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[Stan NordFX]

CryptoNews of the Week

- North Korean hackers stole a record amount in cryptocurrencies in 2022 and targeted the networks of foreign aerospace and defense companies. This is reported by Reuters with reference to a UN report. Cybersecurity specialists estimate the damage at more than $1 billion. At the same time, Chainalysis analysts believe that the attacks have brought the DPRK about $1.7 billion in cryptocurrencies over the past year.
Most of the attacks were carried out by cybercriminals controlled by North Korea's Main Intelligence Bureau. These include Kimsuky, Lazarus Group and Andariel. They distributed malware in various ways, including phishing. “Initial contacts with individuals were made through LinkedIn, and once a level of trust with the targets was established, the malware was delivered via WhatsApp,” the UN notes, adding that the methods of hackers have become more sophisticated, making it more difficult to trace the stolen assets.

- Morgan Creek investment company CEO Mark W. Yusko, said in an interview with Cointelegraph that the next bull market could start as early as Q2 2023. This will be facilitated by favorable macroeconomic conditions and expectations of bitcoin halving.
According to the top manager, the US Federal Reserve is unlikely to cut the key rate in the near future. However, even a slowdown or pause in this process will be perceived as a positive signal for risky assets, which include cryptocurrencies.
The CEO of Morgan Creek indicated the expectations of the next bitcoin halving, which is expected to take place around April 19-21, 2024, as an additional reason for the bull market He believes that the recovery of the digital asset market usually begins nine months before this event, that is, it is the end of summer 2023 this time.

- Cathy Wood, the head of ARK Invest, still considers the first cryptocurrency the best form of protection against financial losses and an insurance policy for developing countries. “We're seeing hyperinflation around the world as fiat currencies crash. All segments of the population need a fallback, an insurance policy like bitcoin,” she said in an interview with Yahoo Finance.
According to Cathy Wood, all segments of the population, both the poor and the wealthy, will benefit from the use of digital gold. As for the latter, she pointed to bitcoin as a hedge against capital forfeiture in countries like China or Russia.

- MicroStrategy, a developer of analytical software and one of the largest crypto investors, recorded a balance sheet loss for 2022 in the amount of $1.3 billion. This is due to its long-term investment in bitcoin. (As of December 31, 2022, MicroStrategy held a total of 132,500 BTC worth $1.84 billion).
At the same time, the company's management states that it does not plan to stop trading the digital asset. According to Michael Saylor, MicroStrategy co-founder Michael Saylor, it has “managed to surpass bitcoin as an index” since the company first announced its purchase of BTC in August 2020: its shares have risen by 117% during this time, while the value of bitcoin has increased by 98%.

- Commenting on the collapse of Alameda and FTX, Michael Saylor said that he sees this as a kind of manifestation of Darwin's theory: weak and bad players left the market, and this pushed the industry forward in the long run. At the same time, according to the co-founder of MicroStrategy, cryptocurrencies need a clear regulatory framework for companies to comply with certain standards and protect customers. “What is really needed is supervision. Clear guidance from Congress is needed for the industry to have its own Goldman Sachs, Morgan Stanley and BlackRock. We need clear rules of conduct from the SEC (Securities and Exchange Commission) of the United States.”

- David Marcus, former head of Meta's blockchain division and former PayPal president, suggested that crypto winter will only end by 2025, when the market recovers from last year's turmoil. He believes that the time will soon pass when you can create a token out of thin air and earn millions of dollars from it. Much more value will be given to decentralized applications that have practical value for the real world. Marcus expects big breakthroughs in payments, asset tokenization, and decentralized finance (DeFi). However, the specialist doubts that the legislature will be able to develop rules for regulating cryptocurrencies in the near future, therefore, crypto companies will continue to operate in a "vacuum" in 2023, at their own peril and risk.

- Charlie Munger, an associate of Warren Buffett, vice president of the Berkshire Hathaway holding company, called on the US authorities to destroy bitcoin, which the billionaire compares investing in to gambling. He said in an interview with the Wall Street Journal that the cryptocurrency industry is undermining the stability of the global financial sector. And that BTC cannot be considered an asset class as it has no value.
Munger has been expressing this point of view over the past few years. And now he calls on the US authorities to deal a devastating blow to the crypto market. In his opinion, it is necessary to push it into the strictest regulatory framework, as a result of which the industry will simply not withstand the pressure and die.

