CryptoNews of the Week

- On April 11, bitcoin rose above $30,000, for the first time since June 2022. The main cryptocurrency continues to outperform other major asset classes such as gold or oil. This comes amid expectations that central banks will put a hold on rate hikes.
Several industry analysts have expressed their opinion on what happened. Michael Van De Poppe, a well-known strategist, and founder of the investment company Eight, noted that bitcoin successfully passed the $28,600 test, which led to a breakthrough in resistance and reached $30,000. An analyst with the nickname PlanB tweeted that all the goals he set back in October 2022 have now been achieved. At that time, the expert predicted that BTC quotes would overcome $21,000, $24,000, and then $30,000. And another popular blogger and analyst, Lark Davis, stressed that the time will soon come when buying bitcoins for less than $30,000 will seem as fantastic as buying BTC at $3,000 now.

- In terms of the number of requests, bitcoin has overtaken former President Donald Trump, famous musician Elvis Presley, and Disney World. In the United States, the number of requests related to the first cryptocurrency in the Google search engine reached 1.9 million, and in terms of the global indicator, the figure reached 12 million. This is stated in research by Ahrefs. According to Google Trends, Donald Trump was only two days ahead of bitcoin last month when reports of his arrest surfaced.

- In India, a 23-year-old employee of a large technology company tried to commit suicide after losing 3 million rupees (about $ 37,000) on investments in cryptocurrency. This is reported by The Times of India. According to the publication, a taxi driver noticed the young man on a bridge in Kolkata and reported to the police. As a result, law enforcement officers prevented him from jumping into the river. During the interrogation, the investor spoke about unsuccessful investments in the digital asset market. For this purpose, he used, among other things, his mother's pension and borrowed funds. Recently, he has been receiving threats demanding a refund.
Earlier, The Balance rehabilitation center in Spain began providing treatment services for addiction to digital asset trading. The course is four weeks long. The cost of treatment exceeds $75,000 (that is, twice what the failed investor from India lost).

- The head of the opposition party “For Thailand” (Pheu Thai) and candidate for Prime Minister Srettha Thavisin has promised to allocate digital assets to every citizen over 16 years of age if he wins the elections in May. According to Bloomberg, each eligible resident will allegedly be able to receive 10,000 baht (~$290). It is not specified which cryptocurrency the “state-owned AirDrop” is planned to be used in. The office of the incumbent Prime Minister is already concerned about the proposed action and is wondering where the funds (about $15 billion) for this AirDrop will come from.
It should be noted that such an initiative is not new. The El Salvadorian government has already given away bitcoins to its citizens who used Chivo wallets. True, the amount was 10 times more modest, about $30.

- ChatGPT artificial intelligence spoke about the formation of a recession-resistant investment portfolio. According to a document published by the Gold IRA Guide, the chatbot recommended allocating 20% for gold and other precious metals. The rest of its hypothetical portfolio consisted of bonds (40%), "defensive" stocks (30%) and cash (10%).
The chatbot did not mention cryptocurrencies, much to the delight of well-known bitcoin critic and gold advocate Peter Schiff. “After all, artificial intelligence is pretty smart. It did not recommend any bitcoin deposit,” this investor wrote.
However, ChatGPT's response was not necessarily against digital gold in favor of physical gold. The ForkLog editors asked the chatbot for its opinion on both assets. According to the answer, the choice between them may depend on investment goals, risk level and personal preferences.

- This week, investors will have access to the second most popular cryptocurrency, ethereum, worth more than $33 billion (about 15% of the total). This will happen as part of the planned blockchain modernization, writes Reuters. A new blockchain software update called Shapella will allow investors to redeem their ETH coins they have invested and locked on the network over the past 3 years in exchange for interest.
Traders are now trying to figure out how this sudden flood of cryptocurrency can affect its price. Some market participants are concerned that the unlock could lead to a massive wave of sales, which in turn would drive the price down dramatically. However, the only thing that can be said for sure is that the hard fork will cause an increase in price volatility.

- Dieter Wermuth, an economist, and partner at Wermuth Asset Management, believes that the economy would be better and simpler without bitcoin. In his opinion, these risky investments are associated with social costs, and the cryptocurrency itself does not contribute to global prosperity.
The BTC market is highly centralized and primarily benefits the very first investors and miners. If we consider it as a currency, given the high volatility and lack of real use, BTC is doomed to failure, the specialist believes. In this vein, it makes sense to ditch bitcoin altogether: it could be good for shared prosperity, as investing in cryptocurrencies is wasteful and takes away funds from overall economic growth. In addition, bitcoin creates social inequality, allows for money laundering, tax evasion, and is very energy intensive due to mining. Dieter Wermuth even called bitcoin “the biggest climate killer.”

- It turns out that Apple has been hiding the official description of BTC in every computer since 2018. Technician Andy Baio revealed on Twitter that he accidentally found a copy of Satoshi Nakamoto's official description of BTC on his Apple Mac computer, Business Insider writes. Baio explained it this way: “Today, while trying to fix my printer, I discovered that a PDF copy of Satoshi Nakamoto’s bitcoin datasheet came with every copy of macOS since Mojave in 2018.” According to him, many of his fellow Mac users confirmed this fact: each of them had a file called "simpledoc.pdf".
Baio suggested the reason why, of all the documents, it was the original description of BTC that was chosen to be included in Apple's operating system: "Maybe it was just a convenient, lightweight, multi-page PDF file for testing purposes that was never meant to be viewed by end users."

- The US Department of Defense commissioned a study on the potential collapse of the economy due to the cryptocurrency market. Inca Digital, an analytical blockchain firm, won the competition for this work. A representative of this company noted in comments to the media that the banking system has increasingly intersected with the crypto market recently, and this connection makes this market a subject of national security: “Cryptocurrencies are no longer an independent vertical. They rely on banks, the internet, and that's what people should be warned about: it's a single combined system that is widespread in everyday services." Defense Department officials, in turn, expect the development to shed light on whether hostile groups or nations can use digital currencies against the US.

- U.S. potential presidential candidate Robert Kennedy Jr called bitcoin a safe haven that, thanks to decentralization, is less exposed to the risks inherent in traditional finance. The politician is confident that the current “financial bubble” will inevitably burst, and cryptocurrencies “will allow people to hide from its splashes” and open up a “way of salvation” for society.

– Lawrence Lepard, managing partner at Boston-based equity firm Equity Management Associates, believes that bitcoin will rise to $10 million due to the collapse of the US dollar. According to Lepard, the dollar will depreciate over the next 10 years, and citizens will begin to actively invest in cryptocurrencies, gold and real estate. The supply of bitcoins is limited, so the digital asset will become a highly sought-after investment vehicle and will benefit from the collapse of the fiat currency. “I believe that the price of bitcoin will go up a lot. I think it will first reach $100,000, then $1 million and eventually rise to $10 million per coin. I’m sure my grandchildren will be shocked at how rich people who own just one bitcoin become,” Lepard said in an interview.
In connection with this forecast, the businessman fears that the authorities will put spokes in the wheels of the crypto industry, trying to slow down the growth in the popularity of digital assets. For example, officials could raise taxes on profits from bitcoin trading and tighten regulation of coins to make it harder for startups to enter the market. However, Lepard is confident that bitcoin will be able to overcome these difficulties and succeed in the long run.

- A well-known analyst under the nickname PlanB noted that bitcoin has left the deep bear zone and is at the very beginning of a new bull market. According to PlanB, the Stock to Flow (S2F) model he developed is still relevant. The expert claims that bitcoin fundamentals will eventually allow it to rise above the all-time high (ATH) of $69,000 set in November 2021. PlanB has previously predicted bitcoin will rise from $100,000 to $1 million after the 2024 halving.
Recall that the S2F (stock-to-flow ratio) model for predicting the BTC rate measures the relationship between the available stock of an asset and its production volume and has been repeatedly criticized by members of the crypto community.

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

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NordFX Wins Two Nominations at the Finance Derivative Awards

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Forex and Cryptocurrency Forecast for April 24 - 28, 2023

EUR/USD: Rate Forecast: USD +0.25%, EUR +0.50%

Due to the lack of significant economic news, the EUR/USD dynamics in recent days has been determined by statements by representatives of mega-regulators regarding interest rate hikes at the upcoming meetings of the US Federal Reserve on May 2/3 and the ECB on May 4.

The U.S. dollar index (DXY) rose following a statement from Federal Reserve representative Christopher Waller, who said that despite the most aggressive monetary policy tightening since the 1980s, the Fed has "not made substantial progress" in returning inflation to its target level of 2%, and that interest rates still need to be raised. As a result, DXY broke through the resistance of 102.00 on Monday, April 17 and reached the level of 102.22.

Raphael Bostic, President of the Federal Reserve Bank of Atlanta, seemed to support his colleague, but at the same time said that "another increase should be enough for us to step back and see how our policy affects the economy."

According to Philadelphia Fed President Patrick Harker, the US Central Bank may soon finish raising interest rates, after which there may be a pause of almost a year and a half. "Since the full impact of monetary policy measures on the economy can take up to 18 months, we will continue to carefully analyze available data to determine what additional actions we may need to take," said Harker, speaking as part of the Wharton Initiative on Financial Policy and Regulation.

Another member of the FOMC (Federal Open Market Committee), Cleveland Fed President Loretta Mester, agreed that the Fed is close to completing the rate hike cycle. However, since inflation in the U.S. remains too high, Mester believes that "the interest rate needs to be raised to a level above 5% and maintained there for some time." At the same time, Ms. Mester did not specify how much "above" 5% (as the current rate is already at 5.00%) and what duration constitutes "some time."

On Wednesday, April 19th, the Beige Book was published: an economic review by the Federal Reserve, which is based on the reporting documents of the 12 Federal Reserve Banks that make up its system. The analysis of the document's content can be summarized in the following points: 1) economic conditions have somewhat cooled in recent weeks, while inflation continues to remain relatively high; 2) wage growth has slightly slowed down but also remains high; 3) the overall price level moderately increased during the reporting period, although the pace of price growth appears to have slowed down.

Taking into account the content of the Beige Book and the statements of FOMC members, the market concluded that the regulator will raise the rate by another 25 bps (basis points) at its meeting on May 2/3, after which it will take a pause. According to the WIRP forecast, the probability of such a rate hike is now about 90%, compared to 80% at the beginning of last week and 50% at the beginning of April. And this is already included in the price. The quotes still take into account one possible rate cut at the end of the year (two cuts were previously predicted).

More clarity may appear in early summer. But two more employment reports, two CPI/PPI reports and one retail sales report will be released between the May 2/3 and June 13/14 meetings. It is clear that all these data can seriously affect the further policy of the Federal Reserve.

As for the situation on the other side of the Atlantic, the Consumer Price Index (CPI) published on Wednesday, April 19, showed that inflation in the Eurozone fell from 8.5% to 6.9% y/y. But since such a decline was fully consistent with the forecast, it did not have much impact on the pair's quotes.

The Minutes of the ECB's March monetary policy meeting were published the next day, on Thursday, May 20. According to this document, the overwhelming majority of the members of the Governing Board agreed with the proposal of Chief Economist Philip Lane to raise the key rate by 50 bps, after which it will reach 4.00%.

The situation described above led to the fact that the DXY Dollar Index consolidated in the area of 101.70-102.00, and EUR/USD stayed in the range of 1.0910-1.1000. S&P Global made a small contribution at the very end of the working week, it published preliminary data on the US Purchasing Managers' Index (PMI) for April. With a forecast of 52.8 and a previous value of 52.3, the Composite PMI came in at 53.7, which supported a certain degree of optimism regarding the state of the U.S. economy. But not for long.  As a result, EUR/USD put the last chord almost at the upper limit of the weekly channel, at around 1.0988.

At the time of writing, on the evening of Friday, April 21, analysts' opinions are divided almost equally: 35% of them expect further weakening of the dollar, 35% - its strengthening, and the remaining 30% have taken a neutral position. As for technical analysis, all the trend indicators on D1 are colored green, as for the oscillators, these are 85%, 15% have changed color to red. The nearest support for the pair is located in the area of 1.0925-1.0955, then 1.0865-1.0885, 1.0740-1.0760, 1.0675-1.0710, 1.0620 and 1.0490-1.0530. The bulls will find resistance around 1.1000-1.1015, then 1.1050-1.1070, then 1.1110, 1.1230, 1.1280 and 1.1355-1.1390.

