, was among the most optimistic participants in the discussion. She predicts that BTC will peak at $220,000 this year. A much more modest figure was voiced by the founder of the CoinFlip bitcoin ATM network, Daniel Polotsky. In his opinion, the cryptocurrency is unlikely to exceed $60,000 in 2022 as the bubbles created by the US Federal Reserve during the pandemic are now deflating.

Crypto analyst Jason Pizzino predicts BTC growth as well. According to his forecast, bitcoin will still enter an accumulation period in the medium term, when whales and investors with smart money will begin to invest in cryptocurrency, waiting for its next bullish trend. This may take a whole year, during which the BTC rate will rise. According to Pizzino's forecast, bitcoin is able to reach a new price high in the second half of 2022, but this will not be a sharp upward movement but a series of ascents.

Finally, the most cosmic forecast was given by Circle CEO Jeremy Aller in an interview with Business Insider. In his opinion, the worldwide adoption of bitcoin will certainly contribute to the growth of this coin to $1 million. The businessman admitted that he is not a "bitcoin maximalist", but he still believes in new cryptocurrency highs. At the same time, he prefers not to compare bitcoin with gold, believing that the digital asset is much more efficient than precious metals. According to the head of Circle, gold as money is simply useless in modern society.


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

https://nordfx.com/

 

[Stan NordFX]

NordFX Affiliate Program and Social Trading Network Recognized as the Best in 2021

The Expert Council of the Forex-Awards.com named the Affiliate Program of the brokerage company NordFX and its Social Trading Network as the best at the end of 2021.

The Forex-Awards.com Expert Council is a unique team of professionals headquartered in Hong Kong. Based on the opinions of both independent experts and the trading community, the Expert Council honors the most remarkable solutions and innovations in almost 30 nominations and rewards market participants featuring breakthrough initiatives and excellent results in the Forex industry. A convincing victory was won by the brokerage company NordFX in two of them in 2021.

The victory in the Best Affiliate Program nomination was won thanks to NordFX's multi-level Flexible Partnership Program, which offers its IB partners payments up to 70% of the spread and most advanced CPA up to $700. Monthly monitoring showed that the total earnings of TOP-3 IB partners amounted to $351.853 in 2021. That is, the average earnings of each of them was $9.773 per month.

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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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[Stan NordFX]

CryptoNews of the Week

- The US authorities announced the detention of persons they consider involved in the hacking of the Bitfinex exchange in 2016, and the confiscation of $3.6 billion worth of bitcoins stolen from it. According to a press release from the US Department of Justice, the accused are the spouses: a 34-year-old Russian and US citizen Ilya Lichtenstein and a 31-year-old Heather Morgan. "According to court documents, Liechtenstein and Morgan allegedly colluded to launder proceeds of 119,754 BTC stolen from Bitfinex after the platform's systems were hacked and more than 2,000 unauthorized transactions were performed," the agency's website says.
Approximately 25,000 of these stolen bitcoins have been withdrawn from a Liechtenstein-controlled wallet through a complex money laundering process over the past five years, according to investigators. The rest of the stolen coins, more than 94,000 BTC, remained in the wallet, which allowed special agents to seize them legally. Representatives of the Ministry of Justice stressed that this is the largest case of cryptocurrency confiscation in the history of the department.
According to the latest information, the court of the Southern District of New York released the spouses on bail of $8 million, and the seized bitcoins were returned to the Bitfinex exchange.

- A trader nicknamed macromule shared a trading algorithm that could bring about 1000% per annum. The signal to open a position is the tweets of the Bitcoin skeptic and gold supporter Peter Schiff about the first cryptocurrency. The user recommended buying BTC every time after the next such tweet and closing the position after 72 hours. According to macromule, this strategy could have made 203 trades since last May, of which 65% would bring an average profit of 3%.

- Sean Farrell, an analyst at the financial research company FSINsight, believes that the
price of the first cryptocurrency is likely to reach $200,000 in the second half of 2022. According to his observations, the correlation of bitcoin and the crypto market as a whole with the shares of technology companies increased in the last quarter of last year. At the same time, according to Farrell, bitcoin's dominance over altcoins remains unshakable and its price, despite a "shaky start" in early 2022, could eventually reach $200,000.
The FSInsight report also states that the ethereum platform is undervalued and the second largest cryptocurrency by capitalization may reach $12,000 this year. The analyst is optimistic about the transition of ethereum to the Proof-of-Stake algorithm. And if the process goes smoothly, capital inflows into the ecosystem will increase, "regardless of bitcoin's performance."

- The CEO of the KuCoin crypto exchange, Johnny Liu, shared his vision of the trends in the digital asset industry and focused on the decrease in the share of BTC relative to the entire crypto market. "Bitcoin dominance index is now 42%. Most innovative projects are launched on ethereum, and I believe that it will pull ahead in the long term," Liu said.
As for regulatory issues, the head of KuCoin recommends patience. The authorities will gradually deal with the benefits and risks of cryptocurrencies. According to him, there is a trend in the mass adoption of cryptocurrencies at the state level, governments are exchanging experience in their legalization, so any restrictions are only a temporary measure.

- Billionaire Ray Dalio, founder of Bridgewater Associates, expressed the opposite point of view. He believes that cryptocurrencies are too vulnerable, they are easy to trace, and it is likely that this asset class will be banned by the governments of a number of countries. Given the small size of the cryptocurrency market, Dalio said, "it gets too much attention." He confirmed that he invested in ethereum in December 2021, but digital assets make up a "negligible percentage" of his personal investment portfolio.
The head of Bridgewater Associates also advised to create an investment portfolio that is diversified across asset classes and markets. At the same time, the billionaire noted that "cash is garbage."

— Ricardo Salinas Pliego, one of the richest people in Mexico and the founder of the Grupo Salinas group of companies, said in an interview with Bitcoin Magazine that the first cryptocurrency was superior to fiat. "Anything we have in fiat can be completely seized by the authorities," he noted and explained that the decentralized nature of the first cryptocurrency makes it much more difficult to ban or control it. Therefore, "the government is not interested in facilitating the use of bitcoin."
He called the limited emission of 21 million BTC an additional advantage of the first cryptocurrency, which allows using this cryptocurrency as a store of value in the long term. "But don't expect to easily make money on it in 30 days," the billionaire warned.

- Cryptocurrency trader Dave the Wave believes that BTC could break the $100,000 mark at the end of this year or early 2023, while his scenario assumes a "decent correction". The trader notes that the cyclical curve pointing to $100,000 should not be interpreted as a support level, but as an average exchange rate trajectory that bitcoin can follow roughly.
In regard to the near future, Dave the Wave noted that while bitcoin's monthly chart may still look bearish, certain bullish signals are emerging on the weekly chart. In addition, bitcoin managed to break out of the narrow downward channel.

- North Korea continues to develop its nuclear programs, and funds received from attacks on cryptocurrency exchanges have become an important source of their financing. This is reported by Reuters with reference to a UN report.
The authors of the report refer to Chainalysis data, according to which cybercriminals from the DPRK carried out at least seven attacks on cryptocurrency platforms last year, stealing assets worth about $400 million. Most of the funds were stolen in hacks that targeted at least three crypto exchanges in North America, Europe and Africa. According to Chainalysis, North Korea controls $170 million in the current balances of exchanges, but these amounts have not yet been laundered.
Recall that Pentagon officials previously claimed that more than 6,000 hackers around the world are working for North Korea.

- The author of the book The Ascent of Money, historian and economist Niall Ferguson said that if the historical dynamics of BTC fluctuations repeat, the price of the first cryptocurrency will fall by November 2022 to a low of $11,515. This is 83% below the historic peak in bitcoin value reached in November 2021.
At the same time, Ferguson disagrees categorically with the opinion of the Nobel Prize winner in economics Paul Krugman, who draws a parallel between the volatility of the cryptocurrency market and the collapse of the US real estate market in 2007-2008. Which, as you know, was followed by the global economic crisis.
Niall Ferguson believes that "it is not worth waiting for a polar vortex or a giant ice cyclone. However, this does not mean that crypto winter will bring less cold." The crypto skeptic clarified that a fall in the value of bitcoin to the lows of the 2010s is unlikely, since BTC has become a larger asset than it was ten years ago, and its market capitalization has grown to almost $1.0 trillion in 2021.

- According to Robert Breedlove, CEO of Parallax Digital, the price of bitcoin will increase over the next few years, and its market capitalization will exceed $5.0 trillion.
Inflation in the US is at a 40-year high at the moment. And according to the businessman, the same thing can happen with the dollar as with the currency of Venezuela. The US dollar will hyperinflate by 2035. At this point, the price of bitcoin in dollar terms will become astronomical: 1, 5, 10 million USD per coin.
In terms of downside risks to BTC, the world's largest cryptocurrency faces few existential threats, and only finite probability or black swan events can significantly hurt its price. It could be a cryptographic hack, it could be some kind of cosmological event, an electromagnetic pulse could destroy all the electronic equipment in the world. However, the biggest threat to bitcoin comes from regulators, according to Robert Breedlove.
The authorities will try to make life as difficult as possible for cryptocurrencies, as a class that poses a threat to their financial systems, which are already under heavy debt pressure. Therefore, it is highly likely that the authorities will use all their tools to regulate digital assets as much as possible.


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

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[Stan NordFX]

Forex and Cryptocurrency Forecast for February 14 - 18, 2022​

EUR/USD: Tsunami Due to US Inflation

Ancient Greeks began to declare a truce during the Olympic Games more than 2,800 years ago. It seems that the EUR/USD bulls and bears have decided to adopt this tradition during the current Winter Olympics in Beijing. We observed a complete lull for at least the first half of the week, and the pair moved eastward under slight pressure in a narrow channel not exceeding 60 points, 1.1400-1.1460.

This calm was interrupted by a small tsunami that swept on Thursday, February 10 after the latest US inflation data was published. Consumer prices grew by 7.5%, while core inflation reached 6.0% (against 5.5% a month earlier). Both values are the highest for the last 40 years, and this has not been observed since 1982. And it scared the markets.

To be completely accurate, it was not the numbers themselves that frightened them, but the possible reaction of the US Federal Reserve to them. Investors were concerned that the US Central bank would act even more aggressively than expected in order to curb inflation. The probability that the FOMC (Federal Open Market Committee) will raise interest rates by 50 basis points (bp) in March has jumped to 80%. There have also been rumors that the rate could be raised as many as seven times in 2022. Analysts at Goldman Sachs predict that federal borrowing costs could rise to 2.0% by early 2023.