- Crypto trader and investor Tone Vays stated that bitcoin “has risen very fast and very high.” BTC rose from a low of $16,272 in November 2022 to $24,229 in early February 2023 and is now facing major resistance as it approaches the $25,000 level. The specialist believes that BTC will eventually break through the resistance zone, but the asset probably “should take a break” at the moment. Weiss clarified that he expects either consolidation of the rate in a narrow range, or a small pullback.
Many experts are also keeping a close eye on the $25,000 level. For example, analyst Benjamin Cowen believes that bitcoin is on the verge of a potential trend change that could lead to a rise in quotes, as it did in 2019. The legendary trader Peter Brandt predicted earlier that the exit from the “double bottom support” technical analysis pattern would lead the coin to rise above $25,000.

- According to statistics, the media forecast of crypto community members accurately predicted the value of bitcoin by the end of each month, over the past six months with a probability of up to 75%. Finbold experts note that the forecasts obtained from a survey of more than 15 thousand traders, and the predictions of machine learning algorithms, are seriously different at the moment. Real people expect BTC quotes to fall to $20,250 by February 28, 2023, while artificial intelligence points to $24,342.

- Swiss Rehabilitation Center The Balance has offered a course of treatment for addiction to crypto trading. According to some reports, about 1% of crypto traders have such a serious pathological addiction. The course is designed for a four-week stay in the center itself or in its branches in Mallorca, London or Zurich. The cost of treatment exceeds $75,000. Anna Lembke, professor of psychiatry at Stanford University, said the course is similar to treating a gambling addiction. At the same time, she called such a high cost of treatment unjustified.


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

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[Stan NordFX]

Forex and Cryptocurrency Forecast for February 13 - 17, 2023​

EUR/USD: The Fed's Doves Have Turned into Hawks Again

After the US Federal Reserve and ECB meetings, the DXY Dollar Index fell to a new 9-month low of 100.80 on February 02. This happened after the dovish hints of the head of the Fed, Jerome Powell, who, during a press conference following the meeting, admitted for the first time that "the deflationary process has begun." The market has decided that this is the beginning of the end, and that the end of the bullish wave is near.

But hints aren't specific promises. Especially from the heads of the US Central Bank. And now, speaking at the Washington Economic Club, Jerome Powell is saying that interest rates must continue to rise in order to control inflation. And he makes a hawkish hint that the peak rates may be higher than the markets expect. And even higher than the Fed's own forecasts, announced in December.

Powell's hawkish attitude was supported by New York Federal Reserve Bank (FRB) President John Williams, Fed Board of Governors Christopher Waller, and Minneapolis Fed Chairman Neil Kashkari. The latter said that the Fed still has a lot of work to do to curb inflation. This could mean that the interest rate could be raised from the current 4.75% all the way up to 5.40% or higher and stay at that high for quite some time.

This time, the market decided that it was not worth waiting for an early easing of monetary policy, and the dollar began to gain strength. The DXY index reached a five-week high at 103.96 points on Tuesday, February 07. However, it could not rise higher, as it met several fairly strong resistance levels at once: 1) the 50-day SMA, 2) the former trend line from 2021, 3) the upper limit of the descending channel, which began in November 2022, as well as horizontal resistance in the 104.00 zone.

The past five days were stingy with macro statistics, but rich in statements by both American and European officials (the EU leaders summit took place on February 09-10). The next week promises to be richer in economic data. January data on US consumer inflation (CPI) will be published on Tuesday, February 14. The forecast assumes that prices rose by 0.4-0.5% in January (0.1% in December). At the same time, annual data may turn out to be lower than the previous value (6.2% vs. 6.5%). If the CPI shows that inflation is stable, this will confirm the latest hawkish statements by Fed officials and support the dollar. (Scotiabank economists believe that EUR/USD may fall to 1.0500-1.0600). If there is a steady decline in inflation, the US currency will be under serious pressure.