We expect a lot of economic statistics next week, especially from the United States. The US Consumer Confidence Index will be known on Tuesday, April 25. The next day, statistics on the volume of orders for capital goods and durable goods will be received from the United States. On Thursday, April 27, data on unemployment and GDP will be known, and on Friday - on personal consumption expenditures in the United States. At the very end of the working week, there will also be a lot of information about the state of the economy of Germany, the main locomotive of the EU. These are the country's GDP indicators, unemployment data, as well as such an important indicator of inflation as the Consumer Price Index (CPI). However, one thing not to expect in the upcoming week is speeches from Federal Reserve representatives, as a silence period began on April 21 and will last until the press conference by Fed Chairman Jerome Powell following the May meeting, with no other statements being made during this time.

GBP/USD: Things Are Not as Bad, But Not as Good Either

The inflation data for March in the United Kingdom, published on Wednesday, May 19, turned out to be not very bad, but not quite good either: in March, the CPI dropped from 10.4% YoY to only 10.1%, while the market was expecting a decline to 9.8%. The fact that consumer prices remain high has given reason to expect that the Bank of England (BoE) will continue to raise interest rates. And this, in turn, supported the British currency a little.

The seasonally adjusted S&P Global/CIPS Purchasing Managers' Index (PMI) in the UK manufacturing sector, with a growth forecast of 48.5, has actually fallen from 47.9 to 46.6 over the month. On the other hand, the preliminary Index of business activity in the service sector presented a surprise: with the forecast and the March value of 52.9, it jumped to 54.9 in April. Thus, the composite PMI improved from 52.2 in March to 53.9 in April.

Commenting on this positive outcome, Dr John Glen, Chief Economist at the UK's Chartered Institute of Procurement and Supply (CIPS), said it was the fastest recovery for the year, which showed that "businesses are taking advantage of the pockets of recovery emerging in the UK economy, and activity levels have risen sharply thanks to new orders and improved supply chain performance."

The UK Office for National Statistics reported on Friday April 21 that retail sales fell 0.9% in March after a 1.1% increase in February. The data turned out to be weaker than the forecast, which suggested a decline of 0.5%, which put pressure on the pound.

GBP/USD started the past five days at 1.2414, and ended nearby at 1.2442, showing a sideways movement against the background of multidirectional statistics. At the moment, 45% of experts side with the pound and expect further growth of the pair, 35% side with the dollar and 20% vote for the continuation of the sideways trend. Among the oscillators on D1, the balance of power is as follows: 35% vote in favor of green, 25% have turned red and 40% prefer neutral gray. Trend indicators are 100% on the side of the greens. Support levels and zones for the pair are 1.2390-1.2400, 1.2330, 1.2275, 1.2200, 1.2145, 1.2075-1.2085, 1.2000-1.2025, 1.1960, 1.1900-1.1920, 1.1800-1.1840. When the pair moves north, it will face resistance at the levels of 1.2450-1.2480, 1.2510-1.2540, 1.2575-1.2610, 1.2700, 1.2820 and 1.2940.

No important statistics on the state of the UK economy are expected in the coming week.

USD/JPY: No BoJ Surprises Expected

USD/JPY rose to its highest level in six weeks, reaching the height of 135.13 on April 19. The fall of the yen was exacerbated by the data of the Ministry of Finance on Japan's trade deficit for the 2022 fiscal year. The figure was $160 billion, setting an anti-record since 1979. At the same time, the mood is quite positive in the semi-annual report of the Bank of Japan, published on April 21, since "the Japanese financial system as a whole remains stable," and the expectation of inflation falling to the target 2% runs like a red thread through all statements.

The historic meeting of the Bank of Japan (BoJ) will take place next week, on Friday, April 28. Historic not because any revolutionary decisions may be made, but because it will be the first one chaired by the new Central Bank Governor Kazuo Ueda, following the departure of Haruhiko Kuroda. Citing a number of informed sources, Reuters reported that the regulator is likely to maintain an ultra-loose monetary policy at this meeting, without making any changes to the interest rate targets and the yield corridor. Recall that the rate is at a negative level of -0.1%, and the last time it changed was on January 29 of 2016, when it was lowered by 20 bps.

Three main factors can support the yen: investor risk flight, the weakening of the dollar due to the easing of the Fed's monetary policy and a decrease in Treasury yields. Recall that there is a direct correlation between ten-year US bonds and USD/JPY. If the yield on Treasury bills falls, the yen shows growth, and the pair forms a downtrend.

USD/JPY ended the last week at the level of 134.12. Regarding its immediate prospects, the opinions of analysts are distributed as follows. At the moment, 35% of experts vote for the growth of the pair, 65% point in the opposite direction, expecting the yen to strengthen. Among the oscillators, 90% point to D1 (10% of them are in the overbought zone), the remaining 10% adhere to neutrality. Trend indicators have 75% looking to the north, 25% pointing to the south. The nearest support level is located in the 134.00 zone, followed by the levels and zones 132.80-133.00, 132.00-132.40, 131.25, 130.50-130.60, 129.65, 128.00-128.15 and 127.20. The resistance levels and zones are 134.75-135.15, 135.90-136.00, 137.00, 137.50 and 137.90-138.00.

The meeting of the BoJ and the subsequent press conference of the leadership of this regulator was mentioned above. As for the release of any important statistics on the state of the Japanese economy, it is not expected in the coming week.

CRYPTOCURRENCIES: Bitcoin Falls, but Optimism Grows

The bulls have struggled to keep BTC/USD above the $29,000 support since April 10. However, it still fell on Thursday, April 20, pulling other cryptocurrencies with it and causing a wave of closing long positions. There was no obvious reason for this drawdown, beautifully named Coinglass. Some analysts believe that against the backdrop of a news vacuum, technical signals have come to the fore. And perhaps some growth in the DXY Dollar Index on April 14-17 played a role. But, despite this fall, according to many experts, the prospects for bitcoin look quite optimistic, which is confirmed by both network metrics and macroeconomic factors. Investors' appetites are fueled by a good start of the flagship cryptocurrency, which showed a yield of 70% in Q1. Thanks to this, Goldman Sachs experts called it the most effective financial asset in 2023.

According to analytics agency Glassnode, despite the collapse of FTX and tightening crypto regulation, the holdings of long-term holders (addresses with coins that have been idle for more than 155 days) rose to 14.2 million BTC. This is near the all-time high and suggests that coin owners are counting on their growth in the future.

At the moment, there is no clear understanding of the future monetary policy of the US Federal Reserve. But it is the behavior of the American mega-regulator that is decisive for the dollar exchange rate, and as a result, determines in which direction the BTC/USD scales will swing. Robert Kiyosaki, author of the popular book Rich Dad Poor Dad, spoke again this week about the inevitability of financial turmoil and called on investors to invest more in bitcoin, gold and silver. The businessman promised that he would increase reserves in digital currency in the near future, as he does not trust the US Federal Reserve and the economic policies of the Joe Biden administration. According to Kiyosaki's forecast, if big capital becomes more active in physical and digital gold, their price will rise to $5,000 and $500,000 by 2025, respectively.

It should be noted here that, according to Glassnode, the correlation coefficient between XAU and BTC is growing and now exceeds 0.85. Such a connection of bitcoin with the classic safe-haven asset can provide it with serious support, since gold has already approached its all-time high and is preparing to update it.

Ark Invest looked even further into the future than Robert Kiyosaki and called the timing of bitcoin's reaching $1 million. “In the next decade, the value of bitcoin could reach $1 million as the digital economy grows,” said Yassine Elmandjra, an analyst at the company. He acknowledged that the 30x coin price growth forecast looks incredible, but it is “quite reasonable” if you look at the history of cryptocurrency development.

According to the Ark Invest analyst, statements that it is now too late to invest in BTC are wrong. The expert noted the impressive performance of bitcoin in recent times, which now makes digital gold an attractive component of investment portfolios. According to Elmandjra, a reasonable share of bitcoin in institutions should be between 2.5% and 6.5%, depending on the overall return of the portfolio and risk appetite.

Bobby Lee, the founder of the Ballet app and the former CEO of the BTCC China crypto exchange, have taken a similar position. In his opinion, against the backdrop of the banking crisis, digital currencies have demonstrated the qualities of safe-haven assets. “People have begun to realize that their money in the bank is not necessarily in place. Institutions lend these funds to other enterprises and firms. And cryptocurrencies like bitcoin provide self-storage and full control over resources". At the same time, Lee has noted signs of bitcoin's recovery after the crypto winter of 2022. “It has been like this for a long time. Cryptocurrency has four-year cycles [...] and now we have practically recovered. It looks inspiring,” said the industry veteran.

According to a report by Matrixport researchers, the price of bitcoin hit its predicted low in November 2022. The analysts explained that BTC historically bottomed out 515-458 days before the next halving. This event is scheduled for April 2024; hence the predicted low was between November 2022 and January 2023. And so it happened. This gives reason to expect that this model will continue to work further, and the value of the coin will rise to at least $63,160 by the spring of 2024.

As for the near-term prospects, the analytical agency K33 predicts the growth of BTC/USD by another 50% in the next 30 days. The analysis is based on the surprising similarity of the 2018 and 2022 cycles. So, in both cases, it took about 370 days to reach the bottom from the historical high, and recovery to 60% took another 140 days. Further extrapolation suggests that bitcoin will trade around $45,000 in the last decade of May.

The forecast of Galaxy Digital CEO Mike Novogratz looks more modest and stretched in time. In his opinion, the quotes of the first cryptocurrency will rise to $40,000 only when the US Federal Reserve begins to reduce the key rate. “The most profitable trades have been and will continue to be longs on gold, euro, bitcoin and Ethereum: these assets will do well when the Fed stops raising [the base rate] and starts lowering it,” Novogratz said. He also predicted a reduction in loans amid the collapse of US banks. In his opinion, this could lead to a credit crisis, and the Fed, against the background of a “slowdown in the economy”, will have to cut the rate more aggressively than expected.

And of course, against the background of dominant optimism, the forecast of analyst Nicholas Merten looks exactly the opposite. He announced in a new video on DataDash to his 511,000 subscribers that it's time to sell bitcoin, as the first cryptocurrency has grown by almost 100% since November 2022. Merten believes that the first cryptocurrency's latest breakthrough could be a trap, as crypto markets were overbought. The expert disagrees with those who believe that bitcoin will follow the 2019 scenario, when it rose by 300% in a few months. According to him, the scenario of June 2021 is likely to be repeated, when BTC reached its historical high and then collapsed.

At the time of writing, Friday evening, April 21, BTC/USD is trading at $27,305. The total capitalization of the crypto market is $1.153 trillion ($1.276 trillion a week ago). The Crypto Fear & Greed Index fell from 68 to 50 in seven days, and moved from the Greed zone to the very center of the Neutral zone.

NordFX Analytical Group

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

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Forex and Cryptocurrency Forecast for May 1 - 5, 2023

EUR/USD: Awaiting Fed and ECB Meetings

The main factor determining the dynamics of the US Dollar Index (DXY) and, consequently, the EUR/USD pair last week was… silence. If recently, the speeches of Federal Reserve representatives were almost the most important market guide, then a silence regime has been in effect since April 21. Leading up to the press conference by Fed Chairman Jerome Powell following the FOMC's May meeting, all officials are instructed to maintain silence. Only a few days remain until the FOMC (Federal Open Market Committee) meeting, where a decision regarding the regulator's future monetary policy will be made, scheduled for May 2/3. Furthermore, on Thursday, May 4, there will be a meeting of the European Central Bank, where an interest rate decision will also be made. In general, the upcoming five-day period promises to be, at the very least, not dull.

Of course, macroeconomic data and events from both sides of the Atlantic caused certain fluctuations in EUR/USD last week. However, the final result was close to zero: if on Friday, May 21, the last chord sounded at the 1.0988 mark, then on Friday, May 28, it was placed not far away: at the 1.1015 level.

One event worth highlighting was the publication of the First Republic Bank (FRC) report, which ranks among the top 30 US banks by market capitalization. It was this report that led to the dollar's decline and the pair's surge by more than 100 points on Wednesday, April 26.

It seemed that the banking crisis caused by the tightening of the Federal Reserve's monetary policy (QT) was beginning to fade... US Treasury Secretary Janet Yellen even assured the public of the resilience of the banking sector. But then... a new flare-up called First Republic Bank (FRC). To prevent its bankruptcy and support its liquidity in Q1 2023, a consortium of banks transferred $30 billion in uninsured deposits to FRC. Another $70 billion in the form of credit was provided by JPMorgan. However, this was not enough: the bank's clients began to scatter, and FRC shares collapsed by 45% in two days and by 95% since the beginning of the year. In March alone, clients withdrew $100 billion from the bank. Thus, First Republic Bank has a very high chance of becoming number 4 in the lineup of bankrupted major US banks. And if the Fed does not stop its QT cycle, there is a very high probability that numbers 5, 6, 7, and so on will appear on this list.