As a result of the panic, the dollar began to rise, while stock indices (S&P500, Dow Jones, Nasdaq) and the EUR/USD pair rolled down. However, the situation changed very quickly: the markets were afraid of the general economic risks caused by such a strong increase in consumer prices. And, having bounced off the level of 1.1374, the pair soared up by almost 120 points, to a height of 1.1494. After that, it changed the course again by 180 degrees.

There were two reasons for this reversal, the third in a row. The first was those overall economic risks, on the contrary, could push the US Federal Reserve to raise interest rates more vigorously. The second reason was Christine Lagarde. The head of the ECB said last week that a sharp tightening of monetary policy will have a negative effect on the Eurozone economy. This suggests the conclusion that this regulator is still not ready to raise rates, even despite high inflation rates. And according to forecasts, the first rate increase by 25 bp. can only be expected in December 2022.

Divergence in the pace of monetary tightening by the Fed and the ECB has always been good for the dollar. The same happened this time: the EUR/USD pair flew down again without reaching the height of 1.1500, reaching the local bottom at the level of 1.1329. As for the final chord of the week, it sounded at the height of 1.1340.

Taking into account the dynamics of the last two weeks, the readings of indicators on D1 are as follows at the time of writing the forecast on the evening of Friday, February 11: 65% of oscillators are colored green, the remaining 35% are neutral. As for trend indicators, only 25% are colored green, the remaining 75% are red. As for the experts, of course, all of them will pick up signals from the US Federal Reserve, primarily regarding how much the rate will be raised at the FOMC meeting in March. But it is already now that 55% of them are voting for the strengthening of the US currency and the movement of the EUR/USD pair to the south. 30% vote for an uptrend, and 15% of analysts predict a sideways movement of the pair.

The nearest resistance is 1.1370, followed by 1.1415, 1.1480-1.1525, 1.1560 and 1.1625. Supports in zones and at levels 1.1275-1.1315, 1.1220, 1.1185 and January 28 low 1.1120.

As for the upcoming week, Eurozone GDP data will be published on Tuesday, February 15. High volatility can be expected due to the release of the next portion of data on the US consumer market the next day, on Wednesday, February 16. The publication of the February FOMC meeting minutes will also cause unconditional interest on this day.

GBP/USD: The Trend Is Rising. Still Rising.

While the ECB is lagging behind the Fed, the Bank of England is so far ahead, raising interest rates faster than its peers across the Atlantic. Therefore, unlike the euro, the British pound managed to hold its ground so far last week, finishing the five-day period at 1.3551. The key word here is "so far": "so far ahead" and "managed so far." The superiority of the pound over the dollar is very shaky and it can quickly start retreating.

The main factors that could force the Bank of England to stop raising the rate, leaving it at a low level, are weak GDP and labor market growth, as well as low levels of consumer spending. According to the data published on Friday, February 11, the UK's GDP, instead of the expected 1.1%, grew by only 1.0% in the Q4 2021. And the situation in the labor market and the consumer marke will become known next week: statistics on the unemployment rate will be released on February 15, and that on the level of prices in the United Kingdom - on February 16.

When predicting the upcoming steps of the British regulator, it is appropriate to recall that only 4 out of 9 members of the Bank of England committee voted for a rate increase by 50 bps at the last meeting. The majority, including the head of the bank, Andrew Bailey, citing a slowdown in economic growth, decided to raise the rate by only 25 basis points.

The fact that this regulator will continue to act very carefully, which was confirmed by the Bank of England chief economist Hugh Pill. He said in an interview with Reuters that the bank expects "further moderate tightening in the coming months if everything goes as planned" and that "one needs to be careful in setting the rate level."

At the moment, most experts (60%) are betting on the strengthening of the dollar, believing that the GBP/USD pair will go down in the near future. The opposite position is taken by 30% of analysts, the remaining 10% remain neutral. Indicators on D1 look as follows: 90% of oscillators point to the north (10% of them are in the overbought zone), 10% look to the south. Among trend indicators, the ratio of forces is almost the same, 85/15%. Supports are located at 1.3500, 1.3425, 1.3365, the next strong support is 100 points lower. The resistance levels are 1.3585, 1.3600-1.3625, 1.3700, 1.3750, 1.3835 and 1.3900.

USD/JPY: The Pair Storms a Five-Year High Again

The correlation between US Treasuries and USD/JPY is not a secret to anyone. If the yield on US bills grows, so does the dollar against the yen. And the Japanese currency received a double blow last week: both the yield on 10-year treasury bonds, which reached peak levels since August 2019, and the USD DXY index, which soared sharply after the events described above on February 10, rose. As a result, the pair retested the multi-year high of 116.35, recorded on January 04, 2022. However, it failed to break this record, and completed the working week at 115.30.

Currently, most experts (60%) expect the USD/JPY pair to try again to update this high and rise to the point where it has not been seen since January 2017. All 100% of oscillators on D1 and 80% of trend indicators support this development. The nearest resistance zone is 115.70. The remaining 40% of experts and 20% of trend indicators side with the bears. Support levels are at 115.00 followed by 114.15, 113.75, 113.45, 113.20, 112.55 and 112.70.

Japan's GDP (Q4) data, which will be made public on Tuesday, February 15, may be able to provide some assistance to the yen. According to forecasts, the country's Gross Domestic Product may grow from minus 0.9% to plus 1.4% during the quarter. Although, in the current post-COVID situation, such economic growth may, on the contrary, play against its national currency, confirming the correctness of the super-dove policy of the Bank of Japan, which has frozen the interest rate at minus 0.1% for a long time.

CRYPTOCURRENCIES: Correction or Reversal?

The question of what we have seen the last three weeks, just a correction to a downtrend or the beginning of a new rise, remains open. Cryptocurrency quotes are going up along with the S&P500 and Dow Jones stock indices, and even slightly ahead of them.

Something similar could be observed a few months ago. But then, digital currencies outperformed stocks by almost two months with the transition from growth to collapse. The BTC/USD pair reached a high on November 10, 2021, after which it turned south. As for the S&P500, its high was on January 04, 2022. And this is logical: despite the correlation, the stock market is still much more stable than the cryptocurrency market. But both of them are very dependent on the monetary policy of the US Federal Reserve (and, in part, on the actions of other Central banks).

The stimulus program that kicked off the printing press flooded the US economy with cheap dollars and boosted risky assets. The Fed is currently tightening its policy. Based on this logic, we can predict a further decline in investors' interest primarily in cryptocurrencies.

We have already said that the movement of crypto quotes will depend in the near future (and already depends) on the mood of just a few governments and Central banks. But the expert community has not yet come to a consensus as to what their attitude will be.

For example, Johnny Liu, CEO of the KuCoin crypto exchange, has taken the "bright side", believing that the authorities will gradually understand the advantages of cryptocurrencies. According to him, there is a trend in the mass adoption of cryptocurrencies at the state level, governments are exchanging experience in their legalization, so any restrictions are only a temporary measure.

The opposite view was expressed by the billionaire founder of Bridgewater Associates, Ray Dalio, who believes that this asset class is likely to be banned by the governments of a number of countries.

Ricardo Salinas Pliego, one of the richest people in Mexico and founder of the Grupo Salinas group of companies, also believes that governments are not interested in facilitating the use of bitcoin, since the decentralized nature of the first cryptocurrency makes it much more difficult to control its turnover.

The same opinion is shared by Parallax Digital CEO Robert Breedlove, who said that the authorities will try to make life as difficult as possible for cryptocurrencies, as a class that poses a threat to their financial systems. To do this, they will use all their tools, aiming to regulate digital assets as much as possible. This is what we have seen lately in countries such as China or Russia.

Some optimism is caused by the fact that quite a lot of representatives of large businesses already side with digital assets, recognizing the merits of cryptocurrencies to one degree or another. Of course, not all of them are ready to invest serious capital in this market right now. The aforementioned billionaire Ray Dalio, while stating that "cash is trash," admitted that digital assets make up a "tiny percentage" of his personal investment portfolio. And that in general, given the small size of the cryptocurrency market, it "is given too much attention."

In terms of market size, Robert Breedlove believes that the market capitalization of bitcoin will increase dramatically over the next few years and exceed $5.0 trillion. Inflation in the US is at a 40-year high at the moment. And according to the head of Parallax Digital, the same thing can happen with the dollar as with the currency of Venezuela. The US currency will hyperinflate by 2035, at which point the price of BTC in dollar terms will become astronomical: 1, 5, or 10 million USD per coin. That is, the Fed's printing press can provide tremendous support to bitcoin. But the biggest threat to it, according to Robert Breedlove, comes from the same regulator.

All indicators of the crypto market look much more modest at the time of writing the review on the evening of Friday, February 04. The total market capitalization is still slightly closer to $2.0 trillion and is at the level of $1.90 trillion ($1.85 trillion a week ago), the Bitcoin Dominance Index is 42.46%. The BTC/USD pair is trading in the $42,500 zone, and the Crypto Fear & Greed Index has left the Extreme Fear zone and, having gone up sharply, reached 50 points, which corresponds to the neutral state of the market.

A number of experts monitoring the dynamics of supply and demand for bitcoin are alarmed by the weak base for the current growth of the coin. As a result, in their opinion, the BTC/USD pair may return to the $40,000 zone within a month, and then fall even lower, to $29,000, in the medium term.

An even more pessimistic forecast was given by the author of the book "The Ascent of Money", historian of economics Niall Ferguson. He believes that if the historical dynamics of BTC fluctuations is repeated, the price of the first cryptocurrency will fall to a low of $11,515 by November 2022. This is 83% below the historic peak in bitcoin value reached in November 2021.

At the same time, Ferguson disagrees categorically with the opinion of the Nobel Prize winner in economics Paul Krugman, who draws a parallel between the volatility of the cryptocurrency market and the collapse of the US real estate market in 2007-2008. Which, as you know, was followed by the global economic crisis.

Niall Ferguson believes that "it is not worth waiting for a polar vortex or a giant ice cyclone. And a drop in the value of bitcoin to the lows of the 2010s is unlikely. However, this does not mean that crypto winter will bring less cold."

