CryptoNews of the Week
– One of the speakers at the annual Bitcoin-2024 conference in Nashville (USA) was the United States presidential candidate Donald Trump. He promised to dismiss the Chairman of the Securities and Exchange Commission (SEC), Gary Gensler, if elected, and to appoint regulators who are friendly to the crypto industry to key positions. "From now on, the rules will be written by those who love your industry, not hate it," Trump declared, receiving a thunderous applause from the audience.
The politician also intends to end the war on digital assets, transform the USA into the world's cryptocurrency capital, and establish a strategic national bitcoin reserve. Trump also stated that "one day," bitcoin will surpass gold and silver in market capitalisation.
Trump's Republican colleague, Senator Cynthia Lummis, went even further. She has prepared a bill requiring the US government to create a reserve of 1 million bitcoins within 5 years. "The goal is to recognise bitcoin as a durable asset. This is digital gold," Lummis stated.
– The head and founder of MN Trading, Michael van de Poppe, commented: "Bitcoin has once again reached the $70,000 mark. Donald Trump's speech had a positive impact, which may allow bitcoin to test its all-time high in the coming weeks. As long as it stays above $60,000-62,000, we have good prospects for further growth."
Some experts, such as Dan Crypto Traders and Tanaka, predict that BTC could rise to $100,000, and ETH to $8,000-10,000, while analyst Daan de Rover, known on the social media platform X as Crypto Rover, expects the price of BTC to exceed $800,000. De Rover bases his forecast on Trump's remarks that bitcoin could surpass gold in capitalisation. According to the analyst's calculations, if this happens, the value of one BTC would be exactly $813,054.
– Former NSA and CIA special agent, Edward Snowden, who has found asylum in Russia, also spoke at Bitcoin-2024 via internet connection. During his speech, he urged American voters to remain critical and not to trust politicians blindly. He mentioned that political figures and parties have their own agendas and are simply trying to garner the support of the bitcoin community. Therefore, it is important to "cast a vote, but not join a cult."
Snowden also expressed serious concerns about privacy issues related to the first cryptocurrency. He reminded the audience that bitcoin transactions are not entirely anonymous, despite common misconceptions, as they can be traced back to specific individuals. "They know what you read, what you buy, who you send [bitcoin] to, whom you support politically, where your donations go: this information is available to them. They can draw conclusions about your thinking and beliefs," Snowden stated.
– Another speaker at the conference in Nashville was the founder of MicroStrategy, Michael Saylor, who announced that bitcoin prices would reach $13 million by 2045. According to his calculations, with the current bitcoin price at around $65,000, its market capitalisation is approximately $1.3 trillion, only 0.1% of the world's wealth. With an annual return of about 29%, digital gold could reach $280 trillion and 7% by 2045.
Saylor noted that this is an average projection. If a bullish scenario unfolds, the price of 1 BTC could reach $49 million, accounting for 22% of global wealth. Conversely, if a bearish scenario occurs, the figures would be $3 million and 2%, respectively.
The MicroStrategy founder is confident that all physical capital, from stocks and bonds to cars and real estate, obeys the laws of thermodynamics, including entropy, the tendency for energy to dissipate over time. "Entropy dilutes the value of physical assets. It drains capital from them." According to Saylor, the main cryptocurrency is an exception to this rule because it "does not exist in the physical world" and possesses "infinite lifespan." "Bitcoin is immortal, immutable, and intangible," he stated, calling it "the solution to our economic dilemma."
– The University of Wyoming (USA) has established the UW Bitcoin Research Institute, as announced by the university's director, Bradley Rettler. The announcement highlighted that many studies on bitcoin are of poor quality because they are conducted by individuals who do not fully understand the asset. "Some researchers are not even aware of the supply limit: perhaps the most defining characteristic of bitcoin. Others make erroneous assumptions about the demographics of its users. [...] Such mistakes find their way into journalism and politics," Rettler wrote, adding that the institute aims to produce high-quality publications.
– Scammers have published a fake video on YouTube, appearing to show Elon Musk speaking at the Bitcoin-2024 conference and promising a free cryptocurrency giveaway. The deepfake of the Tesla and SpaceX CEO was created using artificial intelligence. In the video, users are instructed to send any amount of BTC, ETH, DOGE, or stablecoins like USDT to a specified address. In return, the scammers promise to double the sent amount.