However, as we have already detailed in our previous review, at the meeting on May 2/3, the key rate will be raised by only 25 basis points (FedWatch from CME estimates the probability of this at 72%). After that, the US Central bank is likely to take a pause. As stated by the President of the Federal Reserve Bank of Atlanta, Raphael Bostic, "one more increase should be enough for us to step back and see how our policy is reflected in the economy." It should be noted that the 25 bp rate hike has long been factored into market quotations. Therefore, immediately after the news about FRC and the surge to 1.1095, EUR/USD returned to a comfortable state for itself.

At the time of writing the review, on Friday evening, April 28, analysts' opinions were divided as follows: 35% of them expect the dollar to weaken and the pair to rise, 50% expect it to strengthen, and the remaining 15% have taken a neutral position. As for technical analysis, among oscillators on D1, 85% are coloured green, 15% are neutral-grey, among trend indicators, 90% are green, and 10% have changed to red. The nearest support for the pair is located in the area of 1.0985-1.1000, followed by 1.0925-1.0955, 1.0865-1.0885, 1.0740-1.0760, 1.0675-1.0710, 1.0620, and 1.0490-1.0530. Bulls will encounter resistance in the area of 1.1050-1.1070, then 1.1110, 1.1230, 1.1280, and 1.1355-1.1390.

In addition to the aforementioned FOMC and ECB meetings, we can expect a substantial amount of economic data next week. On Monday, May 1, the ISM Manufacturing PMI for the US will be published. The next day, the value of a similar index, but for Germany, will become known. Also, on Tuesday, May 2, we will learn about the inflation situation in the Eurozone, as the Consumer Price Index (CPI) will be released. Furthermore, on May 2, 3, 4, and 5, we will get a flurry of US labour market data. Important indicators such as the unemployment rate and the number of new non-farm jobs in the US (NFP) are among these, they will traditionally be published on the first Friday of the month, May 5.

GBP/USD: BoE vs. Fed: Who Will Win the Battle of Interest Rates?

The Bank of England (BoE) meeting will take place a week after the Fed's meeting, on Thursday, May 11. Most experts believe that the cycle of interest rate hikes for the pound is not yet over, which supports the British currency.

Recent data on inflation for March contribute to these forecasts. The Consumer Price Index (CPI) in annual terms once again reached a double-digit figure, 10.1%, which is higher than the forecast of 9.8%. To bring this indicator below the psychologically important mark of 10.0%, the BoE is highly likely to continue following the Fed's example. Market participants expect the regulator to raise the interest rate by 50 basis points on May 11: from 4.25% to 4.75%. No more effective ways to curb inflation have been devised so far. And if it continues to remain so high, it will harm both the consumer market and the overall UK economy.

Since the beginning of April, we have observed a sideways trend. However, GBP/USD finished the past five-day period at the 1.2566 mark, unexpectedly breaking the upper boundary of the channel. Perhaps the reason for the jump was the closing of trading positions at the end of the month. Currently, 75% of experts are in favor of the dollar, and only 25% side with the British pound. Among oscillators on D1, the balance of power is as follows: 85% vote in favor of the green (with a third of them being in the overbought zone), and the remaining 15% have turned neutral-grey. Trend indicators are 100% on the green side. Support levels and zones for the pair are 1.2450-1.2480, 1.2390-1.2400, 1.2330, 1.2275, 1.2200, 1.2145, 1.2075-1.2085, 1.2000-1.2025, 1.1960, 1.1900-1.1920, and 1.1800-1.1840. As the pair moves north, it will encounter resistance at the levels of 1.2510-1.2540, 1.2575-1.2610, 1.2700, 1.2820, and 1.2940.

Regarding important statistics on the state of the UK economy for the upcoming week, on Tuesday, May 2, the Manufacturing Purchasing Managers' Index (PMI) will be published. Then, on May 4, we will learn the value of the PMI for the services sector as well as the composite business activity indicator for the UK as a whole. Traders should also be aware that there will be a bank holiday in the country on Monday, May 1.

USD/JPY: Bank of Japan - Heading for Softer Ultra-Soft Policy

Forecasting the interest rate of the Bank of Japan (BoJ) is quite simple and very, very boring. As a reminder, it is currently at a negative level of -0.1% and was last changed on January 29 of the distant 2016, when it was lowered by 20 basis points. This time around, at its meeting on Friday, April 28, the regulator left it unchanged at the same -0.1%.

But that's not all. Many market participants were expecting that with the arrival of the new Central bank governor, Kazuo Ueda, the regulator would eventually change course towards tightening. However, contrary to these expectations, during his first press conference following his first meeting on April 28, Ueda stated, "We will continue to ease monetary policy without hesitation if necessary." One might wonder how much softer it could get, but it turns out that the current -0.1% is not the limit.

The result of the BoJ governor's words can be seen on the chart: in just a few hours, USD/JPY soared from 133.30 to 136.55, weakening the yen by 325 points. Of course, it's still far from the October 2022 peak, but a rise to the 137.50 level no longer seems entirely unrealistic.

The pair ended the past week at the level of 136.30. Regarding its near-term prospects, analysts' opinions are distributed as follows: currently, only 25% of experts vote for the pair's further growth, 65% point in the opposite direction, expecting the yen to strengthen, and 10% simply shrug. Among the oscillators on D1, 85% point upward (a third of them are in the overbought zone), while the remaining 15% remain neutral. Trend indicators show 90% looking north, and 10% pointing south. The nearest support level is in the 136.00 area. Next are the levels and zones at 135.60, 134.75-135.15, 132.80-133.00, 132.00-132.40, 131.25, 130.50-130.60, 129.65, 128.00-128.15, and 127.20. Resistance levels and zones are at 137.50 and 137.90-138.00, 139.05, and 140.60.
Regarding events characterizing the state of the Japanese economy, none are expected in the coming week. Moreover, the country is looking forward to a series of holidays: May 3 is Constitution Day, May 4 - Greenery Day, and May 5 is Children's Day. As a result, the dynamics of USD/JPY will depend entirely on what is happening on the other side of the Pacific Ocean, in the United States.

CRYPTOCURRENCIES: Awaiting the 2024 Halving

BTC/USD continued to decline on Monday, April 24 and, after breaking the support at $27,000, fell to $26,933. Market participants were already prepared to see bitcoin go even lower at the strong support level of $26,500. However, it unexpectedly soared to $30,020 on April 26. The main cryptocurrency was saved, as it has been many times before and will be many times again, by a weakened dollar. The cause of the shock was the problems of First Republic Bank, which followed a series of bankruptcies of crypto-friendly banks, as discussed above.

The correlation between the crypto and banking industries arises thanks to the following chain of events: 1) Tightening of the Federal Reserve's monetary policy hits banks, lowering their asset prices, reducing demand for their services, and causing customers to flee. 2) This situation creates serious difficulties for some banks and leads to the bankruptcy of others. 3) This can force the Fed to pause its cycle of raising interest rates or even lower them. Additionally, the regulator may restart the printing press to support bank liquidity. 4) Low rates and a flow of new cheap money lead to a decrease in the value of the dollar and allow investors to direct these funds into risky assets such as stocks and cryptocurrencies, which leads to an increase in their quotes. We have already seen this during the COVID-19 pandemic and may see it again in the near future.

According to former Goldman Sachs top manager and macro-investor Raoul Pal, the Federal Reserve (Fed) is likely to have finished its saga of raising interest rates. He has also predicted an upcoming recession that will force the regulator to "change course" and support the markets by printing money. In that case, he believes that risky assets are in for an "inevitable liquidity wave." This capital influx will "enlighten" the crypto industry with new innovations, and the number of people using digital assets will increase from the current 300 million to over 1 billion.

According to experts from the British bank Standard Chartered, bitcoin has benefited from its status as a "brand refuge" for savings at the beginning of 2023, and the current situation indicates the end of the "crypto winter". Standard Chartered believes that recent turmoil in the banking sector, stabilization of risky assets due to the end of the Fed's interest rate hike cycle, and increased profitability in the crypto mining industry will contribute to BTC's further growth. In addition, the adoption of the first EU framework for regulating crypto markets by the European Parliament could also support the leading cryptocurrency. The upcoming halving event will also impact BTC's growth, with bitcoin potentially reaching $100,000 by the end of 2024.

It should be noted that the topic of halving is becoming more and more prevalent. The Bitcoin Archive press service reminds us that it is less than a year away, with the procedure scheduled for April 6, 2024, as of April 24, 2023. However, this date is not final and may change, as it has in the past.

Some market participants believe that this event will be crucial for the future price of the flagship cryptocurrency. They believe that cycles for cryptocurrencies are consistent, and BTC quotes will reach new record highs a year or a year and a half after halving, as happened in previous cycles. Others argue that the market situation has changed. Bitcoin has become a mass phenomenon, and now "other laws and rules apply to the cryptocurrency", so other factors will become decisive, not just the halving of mining rewards.

It is worth noting that the second group of specialists includes Bloomberg Intelligence analyst Jamie Coutts, who predicts that the price of bitcoin will rise to $50,000 before April 2024. "The price of bitcoin bottoms out when there are 12-18 months left until the halving. The structure of the current cycle is similar to previous ones. However, many factors have changed: the network has become significantly more resilient, and bitcoin has never experienced a prolonged economic downturn," Coutts said. If his forecast is correct, the asset will appreciate by about 220% from the low reached last November before the halving.

The expert and trader known as Doctor Profit reminded of his previous statement that the bottom for bitcoin was reached at the level of $15,400, and it is unlikely that we will see another drop to this level. The dump in November 2022 was a complete capitulation, including for bitcoin miners, some of whom were forced to sell their coins and equipment at a loss. According to Doctor Profit, BTC is currently in an accumulation phase, neither in a bull nor in a bear market. At the same time, the specialist has advised traders to closely monitor the correlation between the Chinese stock market and bitcoin, believing that China will lift the ban on cryptocurrencies and legalize them, which will have a very positive long-term effect on their price.

Another analyst under the nickname DonAlt also excludes a drop in BTC/USD to the lows of November 2022. At the same time, he allows for a correction down to $20,000, which, in his opinion, will be a good level to replenish the reserves of the main cryptocurrency.

It's been a while since we quoted the popular analyst under the nickname PlanB, known for his Stock-to-Flow (S2F) model. He continues to assert that the predictions he makes based on this model continue to come true. "Before the halving, we can expect $32,000 for bitcoin, then $60,000. Then [after the halving] $100,000 will become the minimum, and the maximum rate could reach $1 million. But on average, after the next halving, the BTC rate should reach $542,000," wrote PlanB. At the same time, the analyst emphasized that the behaviour of the crypto market fully corresponds to S2F, so its critics are simply unfounded.

It is worth noting that PlanB is not alone in his super-optimistic predictions for the price of bitcoin, which legendary Warren Buffett called "rat poison squared." Robert Kiyosaki, the author of the popular book Rich Dad Poor Dad, believes that the value of the flagship cryptocurrency will rise to $500,000 by 2025. And at Ark Invest, looking a decade ahead, they named a figure of $1 million per coin.

As of the evening of Friday, April 28, BTC/USD is trading at $29,345. The total market capitalization of the crypto market is $1.205 trillion ($1.153 trillion a week ago). The Crypto Fear & Greed Index has increased from 50 to 64 points over the past seven days, moving from Neutral to 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.

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Forex and Cryptocurrencies Forecast for May 08 - 12, 2023

EUR/USD: The Market Is at a Crossroads

Everything happened as it was supposed to. The Federal Open Market Committee (FOMC) of the US Federal Reserve raised the federal funds rate by 25 basis points (bps) to 5.25% during its meeting on May 2 and 3. Similarly, the European Central Bank did the same on May 4, increasing the euro interest rate by the same 25 bps to 3.75%. This increase had long been factored into market quotations. Of much greater interest were the statements and press conferences of the leaders of both central banks.

Attention to Federal Reserve Chairman Jerome Powell's speech was heightened by the fact that the banking crisis had escalated earlier in the week. Shares of First Republic Bank plummeted following poor financial reports, dragging down the shares of many other banks. The US banking sector had dropped by more than 10% since the beginning of the week. This situation provided grounds for expecting that the Fed would finally shift from a tightening policy (QT) to a more accommodative one (QE), as high interest rates had been the cause of the banking crisis.

The statements made by the Fed Chairman were characteristically vague. While acknowledging some issues, Jerome Powell did not insist on maintaining peak interest rates until the end of 2023. He also indicated that although a decision to pause in the current monetary tightening cycle had not been made, it was not ruled out that the rate was already approaching its peak levels.