Having reached a high of 1.1032 on February 02 (the highest since April 2022), EUR/USD reversed and ended the week at 1.0679. 35% of analysts expect a further strengthening of the dollar at the time of writing the review (on the evening of February 10), 20% expect the euro to strengthen, and the remaining 45% have taken a neutral position. The picture is different among the indicators on D1. 85% of the oscillators are colored red (a third are in the oversold zone), while the remaining 15% are green. Among trend indicators, 40% recommend buying, 60% - selling. The nearest support for the pair is in the zone 1.0670, then there are levels and zones 1.0620, 1.0560, 1.0500, 1.0440 and 1.0370-1.0400. The bulls will meet resistance in the area of 1.0700-1.0710, 1.0745-1.0760, 1.0800, 1.0865, 1.0895-1.0925, 1.0985-1.1030, 1.1110, after which they will try to gain a foothold in the 1.1260-1.1360 echelon.

Among the events of the upcoming week, in addition to the release of the inflation data mentioned above, we can note the publication of preliminary data on Eurozone GDP on Tuesday, February 14. (And of course, we must not forget that February 14 is St. Valentine's Day, the most romantic holiday celebrated in most countries of the world. People confess their love to each other on this day, for more than one and a half thousand years). Retail sales in the US will become known on Wednesday, February 15, and data on US unemployment will come on Thursday, February 16. The January US Producer Price Index (PPI) will also be released on February 16.

GBP/USD: Coming Week: Volatility Guaranteed

The pound tried to win back part of its losses last week. GBP/USD, having rebounded on February 07 from the level of 1.1961 (the lowest level since January 06), reached a weekly high of 1.2193 on February 09. Then, the pound began to gradually retreat against the dollar along with other currencies included in the DXY Index. As a result, GBP/USD ended the week at 1.2055, that is, almost where it started (1.2050).

The news background still looks vague and uncertain. Economic problems continue to put pressure on the British currency. Recall that in the fight against inflation, the Bank of England (BoE) raised the key rate by 50 bp on February 2 to 4.00%, but at the same time softened its message noticeably. This pushed the British currency down from its highest values since mid-June 2022 (1.2450) by more than 250 points.

Market participants believe that the BoE may be afraid of further sharp rate hikes. It is another question how its growth will affect inflation. But it may well provoke a crisis in the economy and, above all, in the construction sector. January data on the index of business activity in the construction sector of the country were published on Monday, January 06, having shown a drop in this indicator from 48.8 to 48.4 points. The Office for National Statistics of the United Kingdom reported on Friday, February 10 that the entire economy of the country in December, with a forecast of minus -0.3%, actually shrank by -0.5% (there was an increase of +0.1% in November). GDP stagnated at 0% in Q4, after falling by -0.2% a quarter earlier. GDP fell from +1.9% to +0.4% in annual terms.

Against this background, the triumphant reports and optimistic forecasts from the UK Treasury Secretary Jeremy Hunt sounded somewhat strange. The high official said that "the UK was the fastest growing economy in the G7 last year and avoided a recession as well". This shows that "the economy has proven to be more resilient than many feared." And “if we stick to our plan to cut inflation by half this year,” continued Jeremy Hunt, “we can be sure that we will have some of the best growth prospects of any country in Europe.”

Unlike Mr. Hunt, Commerzbank strategists believe that uncertainty about future inflation in the UK remains high. The dynamics and values of the Consumer Price Index, which will be published on Wednesday, February 15, can bring some clarity. It is the CPI that is the key indicator that determines the future monetary policy of the Bank of England. Of course, data on the state of the labor market, which will be released the day before, on Tuesday, February 14, and on retail sales in the UK, which will become known on February 17, will also be important.

All these macroeconomic statistics are sure to cause increased volatility in GBP/USD. In the meantime, 40% of analysts expect further weakening of the pound, the same number prefer to refrain from forecasts and wait for the release of specific indicators. Only 20% of experts vote for the strengthening of the pound and the growth of the pair. Among the trend indicators on D1, the balance of power is 75% to 25% in favor of the reds. Among the oscillators, the red ones have a 100% advantage, however, 10% of them give signals that the pair is oversold. Support levels and zones for the pair are 1.2025, 1.1960, 1.1900, 1.1800-1.1840. When the pair moves north, it will face resistance at the levels 1.2085, 1.2145, 1.2185-1.2210, 1.2270, 1.2335, 1.2390-1.2400, 1.2430-1.2450, 1.2510, 1.2575-1.2610, 1.2700, 1.2750 and 1.2940.