It is reported that over 70,000 people have viewed this "broadcast," resulting in several tens of thousands of dollars being "donated" to the scammers. It is worth noting that theft using deepfakes of Musk has occurred repeatedly. In November 2023, perpetrators promoted another cryptocurrency giveaway in his name, promising a 200% bonus on the amount invested.
– The well-known analyst known as Plan B has forecasted that the price of bitcoin will rise to $140,000. After the flagship cryptocurrency reached $70,000 on 29 July, he wrote: "I expect the price of bitcoin to double from its current value within 3-5 months."
Plan B explained his prediction by noting that following the halving in April, "miner revenue has hit rock bottom, meaning less profitable miners have stopped operations. Only the most profitable ones (with the latest equipment and the lowest electricity costs) have survived." He added, "The battle is over; difficulty will continue to rise. Investors will take over the pricing," indicating that the market dynamics will increasingly be influenced by investor sentiment and actions.
– Economist and trader Alex Krüger believes that bitcoin is in a super cycle. According to him, Wall Street and the traditional financial world have fundamentally changed the structure of the digital asset market. Due to the new nature of the crypto market, downward volatility will be much more limited, and buying activity will significantly increase due to pressure from Wall Street to expand access to digital assets.
"The essence of the super cycle," explained Krüger, "is not that we no longer have bear markets or corrections and are just going up. It means that upcoming corrections will be shallow, and this won't last forever."
"The main driving force behind this change," Krüger continues, "is that Wall Street is now involved, and ETFs [exchange-traded funds] are here, which has radically altered the market structure. [...] The proportion of bitcoin ownership is currently very low in aggregate terms and certainly within portfolios. Wall Street's marketing push suggests that this figure should be around 2%." Based on this, the economist believes the super cycle will continue until this target is reached.
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
July Results: Bitcoin Surpasses Gold in NordFX Trader Rankings
The brokerage company NordFX has released the performance results of its clients' trading activities for July 2024. The evaluation also covered the social trading services, PAMM and CopyTrading, as well as the profits earned by the company's IB partners.
● The highest profit in July was achieved by a trader from East Asia, account No.1609XXX, with a profit of 50,792 USD. This solid result was driven by the strengthening of bitcoin (BTC/USD).
– The second position in the ranking of the most successful traders of the month was secured by a client from South Asia, account No.1749XXX, who earned 45,106 USD from trades involving the 'golden' currency pair XAU/USD.
– The third place on the July podium was taken by a compatriot (account No.1771XXX), who achieved a result of 42,461 USD through operations with both the XAU/USD pair and the relatively exotic GBP/NZD pair.
●
The following situation unfolded in NordFX's passive investment services:
– In the
PAMM service, we continue to observe the account
Zenix 786, which has shown a profit of 106% over 131 days. The account
Gold24 also attracted attention, with its name suggesting exclusive trading in the XAU/USD pair. The number '24' in the name might refer to 24-carat purity (pure gold without any additives) or perhaps that trading is conducted 24 hours a day. Both interpretations are possible. Regardless, the manager of this account managed to achieve a profit of over 60% in just 62 days. The results of both accounts are impressive; however, the maximum drawdown, while not dramatic, is also not the smallest – 36% and 32%, respectively.
– On the
CopyTrading showcase, highly attractive signals, at least at first glance, occasionally appear among the startups, showing astronomical returns. Currently, the signal
Bro has surged to the forefront, increasing the initial deposit by 554% in just 6 days! However, the maximum drawdown for the same period has already approached 43%. Therefore, while these super-results are impressive, it's important to understand that they are achieved through super-aggressive trading. When subscribing to such signals, one must consider that the risk of losing invested funds is also extremely high.
Among the more stable and calm signals,
NordFXSrilanka and
Quiet_trade_USD stand out. While their profits are significantly lower than those of
Bro, they still far exceed the interest rates on USD bank deposits. For instance,
NordFXSrilanka showed a 47% increase over 205 days with a maximum drawdown of less than 10%, and
Quiet_trade_USD yielded a profit of 12% since early March with a drawdown of only around 15%. It is worth noting that the longevity (or lifespan) of signals and PAMM accounts, along with maximum drawdown, are crucial indicators confirming that they won't collapse like a house of cards in the face of the first challenging situation in the financial markets.