As a result, the derivatives market decided that the rate would be 90 basis points lower by the end of the year than it is now. Based on these forecasts, the DXY Dollar Index and Treasury yields went down, while EUR/USD moved upward. However, its growth was relatively moderate, at about 100 points. It failed to surpass the 1.1100 level, and after the ECB meeting on May 5, it even rolled back.

Statistics published on Tuesday, May 2 showed that retail sales in Germany fell from -7.1% to -.6% (forecast -6.1%), and inflation (CPI) in the Eurozone as a whole increased from 6.9% to 7.0%, according to preliminary data. Against this backdrop, the European Central Bank, like the Fed, indicated its concern about the delayed effect of tightening monetary policy, which could cause new problems in the economy. Consequently, the pace of monetary tightening should be reduced.

Although the ECB announced that, starting from July, asset sales from the balance sheet would be increased from €15 billion to €25 billion per month, investors remained unimpressed. The short-term market reacted to the possibility of winding down QT in the Eurozone by lowering the deposit rate forecast from 3.9% to 3.6% by the end of the year. This time, the euro and German bond yields fell together.

As a result, EUR/USD returned to the centre of the sideways channel of 1.0940-1.1090, in which it had been moving for two consecutive weeks. (In fact, if you exclude spikes, the channel appears even narrower: 1.0965-1.1065.)

Data from the US labour market arrived on the first Friday of the month, May 5, and provided the dollar with brief support. The number of new jobs created outside the US agricultural sector (NFP) amounted to 253K, significantly exceeding both the previous value (165K) and the forecast (180K). The unemployment situation also improved, with the rate falling from 3.5% to 3.4%, instead of the expected increase to 3.6%.

As a result, EUR/USD ended the five-day period at the 1.1018 level. At the time of writing this review, on the evening of May 5, analysts' opinions are divided as follows: 60% of them expect the dollar to weaken and the pair to rise, 30% anticipate its strengthening, and the remaining 10% have taken a neutral stance. Regarding technical analysis, among oscillators on the D1 chart, 60% are green (with 10% signalling being overbought), while the remaining 40% are neutral grey; among trend indicators, 90% are green, and only 10% are red. The nearest support for the pair is located around 1.0985-1.1000, followed by 1.0925-1.0955, 1.0865-1.0885, 1.0740-1.0760, 1.0675-1.0710, 1.0620, and 1.0490-1.0530. Bulls would encounter resistance around 1.1050-1.1070, then 1.1109-1.1110, 1.1230, 1.1280, and 1.1355-1.1390.

As for the events of the upcoming week, Wednesday, May 10, is likely to be the most important day. Inflation data (CPI) for Germany and the US will be released then. The preliminary Michigan Consumer Sentiment Index, to be published on Friday, May 12, will complement the economic picture.

GBP/USD: Pound Forecast Mostly Positive

When forecasting the past five-day period, the majority of experts (75%) had sided with the US currency. Indeed, at the beginning of the week, the dollar recouped 130 points from the pound. However, then the UK's Chartered Institute of Procurement and Supply (CIPS) began publishing PMI figures, which indicated an increase in business activity in the country. With a previous value of 52.2 and a forecast of 53.9, the Composite PMI actually grew to 54.9 points. The UK's services sector PMI showed an even more convincing increase: from 52.9 to 55.9 (forecast 54.9).

The pound received additional support from across the Atlantic Ocean. The banking crisis in the US and the vague statements from the Federal Reserve's chair allowed GBP/USD to rise to the 1.2652 mark. It had not soared that high since the beginning of June 2022. As for the final note of the past week, it sounded slightly lower, at the 1.2631 level.

There will be a bank holiday in the United Kingdom on Monday, May 8. However, a whole avalanche of events related to the country's economy awaits us afterwards. Preliminary data on manufacturing output and the UK's overall GDP will be revealed on Thursday. In addition, a meeting of the Bank of England (BoE) will be held on the same day. Most experts believe the pound's interest rate hike cycle has not yet come to an end and will be raised from 4.25% to 4.50%. After the BoE meeting, a press conference will follow, led by its governor, Andrew Bailey. As for the end of the workweek, we will learn the revised data on manufacturing output and the country's GDP on Friday, May 12.

At the moment, many experts anticipate further strengthening of the British currency and growth of GBP/USD. Here are just a few quotes.

"It seems that the belief that European banks, including British ones, are better regulated than banks in the US provides some protection for European currencies," economists from Internationale Nederlanden Groep (ING) write. "This also helps support expectations (with which we disagree) that the Bank of England may raise rates two or three more times this year. According to our latest estimates, the Bank of England may not counteract these expectations next week, leading to sterling retaining its recent achievements." ING economists believe that the GBP/USD pair could rise to 1.2650-1.2750.

Scotiabank specialists believe that upward pressure will continue to develop towards 1.2700-1.2800, although they do not rule out that this growth could be very slow. In their opinion, support is in the 1.2475-1.2525 zone.

Credit Suisse also sees the "potential for a final upward surge towards the main target at 1.2668-1.2758 – the May 2022 high and the 61.8% correction of the 2021/2022 decline." "Here, we will expect an important top to form," the specialists say. Credit Suisse also warns that if the pound weakens, the 1.2344 support should hold. However, if it is broken, a deeper pullback towards the 55-DMA and 1.2190-1.2255 support is threatened.

Strategists at HSBC, one of the largest financial conglomerates in the world, join the positive sentiment of their colleagues. "At present, the pound sterling benefits from both an improvement in investor risk appetite and a cyclical upswing," states HSBC. "We believe that the positive cyclical momentum will continue to support the British pound in the coming months. [...] Nevertheless, amid weakening lending dynamics and the waning positive impact of disinflation, GBP/USD rate may not be able to move far beyond the 1.3000 level."

As for the median forecast, currently 50% of experts are siding with the pound, 10% side with the dollar, and 40% remain neutral. Among trend indicators on D1, 100% are in favour of the green (bullish), and oscillators show a similar picture, although a third of them are in the overbought zone. Support levels and zones for the pair are 1.2575-1.2610, 1.2510, 1.2450-1.2480, 1.2390-1.2400, 1.2330, 1.2275, 1.2200, 1.2145, 1.2075-1.2085, 1.2000-1.2025, 1.1960, 1.1900-1.1920, and 1.1800-1.1840. If the pair moves north, it will face resistance at levels 1.2650, 1.2695-1.2700, 1.2820, and 1.2940.

USD/JPY: Yen Finds Support from the US

At its latest meeting, the Bank of Japan (BoJ) maintained its negative interest rate at -0.1% (The last time it changed was on January 29, 2016, when it was lowered by 20 basis points). Recall that during the press conference following this meeting on April 28, the new head of the Central Bank, Kazuo Ueda, stated that "we will continue to ease monetary policy without hesitation if necessary." It seems like there's not much room left for easing, but perhaps the current -0.1% is not the limit.

The result of BoJ's head's words can be seen on the chart: within just a few hours, USD/JPY soared from 133.30 to 136.55, weakening the yen by 325 points. The growth continued during the past week: the pair recorded a local high at 137.77 on Tuesday, May 2. After that, the yen, acting as a safe haven, was supported by the banking crisis in the US. Jerome Powell's statements finished the "job" of strengthening the yen, ultimately causing the pair to drop by 428 points to 133.49.

On Friday, May 5, strong US labour market data allowed the US currency to recover some of its losses, and USD/JPY ended the workweek at 134.83.

The next BoJ meeting will take place only on June 16. Until then, the USD/JPY rate will most likely depend mainly on the dollar. Regarding the short-term prospects of the pair, analysts' opinions are distributed as follows. At the moment, only 25% of experts vote for its further growth, the same number point in the opposite direction. The majority (50%) simply shrugg, confirming that investors are currently at a crossroads and are waiting for signals that could move the market in one direction or another.

Indicators on D1 are also in doubt. Among oscillators, 50% point north, 25% have taken a neutral position, and the remaining 25% indicate south (with a third of them in the oversold zone). The ratio of forces for trend indicators is 60% to 40% in favour of the greens. The nearest support level is located in the 134.35 area, followed by levels and zones at 133.60, 132.80-133.00, 132.00, 131.25, 130.50-130.60, 129.65, 128.00-128.15, and 127.20. Resistance levels and zones are at 135.15, 135.95-136.25, 137.50-137.75, and 139.05, 140.60.

The report of the April meeting of the Bank of Japan's Monetary Policy Committee will be published on Monday, May 8. No other important economic information related to the Japanese economy is expected during the upcoming week.

CRYPTOCURRENCIES: When Will Bitcoin Wake Up?

Of course, the price of bitcoin is influenced by many specific factors. These include industry-related regulatory actions, bankruptcy of crypto exchanges and banks, and statements made by influencers shaping the crypto community's opinion. All of these factors play a role. However, one of the most important factors affecting BTC/USD is the latter half: the US dollar. The better the world's main currency performs, the worse it is for the leading cryptocurrency, and vice versa. This inverse correlation is clearly visible when comparing bitcoin charts and the US Dollar Index (DXY).

In March, anticipation of the Federal Reserve's interest rate decision locked DXY and BTC/USD in a sideways channel. The 25 basis point increase fully coincided with the forecast and was already factored into the market quotes, so the DXY's calm reaction to this move was quite logical. Bitcoin also reacted calmly to this step, remaining in the $26,500-30,000 range.

The current background remains neutral. The "bulls" are conserving their energy. In addition to the predictable Fed decision on the key interest rate, their reluctance to buy is influenced by investors' general lack of appetite for risky assets. Weak macroeconomic data from China plays a significant role here.

Another factor putting pressure on bitcoin is the profit-taking by some holders, which followed the impressive growth of the coin in Q1 of this year. Most of these were short-term speculators, who accounted for over 60% of the total realized profit.

As for the "whales," having liquidated part of their holdings, they have either gone into hibernation or returned to insignificant accumulation, prompted by the banking crisis. Recall that BTC/USD dropped to $26,933 on April 24. Market participants were already prepared to see bitcoin even lower, at the $26,500 support level, breaking which would open the way to $25,000. However, the coin unexpectedly soared to $30,020 on April 26. The reason for the surge was the fourth bankruptcy of an American bank, this time being the First Republic Bank.

According to experts at the British bank Standard Chartered, bitcoin took advantage of its status as a "brand-safe haven" for savings at the beginning of 2023, and the current situation indicates the end of the "crypto-winter." Geoff Kendrick, the head of currency research at the bank, believes that bitcoin could grow by $20,000 if the US defaults on its debts. In an interview with Business Insider, he stated that this could happen in July 2023 if Congress does not agree to raise the debt limit to a new level. However, the specialist called such a default an "unlikely" event, albeit with "massive consequences."

Kendrick believes that bitcoin will not grow linearly. Most likely, after the default, its price will fall by $5,000 in the first days or week, and then sharply increase by $25,000. As for ethereum, which, according to the analyst, trades like stocks, it is more likely to fall in the event of a default. Kendrick considers the optimal trading strategy to be opening a long position in bitcoin and a short position in ethereum. Recall that earlier, Standard Chartered stated that the first cryptocurrency could grow to $100,000 by the end of 2024. The main reasons cited were the banking crisis, halving, and the easing of the US Federal Reserve's monetary policy.

Investor Ray Dalio agrees that the first cryptocurrency is a good hedge against inflation. He admitted that he owns bitcoins, but still prefers gold. According to the billionaire, bitcoin cannot be a full-fledged alternative to the precious metal. "I don't understand why people are more inclined towards bitcoin than gold," he wrote. "Gold is the third-largest reserve asset for central banks internationally. First dollars, then euros, gold, and Japanese yen." In Dalio's opinion, the precious metal is "timeless and universal." Bitcoin, on the other hand, requires close attention from investors due to its volatility. "You have to be prepared for its significant drop, about 80% or so," warned the billionaire.

Jenny Johnson, the CEO of investment company Franklin Templeton, criticized bitcoin as the biggest distraction from real innovation, blockchain technology. She believes that bitcoin will never become a global currency because the US government will not allow it. Johnson warned that the crypto industry should prepare for tougher regulatory rules.

Senator Cynthia Lummis suggests that President Joe Biden will sign a law establishing basic guidelines for the crypto industry within the next 12 months. Meanwhile, the White House Council of Economic Advisers has proposed a 30% tax on miners to prevent them from damaging the environment, which is expected to be another way for authorities to pressure the industry seen as a threat by many officials.