USD/JPY: The Head of BOJ Is New, the Policy Is Old.

The Japanese yen, like its DXY counterparts, reacted both to the hawkish statements of the US Federal Reserve and to fluctuations in US Treasury yields last week. However, the biggest surge in volatility was the news that the Cabinet of Ministers intends to nominate 71-year-old Kazuo Ueda as the new governor of the Bank of Japan (BOJ).

This former professor at the University of Tokyo is a well-known monetary policy expert. He joined the Board of Governors of BOJ a quarter of a century ago, in April 1998 and remained there until April 2005. Ueda spoke out against the Central Bank's abandonment of the policy of zero rates in 2000, and the choice of his candidacy was probably due to the desire of the authorities to see a person at the head of the Bank of Japan who would not rush to curtail the ultra-soft monetary policy. This is confirmed by Ueda himself, who stated on February 10 that the current policy of the regulator is adequate, and that it is necessary to continue to adhere to it.

USD/JPY ended last week at 131.39, where it has been many times since December 20, 2022. According to the majority of analysts (55%), the yen may strengthen somewhat in the three-month period, but the range of targets here is quite large. Some believe that the Fed will finally return to the doves' camp, and then USD/JPY will be able to reach the 120.00 zone, while others consider the range of 127.00-128.00 to be the limit of the fall.

As for the short term, only 20% of experts vote for the pair to go down, 30% vote for its growth, and 50% have decided not to make any predictions at all. Among the oscillators on D1, 80% point north, 10% look south, and 10% point east. For trend indicators, 40% look north, and 60% look in the opposite direction. The nearest support level is located at 131.25 zone, followed by levels and zones 130.50, 129.70-130.00, 128.90-129.00, 128.50, 127.75-128.10, 127.00-127.25 and 125.00. Levels and resistance zones are 131.85-132.00, 132.80-133.00, 133.60, 134.40 and then 137.50.

Japan's preliminary GDP data will be released next week, on Tuesday, February 14. It is expected that the country's economy will grow +0.5% in Q4 2022 (down -+0.2% a quarter earlier). The data already published also look positive. Bank lending in January was higher than expected (+2.6%) and actually increased by +3.1% (+2.7% in December). The Eco Watchers Current Situation Index also increased, rising from 47.9 to 48.5 points by the end of January.

CRYPTOCURRENCIES: Should Bitcoin “Take a Break”?

Bitcoin's correlation with the stock market (S&P500, Dow Jones, Nasdaq) and other risky assets is nothing new. But digital gold unexpectedly showed not an inverse, but a direct correlation with the US currency last week. This is clearly seen if we compare the BTC/USD and EUR/USD charts. Both assets were getting heavier or lighter, at the same time. Drawing an analogy with a balance scale, we observed a physical paradox where both bowls go up and fall down at the same time. It was only at the end of the working week that the laws of physics began to work again: the dollar strengthened a little, bitcoin weakened.

The upward momentum that raised the main cryptocurrency from a low of $16,272 in November 2022 to $24,244 in the first days of February 2023 has gradually faded away. BTC/USD has returned to where it was in the second half of January, and the result of the last three and a half weeks can be considered close to zero.

As noted by well-known trader and investor Tone Vays, bitcoin has “grown very fast and very high” and is now facing serious resistance as it approaches the $25,000 level. The specialist believes that the asset will eventually break through this resistance zone, but it probably "should take a break now." Vays clarified that he expects either the consolidation of the rate in a narrow range, or a small pullback.

This expert is not alone in his assessment. According to statistics, the media forecast of crypto community members accurately predicted the value of bitcoin by the end of each month, over the past six months with a probability of up to 75%. Finbold experts released the results of the latest survey of more than 15 thousand traders and predictions of machine learning algorithms. Real people expect BTC quotes to fall to $20,250 by February 28, 2023, artificial intelligence points to $24,342.