●
Among NordFX's IB partners, the TOP-3 is as follows:
– The first place was taken by a partner from South Asia, account No.1576XXX, who was rewarded with 16,445 USD in July;
– The next position was secured by another partner from South Asia (account No.1618XXX), who received 13,859 USD;
– Finally, rounding out the top three is a third partner from the same region, account No.1229XXX, who received a reward of 6,610 USD.
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.
Forex and Cryptocurrency Forecast for August 05 – 09, 2024
EUR/USD: What the ECB and Fed Will Do
● There was a significant amount of news last week, so we will highlight and analyse only the most important ones.
Germany set the tone for European statistics, with consumer inflation rising instead of falling. According to the initial estimate, the Consumer Price Index (CPI) increased year-on-year from 2.2% to 2.3%, and month-on-month from 0.1% to 0.3%.
The following day, similar figures for the Eurozone as a whole were released. Preliminary data showed that CPI in July rose to 2.6% (y/y) compared to 2.5% in June, whereas the markets had expected a decline to 2.4%. Alarmingly, core inflation (Core CPI), which excludes volatile components such as food and energy prices, remained at 2.9% for the third consecutive month, against a forecast of 2.8%.
Some economic media outlets described this as an "unpleasant surprise" for the European Central Bank. It was anticipated that the ECB, at its meeting on 12 September, following the first rate cut in June, would take a second step and lower it by another 25 basis points to 4.00%. However, given the unexpected rise in CPI, this task becomes more challenging. Bloomberg currently forecasts that inflation will decrease to 2.2% in August. But, considering the current trend, this may not happen. It is quite possible that if the figure does not decline, the ECB may pause and keep the rate unchanged. This is further supported by the preliminary estimate of Eurozone GDP, which grew from 0.4% to 0.6% (y/y) in Q2. This indicates that the European economy is capable of coping with the regulator's fairly tight monetary policy.
● Another significant event of the week was the meeting of the Federal Open Market Committee (FOMC) of the US Federal Reserve on 30-31 July. It was decided to keep the key rate unchanged at 5.50%, where it has been since July 2023.
In the accompanying comments and Jerome Powell's speech, it was noted that inflation has decreased over the past year and, despite progress towards the 2.0% target, it remains somewhat elevated. It was also stated that economic activity continues to grow at a steady pace, with job growth slowing and the unemployment rate, though increased, remaining low. (The ADP employment report for the US, also released on 31 July, was disappointing, showing a decline from 155K to 122K).
CME derivatives estimate the probability of three Fed rate cuts by the end of the year at 74%. However, considering the cautious approach of the US central bank to economic regulation and its aim to maintain a balance between economic growth, the labour market, and reducing inflationary pressure, the Fed may limit itself to just two or even one act of monetary easing this year. The next Fed meeting will take place on 18 September and will be accompanied by an updated medium-term economic forecast, which will shed light on many issues concerning the market.
● The dollar's position could have been strengthened by key business activity data and US labour market figures released on 1 and 2 August, respectively. However, the PMI in the manufacturing sector showed a decline from 51.6 points to 49.6, falling below the 50.0 threshold that separates growth from contraction. Additionally, according to the report from the US Bureau of Labor Statistics (BLS), the number of non-farm payrolls (NFP) in the country increased by only 114K in July, which is lower than both the June figure of 179K and the forecast of 176K. Other data in the report indicated that the unemployment rate rose from 4.1% to 4.3%.
● After the publication of this data, Bloomberg reported that the likelihood of a 50 basis points rate hike in September increased to 90%. Consequently, the EUR/USD pair soared to 1.0926, then finished the working week at 1.0910.