Of course, there are much more optimistic forecasts. According to Sean Farrell, an analyst at financial research firm FSInsight, bitcoin's dominance over altcoins will remain unshakable and its price, despite a "shaky start" in January, could reach $200,000 in the second half of 2022.

The FSInsight report also states that the ethereum platform is undervalued and the second largest cryptocurrency by capitalization may reach $12,000 this year. Sean Farrell is optimistic about the transition of ethereum to the Proof-of-Stake algorithm. And if the process goes smoothly, capital inflows into the ecosystem will increase, "regardless of bitcoin's performance." And the CEO of the KuCoin crypto exchange, Johnny Liu, believes that since most innovative projects are launched on the ethereum, it will break ahead of BTC in the long run.

The fact that the BTC/USD pair could overcome the $100,000 mark at the end of this year or at the beginning of 2023 is also indicated by the forecast of a crypto trader nicknamed Dave the Wave. However, this scenario also implies a "decent correction". The trader notes that the $100,000 cyclical curve should be interpreted not as a support level, but as an average price trajectory that bitcoin can roughly follow.

In regard to the near future, Dave the Wave noted that while bitcoin's monthly chart may still look bearish, certain bullish signals are emerging on the weekly chart. In addition, bitcoin managed to break out of the narrow downward channel, which also indicates an upcoming increase.

And at the end of the review, our traditional heading of crypto life hacks. This time we will mention a trader nicknamed macromule who shared a very interesting trading algorithm. According to this trader, the signal to open a position is the tweets of the bitcoin skeptic and gold supporter Peter Schiff about the first cryptocurrency. The user recommended buying BTC every time after the next such tweet and closing the position after 72 hours. According to macromule, this strategy could have made 203 trades since last May, of which 65% 65% would have been in positive territory and brought about 1,000% per annum income.

Of course, we cannot recommend using this "strategy". But if someone still wants to test it, they can do it on a demo account without risking real money.


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

https://nordfx.com/

 

[Stan NordFX]

CryptoNews of the Week

- Tom Lee, co-founder of the analytical firm Fundstrat, called $200,000 a target mark for bitcoin in an interview with CNBC and explained what facilitates its achievement. According to the analyst, the total net worth of US households exceeds $141 trillion. The Fed's monetary policy leads to the fact that people are guaranteed to lose money on investing in bonds over the next decade. Lee expects an influx of speculative capital into cryptocurrency that could be "huge", in this regard.
The high price of this asset is an obstacle to the mass adoption of bitcoin, in his opinion. Therefore, Tom Lee has supported the idea of switching to Satoshi, a millionth of BTC.

- The name of Satoshi Nakamoto also made it onto The Guardian pages. British crypto investor Anthony Welch bought Lataro Island in the Pacific Ocean (Vanuatu) with an area of 300 hectares and renamed it Satoshi. According to the newspaper, he plans to build a smart city there for supporters of digital assets.
According to the publication, Welch has been living on the island for the past 12 years with his partner Teresa. They expect 21,000 crypto investors from all over the world to join them soon. "Yes, we already have an island. Yes, we can develop as advertised. Yes, the government supports our plan. Yes, our team has relevant experience," the project description says.
Candidates wishing to live on the island will receive an NFT token that will grant them Satoshi Island citizenship. In addition, all applicants will also have to obtain Vanuatu citizenship, which will cost them $130,000.

- According to the analytical company ESET, NFTs have become one of the main mechanisms for the distribution of malware for hidden mining or theft of cryptocurrency wallets in 2021. Most often, hackers put viruses into gaming NFTs that allegedly contain superpowers or rare weapons. Tools for crypto jacking, which allows for hidden mining, are implemented by attackers using various applications. Previously, the main sources of such viruses were torrent resources and porn sites.

- Legendary billionaire investor and founder of Miller Value Partners Bill Miller, speaking to CNBC, called bitcoin insurance against financial disasters and said that he still holds a significant part of the capital in the first cryptocurrency. He explained that he invested only a few percent of his fortune in digital assets, which then, as the cryptocurrency market grew, turned into half of his personal funds.
According to Miller, the thesis about the lack of intrinsic value of bitcoin is erroneous. "It's like an insurance policy. You don't want your house to burn down, and you don't want to get into a terrible accident, but you pay for insurance every year in case it happens," explained the billionaire. He also likened the digital asset to collectibles like baseball cards and Picasso paintings.

- The Russian authorities unanimously refused bitcoin as a means of payment. The Central Bank and the Ministry of Finance of the country have brought together their positions on the development of cryptocurrencies. The parties agreed that cryptocurrencies will not receive the status of a means of payment in Russia. However, their purchase, exchange and sale are subject to regulation.

- Cardano founder Charles Hoskinson believes that BTC will not be able to become a global reserve currency due to the energy costs of mining, various ecosystem flaws, and inconsistency with current industry standards. But his ADA cryptocurrency is quite suitable for this role. "Imagine that you are selling paintings, one of which you have to draw by hand and another with a machine. Both of them look the same and are in the same demand. So, you're just spending a thousand times more effort.

- Analyst Willy Woo believes that bitcoin will rise over the next five years. In his opinion, the future of the US dollar in terms of inflation has not yet been determined, and the capitalization of bitcoin is consolidating now in the $1 trillion zone. Overcoming this mark will give the coin greater stability. Further growth to the gold capitalization of almost $11 trillion will be relatively smooth, after which it will slow down. As for the final figure, Willy Woo believes that the capitalization of bitcoin could eventually grow to $40 trillion.
The deviation of the BTC price from the trend line occurred, according to Woo, due to the fact that the market was diluted due to the presence of other digital assets. Ethereum was launched in 2015, and as a result, there was a significant deviation in the direct trend line of bitcoin. And the line deviated even more in 2021 due to several thousand "shitcoins".

- Cryptocurrency analyst Nicholas Merten believes that bitcoin is showing signs of an upcoming rally, and the bulls have a chance to beat the bears. According to him, bitcoin has not gone into a bear market, and the recent stagnation should not be confusing. "This is a really great signal," says Merten, "Bitcoin doesn't create lower highs, they are relatively constant, but the lows are getting higher. The previous resistance level becomes an upward support. Investors are ready to overpay, which indicates the market is ready to return to the formation of another uptrend."
According to the analyst's forecasts, "Bitcoin's capitalization could potentially reach $4 trillion in October-December 2022, that is, the asset will show a 220% increase compared to the previous record high. The previous rally was up 392% and it was up 359% earlier.

- Jurrien Timmer, Global Macroeconomics Director at one of the largest asset management companies, Fidelity Investments, is confident that the value of the first cryptocurrency will repeat the growth of the Apple's market value. "I compared the network effect of bitcoin to the network effect of Apple computers. As Apple's earnings increase, its share price rises exponentially. I have reason to believe that bitcoin is following the same path. The price of this cryptocurrency will only increase as demand increases."
BTC benefits from its strong difference from all other crypto assets, the expert believes. "Perhaps other digital currencies will look better against the background of bitcoin due to better scalability, but at the same time, they are likely to be less decentralized. For me, bitcoin is like gold, and other cryptocurrencies are more like venture capital."
Recall that Timmer said last October that the value of BTC will reach $100,000 by 2023.

- A few days after the United Nations said that North Korea hacked cryptocurrency exchanges on several continents last year, Pyongyang hit back. The DPRK Ministry of Foreign Affairs has accused the United States of being a wiretapping empire, a hacker king and a [expert] country when it comes to covert thefts.
The Foreign Ministry statement also claimed that the accusations of stealing the cryptocurrency were a kind of "fabrication that only the United States could invent, with their rejection of North Korea."
Pyongyang added that all this was evidenced by revelations made by former US intelligence agent Edward Snowden, who said that US intelligence agencies were spying on their own citizens, as well as reports that the United States tapped the phones of European leaders.


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

https://nordfx.com/

 

[Stan NordFX]

Forex Forecast and Cryptocurrencies Forecast for February 21 - 25, 2022​

EUR/USD: Waiting for War and Rate Hike

The period from February 10 to 14 was unexpectedly stormy. Panic moods were diligently warmed up by the leading media, actively discussing the statements of world leaders, primarily the President of the United States, regarding a possible Russian invasion of Ukraine. The White House even decided to relocate its diplomatic mission from Kiev, the capital of Ukraine, to Lviv, away from the zone of possible military operations and closer to the EU borders.

All this happened against the background of the US Federal Reserve's decision to convene an emergency meeting of the FOMC (Federal Open Market Committee). Rumors immediately spread that the refinancing rate would be increased by 50 basis points (bp) right now.

As a result, investors began to panic to get rid of risky assets, and the stock indices S&P500, Dow Jones and Nasdaq flew down.

The EUR/USD went down as well. The markets feared that the "hot" phase of the Russian-Ukrainian conflict would lead to further growth in energy prices and slow down the recovery of the European economy. According to JP Morgan strategists, if the price of oil rises to $150 per barrel, the global consumer price index (CPI) could soar to 7.0%. And according to Capital Economics, inflation in advanced economies could rise to 4.5%.

As a result, having started on February 10 at 1.1494, the war-terrified EUR/USD pair ended up at 1.1279 on February 14. That is, the euro returned to where it started north during Christine Lagarde's hawkish press conference, which she gave after the last meeting of the European Central Bank.

The results of the emergency FOMC meeting left many experts bewildered. There was no increase in interest rates. Perhaps the members of the Committee did not want to provoke further mass sales of shares and decided to wait for the outcome of the conflict between Russia and Ukraine. Moreover, there are signs of its peaceful resolution.

Investors began to calm down little by little. However, it was not possible to avoid a new wave of sales in the stock markets. And it followed on February 17 after another "apocalyptic" speech by US President Joe Biden.

Unlike equities, EUR/USD managed to stay neutral and ended the five-day trading session at 1.1324, within the 1.1260-1.1400 range it traded throughout December and the first ten days of January.

The European currency was kept from further falling, among other things, by multidirectional macroeconomic statistics from the USA. Thus, the number of initial applications for unemployment benefits there amounted to 248K, that is, it increased by 23K instead of the expected fall by 5K. But repeated requests, instead of decreasing by 2K, fell immediately by 26 K.

The dynamics of the EUR/USD pair in the coming days will certainly be influenced by how far the conflict between Russia and Ukraine will go, as well as how deeply European countries and the United States will be involved into it and what the rhetoric of their leaders will be. If there is no war, the topic of the energy crisis in Europe will fade into the background, which will support the European currency.