Such a small (by bitcoin standards) range of fluctuations corresponds quite accurately to Vays’ prediction of a “breather”. The market situation is quite uncertain at the moment, and while short-term holders have returned to the profitable zone, long-term holders (holding for six months) still remain in the red zone. It took 291 days for all the metrics to turn green in the last bearish phase, only 268 have passed now.

Most investors went into the red at the end of last year. Thus, MicroStrategy recorded a balance sheet (unrealized) loss of $1.3 billion for 2022, due to its long-term investments in bitcoin. (As of December 31, 2022, MicroStrategy held a total of 132,500 BTC worth $1.84 billion). At the same time, the company's management does not plan to stop operations with a digital asset. Commenting on last year's turmoil, MicroStrategy co-founder Michael Saylor said he sees this as a kind of Darwinian theory: weak and bad players have left the market, and this should push the industry forward in the long run. At the same time, according to Saylor, cryptocurrencies need a clear regulatory framework for companies to comply with certain standards and protect customers. “What is really needed is supervision. Clear guidance from Congress is needed for the industry to have its own Goldman Sachs, Morgan Stanley and BlackRock. We need clear rules of conduct from the SEC (Securities and Exchange Commission) of the United States.”

However, David Marcus, former Meta blockchain executive and former PayPal president, for example, doubts that legislatures will be able to develop such rules anytime soon. Based on this, he believes that crypto companies will continue to operate in a "vacuum" in 2023, at their own peril and risk, and the crypto winter will end only by 2025, when the market recovers from last year's shocks.

Surprisingly, not only supporters of cryptocurrencies, but also their fierce opponents advocate increased regulatory pressure. Thus, Charlie Munger, an associate of Warren Buffett, vice president of the Berkshire Hathaway holding company, called on the US authorities to destroy bitcoin, which the billionaire compares investing in to gambling. He said in an interview with the Wall Street Journal that the cryptocurrency industry is undermining the stability of the global financial sector. And that BTC cannot be considered an asset class as it has no value.

Munger has been expressing this point of view over the past few years. And now he calls on the US authorities to deal a devastating blow to the crypto market. In his opinion, it is necessary to drive it into such a strict framework of regulation that will finally strangle this industry.

Note that Charlie Munger is 99 years old, which, perhaps, explains his radical conservatism. The younger generation of businessmen is more loyal to digital innovations. Suffice it to recall the results of a survey conducted by the financial consulting company deVere Group. They showed that despite the challenges of 2022, 82% of millionaires were considering investing in digital assets. According to Nigel Green, CEO of the deVere Group, the momentum for such interest will increase as conditions in the traditional financial system change.

Morgan Creek investment company CEO Mark W. Yusko believes that favorable macroeconomic conditions will lead to the fact that the next bull market could begin as early as Q2 2023. According to the top manager, the US Federal Reserve is unlikely to cut the key rate in the near future. However, even a slowdown or pause in this process will be perceived as a positive signal for risky assets, which include cryptocurrencies. The CEO of Morgan Creek pointed to the expectations of the next bitcoin halving, which will tentatively take place on April 19-21, 2024, as an additional reason for the growth of the crypto market. According to Yusko's calculations, the recovery of the digital asset market usually begins nine months before this event, which means that the rally will start at the end of the summer of 2023 this time.

Cathie Wood, the head of ARK Invest, is even more optimistic about the future, she still considers the first cryptocurrency to be the best form of protection against financial losses. In her opinion, all segments of the population, both the poor and the wealthy, will benefit from the use of digital gold. In confirmation of the words of their manager, Ark Invest analysts make just a cosmic forecast. Their pessimistic scenario assumes that the BTC price will rise to $259,000, and the optimistic one - up to $1.5 million per coin. (we wonder what Charlie Munger would say about this?)

At the time of writing this review (Friday evening, February 10), BTC/USD is trading in the $21,600 zone. The total capitalization of the crypto market is $1.010 trillion ($1.082 trillion a week ago). The Crypto Fear & Greed Index fell from 60 to 48 points over the week, and ended up in the Neutral zone, almost in the very center of the scale. The situation is uncertain, and perhaps traders, like bitcoin, “should take a break”?