As of the evening of 2 August, all 100% of surveyed analysts consider this rise in the pair to be temporary and expect the dollar to regain its positions soon, with the pair heading south. In technical analysis, 100% of trend indicators on D1 hold the opposite view, pointing north. Among oscillators, 75% point north, while the remaining 25% look south. The nearest support for the pair is located in the 1.0825 zone, followed by 1.0775-1.0805, 1.0725, 1.0665-1.0680, 1.0600-1.0620, 1.0565, 1.0495-1.0515, 1.0450, and 1.0370. Resistance zones are found around 1.0950-1.0980, 1.1010, 1.1050-1.1065, 1.1140-1.1150, and 1.1240-1.1275.
● In the upcoming week's calendar, Monday, 5 August, is notable for the release of the US services sector PMI. The following day, data on retail sales volumes in the Eurozone will be released. On Thursday, 8 August, the traditional statistics on the number of initial jobless claims in the United States will be published. At the very end of the working week, on Friday, 9 August, we will learn the revised consumer inflation (CPI) data for Germany, the main engine of the European economy.
GBP/USD: BoE Doves vs. Hawks, Score 5:4
● After the US Federal Reserve meeting, the market's attention shifted to the Bank of England (BoE) meeting on Thursday, 1 August. The interest rate on the pound had been at a 16-year high of 5.25% since August 2023. Now, for the first time in over four years, the British central bank lowered it by 25 basis points to 5.0%. The decision was made with a narrow margin – five members of the Monetary Policy Committee (MPC) voted for the reduction, while four voted to keep the rate unchanged. It should be noted that this outcome generally matched forecasts. The markets had estimated the probability of a rate cut at just 61%, despite the country's inflation being at the target level of 2.0% for the past two months.
As noted, this move was challenging for the regulator, as several Committee members expressed concerns about rising wages and persistent inflation in the services sector. Former Prime Minister Rishi Sunak welcomed the BoE's decision as "good news for homeowners" and a sign that the Labour Party had "inherited a strong economy." However, he also expressed concern that wage increases in the public sector could jeopardise further rate cuts.
● Let us quote some key points from the Bank of England's statement following the meeting. The regulator significantly revised the country's GDP growth forecast for 2024 to +1.25% (May forecast: 0.5%), with expected growth of +1.0% in 2025 and +1.25% in 2026. At the same time, the BoE anticipates "slackness as GDP slows and unemployment rises." According to the Bank of England's forecast, the unemployment rate will be 4.4% in Q4 2024, 4.7% in Q4 2025, and the same in Q4 2026.
Regarding consumer inflation, the CPI is expected to rise to approximately 2.75% in the second half of 2024. However, over the next three years, the Consumer Price Index is expected to fall to 1.5%, based on market interest rates. The BoE forecasts the interest rate at 4.9% in Q4 2024, 4.1% in Q4 2025, and 3.7% in Q4 2026. It is also stated that the "MPC will ensure that the bank rate remains sufficiently restrictive for as long as necessary until the risks of inflation returning are mitigated." Additionally, the statement includes the obligatory phrase that the scope of monetary policy will be determined and adjusted at each meeting.
● The market reacted to the rate cut to 5.0% with a weakening of the British currency and a drop in the GBP/USD pair to the level of 1.2706. However, the pound was subsequently supported by weak US labour market statistics, leading to a sharp upward movement of the pair towards the end of the working week, ultimately closing at 1.2804.
● All 100% of experts, when giving forecasts for the coming days, expect the dollar to strengthen and the pair to decline, just as with EUR/USD. As for the technical analysis on D1, 50% of trend indicators are green, while the other 50% are red. Among oscillators, only 10% are on the green side, another 10% are neutral grey, and 80% are on the red side, with 15% of them signalling oversold conditions.
In case the pair falls, support levels and zones are expected at 1.2700-1.2750, then 1.2680, 1.2615-1.2625, 1.2540, 1.2445-1.2465, 1.2405, and 1.2300-1.2330. If the pair rises, it will encounter resistance at levels 1.2855-1.2865, then 1.2925-1.2940, 1.3000-1.3040, and 1.3100-1.3140.
● No significant macroeconomic data publications regarding the state of the UK economy are expected in the coming days.