Upcoming regulatory changes, along with wars and catastrophes, are just some of the many factors that Artificial Intelligence is currently unable to take into account. Therefore, relying on ChatGPT's predictions when developing trading strategies would be, to put it mildly, reckless. However, they are still of interest. According to the statement of Coinbase's Business Director, Conor Grogan, "ChatGPT clearly sympathizes with BTC, while being much more skeptical towards altcoins." Thus, according to the AI's forecast, there is a 15% chance that BTC will lose 99.9% of its value by 2035 and become obsolete. In the case of ethereum, the chances of such a scenario are 20%, with LTC - 35%, and with DOGE - 45%.

Earlier, ChatGPT stated that the price of Bitcoin could reach the mark of $150,000 already in 2024, after which it will grow on average by $25,000 per year and reach the mark of $300,000 by 2030.

Unlike ChatGPT, the trader known as Bluntz possesses human, not artificial intelligence. It was this intelligence that allowed him to correctly predict the bottom of the bearish BTC market in 2018. Now, however, he believes that the leading cryptocurrency is unlikely to sustainably establish itself above $30,000 in the foreseeable future. This opinion is based on the fact that BTC has already passed a five-wave bullish trend on the daily chart. According to Bluntz's calculations, bitcoin is currently in the middle of a corrective ABC formation, which could lead to a drop to around $25,000. After that, the trader believes the coin will rise to $32,000, and this will happen in the second half of 2023.

As of the writing of this review, on the evening of Friday, May 5, BTC/USD is trading at $29,450. The total market capitalization of the crypto market is $1.219 trillion ($1.204 trillion a week ago). The Crypto Fear & Greed Index decreased from 64 to 61 points over the past seven days, and it remains in the Greed zone.

The Bitcoin Dominance Index (the share of the first cryptocurrency in the total market capitalization of the crypto market) is currently at 46.9%. According to the legendary trader, analyst, and CEO of Factor LLC, Peter Brandt, this indicator is preparing for a breakthrough after a two-year consolidation in the form of a large rectangle. While the trend is within a "limiting range," the exit from it will be crucial for the asset, explained the expert. Over the past five years, the BTC share has fallen to 32.4% in 2018 and risen to 71.9% in 2021. The indicator is likely to surpass the 50% mark to begin a bullish movement. "I believe that bitcoin will bury all the imposters. In the end, there will be only one king of the hill," Peter Brandt wrote.

NordFX Analytical Group

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

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

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Forex and Cryptocurrencies Forecast for May 15 - 19, 2023

EUR/USD: Why the Dollar Rose

We named the previous review "Market at a Crossroads." We can now say that it finally made a decision and chose the dollar last week. Starting from 1.1018 on Monday, May 8, EUR/USD reached a local low of 1.0848 on Friday, May 12. Interestingly, this growth occurred despite the cooling of the U.S. economy. Not even the prospects of a U.S. debt default or the possibility of a reduction in federal fund rates could stop the strengthening of the dollar.

The slowdown in the American economy is further evidenced by a decline in producer prices (PPI) to the lowest level since January 2021, at 2.3%, and an increase in the number of unemployment benefit claims to the highest level since October 2021, reaching 264K (compared to a forecast of 245K and a previous value of 242K). Inflation in the United States, measured by the Consumer Price Index (CPI), decreased to 4.9% on an annual basis in April from 5.0% in March (forecasted at 5.0%), while the monthly core inflation remained unchanged at 0.4%.

It may have seemed that this situation would finally prompt the Federal Reserve (Fed) to start easing its monetary policy. However, based on recent statements by officials, the regulator does not intend to do so. For instance, Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, stated that although inflation has softened slightly, it still significantly exceeds the target level of 2.0%. Kashkari agreed that a banking crisis could be a source of economic slowdown. However, he believed that the labour market remains sufficiently strong.

Following the head of the Minneapolis Fed, Federal Reserve representative Michelle Bowman also confirmed the regulator's reluctance to change course towards a more dovish stance. According to Bowman, "inflation is still too high" and "the interest rate will need to remain sufficiently restrictive for some time." Moreover, Bowman added that there is no certainty that the current policy is "sufficiently restrictive to bring down inflation," and if inflation remains high and the labor market remains tight, additional rate hikes are likely to be appropriate.

Similar conclusions have been reached by many analysts. For example, according to experts from Commerzbank, "given the slow decline in inflation, which remains well above the target level, the Fed is unlikely to consider the possibility of lowering the key rate this autumn.".

The market reacted to the prospects of maintaining (and possibly further increasing) the interest rate with a rise in the dollar. The strengthening of the American currency could have been even more significant if not for the banking crisis and the issue of the US debt ceiling.

A hawkish stance from the European Central Bank (ECB) could have aided the euro and reversed EUR/USD to the upside. However, after the May meeting of the European regulator, it appears that the end of monetary restraint is near. It is quite possible that the rate hike in June will be the last. "At this point, the ECB can only surprise with a dovish tone. [...] Euro bulls should be prepared for this," warn economists from Commerzbank.

The final note of the past week for EUR/USD was set at 1.0849. As for the near-term prospects, at the time of writing this review on the evening of May 12, the majority of analysts (65%) believe that the dollar has become too overbought, and it's time for the pair to correct to the upside. Only 15% expect further strengthening of the dollar, while the remaining 20% hold a neutral position. In terms of technical analysis, among the oscillators on the daily chart (D1), 90% are coloured red (although one-third of them are signalling the pair's oversold condition), with only 10% in green. Among the trend indicators, there are more green ones, 35%, while red ones account for 65%. The nearest support for the pair is located around 1.0800-1.0835, followed by 1.0740-1.0760, 1.0675-1.0710, 1.0620, and 1.0490-1.0530. Bulls will encounter resistance around 1.0865, followed by 1.0895–1.0925, 1.0985, 1.1090-1.1110, 1.1230, 1.1280, and 1.1355-1.1390.

The upcoming week will be quite eventful with important economic events. On Tuesday, May 16, we will see retail sales data from the United States and the ZEW Economic Sentiment indicator from Germany. Additionally, preliminary GDP data for the Eurozone for Q1 will be published on the same day. On Wednesday, May 17, inflation data (CPI) for the Eurozone will be released. Thursday, May 18th, will bring a series of US statistics, including unemployment data, manufacturing activity, and the US housing market. Furthermore, speeches by ECB President Christine Lagarde are expected on May 16 and May 19. The week will conclude with a speech by Federal Reserve Chair Jerome Powell on the last working day.

GBP/USD: BoE and GDP Upset Investors

The bulls managed to push GBP/USD higher until Thursday. Although the forecast suggested that the Bank of England (BoE) would raise the interest rate by 25 basis points at its meeting on May 11, investors were hopeful for a miracle: what if it's not 25, but 50? However, the miracle did not happen, and after reaching a high of 1.2679, the pair reversed and started to decline.

The decline continued the next day. The strengthening dollar played a role, and mixed preliminary GDP data for the UK added to the negative sentiment. The country's economy grew by 0.1% in Q1 2023, which fully matched the forecast and the growth in Q4 2022. On an annual basis, GDP increased by 0.2%, which, although in line with the forecast, was significantly lower than the previous value of 0.6%. However, in monthly terms, the GDP showed an unexpected contraction of -0.3% in March, against expectations of 0.1% growth and a previous value of 0.0%. Despite the optimistic statement by UK Chancellor of the Exchequer Jeremy Hunt that this was "good news" as the economy is growing, it did not help the pound. It was evident that the growth occurred only in January, stalled in February, and began to contract in March.

Economists at Commerzbank note that the indecisiveness of the Bank of England (BoE) in combating inflation is a negative factor for the pound. "Future data will be crucial for the BoE's next rate decision," Commerzbank states. "If a swift decline in inflation becomes evident, as expected by the BoE, they are likely to refrain from further rate hikes, which will put pressure on the sterling."

Strategists at Internationale Nederlanden Groep (ING) also believe that the rate hike on May 11 may be the last. However, they add that "the Bank of England has maintained flexibility and left the door open for further rate hikes if inflation proves to be persistent."

The plunge on May 11 and 12 resulted in GBP/USD failing to hold above the strong support level of 1.2500, and the week ended at 1.2447. However, according to 70% of experts, the bulls will still attempt to reclaim this support level. 15% believe that 1.2500 will now turn into resistance, pushing the pair further downward. The remaining 15% preferred to refrain from making forecasts. Among the oscillators on the daily chart (D1), 60% recommend selling (with 15% indicating oversold conditions), 20% are inclined towards buying, and 20% are neutral. Among the trend indicators, the balance between red and green is evenly split at 50%.

The support levels and zones for the pair are at 1.2390-1.2420, 1.2330, 1.2275, 1.2200, 1.2145, 1.2075-1.2085, 1.2000-1.2025, 1.1960, 1.1900-1.1920, and 1.1800-1.1840. In the event of an upward movement, the pair will encounter resistance at levels of 1.2500, 1.2540, 1.2570, 1.2610-1.2635, 1.2675-1.2700, 1.2820, and 1.2940.

There are several notable events on the calendar in the upcoming week. The Inflation Report hearing will take place on Monday, May 15. Data on the UK labor market will be released on Tuesday, May 16. And the Governor of the Bank of England, Andrew Bailey, is scheduled to speak on Wednesday, May 17.

USD/JPY: Yen as a Shelter from Financial Storms

The yen was the worst-performing currency in the DXY basket in April. USD/JPY soared to a height of 137.77 on the ultra-dovish statements of the new Governor of the Bank of Japan (BoJ), Kadsuo Ueda. However, after that, the yen, acting as a safe haven, was aided by the banking crisis in the United States, causing the pair to reverse downwards.

As for Japanese banks, Ueda stated on Tuesday, May 9 that "the impact of recent bankruptcies of American and European banks on Japan's financial system is likely to be limited" and that "financial institutions in Japan have sufficient capital reserves." Assurances of the stability of the country's financial system were also expressed by the Minister of Finance, Shunichi Suzuki.

Currency strategists at HSBC, the largest British bank, continue to believe that the Japanese yen will strengthen further, aided by its status as a "safe haven" amidst the banking crisis and US debt issues. According to their analysis, the yen may also strengthen because the current review by the Bank of Japan does not exclude changes in its yield curve control (YCC) policy, even if it happens slightly later than previously expected. The shift in the BoJ's course could be influenced by the fact that core inflation in Japan remained stable in March, and excluding energy prices, it accelerated to a 41-year high of 3.8%. However, when comparing this level with similar indicators in the US, EU, or the UK, it is difficult to consider it a significant problem.

Meanwhile, analysts at Societe Generale, a French bank, believe that considering yield dynamics, geopolitical uncertainty, and economic trends, USD/JPY may "get stuck in narrow ranges for some time." However, they also mention that the sense that the dollar is overvalued, and the anticipation of the Bank of Japan's actions will not be easy to dismiss. The perception that the yen's recovery is only a matter of waiting for actions by the Bank of Japan lingers.

The next meeting of the Bank of Japan (BoJ) is scheduled for June 16. Only then will it become clear whether or not there will be any changes in the monetary policy of the Japanese central bank. Until that day, the USD/JPY exchange rate will likely depend largely on events in the United States.

The pair concluded the past week at 130.72. Regarding its immediate prospects, analysts' opinions are divided as follows. At present, 75% of analysts have vote for the strengthening of the Japanese currency. 15% of experts expect an upward movement, while the same percentage remains neutral. Among the oscillators on the daily chart (D1), the balance leans toward the dollar, with 65% indicating an upward trend, 20% remaining neutral, and the remaining 15% showing a downward direction. Among the trend indicators, the balance of power is 90% in favour of the green zone. The nearest support level is located in the range of 134.85-135.15, followed by levels and zones at 134.40, 133.60, 132.80-133.00, 132.00, 131.25, 130.50-130.60, 129.65, 128.00-128.15, and 127.20. The resistance levels and zones are at 135.95-136.25, 137.50-137.75, 139.05, and 140.60.

As for economic data releases, the preliminary GDP data for Japan's Q1 2023 will be announced on Wednesday, May 17. However, there are no other significant economic information expected to be released concerning the Japanese economy in the upcoming week.

CRYPTOCURRENCIES: Bitcoin Hopes for a Banking Crisis

Bitcoin has been under selling pressure for the eighth consecutive week but continues to attempt to hold within the strong support/resistance zone of $26,500. The past week once again did not bring joy to investors. As noted by WhaleWire, transaction fees within the bitcoin ecosystem reached global highs for the third time in history (similar to what was observed in 2017 and 2021). The average network speed does not exceed 7 transactions per second. As a result, those wishing to make transfers increase the amount of the transaction fee to expedite its execution. This caused the average fee on May 8 to soar to $31 per transaction. This was very frustrating for users but welcomed by miners, as for the first time since 2017, fees surpassed block rewards.