NordFX Analytical Group


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

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

https://nordfx.com/

 

[Stan NordFX]

CryptoNews of the Week

- Cryptocurrency entrepreneurs should consider moving to a country with favorable regulation of the bitcoin industry. This was stated by Binance CEO Changpeng Zhao. He considers Dubai (UAE), Bahrain and France to be such jurisdictions. Zhao added that newcomers to the industry will definitely need legal advice in order to "not cross any of the red lines" set by regulators.
This advice came against the background of tightening regulation of the industry by the US authorities. In particular, we are talking about an investigation launched by the New York State Department of Financial Services against infrastructure company Paxos. The regulator later ordered the firm to stop issuing the Binance USD (BUSD) stablecoin. The SEC (US Securities and Exchange Commission) also announced its readiness to sue Paxos.
The CEO of Binance was supported by Uniswap founder Hayden Adams. “It is a shame to watch the US efforts in the cryptosphere. Innovative companies get an additional incentive to go abroad. It's like if the government banned the development of the Internet 30 years ago,” he wrote.

- According to Politico, Senator Elizabeth Warren has begun building a coalition against cryptocurrencies and is actively recruiting conservative Republicans in the US Senate. By doing so, she wants to support her bills, which could have serious consequences for the crypto industry, and which imply tighter restrictions in the fight against money laundering, including additional requirements for verifying the identity of consumers. Warren positions herself as a leading digital asset legislator and enjoys the backing of the banking lobby.
The US Department of the Treasury is currently actively monitoring cases of illegal funding using cryptocurrencies. The Warren bill will extend these obligations to other agencies and entities, including service providers in the digital asset segment.

- Ethereum co-founder Vitalik Buterin sent 99 ETH (~$155,000 at the time of writing) to Ahbap, a non-profit organization that raises money to help earthquake victims in Turkey and Syria. According to Ahbap's official website, the organization has already raised over $4.2 million in cryptocurrencies.
According to the latest data, the disaster has claimed the lives of more than 25,000 people. More than 80,000 people have been injured in Turkey alone. The series of earthquakes has become the largest since 2010 in terms of the number of victims.

- Investor and star of the TV show Shark Tank, Kevin O'Leary, said on The Wolf of All Streets podcast that most of the 10,000 digital assets are worthless. “They will eventually fall to zero due to the lack of volatility and [trading] volume. They are not needed,” he announced his verdict. O'Leary also talked about losing all of his crypto investments after the FTX crash in November 2022. However, after that, he has already opened new positions in bitcoin, ethereum and 5 other assets (previously his portfolio included 32 positions).

- The South Korean authorities have included in the sanctions list a number of North Korean hacker groups and individuals associated with cyber attacks and cryptocurrency theft. This was reported by the Ministry of Foreign Affairs of Seoul. The sanctions came just hours after South Korea and the United States announced a cybersecurity joint venture.
In particular, hackers working in the information technology sector at the North Korean company Chosun Expo Joint Venture were blacklisted. It is alleged to be a shell company associated with the Lazarus Group. North Korean hackers have stolen more than $1.2 billion worth of virtual assets since 2017, including $626 million in 2022, according to information provided by the Foreign Ministry.

- Former Goldman Sachs CEO Raoul Pal believes Ethereum is destined to reach a five-digit price in the next bull market. The macro expert has set a target price for ethereum around $10,000, primarily due to the good potential of the token. However, he believes that some of the main competitors will surpass him. “ETH is the money of the internet. And I do not think that it will lose this status, but this does not mean that this is the best player, - said the financier. - Solana, I think, aims for the widest possible adoption, making it convenient for the consumer. […] However, ETH is the easiest way because it probably has the least risk.”

- According to technical analysis by CryptoQuant expert Grizzly, BTC/USD has formed a unique pattern that has previously been observed at market lows. The specialist added the 200-day SMA and the realized price to the long-term chart and concluded that this could be a sign of a long-term uptrend. According to his observations, this was especially evident in 2019, 2015 and 2012.
At the same time, Grizzly noted that macroeconomic factors that put pressure on high-risk asset markets should not be overlooked. It is not known whether bitcoin will be able to “separate” from assets such as stocks and demonstrate “decent behavior” as a reliable hedge against inflation. According to the expert, only time will tell if the largest cryptocurrency maintains its upward trajectory.