USD/JPY: New Surprises from the Yen and Bank of Japan
● The USD/JPY pair has recently earned titles such as "the package of surprises" and "the most intriguing pair on Forex." Last week, with the help of the Bank of Japan (BoJ), it confirmed these titles. What everyone had been waiting for finally happened – the Japanese central bank raised the key interest rate at its meeting on Wednesday, 31 July. What was unexpected was the magnitude of the increase: 150 basis points, from 0.10% to 0.25%, reaching a level not seen since 2008. This decision was made by the Board of Directors with a vote of 7 to 2. Throughout July, the regulator and other representatives of Japanese financial authorities had consistently expressed their readiness to tighten monetary policy. However, the decisiveness of this move caught many market participants by surprise.
"If the economy and prices move in line with our forecasts, we will continue to raise interest rates," said Bank of Japan Governor Kazuo Ueda at the post-meeting press conference. "In fact, we haven't significantly changed our forecast since April. We don't consider 0.5% to be a key barrier for rate hikes."
● At the recent meeting, the regulator also presented a detailed plan to slow down the large-scale bond purchases, taking another step towards gradually ending the decade-long cycle of economic stimulus. It decided to reduce the monthly bond purchases to ¥3 trillion ($19.6 billion) from the current ¥6 trillion in Q1 2026. This decision followed a survey of market participants on the extent to which the regulator should scale back the large purchases. Some called for a threefold reduction, while others suggested a one-and-a-half times cut. The Bank chose a middle ground, deciding to halve the purchases.
● The decision to raise the rate was made against the backdrop of rising inflation in the country, increasing wages, and service prices. Another reason, undoubtedly, was the weakening yen, which had been barely prevented from a complete collapse through numerous currency interventions. At the beginning of July, the Japanese currency weakened to a 38-year low against the US dollar. This caused serious concern in society, contributed to inflation, and negatively affected the government's rating. Now, officials can proudly present themselves to their fellow citizens – on 2 August, the USD/JPY pair recorded a low at 146.41, a level last seen on 12 March 2024. Thus, thanks to currency interventions and the rate decision, the yen strengthened by more than 1,550 points in just four weeks.
● Thus, the Bank of Japan is tightening monetary policy (QT) against the backdrop of easing policies (QE) in the US and Europe. This is happening amid a -1.8% (y/y) contraction in the country's GDP in Q2. Household spending is also declining despite rising wages. If the Japanese central bank continues to raise rates rapidly in an effort to curb inflation and support the national currency, it could push the economy back into sustained deflation and lead to a more severe GDP contraction.
● The USD/JPY pair ended the past five-day period at 146.52. The expert forecast for the near future is as follows: 65% voted for a correction and a rebound of the pair upwards, while the remaining 35% took a neutral position. The number of supporters for further strengthening of the yen was zero this time. However, it is worth remembering the pair's titles mentioned at the beginning of the review, which have often seen it act contrary to any forecasts. All 100% of trend indicators and oscillators on D1 point to a further decline of the pair, although a quarter of the oscillators indicate it is oversold. The nearest support level is around 145.90-146.10, followed by 144.30-144.70, 143.40, 141.60, 140.25-141.00, 138.40-138.75, 137.20, 135.35, 133.75, 130.65, and 129.60. The nearest resistance is in the 148.30-148.90 zone, followed by 150.85-151.00, 154.65-155.20, 157.20-157.40, 158.25, 158.75-159.00, 160.20, 160.85, 161.80-162.00, and 162.50.
● No significant macroeconomic data releases regarding the state of the Japanese economy are scheduled for the coming days.
CRYPTOCURRENCIES: Donald Trump – "Master" of the Price
● The main event of recent days in the crypto world was the annual Bitcoin-2024 conference in Nashville (USA). The highlight of this conference was the speech by Donald Trump. The former and possibly future President of the United States promised to fire SEC Chairman Gary Gensler if elected and appoint key regulators who will be friendly to the crypto industry. "From now on, the rules will be written by those who love your industry, not hate it," Trump declared, receiving a standing ovation from the audience.
The politician also intends to end the war on digital assets, turn the US into the cryptocurrency capital of the world, and include the government's existing bitcoins in the national strategic reserve. Trump also stated that "one fine day" bitcoin would surpass gold and silver in market capitalization. Following these promises and forecasts by the presidential candidate, the BTC/USD pair surged, reaching $70,000 on July 29. However, it failed to set a new all-time high.