Support for the dollar is now largely dependent on the Fed. Yes, there are disagreements among FOMC members. But they are not about whether or not to tighten monetary policy, but how quickly to do it and to what extent. The hawkish statements of some members of the Committee give rise to forecasts of 6 or even 7 acts of monetary restriction in 2022. However, a number of leaders of the Federal Reserve Banks believe that it is necessary to act slowly and more carefully, since too aggressive steps could hit the US economy.

At the time of writing, the trend indicators on D1 are 90% red and only 10% green. Among the oscillators, 20% are green, 50% are red, and 30% are neutral.

Experts' forecast for the next week also looks very uncertain: 40% do not exclude the growth of the pair, 50% adhere to the opposite point of view, and 10% remain neutral. However, 65% of analysts support the strengthening of the dollar in a forecast for March.

Resistances are located at levels 1.1385-1.1400, 1.1480, 1.1525, 1.1570 and 1.1615. Support levels are 1.1300, 1.1275, 1.1220. This is followed by 1.1185 and the Jan 28 low at 1.1120.

As for the economic calendar for the coming week, we can note the release of data on business activity (Markit) in Germany and the Eurozone on Monday, February 21. Preliminary annual data on US GDP will become known on Thursday, February 24, and US statistics on orders for capital goods and durable goods will arrive at the end of the week, on Friday.

GBP/USD: Consolidation of the Pair, Consolidation of Experts

The macro data released last week supported the British currency. This applies to both the labor market and the consumer market. The unemployment rate in the United Kingdom remained unchanged at 4.1%, which was exactly in line with the forecast. At the same time, the number of applications for unemployment benefits decreased from 51.6K to 31.9K in January. Retail sales added 1.9% after a 4.0% dip in December and are above the long-term trend level. All this is a positive signal about the recovery of the country's economy.

Looking back a few years, we can see that the 2007-2008 financial crisis was followed by an eight-year period during which retail sales remained below the trend line. This was one of the reasons that prevented the Bank of England from raising rates. But now both inflation indicators and the state of the labor market can give it a free hand in tightening monetary policy. Moreover, the British regulator is still in the lead, raising interest rates faster than its counterparts on the other side of the Atlantic do.

However, this superiority is very shaky. The growth in sales may not be due to an improvement in the economic situation, but due to pent-up demand for goods and services, access to which was limited due to quarantine measures during the COVID-19 pandemic. So, the upcoming steps of the British regulator are likely to be very balanced. So as not to repeat the mistakes of the ECB, which rushed to raise the rate in May 2009, undermining the economic recovery.

In support of the forecast, it is enough to recall that only 4 out of 9 members of the BoE committee voted for a 50 bps rate increase at the last meeting. The majority, including the head of the bank, Andrew Bailey, decided to raise the rate by only 25 basis points, citing a slowdown in economic growth.

Economic indicators allow the pound to successfully repel the attacks of the US currency at the moment, and we can see the GBP/USD pair consolidating around 1.3600. We can say that experts' forecasts for the coming week are also consolidating: 25% of them vote for a sideways trend. 40% vote for moving north and 35% for moving south. (When moving to a monthly forecast, the number of bear supporters increases to 70%).

The overwhelming majority of indicators are aimed upwards D1. Among the oscillators, there are 70% of those. 20% have taken a neutral position, the remaining 10% side with the dollar. Among trend indicators, 90% are for the growth of the pair, 10% are for its fall.

Supports are located at 1.3570, 1.3500, 1.3425, 1.3355, the next strong support is 100 points lower. Resistance levels are 1.3600, 1.3650, 1.3700-1.3740, 1.3830 and 1.3900.

Of the events of the coming week, data on business activity in the services sector (Markit), which will be published on Monday, February 21, as well as the hearing of the UK Inflation Report on Wednesday, February 23, are of interest.

USD/JPY: Investors at a Crossroads

The USD/JPY was trading in a fairly narrow range throughout the past week, less than 110 pips (114.78-115.86). As already mentioned, investors are now most concerned about two issues: the expected Russian invasion of Ukraine and the increase in the refinancing rate by the US Central Bank. And, apparently, they have not yet decided what to do with such a safe-haven currency as the yen at this stage.

On the one hand, the increase in USD rates should push the pair up, strengthening the position of the US currency.

On the other hand, the escalation of the conflict in Ukraine may remind the markets of economic crises and a spike in inflation. In this case, one can expect a complete loss of risk appetite among investors and an influx of their capital into such a safe haven as the Japanese currency. Actually, this is happening now, although not on a very large scale: it is enough to compare the charts of stock indices and USD/JPY. This relationship is even clearer when compared to the EUR/JPY chart, since, unlike the US, the Eurozone is located in close proximity to the potential war zone.

Analysts' forecasts for the coming week are as follows: 25% of them are in favor of a sideways trend, 50% are in favor of the pair's growth and 25% are in favor of its fall.

Among the oscillators on D1, 30% are neutral gray, 10% are green, 60% are red (with a quarter of them in the oversold zone). Trend indicators have a 50-50 draw. The nearest resistance zone is 115.30, then 115.70. The main goal of the bulls is to renew the high of 116.34 and rise to where the pair has not been seen since January 2017. Support levels are at 115.00, 114.80, 114.15, 113.75, 113.45, 113.20, 112.55 and 112.70.

No significant economic events are expected in Japan next week.

CRYPTOCURRENCIES: Crypto Market Black Friday

BTC/USD is back where it was a month ago. The chart of the last two weeks resembled the chart of mid-January. The front line then lay at the $42,000 level, along which the bulls and bears fought with varying degrees of success. Last time, they ended with the pair falling to $32.945, and, according to a number of analysts, a similar outcome is possible this time as well. It depends not so much on the sales caused by a possible Russian invasion of Ukraine, but on the US Federal Reserve. Tightening monetary policy and rising interest rates could hurt all risky assets, including cryptocurrencies.

Bitcoin has acted as an inflation protector throughout the pandemic. This was one of the main drivers of its growth. But if inflation returns to normal, who needs such a protector?

There is no doubt that the US Central bank will try to curb inflation, which has already reached a 40-year high. But how successful its efforts will be is a question to which different experts give different answers. Bitcoin supporters continue to convince everyone (and themselves in the first place) that we are ahead of an endless rise in prices and serious financial turmoil.

According to Parallax Digital CEO Robert Breedlove, the same thing could happen to the dollar as to the currency of Venezuela. The US currency will hyperinflate by 2035, at which point the price of BTC in dollar terms will become astronomical: 1, 5, or 10 million USD per coin.

The legendary investor, founder of Miller Value Partners, Bill Miller almost half of whose fortune is now made up of cryptocurrency, also stood up to the defense of bitcoin. "It's like an insurance policy. You don't want your house to burn down, and you don't want to get into a terrible accident, but you pay for insurance every year in case it happens," explained the billionaire.

Tom Lee, co-founder of the analytical firm Fundstrat, called $200,000 a target mark for bitcoin in an interview with CNBC and explained who will facilitate its achievement. And these are not institutional investors at all, but small investors. According to the analyst, the total net worth of US households exceeds $141 trillion. People will look for ways to protect them over the next decade in order not to lose their savings due to inflation, . Therefore, Lee says, the inflow of capital into cryptocurrency can be "huge".

The high price of this asset is an obstacle to the mass adoption of bitcoin, in his opinion. Therefore, Tom Lee has supported the idea of switching to Satoshi, a millionth of BTC.

Jurrien Timmer, Director of Global Macroeconomics at Fidelity Investments, one of the largest asset management companies, is also optimistic. He is confident that the value of the first cryptocurrency will repeat the growth of Apple's market value. "I compared the network effect of bitcoin to the network effect of Apple computers. As Apple's earnings increase, its share price rises exponentially. I have reason to believe that bitcoin is following the same path. The price of this cryptocurrency will only increase as demand increases." And according to Trimmer, it will reach $100,000 by 2023.

This expert believes that BTC benefits from its strong difference from all other crypto assets. "Perhaps other digital currencies will look more profitable against the background of bitcoin because of the better scalability, but at the same time they are likely to be less decentralized. For me, bitcoin is like gold, and other cryptocurrencies are more like venture capital."

Analyst Willy Woo believes that the future of the US dollar in terms of inflation has not yet been determined. Bitcoin's capitalization is currently below $1 trillion, and breaking this mark will give the coin more resilience, and it will grow over the next five years. Further growth to the gold capitalization of almost $11 trillion will be relatively smooth, after which it will slow down. As for the final figure, Willy Woo believes that the capitalization of bitcoin could eventually grow to $40 trillion.

As for the immediate prospects, according to analyst Nicholas Merten, bitcoin is now giving signals of future growth and "its capitalization could reach $4 trillion potentially in October-December 2022." That is, the asset will show a 220% increase in relation to the previous record high. The previous rally was 392% up and it was 359% up earlier.

"This is a really great signal," says Merten. "The past resistance level is becoming an upward support. Investors are ready to pay more and more, which indicates the market is ready to return to the formation of another uptrend."

The fact that BTC/USD was above the 50-day moving average for 10 days really looked like a trend reversal. A breakdown of the 200-day MA at $48,000 could be the next confirmation. Investors were also encouraged by the growth of the Crypto Fear & Greed Index. If at the same BTC price, it was in the zone of Extreme Fear at the level of 20 points a month ago, it reached 52 points on Thursday, February 17.

However, another wave of active sales on Black Friday, February 18 brought another portion of doubts about the bulls' near victory. The Crypto Fear and Greed Index fell into the Fear zone to the 30 mark. The 50-day MA has again turned from support to resistance, and the total crypto market capitalization has not managed to gain a foothold above the psychologically important level of $2.0 trillion, and it is $1.815 trillion at the time of writing.

In conclusion, it remains only to quote the words of Tom Lee from Fundstrat. "If there is no crystal ball, it is very difficult to be accurate in cryptocurrency," he joked about the forecasts. According to a proverb, there is some truth in every joke. In this case, this proportion clearly exceeds 50%.