Some operators, including Binance, were unprepared for this and did not adjust the fees in time for users. Hundreds of thousands of transactions got stuck in the mempool. In order to speed up their "clearing," the largest cryptocurrency exchange suspended withdrawals twice and increased the transfer fee. The situation was exacerbated by an investigation launched by US authorities against Binance. According to Bloomberg reports, the exchange is suspected of violating sanctions related to Russia due to its invasion of Ukraine.

Panic sentiment was further heightened by the news that the cryptocurrency exchange Bittrex filed for bankruptcy on the same day, May 8 (although this procedure is expected to only affect its US subsidiary). The problems faced by Binance and Bittrex reminded investors of the FTX crash. All of this has instilled fear, uncertainty, and doubt (FUD) among participants in the crypto market, leading to a decrease in the number of active addresses to yearly lows. Bitcoin experienced a sharp decline against this backdrop.

BTC is forming a "head and shoulders" pattern on the daily chart. A trader and analyst known as Altcoin Sherpa suggested that the price of the leading cryptocurrency may soon drop to $25,000. According to his analysis, this price level coincides with the 200-day EMA, the 0.382 Fibonacci level, and has previously been tested as support/resistance. The possibility of a deeper correction, down to the $24,000 level, cannot be ruled out. However, experts at CoinGape point out that the supply of bitcoins on centralized platforms is at its lowest level since 2017. They believe this indicates that the upcoming correction may have a local character.

The strengthening of the US dollar last week also played against bitcoin. However, hopes that the banking crisis in the US will continue to support the digital market are still in the air. For many cryptocurrency enthusiasts, bitcoin is considered a safe haven and a store of value similar to physical gold, protecting against loss of funds.

The tightening of monetary policy by the Federal Reserve has reduced the value of certain assets on banks' balance sheets and decreased demand for banking services. Therefore, the likelihood of new disruptions in the traditional financial sector remains quite high. Four US banks (First Republic Bank, Silicon Valley Bank, Signature Bank, and Silvergate Bank) have filed for bankruptcy, and a dozen more are facing difficulties. According to surveys by the Gallup polling agency, half of US citizens are concerned about the safety of their funds in bank accounts.

Robert Kiyosaki, the author of the bestseller Rich Dad Poor Dad, often emphasizes that challenging times lie ahead for the US and global economy. This time, he addressed his 2.4 million Twitter followers, stating that the sharp increase in the yield of one-month US Treasury bills indicates that a recession may be approaching. He questioned whether this implies that the global banking system is collapsing and advised people to focus on gold, silver, and bitcoins. It is worth noting that Kiyosaki has previously predicted that the price of bitcoin will soon rise to $100,000.

Michael Van de Poppe, an analyst, trader, and founder of the consulting platform EightGlobal, conducted a detailed analysis of the relationship between the banking sector and the crypto market. The stocks of American banks reacted with a decline to an attempt by Jerome Powell, the head of the US Federal Reserve, to calm the financial markets. Within a few hours after the official's speech on May 3, shares of PacWest Bancorp fell by almost 58%, and Western Alliance by more than 28%. Other credit institutions such as Comerica (-10.06%), Zion Bancorp (-9.71%), and KeyCorp (-6.93%) experienced a decline as well.

Using a 30-minute chart, Van de Poppe demonstrated that while banks were falling in price, bitcoin and gold were rising. According to the founder of EightGlobal, there is growing uncertainty and distrust among bankers towards the statements made by government officials. Such sentiments may lead to further problems in traditional markets and contribute to the continued growth of digital and physical gold.

Warren Buffett, the billionaire investor, remains steadfastly sceptical of the flagship cryptocurrency, bitcoin. At the annual Berkshire Hathaway shareholders' meeting, Buffett stated that while people may lose faith in the dollar, it does not mean that bitcoin can become the world's reserve currency. In response to this, James Ryan, the founder of Six Sigma Black Belt, pointed out that Buffett does not believe in gold either, as he believes the precious metal does not produce anything and does not generate cash flow.

By the way, Warren Buffett may be right about gold. According to research by DocumentingBTC, an investor who invested exactly $100 in physical gold ten years ago would now have only $134 in their account. But if they had invested in digital gold, they would have $25,600! That's why bitcoin is considered the best investment of the decade.

Second are NVIDIA stocks, which would have grown to $8,599. The honourable third spot goes to Tesla with an investment growth from $100 to $4,475. Apple investors could have gained $1,208, Microsoft - $1,111, Netflix - $1,040, Amazon - $830, Facebook - $818, and investing in Google stocks would have yielded $504 in the present.

To further justify the hopes of bitcoin enthusiasts, technically bitcoin needs to rise above $28,900, test $30,400, and firmly fix above the $31,000 level. However, at the time of writing this review on Friday evening, May 12, BTC/USD is trading at $26,415. The total market capitalization of the crypto market stands at $1.108 trillion ($1.219 trillion a week ago). The Crypto Fear & Greed Index has decreased from 61 to 49 points over the past seven days, moving from the Greed zone to the Neutral zone.

NordFX Analytical Group

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

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Forex and Cryptocurrencies Forecast for May 22 - 26, 2023

EUR/USD: Why the Dollar Continues to Rise

We titled our last week’s review "Why the Dollar Rose" and detailed the reasons for the strengthening of the American currency. It's fitting to name today's fresh review "Why the Dollar Continues to Rise," and naturally, we will answer this question.

The DXY dollar index has been on the rise for the past two weeks, reaching a mark of 103.485 on May 18. This is the highest it's been since March 2023. This coincides with increasing chances of a new interest rate hike at the upcoming Federal Open Market Committee (FOMC) meeting of the U.S. Federal Reserve on June 14.

A potential U.S. government debt default could have dampened the hawkish sentiment of the American Central Bank. However, firstly, the Federal Reserve has developed a system of measures since 2011 to mitigate the effects of a U.S. default on its obligations. Secondly, and most importantly, it's unlikely they will have to resort to such quantitative easing (QE). President Joe Biden has expressed confidence in reaching a deal with the Republicans. Additionally, the Republican House Speaker, Kevin McCarthy, has confirmed that a vote on the debt ceiling will take place next week.

Markets have responded to this with optimism and confidence that an economic and financial market crisis can be averted. This has boosted not only the dollar but also the S&P500, Dow Jones, and Nasdaq stock indices (noting that such a combination is extremely rare). As a result, the likelihood of raising the key interest rate to 5.5% has reached 33% (the chances were close to 0% at the beginning of May).

Lorie Logan, the president of the Federal Reserve Bank (FRB) of Dallas, and her colleague from St. Louis, James Bullard, are prepared to vote for monetary tightening. Raphael Bostic, the head of the FRB of Atlanta, does not rule out that after a pause in June, the rate could be raised at the July meeting. Neil Kashkari, the president of the FRB of Minneapolis, has also made hawkish statements. He agreed that a banking crisis could be the source of the economic slowdown. However, in his view, the labor market remains quite strong, inflation, although somewhat weakened, still significantly exceeds the target level of 2.0%, so it's too early to talk about easing monetary policy.

EUR/USD fell to a level of 1.0760 on Friday, May 19, after which the decline ceased. This slowdown was aided by a statement from European Central Bank President Christine Lagarde, who said that like the Fed, the ECB "will boldly make the necessary decisions to return inflation to 2%". Clearly, this will require further tightening of credit and monetary policy (QT) and a rate hike, as inflation (CPI) in the Eurozone is reluctant to decrease. Statistics published on Wednesday, March 17, showed that in annual terms it had increased over the month from 6.9% to 7.0%.

Economists from the Canadian investment bank TD Securities (TDS) believe that the deposit rate for the euro will rise from the current 3.25% to 4.00% by September and will be maintained at this level until mid-2024. Accordingly, after a rise of 75 basis points (bps), the key interest rate will reach 4.5%.

The picture of the past week would be incomplete without the final part, aptly titled "Why the Dollar Fell." This happened on the evening of Friday, May 19, thanks to the same Fed. More precisely, its chairman Jerome Powell. Earlier in the day, he stated that inflation was much higher than the target, this created significant difficulties, and therefore it needed to be brought back to 2%. This speech had no impact on market participants as it completely aligned with their expectations. However, in his second speech at the end of the trading week, Powell managed to shock the market. According to him, the recent banking crisis, which led to a tightening of credit standards, has reduced the need for interest rate hikes. "Our rate may not need to rise as much as we would like," Powell said, adding that "the markets have priced in a different rate hike scenario than what the Fed is forecasting."

Following these words, EUR/USD rallied north, closing the past week at a level of 1.0805. As for the near future, as of the evening of May 19, when this review was written, most analysts (55%) expect the dollar to continue strengthening. Northward corrections are expected by 30%, and the remaining 15% have taken a neutral position. Among the oscillators on D1, 100% are coloured red (although a quarter of them are signalling that the pair is oversold). Among the trend indicators, 75% point south, and 25% look north. The nearest support for the pair is located around 1.0740-1.0760, followed by zones and levels of 1.0680-1.0710, 1.0620, and 1.0490-1.0525. Bulls will meet resistance around 1.0820-1.0835, then 1.0865, 1.0895-1.0925, 1.0985, 1.1045, 1.1090-1.1110, 1.1230, 1.1280, and 1.1355-1.1390.

Noteworthy events for the upcoming week include the publication of Germany's business activity (PMI) and business climate (IFO) indices on May 23 and 24, respectively. Also, the minutes of the last FOMC meeting will be released, on Wednesday, May 24. We will know the GDP values of Germany and the US (preliminary) for Q1 2023, as well as data from the US labour market, on Thursday, May 25. To round off the working week, we are expecting data on US core durable goods orders and personal consumption expenditures on Friday, May 26.

GBP/USD: BoE Hints at a Dovish Turn

The plunge on May 11 and 12 resulted in GBP/USD being unable to maintain its position above the strong 1.2500 support level. On the past week of May 18, the pair reached the next, no less significant, support level, but couldn't break through it. After several attempts to drop below 1.2391, the pair reversed and headed north, ending the week at 1.2445.

The economy of the United Kingdom currently, to put it mildly, doesn't look good. Inflation is still measured in double digits. And while general inflation slowed down a bit over the month, dropping from 10.4% to 10.1%, food inflation, on the other hand, is soaring: it has already reached 19.1% and may soon cross into the third decade.

In terms of bankruptcies, the United Kingdom ranked third in the world in March, after Switzerland and Hong Kong. Moreover, the wave of compulsory liquidations could turn into a full-blown tsunami as the Electricity Bill Assistance Program comes to an end. And if the government doesn't extend it, many more businesses will be buried under new bills. The only slightly reassuring thing is that the industry's share of the country's GDP is less than 20%. The service sector, which consumes significantly less energy, contributes about 75% of GDP.

The pound could have been supported by further tightening of the Bank of England's (BoE) monetary policy. However, judging by the recent statements of its leaders, the cycle of rate hikes is coming to an end, with the last increase most likely in June. Deputy Governor of the BoE, Dave Ramsden, speaking before the UK Parliament's Treasury Select Committee, stated that while quantitative tightening (QT) does have some effect on the economy, it is quite insignificant. Another Deputy Governor, Ben Broadbent, announced a reduction in QT volumes to disrupt market liquidity. However, he was only talking about the volumes of bond sales, but overall, the direction of movement is evident.

Commerzbank strategists rightly believe that the BoE's indecision in combating inflation is putting heavy pressure on the pound. Their colleagues from the Internationale Nederlanden Groep (ING) talk about the possibility that if the Bank of England maintained its hawkish stance, GBP/USD could advance to the 1.3300 mark by the end of the year. But will it maintain this stance?

At present, talking about the near-term prospects for the pair, 35% of experts maintain a bullish outlook, 55% prefer bears, and the remaining 10% prefer to abstain from forecasts. Among oscillators on D1, 75% recommend selling (20% are in the oversold zone), 10% are set to buy and 15% are painted in neutral gray. Trend indicators, as a week ago, have a 50% to 50% ratio of forces between red and green. Support levels and zones for the pair are 1.2390-1.2420, 1.2330, 1.2275, 1.2200, 1.2145, 1.2075-1.2085, 1.2000-1,2025, 1.1960, 1.1900-1.1920, 1.1800-1.1840. When the pair moves north, it will meet resistance at the levels of 1.2480, 1.2510, 1.2540, 1.2570, 1.2610-1.2635, 1.2675-1.2700, 1.2820 and 1.2940.

Key events for the coming week in the calendar include Tuesday, May 23, when preliminary business activity (PMI) data will arrive from various sectors of the UK economy. The next day will reveal the value of one of the main indicators of inflation levels, the Consumer Price Index (CPI) in the country, followed by two speeches by the Bank of England's head, Andrew Bailey. Finally, the volume of retail sales in the UK will be disclosed on Friday, May 26.