● A known supporter of physical gold and a fierce critic of digital gold, financier Peter Schiff believes Trump should have kept his mouth shut. According to Schiff, the Biden administration, out of a desire to harm its competitor, will now sell everything in the government's crypto stash, leaving not a single satoshi. It turns out these are not empty predictions – as reported by Arkham Intelligence, 30,000 BTC out of the 200,000 owned by the US government have already started moving. Against this backdrop, the leading cryptocurrency plunged, reaching a local bottom of $62,210 on the first day of August.
● Summer 2024 has been tough for bitcoin. The crypto market faced significant pressure due to the German government's sale of 50,000 BTC (approximately $3.0 billion) confiscated by the police. Additionally, another 62,000 coins (about $4 billion) were distributed to creditors of the bankrupt crypto exchange Mt.Gox, which collapsed 10 years ago. According to the analytical agency Glassnode, the total pressure for June-July amounted to 147,500 bitcoins (around $10 billion).
It should be noted that the flagship cryptocurrency has honourably withstood the bear attacks. Contributing to its resilience were the launch of exchange-traded spot ETFs, the April halving, and the anticipation of an imminent easing of the Federal Reserve's monetary policy. Long-term holders (LTHs) also supported the prices, not only refraining from selling but continuing to add to their wallets. The Glassnode data clearly shows how recent months' sell-offs by short-term holders (STHs) have been offset by purchases from long-term holders.
Of course, if the Biden administration decides to part with all 200,000 BTC, it will exert new downward pressure on the prices. However, the market will likely cope with this issue, and any price decline is not expected to be very severe or long-lasting.
● Economist and trader Alex Krüger believes that bitcoin is in a super-cycle. According to him, Wall Street and the traditional financial world have fundamentally changed the nature and structure of the digital asset market. As a result, downside volatility will be much more limited, and buyer activity will significantly increase. "Essentially, a super-cycle means the following," explained the expert, "it's not that we no longer have bears or corrections, and we just keep going up. It means that upcoming corrections will be shallow and won't last forever."
"The main driving force behind this change," Krüger continues, "is that Wall Street is here, and ETFs [exchange-traded funds] are now here, which has fundamentally altered the market structure. [...] The share of bitcoin ownership is currently very low in aggregate terms and, of course, in portfolios. The marketing pitch from Wall Street is that this figure should be around 2%." Based on this, the economist believes the super-cycle will continue until this target is reached.
Analyst Daan de Rover, better known on social network X as Crypto Rover, expects the BTC price could exceed $800,000. De Rover bases his forecast on Trump's remarks that bitcoin could surpass gold in market capitalization. If this happens, according to the analyst's calculations, the value of 1 BTC would be exactly $813,054.
● Another speaker at the Nashville conference was MicroStrategy founder Michael Saylor, who announced that bitcoin's price will reach $13 million by 2045. According to his calculations, with the current bitcoin price around $65,000, its market capitalization is $1.3 trillion – just 0.1% of global wealth. With an annual return of approximately 29%, digital gold will reach a market cap of $280 trillion and represent 7% of global wealth by 2045. According to Saylor, this is an average result. If the bullish forecast materializes, the price of 1 BTC will reach $49 million, totalling 22% of global wealth. If the bearish forecast plays out, the figures will be $3 million and 2%, respectively.
The MicroStrategy founder is confident that all physical capital – from stocks and bonds to cars and real estate – is subject to the laws of thermodynamics, including entropy, which is the tendency of energy to disperse over time. "Entropy dilutes the value of physical assets. It sucks capital out of them." According to Saylor, the primary cryptocurrency is an exception to this rule because it "does not exist in the physical world" and has an "infinite lifespan." "Bitcoin is immortal, immutable, and incorporeal," making it "the solution to our economic dilemma," the billionaire stated.
● 2045 is still a long way off. Regarding the near-term horizons, the head and founder of MN Trading, Michaël van de Poppe, believes that "Donald Trump's speech [in Nashville] had a positive impact, thanks to which bitcoin could test its all-time high in the coming weeks." "As long as it stays above $60,000-62,000, we have good prospects for further growth," the expert stated.