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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[Stan NordFX]

CryptoNews of the Week

- Expectations of a key rate hike by the US Federal Reserve and geopolitical tensions are fueling the pessimism of bitcoin investors and increasing the likelihood of selling unprofitable coins. This is the conclusion reached by Glassnode analysts. The bearish trend is confirmed by on-chain indicators: the number of active bitcoin addresses has dropped to the lower boundary of the corridor. This indicates a decrease in demand for the asset. The percentage of profitable bitcoin investors ranges between 65.8% and 76.7%.
Short-term speculators (coin holding period less than 155 days) have purchased 2.56 million BTC. The average acquisition cost is $47,200. Their unrealized loss is about 20%, with the price around $38.000. They are currently a source of sales pressure in the absence of an equivalent increase in demand. Glassnode believes that if the price rises, the pressure of sellers may increase, who will try to leave the market without losses or with a minimum profit.

- Ethereum co-founder Vitalik Buterin believes that the new "crypto winter" can help the industry become stronger. However, he is not yet sure that this period has really come, Bloomberg writes.
Buterin emphasized in an interview with the agency that in fact, people "deeply immersed in the cryptocurrency industry" welcome periods of the bear market. This allows you to get rid of weak projects, and also reduces the level of "hype". It is in the "winter" that many weak and harmful projects disappear, and only reliable, important projects remain, with well-thought-out business models and a close-knit team, the developer believes.

- The law legalizing and accepting bitcoin as a means of payment came into force in El Salvador on September 7, 2021. According to the Minister of Tourism Morena Valdes, the tourist flow to the country increased by 30% after that. She said that the recovery in the segment has exceeded expectations, as the country received 1.4 million visitors in November-December, against the forecast of 1.1 million. She also drew attention to the growth in tourism revenues: "We planned $0.8 billion in foreign currencies but received $1.4 billion."
The introduction of cryptocurrency had an impact on the structure of the tourist flow as well. If the bulk of tourists had before been from neighboring Central American countries, up to 60% currently come from the United States, the minister said.

- Indian police have detained suspects in a Rs 400 million (about $5.34 million) cryptocurrency scam, according to the Times of India. Authorities arrested four people in the city of Lanowala during the raid, and seven more in Nagpur a day later.
According to police, the attackers urged potential investors to buy ethereum on the ZebPay platform and then send the cryptocurrency to their Ether Trade Asia platform. Manipulating the data, they demonstrated to investors the imaginary profitability of the project and spent the raised funds on themselves.
Participants in the scheme are also suspected of killing one of the accomplices for refusing to disclose "passwords for important transactions."

- Past price cycles indicate that a new bull market for bitcoin may not occur until late 2024 or early 2025. Du Jun, CEO of Huobi crypto exchange, expressed this opinion in an interview with CNBC. According to him, bitcoin's price cycles are closely related to halvings: periodic block reward halvings embedded in the algorithm, which occur approximately every four years.
The last halving took place in May 2020, and the quotes of the first cryptocurrency reached an all-time high above $68,000 a year later. A similar price movement was observed after the 2016 halving: bitcoin reached record levels in December 2017.
Then deep drops in the price of digital gold followed in both cases, Du Jun recalled.
Based on the trend, Huobi CEO believes that "we are now in the early stages of a bear market" and expects a bullish trend for bitcoin to come only after the next halving in 2024. However, he added that "it is difficult to predict accurately in reality, since there are many other factors that can affect the market, such as geopolitical issues, including war, or the recent COVID."

- Ricardo Salinas Pliego, one of the richest Mexicans, has spoken out in favor of the oldest crypto asset not for the first time. This time, the billionaire recommended strongly to continue buying BTC while the price is low enough, and to hold this asset without even thinking about a possible sale. He is convinced that those who listen to his advice will thank him later.
The first cryptocurrency is separated from its November high by about 45% now, and a number of investors and large companies have taken advantage of the fall to replenish their BTC reserves. For example, this is the step taken by Microstrategy software developer, US Senator Ted Cruz, and El Salvador that made a splash last year.

- David Schwartz, Ripple's CTO and one of the creators of XRP Ledger, continues to be one of the most mysterious characters in the cryptosphere. So much so that many people suspect that he may be the creator of bitcoin under the pseudonym Satoshi Nakamoto, or at least be associated with the Satoshi group.
Although Schwartz has repeatedly denied this, he has admitted to "having optimized" the bitcoin code and working on it very early on, back in 2011. Here is what he had to say about it: "I have almost the entire skill set needed to be Satoshi. It is likely that I was part of a group. But, nevertheless, this is not true. I didn't know about bitcoin until 2011." And to the question: "If you really were Satoshi, would you tell us?", Schwartz replied: "Honestly, I would not speak."
Schwartz's speech at the recent presentation of the XRP Ledger Foundation gave another reason for speculation. Attentive listeners noticed that he spoke about "When I Found Bitcoin…" at the beginning of his speech. The fact is that if the word "Found" had the ending -ed at the end, then it would already sound like "founded" or "created".

- The Coinbase cryptocurrency exchange will pay a premium of $250,000 to a Twitter user nicknamed Tree of Alpha, who discovered a "market nuclear bomb". Tree of Alpha found a bug in the Coinbase trading platform, with which he managed to deceive the system and sell ethereum under the guise of bitcoins. He transferred 0.0243 ETH from his account, which he sold as 0.0243 BTC, and earned about $1000 instead of $70.
After that, the trader contacted Coinbase management, reporting the vulnerability of the platform. The exchange staff, having checked for the error, eliminated it promptly, and the honest trader who prevented the "bomb explosion" was promised a reward of $250,000.

- While the US federal authorities are thinking about how to conduct financial policy in relation to cryptocurrencies, local authorities are already trying to get ahead of them. It is possible that the state of California will recognize BTC as legal tender, following El Salvador. An expert group is working on the relevant bill at the moment. We should expect an influx of not only new investments in the state economy after its adoption, but also an increase in the number of companies and digital nomads working with cryptocurrencies.
If California recognizes bitcoin, it is likely that other states will begin to consider similar initiatives, which can seriously improve the position of the cryptocurrency.

- The aggravation of geopolitical tensions has led to an increase in the correlation between the first cryptocurrency and the US stock index S&P 500. This is stated in the analytical report of Arcane Research. According to the researchers, the 90-day correlation between BTC and the "barometer of the American economy" reached the highest level since October 2020. On the contrary, the statistical relationship between bitcoin and gold has become negative, as gold acts as a low-risk asset. Arcane Research has also noted that bitcoin spot trading volume on centralized exchanges has fallen to early December 2020 levels.
Analysts are confident that the strongest support range is $28,000-$30,000, as it represents the "bottom of the bear market in the summer of 2021." They have named $40,000 as an important resistance level.

- Shark Tank business reality show star Kevin O'Leary has recently made his bitcoin prediction. He notes that many institutional investors cannot yet invest in the leading cryptocurrency, as this issue has not yet been resolved at the level of regulators.
O'Leary has noted that anyone who wants to speculate about the cost of BTC at $100,000, $200,000, $300,000 should understand that all this will become possible when institutionalists finally have the opportunity to purchase a crypto asset in accordance with regulatory standards. He notes that he can say this with confidence, as he works with "sovereign wealth funds and pension plans." And although there is a lot of buzz around BTC right now, none of them have a single token. Moreover, they do not even plan investments in this asset yet.
According to O'Leary, it is much better to think of BTC not as a coin, but as software. He has noted that the above institutions have shares in Microsoft and Google, so it will be easier for them to understand if they regard cryptocurrencies as software. At a time when the crypto sector begins to meet all the requirements, these financial institutions will be able to invest 1% to 3% of their capital in bitcoin, and this can happen within the next 2-3 years.


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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[Stan NordFX]

Forex and Cryptocurrencies Forecast for February 28 - March 04, 2022​

EUR/USD: War Is Not Only Blood, But Also Business

The dynamics of European currencies is now determined by what is happening in Ukraine. You can forget about all kinds of macro-economic indicators for a while. Who and how much earned on Russia's invasion of a neighboring country, and who lost and how much, will become clear only when the situation stabilizes finally. And this may not happen soon.

Russia's possible hostilities against Ukraine had been discussed for several weeks. However, the world had expected that they would be limited to two regions in the east of the country, Donetsk and Luhansk. However, Russia launched missile and bomb attacks on all major cities of the country on Thursday, February 24, early in the morning, including the capital city of Kyiv, followed by an offensive by ground forces.

Nobody had expected anything like this (except for Russian President Putin and his inner circle). The markets experienced a real shock, and a stampede began not only from risky assets, but also from European currencies.

A number of European countries, primarily the Baltic ones, are afraid that Russia may invade their territory, following Ukraine. But even if these fears are discarded, Europe's economy has already suffered serious damage.

Due to its proximity, the Eurozone is much more dependent on Russian energy than the United States. Russia accounts for about 40% of gas supplies and 30% of oil supplies to the EU. Moreover, one of the main gas pipelines passes through the territory of Ukraine, where the fighting is going on. This situation instantly raised the prices for blue fuel to cosmic heights and they were eight times higher than similar prices in the United States.

It is clear that for Western Europe this does not portend anything else but falling into a deep recession, or even into stagflation Stagflation is an extremely weak GDP growth coupled with extremely high inflation, which has already reached a record level of 5.1%.

The negative outlook is reinforced by the economic sanctions that the EU imposed against Russia to support Ukraine. They limit the current industrial turnover seriously, and also tighten the banking sector. It is difficult to imagine how the ECB will be able to wind down monetary stimulus and raise interest rates in this situation. As for the US Federal Reserve, this regulator is unlikely to abandon its plans. Although, it is possible that their implementation will be somewhat slowed down for the sake of supporting the stock market. At least in the near future.

The EUR/USD pair was trading at 1.1494 back on February 10. The war in Eastern Europe led to the fact that it found the bottom at the level of 1.1106 just two weeks later, losing 388 points.

The markets recovered somewhat from a powerful shock at the end of the week on Friday, February 25. The old principle, known since Napoleon Bonaparte, "Buy while the blood is shed," worked. Stock indices went up, supporting the European currency. After the correction, it completed the week at 1.1270.

At the time of writing the review, on February 25, it is unknown how the operation of Russian troops in Ukraine will end. It is unknown either what new sanctions the EU and the US will take against Russia if hostilities do not stop. Therefore, it is President Putin alone who could give the most accurate forecast for the coming week. We can only record the opinions of experts and the readings of indicators at the moment.