- Another popular Twitter analyst, Kaleo, with 563,000 followers, also shared his prediction about the near future of bitcoin and ethereum. The analyst believes that a price of $30,000 is still possible for bitcoin. Ethereum, in his opinion, will repeat the movement of 2018-2020. The price of this altcoin rose from $80 to $480 then. At the time of writing the review, the ETH exchange rate is $1,580. According to Kaleo's calculations, the target level is located almost twice as high: around $3,000.

- The number of users of the first cryptocurrency will grow from the current over 300 million to 1 billion in the next three years. This would be riughly 12% of the world's population. This forecast was given by well-known analyst Willy Woo. He recalled that it took six months for bitcoin to form an audience of the first 1,000 users. It took five years for that number to rise to 1 million. The network achieved its current figures of more than 300 million, 13.8 years after the formation of the genesis block. For comparison, Woo cited the audience of PayPal (430 million people) and Twitter (400 million, most of which, he believes, are bots).

- Robert Kiyosaki, author of the bestselling book Rich Dad Poor Dad, stated that the price of bitcoin will rise to $500,000 by 2025. “A giant crash is coming. Depression is possible. The Fed has been forced to print billions in counterfeit money. Gold at $5,000, silver at $500, and bitcoin at $500,000 by 2025,” he wrote. And he added that gold and silver are the money of the gods, and bitcoin is like a dollar for ordinary people.
Prior to this, Anthony Scaramucci, founder of the hedge fund SkyBridge Capital, said that the value of one bitcoin on the exchange could double to $50,000 over the next two to three years. Scaramucci called 2023 a “recovery year” for bitcoin.


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

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

https://nordfx.com/

 

[Stan NordFX]

Forex and Cryptocurrency Forecast for February 20 - 24, 2023​

EUR/USD: The Fed Doesn't Hinder the US Economy

January data released on Tuesday, February 14 showed that the US Federal Reserve's victory over inflation is still very, very far away. The core Consumer Price Index (CPI) remained unchanged on a monthly basis at +0.4%. At the same time, although the annual data were slightly lower than the previous value: +6.4% against +6.5%, they exceeded the forecast of +6.2%. Another portion of American statistics came out the next day, February 15. After two months of decline, retail sales in the US showed the highest growth rate in almost 2 years, jumping from -1.1% in December to +3.0% in January (against the forecast of +1.8%).

The initial reaction to this was the strengthening of the dollar (the DXY index reached 104.1 points, the maximum since January 09), and a sharp drop in stock indices. Market participants decided that such macro statistics will force the Fed to further tighten monetary policy actively. If the peak value of the interest rate was predicted at 4.9% in early February with a subsequent decrease by 50 basis points (bp) by the end of the year, the peak is seen now at 5.25%, and a possible decrease only by 25 b.p. in 2023. At the same time, the probability that the rate will be increased three more times, in March, May and June, is 50%.

As already mentioned, the strengthening of the dollar and the sharp fall in stock indices was the first reaction of the market. But then there was an equally sharp reversal and the return of investor risk appetite. Stock indices went up. The market decided that if the US economy coped with the most aggressive interest rate hike in decades quite easily, it would cope with it in the future. Not only retail sales, but also other economic indicators show a convincing rise at the moment. Thus, employment grew by an impressive 517K new jobs, and the country's GDP, according to the leading indicator from the Atlanta Fed, may grow not by 2.2%, but by 2.4% in Q1 2023.

Then the market sentiment changed again. Another piece of statistics showed that the number of Americans who filed new applications for unemployment benefits fell unexpectedly, while producer prices (PPI) rose to a 7-month high in January. In this situation, market expectations regarding the further cycle of monetary restriction have again increased. S&P500, Dow Jones, and Nasdaq headed south together, while DXY headed north to a six-week high of 104.58. After that, on the eve of a long weekend in the US, the Dollar Index fell again to 103.85 points.

EUR/USD reacted accordingly to the volatile DXY fluctuations. As a result, having started last week at 1.0679, it ended it at 1.0694, that is, with almost zero results. At the time of writing the review (evening of February 17), 80% of analysts expect further strengthening of the dollar, 10% expect the strengthening of the euro, and the remaining 10% have taken a neutral position.