Some experts, such as Dan Crypto Traders and Tanaka, predict BTC will rise to $100,000 and ETH to $8,000-10,000. The well-known analyst Plan B forecasted bitcoin's price to reach $140,000. After the flagship cryptocurrency hit $70,000 on July 29, he wrote, "I expect bitcoin's price to double from today's value within 3-5 months." Plan B explained his prediction by stating that after the April halving, "miner revenues have bottomed out, meaning less profitable miners have stopped. Only the most profitable ones (with the latest equipment and lowest electricity costs) have survived." "The battle is over, the difficulty will continue to rise. And investors will take over pricing," Plan B stated.
● As of the evening of Friday, August 2, the BTC/USD pair is trading at $62,400. The total market capitalization of the crypto market is $2.22 trillion (down from $2.42 trillion a week ago). The Crypto Fear & Greed Index has dropped from 68 to 57 points over the past 7 days but remains in the Greed zone.
NordFX Analytical Group
Notice: These materials are not investment recommendations or guidelines for working in financial markets and are intended for informational purposes only. Trading in financial markets is risky and can result in a complete loss of deposited funds.
CryptoNews of the Week
– Another bearish bitcoin cycle started on 29 July after the BTC/USD pair reached a high of $70,048. The primary cryptocurrency continues to be pressured by the potential sale of coins returned to creditors of the bankrupt exchange Mt.Gox, as well as those assets confiscated by law enforcement agencies, including the US.
The decline in quotations is occurring amidst investors fleeing risks and a global stock sell-off triggered by concerns about the prospects of the world economy in general and the economies of countries such as Japan and the US. Negative sentiments are further exacerbated by tensions in the Middle East, uncertainty regarding the Federal Reserve's monetary policy, and the policy of the new US president to be elected in November.
On Friday, 02 August, bitcoin spot ETFs experienced the largest outflow of funds in the past three months. The head of cryptocurrency investments at Evergreen Growth, Hayden Hughes, believes that digital assets have become victims of the unwinding of carry trade operations using the Japanese yen after the Bank of Japan raised interest rates. However, the more apparent driver for the sell-off was the publication of extremely disappointing data from the US labour market.
The US Bureau of Labor Statistics (BLS) report showed that the number of non-farm payrolls (NFP) increased by only 114K in July, lower than both the June figure of 179K and the forecast of 176K. Additionally, it was revealed that the unemployment rate has been rising for the fourth consecutive month, reaching 4.3%. These data have raised concerns about a possible recession in the US, triggered a fall in Treasury bond yields, panic on Wall Street, and a sell-off of risky assets, including stocks and cryptocurrencies.
On "Black Monday," 05 August, bitcoin temporarily fell to $48,945, and ethereum to $2,109. The drop was the sharpest since the collapse of the FTX exchange in 2022. Long leveraged positions worth almost $1 billion were liquidated. In total, from Sunday evening, the overall market capitalization of the crypto market fell by more than $400 billion.
– At the opening of stock exchanges on Monday, 05 August, MicroStrategy shares, the largest corporate holder of BTC, immediately fell by 22%. (It is worth noting that just last week, MicroStrategy increased its bitcoin reserves to 226,500 BTC, and the company's founder, Michael Saylor, announced that bitcoin quotations would reach $13 million per coin by 2045).
Metaplanet securities, which calls itself the "MicroStrategy of Japan," fell by 18% – from 820 yen to 670 yen. "Black Monday" also affected the crypto exchange Coinbase, whose shares lost 18.5% in value. Public miners' shares also suffered significant losses: the three largest US companies by market capitalization – MARA, CleanSpark, and Riot Platforms – fell by 19.1%, 24.9%, and 16.7%, respectively.
– Disappointing macroeconomic statistics indicate the need for active measures to support US economic growth. According to several analysts, the current situation should push the Federal Reserve to start easing monetary policy and lowering interest rates as early as September. Recent shocks in traditional markets "increase the likelihood that less restrictive monetary policy will come sooner rather than later – which is good for cryptocurrency," claims Sean Farrell, head of digital asset strategy at Fundstrat Global Advisors.