The forecast of analysts for the next week looks very uncertain: 65% of them point to the 1.1300 zone, which has been the Pivot Point since mid-November 2021. The remaining 35% vote for the bears and do not rule out that the pair will test the support of 1.1100 again. Trend indicators on D1 are 90% red and 10% green. Among the oscillators, 80% are colored red, 20% are green.

Given the current increased volatility, the nearest resistance is located in a wide area of 1.1285-1.1390. If the bulls do not stop there, their next target will be the highs of January 13 and February 10 at 1.1485, then 1.1525, 1.1570 and 1.1615. Support zones are 1.1185-1.1200 and 1.1085-1.1120. They are followed by the levels of summer 2020, which are hardly worth focusing on in the current unstable geopolitical situation. Although, it can be assumed that the bears will try to at least reach the symbolic horizon of 1.1000.

As for the upcoming week's calendar, it will be quite busy. It is clear that the main focus will be on the events in Ukraine and the new sanctions associated with them from the EU and the US.

In addition, there will be data on the consumer market in Germany and business activity (ISM) in the US manufacturing sector on Tuesday, March 01. There will be statistics on the consumer market of the Eurozone on Wednesday, March 02, and a report from ADP on employment in the private sector will be published in the USA. Fed Chairman Jerome Powell will address Congress on the same day. The value of the ISM business activity index in the US services sector will become known on Thursday. And in addition to data on retail sales in the Eurozone, we are traditionally waiting for a portion of statistics from the US labor market, including the number of new jobs created outside the agricultural sector (NFP) on the first Friday of the month, March 04.

GBP/USD: Great Britain Is Europe as Well

Although the United Kingdom has left the European Union, it has not ceased to be part of Europe. Therefore, everything that has been said about the EU and the Eurozone is also relevant for the UK. The only difference is the numbers. Thus, the maximum volatility of the week for the GBP/USD pair was 366 points (falling from 1.3638 to 1.3272), and the finish, after the correction, fell at 1.3410. We can now forget about consolidation around 1.3600.

Just like the EU, the UK was very quick to impose sanctions on Russia and the Prime Minister issued an extremely tough and angry statement condemning the military operation in Ukraine. The consequences of such a step will be quite serious not only for the Russian, but also for the British economy. Suffice it to say that British Petroleum is one of the largest foreign investors in Russia and a shareholder of Rosneft. And the British banks have very close contacts with the largest Russian corporations and individuals. In addition, both countries have banned flights of national airlines over each other's territories.

Experts' forecast for the GBP/USD pair for the next week is as follows: 40% of them vote for the movement to the north and 40% for the movement to the south, the remaining 20% vote for the sideways trend. Almost all indicators on D1 are colored red. Among trend indicators, these are 100%, among oscillators these are 85%. Only 15% of them have reacted to the upward correction of the pair. Supports are located at 1.3400, 1.3365 and 1.3275-1.3315, then 1.3200 and the low of 08 December 2021, 1.3160. Resistance levels are 1.3485, 1.3600, 1.3645, 1.3700-1.3740, 1.3830 and 1.3900.

Following the results of February, we will have a fairly large package of macroeconomic statistics related to the British economy this week. The manufacturing business activity index (PMI) will be published on Tuesday, March 01, the composite index and the index of business activity in the services sector on Thursday, and a similar index in the construction sector - on Friday. The annual budget of the United Kingdom, which will be made public on Wednesday 02 March, is of interest as well.

USD/JPY: Japan Is Not Europe

Japan is the one who practically did not react to the war in Ukraine. This is understandable: Kyiv and Tokyo are separated by 8205 kilometers. Japan, of course, joined the sanctions against Russia, but this made almost no impression on the dynamics of the USD/JPY pair. Rather, it was influenced by the rise in prices for energy resources, on which the economy of this country is quite dependent. As a result, having bounced off the level of 114.40 on Thursday, February 24, the pair rose to a height of 115.75, and put the last chord a little lower, at the level of 115.52. Summing up the results of the week, it can be noted that the fluctuation of the pair's quotes was quite insignificant: only 57 points (115.03-115.60).

Analysts' forecasts for the coming week look like this: 55% are in favor of the pair's growth, 35% are in favor of its fall, and 10% are in favor of a sideways trend. Among the oscillators on D1, 65% are green, 20% are red, and 15% are neutral grey. For trend indicators, 65% look up, 35% take the opposite position. The nearest resistance zone is 115.70. The main goal of the bulls is to renew the high of 116.34 and rise to where the pair has not been seen since January 2017. Support levels are at 115.00, 114.80, 114.15, 113.75, 113.45, 113.20, 112.55 and 112.70.

No significant economic events are expected in Japan next week.

CRYPTOCURRENCIES: Bitcoin and Ethereum Prove to Be More Reliable Than Stocks

The main factor putting pressure on the crypto market was the expectation of an increase in interest rates by the US central bank a week ago. Russia's possible invasion of Ukraine was number two. It has now moved to the forefront, from assumption to fact.

The aggravation of the geopolitical situation associated with this increased the flight of investors from risky assets and led to a further fall in both stock indices and digital currency quotes. The 90-day correlation between bitcoin and the S&P 500 reached its highest level since October 2020. This is stated in the analytical report of Arcane Research. The statistical relationship between virtual gold and real gold, on the contrary, has become negative, since gold, unlike BTC, is a low-risk asset. Arcane Research has also noted that bitcoin spot trading volume on centralized exchanges has fallen to early December 2020 levels.

Bitcoin is commonly opposed to the dollar, being called insurance against inflation. But if you look at the charts of the last week, BTC is more likely an insurance within the market for risky assets: stock prices have fallen much faster since the outbreak of the war in Ukraine than the quotes of leading cryptocurrencies such as bitcoin and ethereum. The S&P500, Dow Jones, Nasdaq stock indices fell below the lows of a month ago in a few hours on the very first day of the bombing and rocket attacks, February 24. There is no need to talk about the Russian IMOEX index: it lost almost 50% in just a few hours, after which trading was stopped. Unlike all of them, the BTC/USD and ETH/USD pairs held their positions courageously above the January 24 low.

Of course, this is not a reason to rejoice. Expectations of a key rate hike by the US Federal Reserve and geopolitical tensions will continue to feed the pessimism of bitcoin investors, and therefore the likelihood of selling unprofitable coins will continue to grow. This is the conclusion reached by Glassnode analysts. The bearish trend is confirmed by on-chain indicators: the number of active bitcoin addresses has dropped to the lower boundary of the corridor. This indicates a decrease in demand for the asset. The share of bitcoin investors in profit is currently in the range between 65.8% and 76.7%.

Short-term speculators (coin holding period less than 155 days) have purchased 2.56 million BTC. The average acquisition cost is $47,200. Their unrealized loss is about 17%, with the price around $39.000. They are currently a source of sales pressure in the absence of an equivalent increase in demand. Glassnode believes that if the price rises, the pressure of sellers may increase, who will try to leave the market without losses or with a minimum profit.

According to Du Jun, CEO of Huobi crypto exchange, past price cycles indicate that a new bull market for bitcoin may not occur until late 2024 or early 2025. According to him, bitcoin's price cycles are closely related to halvings: periodic block reward halvings embedded in the algorithm, which occur approximately every four years.

The last halving took place in May 2020, and the quotes of the first cryptocurrency reached an all-time high above $68,000 a year later. A similar price movement was observed after the 2016 halving: bitcoin reached record levels in December 2017.

Then deep drops in the price of digital gold followed in both cases.

Based on the trend, Huobi CEO believes that "we are now in the early stages of a bear market" and expects a bullish trend for bitcoin to come only after the next halving in 2024. At the same time, he added that "it is difficult to predict accurately in reality, since there are many other factors that can affect the market, such as geopolitical issues, including war, or the COVID-19 pandemic."

Kevin O'Leary, the star of the Shark Tank business reality show, also announced his forecast. He notes that many institutional investors cannot yet invest in the leading cryptocurrency, as this issue has not yet been resolved at the level of regulators.

O'Leary has noted that anyone who wants to speculate about the cost of BTC at $100,000, $200,000, $300,000 should understand that all this will become possible when institutionalists finally have the opportunity to purchase a crypto asset in accordance with regulatory standards. He notes that he can say this with confidence, as he works with "sovereign wealth funds and pension plans." And although there is a lot of buzz around BTC right now, none of them have a single token. Moreover, they do not even plan investments in this asset yet.

According to O'Leary, it is much better to think of BTC not as a coin, but as software. He has noted that the above institutions have shares in Microsoft and Google, so it will be easier for them to understand if they regard cryptocurrencies as software. At a time when the crypto sector begins to meet all the requirements, these financial institutions will be able to invest 1% to 3% of their capital in bitcoin, and this can happen within the next 2-3 years.

Against this not very joyful background, the interview given by Vitalik Buterin, co-founder of Ethereum, to Bloomberg, can be considered the height of optimism. First, he is not yet sure that the "crypto winter" has really arrived. And secondly, he believes that such a "winter" can help the industry become stronger.

Buterin emphasized in the interview with the agency that in fact, people "deeply immersed in the cryptocurrency industry" welcome periods of the bear market. This allows to get rid of weak projects, and also reduces the level of "hype". It is in the "winter" that many weak and harmful projects disappear, and only reliable, important projects remain, that have well-thought-out business models and a close-knit team, the developer believes.

Looking to the near term, Arcane Research analysts believe that the strongest support range lies in the $28,000-$30,000 zone, as the "summer 2021 bear market bottom" is located there. They have named $40,000 as an important resistance level.

At the time of writing this review (Friday evening, February 25), the BTC/USD pair is trading around $39,000. The Crypto Fear and Greed Index has dipped a little into the Fear zone, falling from 30 to 27 points in a week, while the total crypto market capitalization has fallen from $1.815 trillion seven days ago to $1.755 trillion.


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

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[Stan NordFX]

Results of February 2022: Bitcoin and Gold Are Leading Again Among NordFX Traders

NordFX Brokerage company has summed up the performance of its clients' trade transactions in February 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 first place in the ranking of the most successful traders was taken by a client from Southeast Asia, account No. 1416XXX, who received a profit of 82,636 USD on transactions, most of which were carried out in pairs with bitcoin (BTC/USD), S&P500 and Dow Jones stock indices, and with oil.
The second place belongs to the owner of account No. 1602XXX. This trader earned 22,046 USD during the month, and their earnings were based on operations with bitcoin (BTC/USD), gold (XAU/USD) and silver (XAG/USD).