USD/JPY: The Yen Gets Knocked Down

In April, the yen was the worst currency in the DXY basket. On ultra-dovish statements from the new Bank of Japan (BoJ) Governor Kazuo Ueda, USD/JPY soared to a height of 137.77 by May 2. After that, the banking crisis in the United States came to the aid of the yen, playing the role of a safe haven, and the pair turned downwards. But not for long…

Ueda once again struck at the national currency, commenting on Japanese inflation data. He stated that "the current inflation increase is due to external factors and rising costs, not a strengthening of demand", that "inflation in Japan is likely to slow to below 2% in the middle of the current fiscal year" and that "tightening monetary policy would harm the economy". The yen was also undermined by the GDP data for Japan published on May 17. If the country's economy fell in the third and fourth quarters of 2022, then in the first quarter of 2023, it showed an increase of 1.6% YoY.

So, if inflation falls even below 2.0% by the middle of the year, and GDP grows, why should the central bank change anything in its monetary policy and raise the interest rate? Let it stay at the previous negative level of -0.1%. That's exactly what the market participants thought, sending the yen into the abyss, and USD/JPY into flight. As a result, it updated a six-month high, reaching the height of 138.74 on May 18. The speech by the Fed Chair on the evening of Friday, May 19, slightly weakened the dollar, and the end of the week the pair met at the level of 137.93.

Of course, this flight would not have been possible without a strengthening dollar and U.S. Treasury bonds. It is known that there is traditionally a direct correlation between ten-year treasuries and USD/JPY. If the yield on securities goes up, so does the pair. And last week, against the backdrop of the hawkish mood of the Fed, the yield rose by 8%. Another piece of not very pleasant news for the Japanese currency is that SWIFT data showed that in April, the use of the dollar in cross-border payments increased from 41.74% to 42.71%, while the share of the yen, on the contrary, fell from 4.78% to 3.51%.

Regarding the near-term prospects for USD/JPY, the votes of analysts are distributed as follows. At the moment, 35% of analysts vote for the strengthening of the Japanese currency. 45% of experts expect a continuation of the flight to the Moon, 20% remain neutral. Among the indicators on D1, the absolute advantage is on the side of the dollar: 100% of trend indicators and oscillators point north (although among the latter 20% signal the pair is overbought). The nearest support level is in the 137.30-137.50 zone, followed by levels and zones at 136.70, 135.95-136.30, 134.85-135.15, 134.40, 133.60, 132.80-133.00, 132.00, 131.25, 130.50-130.60, 129.65, 128.00-128.15 and 127.20. The nearest resistance is 138.30-138.75, then the bulls will need to overcome barriers at levels 139.05, 139.60, 140.60, 142.25, 143.50 and 144.90-145.10.

There is no significant economic information related to the Japanese economy expected to be released in the upcoming week.

CRYPTOCURRENCIES: Bitcoin Has No Intention of Retreating

Bitcoin has been under pressure from sellers for the ninth consecutive week. However, despite the difficulty, it manages to hold on, relying on strong support in the $26,500 zone, preventing it from falling to $25,000 and lower. The bearish attack attempt on Friday, May 12, was unsuccessful: after dropping to $25,800, BTC/USD reversed course and reached a local high of $27,656 on May 15. According to some experts, investors seem willing to buy. However, there are no triggers for a bullish impulse. Market participants are focused on the prospects of a US debt default on June 1, which is causing them to refrain from any significant activity. At the same time, there is an atypical situation where both the Dollar Index (DXY) and stock indices are rising simultaneously. This preservation of investor risk appetite undoubtedly provided support to the cryptocurrency market.

According to a survey conducted by Bloomberg, in the event of a default, 7.8% of professional investors and 11.3% of retail investors will choose the first cryptocurrency as a safe haven, while 7.8% and 10.2% will rely on the US dollar, respectively.

Gold remains in the first place on the list of safe-haven assets. Even though the price of the precious metal is currently near its historical high ($2,000 per ounce), it was chosen by about half of the surveyed investors from both categories. The Bloomberg report highlights the existing deficit of alternative assets to hedge against gold.

US Treasury bills became the second most popular asset (purchased by 14-15% of respondents). Bloomberg journalists see some irony in this, as these debt instruments may potentially default. Bitcoin comes in third place, slightly behind the dollar, followed by the Japanese yen and the Swiss franc.

The debates in the US Congress regarding the debt ceiling were relatively lacklustre last week. Influencers' statements on the ceiling (and the "bottom") for bitcoin were equally sluggish and uncertain. For example, venture billionaire Chamath Palihapitiya stated that, on one hand, the devaluation of the dollar certainly stimulates the US economy, and the dominant position of the dollar in the global economy remains undisputed. However, on the other hand, he believes that in the long term, the US government is likely to face currency devaluation, and therefore, it is advisable to invest in risky assets such as stocks and cryptocurrencies.

Paul Tudor Jones, the head of hedge fund Tudor Investment Corporation, who has always been a proponent of investing in bitcoin, has now stated that the leading cryptocurrency has become less attractive in the current regulatory and economic situation. He noted that bitcoin is currently facing real problems because the entire regulatory apparatus in the United States is against cryptocurrencies. Furthermore, the billionaire expects a decrease in inflation in the US, which makes hedging assets less appealing. Bitcoin is often perceived as an asset for protection against inflation.

Paul Tudor Jones himself continues to hold a small amount of bitcoin and has no intention of selling the cryptocurrency even in the distant future. However, it appears that he has abandoned his previous plans to invest up to 5% of his wealth in BTC. Perhaps he has decided to wait out these uncertain times.

Mark Yusko, the founder and CEO of cryptocurrency hedge fund Morgan Creek Digital, has reiterated his prediction of an inevitable bull rally in the digital asset market. He believes that the "crypto summer" is likely to begin in mid-June. According to him, bitcoin could already make a significant breakthrough as a technical reversal pattern is forming on the chart. "If you look at the chart [starting from May 2022], you'll see that it's a beautiful inverted head and shoulders pattern at the $27,000 level," Yusko writes. "It's a really interesting technical pattern. And you know, I think we need some good news to give it a boost." (Regarding the need for good news, one can only agree with Mark Yusko. However, if you look at the chart starting from March 17-18, 2023, the head and shoulders pattern would point in the opposite direction).

Glassnode, too, anticipates the arrival of the first summer month. "We are confident in our medium-term target of $35,000 as external pressures ease. The Federal Reserve will pause its interest rate hike in June [...] - optimal for upward movement [of bitcoin] throughout the summer. The dollar index has crossed below a significant moving average - explosive movements are ahead," analysts from the agency explain.

Even though summer is approaching, it has not yet arrived. As of the evening of Friday, May 19, BTC/USD is currently trading at $26,850. The total market capitalization of the crypto market stands at $1.126 trillion ($1.108 trillion a week ago). The Crypto Fear & Greed Index has remained relatively unchanged over the past seven days and is in the Neutral zone at 48 points (49 points a week ago).

And to conclude the review, in order to liven up the tranquil state of the crypto market, let's discuss a sensation. Debates have ignited online regarding the first purchase made with BTC. It turns out that the legendary pizza may not have been the actual first purchase. It has been discovered that in 2010, a user named Sabunir attempted to sell a JPEG image for 500 bitcoins, which was worth about $1 at the time. As evidence, a screenshot indicating the date of January 24, 2010, has been presented, which is four months prior to Laszlo Hanyecz's famous pizza purchase of 10,000 BTC. It is also claimed that a user named Satoshi Nakamoto even attempted to participate in the buying/selling process.

However, doubts remained as to whether it was merely an attempted sale or if the transaction actually took place. To dispel the doubt, Matt Lohstroh, co-founder of Gige Energy, conducted his own investigation. According to the obtained on-chain data, on January 24, 2010, 500 BTC (equivalent to approximately $13.3 million at the current exchange rate) were indeed received in Sabunir's wallet. This means that the transaction did take place, and therefore, this image is indeed the world's first item purchased with BTC.

So now, instead of celebrating the annual Pizza Day on May 22, will crypto enthusiasts have to mark January 24 as the Day of the JPEG Image? But what about the "Bitcoin Pizza" pizzeria owned by Morgan Creek co-founder Anthony Pompliano? It seems that "JPEG Pizza" doesn't sound quite as appetizing.

NordFX Analytical Group

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

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Forex and Cryptocurrency Forecast for May 29 – June 2, 2023

EUR/USD: Dollar Awaits U.S. Bankruptcy

The dollar has been rising since May 4. Last week, on May 26, the DXY Index reached 104.34. It hasn't been this high since mid-March 2023. What is driving the U.S. currency up and, consequently, pushing the EUR/USD pair down? According to analysts at Commerzbank, "the absolute calmness in the options market suggests that the driving force behind the EUR/USD exchange rate is monetary policy considerations rather than ongoing U.S. debt ceiling negotiations." It is worth noting that the probability of a rate hike at the June 14 FOMC (Federal Open Market Committee) meeting increased throughout May. At the beginning of the month, the likelihood of a rate increase was close to 0%, but by the end of the month, it reached 50%. It turns out that the U.S. economy is holding up very well compared to other economies, and the deterioration in lending has not been as severe or rapid as initially feared.

Of course, 50% is far from 100%. Moreover, the FOMC published the minutes of its latest meeting on Wednesday, May 24, and the key phrase regarding the possibility of additional tightening of monetary policy was absent. The document also revealed divergent opinions among committee members regarding further rate hikes. However, despite this, the flight to safety in anticipation of a potential U.S. default continued to support the dollar.

The United States government has been living with a debt that has already exceeded $31 trillion. If Congress does not raise its permissible limit by June 1, the U.S. will declare default. Treasury Secretary Janet Yellen has already warned about this multiple times. However, the actual date of bankruptcy may vary slightly from the "X Day" on June 1. For example, Deutsche Bank points to the end of July, while Morgan Stanley mentions either June 7-14 or July 21-28, and Goldman Sachs even suggests the end of September.

The authors of the British publication The Economist are alarming readers, stating that U.S. bankruptcy will cause a collapse in global stock markets and sow panic in the global economy. According to the estimates of the White House Council of Economic Advisers, the securities market will plummet by 45% in the first months of the crisis. Moody's agency predicts a decline of about 20%, but unemployment will increase by 5%.

As for politicians, discussions about extending the debt ceiling continue. On Wednesday, May 24th, Kevin McCarthy, the Speaker of the United States House of Representatives, noted that there is still work to be done to reach an agreement. However, he added that the country will not declare default. President Joe Biden also expressed confidence in reaching a deal with Republicans. An agreement is in the interests of both parties, as next year is an election year in the United States.

David Malpass, the President of the World Bank, stated in an interview with CNN that he does not expect a default and explained that such situations occur every few years. (For reference, the U.S. debt ceiling has existed since 1917 and has been raised 78 times since 1960).

As mentioned earlier, statistics indicate that the U.S. economy is feeling relatively confident. The GDP estimate for Q1 was revised upward from 1.1% to 1.3%. At the same time, the number of initial unemployment claims, forecasted at 250K, actually decreased to 229K. Durable goods orders increased by 1.1%. This figure followed a growth of 3.3% in March and exceeded market expectations, which anticipated a 1.0% decrease. Finally, the April National Activity Index from the Chicago Fed rose from -0.37 to +0.07.

Investment bank Goldman Sachs predicts further strengthening of the dollar due to the lack of an attractive alternative among other currencies. According to the bank's experts, there is currently no serious contender for the reserve status of the dollar in the world, including the euro. Unlike the American economy, the Eurozone does not please investors. If the preliminary estimate of Germany's GDP for Q1 was -0.1%, the reality showed a decline to -0.3%. Additionally, the Purchasing Managers' Index (PMI) for Germany's manufacturing sector declined (42.9 compared to the previous value of 44.5 and a forecast of 45.0), as did the country's business climate index (IFO) (91.7 compared to the previous value of 93.4 and a forecast of 93.0).

Starting the week at 1.0805, on May 25, EUR/USD reached a local low of 1.0701, and by the end of the five-day workweek (Friday evening, May 26), it is trading around 1.0725. As for the near-term prospects, at the moment, the majority of analysts (55%) anticipate a correction to the upside. 20% expect further strengthening of the dollar, while the remaining 25% hold a neutral position. Among the indicators on the daily chart (D1), there is a significant advantage for the dollar: 100% of oscillators are coloured in red (although a third of them signal oversold conditions for the pair), and among the trend indicators, 85% favour the red side (15% are on the green side). The nearest support for the pair is located around 1.0680-1.0710, followed by zones and levels at 1.0620 and 1.0490-1.0525. Bulls will encounter resistance around 1.0800-1.0835, followed by 1.0865, 1.0895-1.0925, 1.0985, 1.1045, 1.1090-1.1110, 1.1230, 1.1280, and 1.1355-1.1390.