– According to Jan3 CEO and former Blockstream head Samson Mow, evaluating the situation with bitcoin during periods of market financial turmoil is challenging. However, an analyst under the pseudonym Rekt Capital believes that the first cryptocurrency could see a price surge as early as October. He says the forming chart creates a bullish flag, which inspires optimism. "While bitcoin shows the possibility of a downward deviation in the near future, [however] the first cryptocurrency is slowly approaching its historical breakout point 150-160 days after the halving," notes Rekt Capital. He believes that although a price breakout will occur, it is not worth expecting an update to the historical maximum reached in March in the medium term.
The expert also emphasized that the current position in the crypto market suggests that BTC is unlikely to fall to $42,000, as buyers show strong support for the asset.
– Renowned analyst and trader, head of Factor LLC Peter Brandt noted that as a result of the market collapse, the situation has become similar to that recorded in 2016. Eight years ago, bitcoin fell by 27% after the halving that took place in July, and this year the coin's price dropped by 26%.
After hitting a low of $465 in August 2016, the price of bitcoin rose by 144% by early January 2017. Drawing an analogy between trends, Brandt suggests that an upward trend may soon emerge, and the BTC price could update its all-time high (ATH) in eight weeks (i.e., in early October). If this time digital gold appreciates to the same extent as in 2016, its price will be $119,682.
However, ITC Crypto blockchain project founder Benjamin Cowen holds a different view and believes that the bitcoin exchange rate dynamics will reflect the trend seen in 2019 when the coin appreciated in the first half of the year and depreciated in the second. In this case, the downward trend will continue, and BTC will see new lows.
– Analysts at Bernstein believe that bitcoin's reaction as a risky asset to general macroeconomic and political signals is not surprising. "A similar situation was observed earlier during the sudden collapse in March 2020. However, we remain calm," explained Bernstein. The experts noted that the launch of spot BTC-ETFs helped simplify investments in the first cryptocurrency and prevented its price from falling to $45,000. This time, the crypto industry's response to external factors will also be restrained, and the recovery of stock market indices will allow cryptocurrencies to show a slight but noticeable growth.
The company's analysts also warn that the "Trump factor" will influence the first cryptocurrency's price. "As the gap between Trump and Kamala Harris narrows, bitcoin and altcoins have traded weakly. We expect bitcoin and cryptocurrency markets to remain in a narrow range until the US elections, changing in response to catalysts such as presidential debates and the final election result," said Bernstein experts.
– Back in December 2022, the Reserve Bank of India launched a digital version of the rupee (CBDC), stating that transactions in such currency would be more confidential than in fiat. Initially, only Indian banks could conduct transactions with it through their mobile apps. The implementation process of the national CBDC was quite slow, and by the end of June this year, just over 1 million retail transactions had been recorded. This figure was achieved only after local banks began offering customers bonuses for using the virtual rupee and started paying part of employees' salaries in CBDC.
Most likely due to the low popularity of the novelty, the regulator announced in April 2024 that any financial companies with payment services could participate in the project. It was recently revealed that companies such as AmazonPay, GooglePay, and Walmart-backed PhonePe have expressed their desire to join the testing of the electronic rupee. Besides these US payment giants, Indian fintech companies Cred and Mobikwik plan to join the project.
– QCP Group has proposed a rather unexpected version regarding the cause of the crypto market crash. "The drop in cryptocurrency quotations to more than a five-month low was mainly caused by the sale of ethereum by the Jump Trading team," QCP Group believes. According to their information, Jump Trading unlocked 120,000 wETH tokens on Sunday, 04 August. Most of the coins were sold on 05 August, negatively impacting ethereum and other assets' prices. QCP Group suggests that the market maker either needs liquidity urgently on the traditional market or has decided to exit the market entirely due to reasons related to LUNA tokens.
For reference: On 21 June 2024, the US Commodity Futures Trading Commission (CFTC) launched an investigation into Jump Trading's activities, as the company acquired LUNA tokens at a price 99.9% below market value, and the subsequent sale of the coins caused a collapse in the asset's quotations. On 24 June, Kanav Kariya, president of Jump Crypto, a subsidiary of Jump Trading, resigned.