Another trader from Asia, who took the third step of the podium (account No. 1617XXX), also used the XAU/USD pair as a trading instrument. Their profit for February was USD 18,059.

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 149% 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 0.27% in their arsenal.
Startup signals include NVT Capital (388% income with 41% drawdown) and Thuytien1707 (25% with less than 10% drawdown). Both signals exist for only 14 days. And such a short life span is an additional risk factor for subscribers.

- In the PAMM service, we once again mark the manager under the nickname KennyFXPRO. They increased their capital on the KennyFXPro-the Multi 3000 EA account by 73% in 400 days with a fairly moderate drawdown of less than 16%. In addition, investors can pay attention to the TranquilityFX-The Genesis v3 account, which showed a profit of 52% in 330 days with a drawdown of 16%, and NKFX-Ninja 136 , which has brought income of 40% since June 11, 2021 with a drawdown of about 15%. Interestingly, the EUR/USD pair is also missing among the trading instruments here. The vast majority of transactions were made with NZD/CAD, AUD/CAD and AUD/NZD.

Among the IB partners of NordFX, the TOP-3 also includes representatives of Central and Southeast Asia:
- the largest commission, 10.498 USD, was credited to a partner with account No.1593ХXХ;
- the next is the partner (account No. 1371ХХХ), who received 9.410 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

https://nordfx.com/

 

[Stan NordFX]

CryptoNews of the Week

- According to Bloomberg, the National Security Council of the White House and the US Treasury Department appealed to the operators of the world's largest centralized exchanges with a request to stop any attempts to circumvent the sanctions imposed on Russia after its invasion of Ukraine. The White House spokesman said that cryptocurrencies are not a replacement for the US dollar, which is widely used in the Russian Federation. However, the US authorities intend to combat their misuse. European Central Bank President Christine Lagarde also called for increased regulation of digital assets in the euro area.
At least four cryptocurrency exchanges, including Coinbase and Gemini, have said they will take steps to tighten controls. At the same time, experts interviewed by The New York Times noted that Russian companies have many other tools at their disposal to circumvent the imposed restrictions, including the digital ruble and ransomware.

- The number of bitcoin addresses with balances over 1,000 BTC increased by more than 6% to 2,226 on Monday, February 28. The indicator has not reached this level since March 2021. The number of addresses with a balance of 100 to 1000 BTC also increased on February 28, although not as noticeably. The indicator increased by 1.3% during the day, to 15,929. This is evidenced by the data of the Glassnode service.
Some analysts suggest that such a rapid increase in the number of bitcoin whales is due to the attempts of the Russian elites to withdraw their assets to circumvent the sanctions.

- The dynamics of the cryptocurrencies' movement between private and exchange wallets indicates the lack of certainty among investors regarding the further developments in the digital asset market. This is written by CoinDesk with reference to the report of Bank of America (BofA).
According to analysts, the tightening of the Fed's policy and macroeconomic factors will limit the growth of cryptocurrencies in the next six months. However, BofA emphasized that this will not be the beginning of a new "crypto winter", as the level of adoption of digital assets by users and the activity of developers has increased significantly.
BofA specialists noted that the observed outflow of bitcoin from exchanges indicates the exhaustion of the sellers' momentum. At the same time, the influx of ethereum to the addresses of these platforms may indicate potential pressure on the price of the cryptocurrency which is second in terms of capitalization.
The bank also added that it will be difficult for the digital asset market to move out of the current price range until fears of a possible recession are discarded.

- Tesla board member Kimbal Musk, brother of the company founder Elon Musk, told TechCrunch that they had no idea about its environmental impact when they made the decision to buy $1.5 billion worth of bitcoin.
"We were very clueless when we invested in bitcoin. We had no idea about the impact on the environment, it seemed to us a good store of value and a way to diversify assets. And it certainly didn't take long to get a million - I'm not kidding, probably no less - messages about what we're doing to the environment." "I don't really agree with the environmental impact of cryptocurrencies, but I love what it does," Kimbal Musk added, expressing his hope that, broadly speaking, the blockchain industry will move towards a greener infrastructure.

- According to Voyager Digital CEO Stephen Ehrlich, cryptocurrencies are becoming stronger in the global financial system and will become a haven for future generations. He noted that the overall growth of the cryptocurrency ecosystem is manifested in increasing programs that allow employees of various organizations to receive part of their salaries in bitcoins. According to Erlich, the fact that people are ready not only to trade in cryptocurrency, but also to work for it, is a clear sign of the growth of the industry.

- A study by recruitment company Deel says that more and more employees of companies are willing to receive part of their salaries in cryptocurrency. Analysts studied more than 100,000 contracts offered to workers living in 150 countries. 52% of respondents in Latin America receive full or partial salary in cryptocurrency, 34% in Africa and the Middle East, and 7% in North America and the Asia-Pacific region. Bitcoin is followed by Ethereum (ETH), Dash (DASH), Solana (SOL) and USD Coin (USDC).
The number of vacancies representing the blockchain industry is also growing rapidly around the world. LinkedIn published a study in January that said that the number of such vacancies soared by almost 400% last year.

- A group of hackers claim to have hacked Nvidia servers. It is currently trying to sell miners data that can be used to easily unlock the "Lite Hash Rate" limiter from RTX 3000 video cards and use them for mining ethereum. The LAPSUS$ hacker group claimed responsibility for the hack, adding that they managed to steal 1 terabyte of data from the company's servers. This is reported by the industry publication PCmag.

- Not only popular bloggers and bank analysts are leaning towards the Hodl strategy at present, but also robots. "Hodling" is a way to accumulate bitcoins and the most correct trading strategy, this is the conclusion of an AI trading robot created by Portuguese software developer Tiago Vasconcelos. The coder "trained the bot, explained the rules, candles, principles when you can either buy or sell, or do nothing." The bot receives one point for each profitable trade and loses it as a "punishment" for unprofitable trades. The robot advisor makes thousands/millions of attempts with this data set, making moves to maximize the trading account balance.
Recall that Hodl is a popular meme in the bitcoin space that originated from a post on the Bitcointalk forum in 2013 with a typo in the word "hold".

- According to well-known economist and analyst Alex Kruger, "Everyone is investing in precious metals now. This is what the market situation tells us. It could be even worse: China invades Taiwan, Russia takes over even more countries. Then the market will fall further." "Russia using cryptocurrency to circumvent the sanctions would lead the digital asset market to a bearish scenario. Don't expect this to happen. But be careful what you do," he wrote.
Kruger suggests that the sanctions circumvention will be enough for U.S. regulators to ban digital assets in order to protect national security. However, if the geopolitical situation does not worsen, investors will soon see their growth.

- Popular Hollywood actor and film producer Ryan Reynolds has joined the list of celebrities who support the crypto industry. he has recently given an interview to the Bloomberg Markets business publication, in which he stated that the sphere of virtual money is doomed to gain a foothold in the global financial market as a serious player and competitor. "I am absolutely not surprised that cryptocurrency has become a major player in the global financial market, it has been going to this for a very long time. Of course, people's fears about some flaws in its security slow down this process significantly. However, in the context of this issue, one cannot underestimate the efforts of companies whose activities are aimed at making the trading of digital assets safer and, more importantly, accessible," said Reynolds.
It is worth adding that a large number of Ryan Reynolds' colleagues have recently joined the crypto community. For example, Reese Witherspoon invested in ethereum a few months ago, Paris Hilton does not hide her love for bitcoin, Matt Damon, in turn, is the face of the CryptoCom marketing campaign. But there is no information about whether Reynolds himself is a holder of cryptocurrencies. As part of the interview, he answered this question with only a mysterious smile.

- Legendary trader Henrik Zeberg, author of The Zeberg Report and expert on macroeconomic cycles, presented three charts to show that major stocks and cryptocurrencies are poised to rise in Elliot Wave 5. According to Zeberg, the most important stock market indices S&P500 and Nasdaq are approaching bullish reversals on the weekly charts. If his prediction comes true, bitcoin could once again increase its correlation with stocks and indices.

- Bloomberg Intelligence Chief Strategist Mike McGlone gave another forecast for the future value of bitcoin. He assured that the BTC rate will reach $100,000 in 2022. The analyst also emphasized that the price of the flagship digital currency will not drop to $30,000 despite the bearish sentiment in the market.
The expert once again noted that bitcoin is confidently moving towards becoming an international reserve asset. Against the background of the policy of the US Federal Reserve and the war between Russia and Ukraine, this main cryptocurrency is getting closer to the full status of digital gold. The strategist also believes that such coins as Dogecoin must lose their influence in order for bitcoin to finally establish itself as a reliable tool for protecting money savings.


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

https://nordfx.com/

 

[Stan NordFX]

New NordFX Super Lottery: 202 Prizes in 2022

The NordFX brokerage company started a new super lottery on March 1, 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.

Unlike traders' competitions, the undoubted advantage of this NordFX lottery is that its participants do not have to show exceptional results in trading in the financial markets. Both experienced professionals and beginners have equal chances of winning in this case.

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.

The first lottery was held in 2021 and was a great success: more than 20 thousand tickets participated in it. The draws were held online using an electronic lottery drum, and everyone could follow them. And now, a year later, the NordFX brokerage company has decided to hold a new lottery. Its slogan is More Prizes, More Winners. 202 prizes will be drawn in 2022 in three stages: 140 prizes of $250, 40 prizes of $500, 20 prizes of $1,250 and 2 super prizes of $10,000. 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. (If you look at the statistics of the last lottery, you will see that some of its most active participants were able to win two, and even three prizes).

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

https://nordfx.com/

 

[Stan NordFX]

Forex and Cryptocurrency Forecast for March 07 - 11, 2022​

EUR/USD: The Fate of the Euro Is Decided in Ukraine

Macro statistics were mixed last week. But few people pay attention to it at the moment. The dynamics of European currencies is determined by what is happening in Ukraine for the second week now. The escalation of the Russian-Ukrainian armed conflict is intensifying, increasing the demand for risk-free assets. And it is the dollar that acts as such, not the pan-European currency.