The upcoming week features several notable events. The US Consumer Confidence Index will be published on Tuesday, May 30. The following day will bring unemployment and Consumer Price Index (CPI) data, while on Thursday, Germany's Purchasing Managers' Index (PMI) for business activity will be released. On June 1st, the preliminary Consumer Price Index (CPI) for the Eurozone and the minutes of the European Central Bank's latest Monetary Policy Committee meeting will be published. Additionally, a significant number of US economic data will be released, including labour market data and the Institute for Supply Management's (ISM) PMI for the US manufacturing sector. As is customary, the first Friday of summer will see another round of US labour market statistics, including the unemployment rate and the number of non-farm payroll jobs created in the country. Traders should also note that Monday, May 29, is Memorial Day in the United States, and there will be no trading.

GBP/USD: One Step Forward, One Step Back

Indeed, GBP/USD has been moving with one step forward and one step back recently. Although it appears to be heading downwards, a closer look at the chart reveals that it ended the week on Friday, May 26, at the same level it had reached in April and a week ago. On one hand, the strengthening dollar is pushing the pair down. On the other hand, hopes that inflation will prompt the Bank of England (BoE) to continue raising interest rates prevent it from plummeting into the abyss.

Fresh consumer inflation (CPI) data in the UK turned out to be significantly higher than expected. The April release showed a rise in consumer prices by 1.2% compared to the previous month's 0.8%. The core CPI reached multi-year highs, reaching 6.8% YoY instead of the forecasted 6.2%. Although the annual inflation rate slowed from 10.1% to 8.7%, it still exceeded the projected 8.2%. While it is the lowest level in 13 months, it remains well above the target level.

In response to this data, Bank of England Monetary Policy Committee member Jonathan Haskel stated that he would not comment on market prices but could not rule out further rate hikes. Another important figure, Chancellor of the Exchequer Jeremy Hunt, also expressed support for tightening monetary policy, even if it harms the economy. In an interview with Sky News, he stated that "it's not a trade-off between tackling inflation and recession; ultimately, the only route to sustainable growth is reducing inflation." Many analysts believe that if the Bank of England indeed raises rates by another 1.0%, the UK economy will fall into a recession, putting significant pressure on the pound.

At the time of writing, GBP/USD is trading around 1.2350. The current analyst consensus is nearly neutral, with 40% bullish, 30% bearish, and another 30% refraining from commenting. Among the oscillators on the D1 timeframe, 100% recommend selling (20% indicate oversold conditions). Among the trend indicators, the ratio between red and green stands at 65% to 35%. In the event of a southward movement, the pair will encounter support levels and zones at 1.2300-1.2330, 1.2275, 1.2200, 1.2145, 1.2075-1.2085, 1.2000-1.2025, 1.1960, and 1.1900-1.1920. If the pair rises, it will face resistance levels at 1.2390, 1.2480, 1.2510, 1.2540, 1.2570, 1.2610-1.2635, 1.2675-1.2700, 1.2820, and 1.2940.

As for the upcoming events in the following week, traders can enjoy a day off on Monday, May 29, in both the UK and the US as it is a public holiday. However, Thursday, June 1, is worth noting as it will reveal the Manufacturing Purchasing Managers' Index (PMI) for the country's manufacturing sector.

USD/JPY: Yen Receives "Ticket to the Moon"

Вue to the ongoing ultra-accommodative policy of the Bank of Japan (BoJ) and similar statements from its new Governor Kadsuo Ueda, the yen was the weakest currency in the DXY basket in April. With a high probability, it will retain this title in May as well. Last week, USD/JPY continued its journey to the Moon. Starting at 137.93 on Monday, it reached above 140.70 on Friday evening, with a finish slightly lower in the 140.60 zone.

According to many analysts, the dovish stance of the Bank of Japan could continue undermining the Japanese currency and suggests that the path of least resistance for USD/JPY is upwards. This is supported by prospects of further interest rate hikes by the US dollar and new rising Treasury yields, increasing the interest rate differential between the US and Japan and encouraging a flow of funds from JPY to USD.

Regarding the near-term prospects of USD/JPY, analysts' opinions are divided as follows. Currently, 75% of them are hoping for at least a short-term strengthening of the Japanese currency and a correction to the south. Only 25% of experts vote for the continuation of the upward trajectory. Among the indicators on the daily chart, the US dollar has an absolute advantage, with 100% of trend indicators and 100% of oscillators pointing north (though 25% of the oscillators indicate overbought conditions for the pair). The nearest support level is located in the 139.85 zone, followed by levels and zones at 138.75-139.05, 137.50, 135.90-136.10, 134.85-135.15, 134.40, 133.60, 132.80-133.00, 132.00, 131.25, 130.50-130.60, and 129.65. The closest resistance is at 141.40, and then bulls will need to overcome obstacles at levels 142.20, 143.50, and 144.90-145.10. The October 2022 high of 151.95 is not far from there.

There is no significant economic information related to the Japanese economy expected for the upcoming week.

CRYPTOCURRIENCIES: Bitcoin Needs a Trigger

Bitcoin remains under pressure from sellers for the tenth consecutive week. However, despite the struggle, it manages to hold its ground in the strong support/resistance zone around $26,500. On Thursday, May 25, amid the strengthening of the dollar, bears launched another attack and pushed the BTC/USD pair down to the $25,860 level. A similar attack was observed on May 12 when the pair dropped to $25,799. But both attacks were repelled, and the storm did not occur.

Investors nostalgically recall the impressive start of the leading cryptocurrency in the first quarter of this year. However, since then, a period of calm and declining trading activity to three-year lows has set in. Some analysts believe that the current price fails to generate enthusiasm among both sellers and buyers. In this situation, investors are hesitant to spend money. According to the analytics agency Glassnode, long-term holders (over 155 days) have accumulated 14.5 million BTC coins. If we add the reserves of cryptocurrency exchanges and other aggregators to this figure, it will be even higher. Even short-term speculators have fallen into a state of hibernation. The market needs a trigger, which could be either decisions by the Federal Reserve regarding monetary policy or an announcement of a US government debt default.

There are two possible scenarios: either a default will be declared (which is unlikely), or it will not. In the first case, if a default occurs, investor confidence in the US dollar as a reserve currency will sharply decline, benefiting bitcoin as a safe haven asset. In the second case, if there is no default, it will become more challenging for cryptocurrencies. To replenish cash reserves, the US Treasury will issue a large number of bonds, causing their yields to rise, and investors will prefer to invest their money in these securities rather than BTC.

However, it is important to note that the announcement of a default could have a significant impact on the stablecoin market. It is worth remembering that Tether, the issuer of USDT, is one of the largest holders of US Treasury bills, surpassing countries like Thailand and Israel. The volume of these debt securities on Tether's balance sheet is $53 billion, or 64% of its own reserves. It is these reserves that support the liquidity of USDT. If a default occurs, then 1 stablecoin will be worth not $1 but only 36 cents. Alternatively, it is possible that it will simply cease to exist along with Tether.

Indeed, the situation is highly ambiguous. Furthermore, industry participants continue to be concerned about increasing regulatory pressure. It is worth noting that in 2023 alone, the US Securities and Exchange Commission (SEC) has filed complaints against cryptocurrency exchanges Bittrex, Coinbase, Kraken, Gemini, and Genesis. Additionally, the Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Binance and its CEO, Changpeng Zhao. According to Yassine Elmandjra, an analyst at ARK Invest, this situation discourages new players and has a negative impact on existing companies, prompting them to flee from the United States to more crypto-friendly countries such as the UAE, South Korea, Australia, and Switzerland. (According to Coin Metrics, bitcoin trading volume in the US has declined by 75% over the past two months, from $20 million per day in March to $4 million in May).

Michael Saylor, the CEO of MicroStrategy, believes that active regulatory intervention will actually benefit bitcoin because it will create problems for its competitors. Saylor pointed out the increased investor interest shifting towards bitcoin from other tokens. According to him, BTC's competitors naturally fall away after more persistent regulation of the industry. This became particularly noticeable after SEC Chairman Gary Gensler stated that "all but bitcoin" fall under securities laws. Saylor believes that "crypto tokens and crypto securities will be regulated, and perhaps cease to exist. Bitcoin is the only commodity that the SEC is not going to regulate. Bitcoin is the safest network and the safest asset." He expects a continuous capital outflow from the rest of the crypto space into Bitcoin, and he already sees the beginning of a new bullish cycle. (As of April 4, 2023, MicroStrategy, along with its subsidiaries, held approximately 140,000 BTC, making it one of the largest holders of the cryptocurrency. The company paid a total of $4.17 billion for them. Thus, the average purchase price was $29,803 per bitcoin).

The opposite opinion is held by Bloomberg analyst Mike McGlone, who expects a collapse in the bitcoin price to the support level of $7,366. This forecast is based on the descending movement of the 52-week moving average (MA) on the BTC chart. McGlone notes that before the powerful pump in 2020, this line, on the contrary, was moving upwards. According to the expert, the negative trend will continue, and the cryptocurrency will face challenging times. (It should be noted that not long ago, at the end of last year, McGlone was looking in a completely different direction. At that time, according to his version, bitcoin was supposed to rise to $100,000).

In the absence of fundamental triggers, experts are paying more attention to technical analysis. For example, a trader known as Dave the Wave, who has made several accurate forecasts, believes that currently Bitcoin is consolidating in the "buying zone" of the logarithmic growth curve. This curve evaluates long-term highs and lows of the leading cryptocurrency throughout its lifecycle, ignoring short-term volatility. The analyst notes that based on the current market structure, a breakout signal from the consolidation channel would be a rise above $32,000. Therefore, according to Dave the Wave, any purchase below $31,000 is still considered an excellent deal. Based on his conservative estimate, the target price for bitcoin by the end of the year should be around $40,000.

Michael van de Poppe, an analyst, trader, and founder of the consulting platform EightGlobal, informed his Twitter followers that a successful retest of support at the $26,280 level (MA200) could mark the completion of the correction and consolidation for the leading cryptocurrency. Therefore, it is advisable to buy bitcoins at such a level. "If we look at past periods, the retest of the 200-day moving average has always been an excellent time to accumulate bitcoins. Over the past six months, Bitcoin has spent a long time below this indicator, making it [BTC] undervalued. The next week will be crucial - a quick retest and bounce upward will signify the end of the bitcoin correction," explains the crypto analyst. Michael van de Poppe is confident that for bitcoin to confirm future growth, it needs to firmly establish itself above $27,000.

The well-known saying goes, "Different people, different opinions." In this case, it can be paraphrased as "Different analysts, different forecasts." The opinions of representatives from the crypto community, surveyed by the online publication BeInCrypto, also turned out to be quite contradictory. For example, the forecast of popular blogger CryptoKaleo does not exclude the possibility of bitcoin reaching a new local high. Signals that indicate a bet on the coin's growth were also noticed by a trader known as DaanCrypto. He paid attention to the bounce of BTC from the weekly MA200 moving average. From a technical analysis perspective, such behavior of the cryptocurrency may indicate the strength of buyers.

On the other hand, crypto blogger Nebraskangooner sees signals for a decline on the chart. His forecast does not rule out a drop in the cryptocurrency to $25,500. According to the blogger, this is indicated by the coin's exit from the symmetrical triangle formation on the chart. The negative Bitcoin forecast was supported by the usually optimistic analyst Inmortal, who pointed to a target level of $22,000. However, Inmortal is confident that the cryptocurrency will be able to recover its position promptly.

As of the evening of Friday, May 26, BTC/USD is trading at $26,755. The total market capitalization of the crypto market stands at $1.123 trillion ($1.126 trillion a week ago). The Crypto Fear & Greed Index has remained relatively unchanged over the past seven days and is currently in the Neutral zone at a level of 49 (48 points a week ago).

NordFX Analytical Group

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

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

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Crypto Traders Vote for NordFX Once Again

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

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

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

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

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

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

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Forex and Cryptocurrencies Forecast for June 05 - 09, 2023

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

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

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

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

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

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

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

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

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

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

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

GBP/USD: UK Inflation Propels Pound Upwards

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

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

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

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

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

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

USD/JPY: The Pair Seeks a Return to Earth

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

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

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

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

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

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

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

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

CRYPTOCURRENCIES: A Moderately Positive Forecast for Bitcoin

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

NordFX Analytical Group

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

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CryptoNews of the Week

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

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

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

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

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

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

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

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

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

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

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

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

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