The difference in the monetary policies of the Fed and the ECB pushed the EUR/USD pair down both in 2021 and in January-February 2022. The tragic events of recent days have only given it an additional downward impetus. How else can the market react, say, to a rocket attack in the area of Europe's largest Zaporozhye nuclear power plant, located in southern Ukraine? The fire that arose not far from its power units was extinguished, but this did not make it any easier: Chernobyl has not been forgotten in Europe yet, and no one wants a new nuclear catastrophe that could claim millions of lives.

The negative outlook is reinforced by the extraordinarily tough economic sanctions that the EU has imposed against Russia to support Ukraine. They create huge problems in the supply of Russian energy resources to the EU, seriously limit industrial trade, and tighten the banking sector in a grip. It is difficult to imagine how, in such a situation, the ECB will be able to curtail monetary stimulus and raise interest rates. As for the US Federal Reserve, this regulator is unlikely to abandon its plans.

Speaking in Congress on Wednesday, March 02, Fed Chairman Jerome Powell named a number of advantages of the US currency. The first is the flight of investors from risk to such safe-haven assets as the dollar due to the events in Ukraine. Other trump cards include divergence in monetary policy with European countries and the growth of the US economy. By the way, such an important indicator as the number of new jobs created outside the US agricultural sector (NFP) has confirmed Powell's words, showing real growth to 678K against a forecast of 400K (481K a month ago).

Also, the US Central Bank believes that due to the events in Ukraine and the influence of Russia on commodity markets, inflation will be higher than previously predicted. And this, as Jerome Powell said, will require a more vigorous increase in interest rates. That is, they may be even higher by the end of 2022 than the market expects.

The previous week's forecast suggested that the EUR/USD pair would retest support at 1.1100, after which the bears would try to reach the landmark horizon of 1.1000. Such a scenario seemed very bold and almost unbelievable on February 25. But the events described above led to the fact that the pair easily broke through the seemingly "impenetrable" support of 1.1000 and collapsed to 1.0885, having lost 385 points in a week. The last chord, after a small correction, sounded at the level of 1.0932.

Amid mounting geopolitical tensions, the euro has lost more than 600 points to the dollar since February 10 and is now rapidly approaching the 2020 lows. And it is not far to parity 1:1. It is extremely difficult to predict where the bottom will be in the current situation. It was at around 1.0635 in 2020, the pair was falling to 1.0325 in 2016. Perhaps these values will become support levels.

As for the bulls, taking into account the increased volatility, their immediate goal is a return to the 1.1000 zone, followed by resistance in the 1.1100-1.1125 area, then a wide zone of 1.1280-1.1390, then - the highs of January 13 and February 10 in the 1.1485 area. However, the pair will be able to achieve them only if hostilities cease or, at least, when a stable truce is concluded. Most analysts hope for the best: 65% of them vote for the fact that EUR/USD will be able to return to at least 1.1200 within March. But trend indicators and oscillators on D1 have a completely different opinion: they are all colored red, although 25% of the latter are in the oversold zone.

As for economic statistics, data on retail sales in Germany will be published on Monday, March 07, then the data on GDP in the Eurozone on Tuesday. The event of the week can be Thursday, March 10, when the ECB meeting will take place. The interest rate is likely to remain the same at 0%, so the subsequent press conference of the regulator's management will be of more interest. Data on the US consumer market will come out on the same day, and we will find out the values of the harmonized consumer price index in Germany and the US University of Michigan consumer confidence index at the very end of the week, on Friday, March 11.

GBP/USD: Great Britain Is Europe as Well

The EU's dependence on Russian gas was about 45-50% before the introduction of sanctions. Unlike the countries of the European Union, the UK is practically independent of Russian gas supplies: this figure is less than 3%. Its trade turnover with the Russian Federation is much lower as well. And geographically, it is separated from the zone of the armed Russian-Ukrainian conflict by about 2,000 kilometers.

All these factors helped the GBP/USD pair to stay in a sideways trend for several days. But against the backdrop of events around the Zaporizhzhya NPP, it still could not resist and updated the February 24 low, dropping to the level of 1.3201. The week finished at 1.3246.

The experts' forecast for the pair for the next week is as follows: 50% of them vote for moving north and 25% for further movement to the south, the remaining 25% vote for a sideways trend. The indicator readings on D1 fully coincide with the readings for the EUR/USD pair. Strong support lies at 1.3170 (December 2021 lows), followed by 2020 supports. Resistance levels are 1.3270-1.3325, 1.3400, 1.3485, 1.3600, 1.3640.

Highlights of the upcoming week include the release of retail sales data for the UK on Tuesday March 08, and the release of UK output and GDP on Friday March 11.

USD/JPY: Yen or Dollar: Which Safe Haven Is Better?

Japan is even further from Ukraine than the UK, as much as 8,000 kilometers. Although it has joined the sanctions against Russia, this has not ceased to be a safe haven for investors. Therefore, everything that literally makes Europe feverish does not affect the dynamics of the USD/JPY pair. It continued to move along the 115.00 horizon last week, fluctuating in the range of 114.65-115.77. And it completed the five-day working week not far from its lower border, at 114.81. This decrease occurred on Friday, March 04, not because of the shelling of the Zaporizhzhya nuclear power plant, but because of the fall in the yield of US Treasury bonds.

That is, when the dollar rose against the euro and the pound, it fell against the yen. Competition between these two safe-haven assets will undoubtedly continue next week. 75% of analysts believe that the pair will return to the upper limit of the channel, while 25% believe that it may fall further down. As is usually the case in such situations, disagreements immediately arise among the indicators. Among the trend indicators on D1, 65% are for selling, 35% for buying. Among the oscillators, 20% vote for the purchase, 25% vote for the neutral status and 55% are for the sale, but at the same time, a quarter of them have signaled that the pair is oversold. The nearest resistance zone is 115.00-115.25, then 115.70. The main goal of the bulls is to renew the high of 116.34 and rise to where the pair has not been seen since January 2017. Support levels and zones: 114.40-114.65, 114.15, 113.75, 113.45, 113.20, 112.55 and 112.70.

The release of any significant macro statistics on the state of the Japanese economy, with the exception of data on GDP on Wednesday, March 09, is not expected next week.

CRYPTOCURRENCIES: Sanctions, Bitcoin and What Robots Choose

Immediately after the Bank of Russia asset freeze due to hostilities in Ukraine, bitcoin trading volumes increased sharply on Monday, February 28, and the coin itself jumped in price by almost 17% (from $37,840 to $44,220). The number of bitcoin addresses with balances over 1,000 BTC increased by more than 6% to 2,226. The indicator had not reached this level since March 2021. The number of addresses with a balance of 100 to 1000 BTC also increased on February 28, although not as noticeably. The indicator increased by 1.3%, to 15,929 over the day. This is evidenced by the data of the Glassnode service.

Some analysts suggest that such a rapid increase in the number of bitcoin whales is due to the attempts of the Russian elites to withdraw their assets to circumvent the sanctions and convert the depreciating rubles into cryptocurrency.

According to Bloomberg, the National Security Council of the White House and the US Treasury Department appealed to the operators of the world's largest centralized exchanges with a request to stop any attempts to circumvent the sanctions imposed on Russia. The White House spokesman said that cryptocurrencies are not a replacement for the US dollar, which is widely used in the Russian Federation. However, the US authorities intend to combat their misuse. European Central Bank President Christine Lagarde also called for increased regulation of digital assets in the euro area.

At least four cryptocurrency exchanges, including Coinbase and Gemini, have said they will take steps to tighten controls.

According to well-known economist and analyst Alex Kruger, if Russia uses cryptocurrencies to circumvent sanctions, this will be enough for US regulators to ban digital assets altogether. "Don't expect this to happen. But be careful in your actions," he warned, adding that if the geopolitical situation does not worsen, investors will soon see the growth of the crypto market.

The dynamics of the cryptocurrencies' movement between private and exchange wallets indicates the lack of certainty among investors regarding the further developments in the digital asset market. This is written by CoinDesk with reference to the report of Bank of America (BofA).

According to analysts, the tightening of the Fed's policy and macroeconomic factors will limit the growth of cryptocurrencies in the next six months. However, BofA emphasized that this will not be the beginning of a new "crypto winter", as the level of adoption of digital assets by users and the activity of developers has increased significantly.

The bank also added that it will be difficult for the digital asset market to move out of the current price range until fears of a possible recession are discarded.

After the jump on February 28, the upward movement of the BTC/USD pair slowed down on March 01-02, when approaching the strong $45,000 resistance zone. And then, after an unsuccessful attempt to break further up, it turned back to the south. (Recall that this resistance had already sent the pair down several times in January-February).

If the flagship currency still manages to rise above $45,700 at some point, we can expect its further growth to $47,000-50,000 due to the triggering of a large number of buy orders.

Legendary trader Henrik Zeberg, author of The Zeberg Report and expert on macroeconomic cycles, presented three charts to show that major stocks and cryptocurrencies are poised to rise in Elliot Wave 5. According to Zeberg, the most important stock market indices S&P500 and Nasdaq are approaching bullish reversals on the weekly charts. If his prediction comes true, bitcoin could once again increase its correlation with stocks and indices.

At the time of writing (the evening of March 04), the BTC/USD pair is trading around $39,300, the total market capitalization, after rising to $1.963 trillion, returned to the values of a week ago at $1.755 trillion, and the Crypto Fear & Greed Index grew by only 6 points (from 27 to 33 points), having firmly stuck in the zone of Fear.

Bloomberg Intelligence Chief Strategist Mike McGlone reiterated that bitcoin is well on its way to becoming an international reserve asset. He assured that the BTC rate will reach $100,000 in 2022. The analyst also emphasized that the price of the flagship digital currency will not drop to $30,000 despite the bearish sentiment in the market.

McGlone also believes that such coins as Dogecoin must lose their influence in order for bitcoin to finally establish itself as a reliable tool for protecting money savings.

An AI robot advisor created by Portuguese software developer Tiago Vasconcelos has supported Bloomberg Intelligence's chief strategist's point of view. The coder "trained the bot, explained the rules, candles, principles when you can either buy or sell, or do nothing." The bot receives one point for each profitable trade and loses it as a "punishment" for unprofitable trades. having talen thousands/millions of steps to increase the balance of the trading account, the robot advisor eventually opted for a "hodling" strategy, that is, accumulating bitcoin. (Recall that Hodl is a popular meme in the bitcoin space that arose from a message on the Bitcointalk forum in 2013 with a misprint in the word "hold").



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

https://nordfx.com/