This time, the readings of the oscillators on D1 coincide with the opinion of analysts almost completely. 80% of them are colored red (20% signal that the pair is oversold), the remaining 20% are colored gray neutral. Among trend indicators, 60% recommend selling, 40% - buying. The nearest support for the pair is located in the zone 1.0600-1.0620, then there are levels and zones, 1.0560, 1.0500, 1.0440 and 1.0370-1.0400. The bulls will meet resistance in the area of 1.0700-1.0710, 1.0745-1.0760, 1.0800, 1.0865, 1.0895-1.0925, 1.0985-1.1030, 1.1110, after which they will try to gain a foothold in the 1.1260-1.1360 echelon.

The events of the coming week include the publication of business activity indicators (PMI) in Germany and the Eurozone on Tuesday, February 21. The value of the German Harmonized Consumer Price Index (CPI) will become known on Wednesday, February 22. Also on this day, the minutes of the last FOMC (Federal Open Market Committee) meeting will be published late in the evening. Volatility will be provided by data on inflation (CPI) of the Eurozone, as well as on unemployment and US GDP, on Thursday, February 23. We will find out German GDP indicators and statistics on consumer spending by American citizens at the very end of the working week, on Friday, February 24. Traders also need to keep in mind that Monday, February 20 is a day off in the US: the country celebrates President's Day.

GBP/USD: BoE Could Crash the Pound

The pound tried to win back part of its losses at the beginning of last week. GBP/USD, having bounced off the level of 1.2030 on February 13, reached a two-week high of 1.2270 the next day. Then, along with other currencies included in the DXY Index, the pound began to retreat against the dollar. As a result, the local minimum was fixed at 1.1915. This was followed by a return to the initial positions and GBP/USD ended the week at 1.2040.

Neither Inflation data nor data on unemployment in the UK helped the British currency (CPI fell to +10.1% in January against the forecast of +10.3% and +10.5% in December). The market also ignored retail sales statistics, although they rose by +0.5% in January against the forecast of -0.3% and the previous result of -1.2%. The news that the UK and the EU have achieved good results in the protracted Brexit negotiations did not have a noticeable effect on the dynamics of the pound either.

Much more important for the quotes of the British currency was macro statistics from the US, as well as expectations that the Bank of England (BoE) may soon reach the end of the rate hike cycle. “The Bank of England is clearly concerned that a significant rate hike could slow down the economy too much,” Commerzbank economists wrote, explaining their bearish view of GBP's prospects, and colleagues from Singapore's United Overseas Bank agreed, according to them GBP/USD may retest the 1.1900 level in the near future.

If we talk about the median forecast of experts, 70% of them vote for the further weakening of the pound, 10% prefer to refrain from forecasts. Only 20% of analysts vote for the strengthening of the pound and the growth of the pair. Among the trend indicators on D1, the balance of power is 85% to 15% in favor of the reds. Reds have a 100% advantage among oscillators. Support levels and zones for the pair are 1.1990-1.2025, 1.1960, 1.1900-1.1915, 1.1840, 1.1800, 1.1720 and 1.1600. When the pair moves north, it will face resistance at the levels 1.2085, 1.2145, 1.2185-1.2210, 1.2270, 1.2335, 1.2390-1.2400, 1.2430-1.2450, 1.2510, 1.2575-1.2610, 1.2700, 1.2750 and 1.2940.

As far as the UK economy is concerned, Tuesday February 21 is of interest on the calendar for the upcoming week, when the country's business activity statistics (PMI) are released.

USD/JPY: Hopes for QT Remain

“The Japanese government has chosen Academician Kazuo Ueda as the new head of the Central Bank based on expectations of a stable inflation target along with a structural increase in wages,” said Finance Minister Shunichi Suzuki. And it doesn't seem that this choice went in favor of the Japanese currency. Having started the week at 131.39, USD/JPY fixed a local high at 135.15, and set the last chord of the five-day period at 134.17.

Recall that 71-year-old Kazuo Ueda, a former professor at the University of Tokyo, joined the board of governors of BOJ a quarter of a century ago, in April 1998, and remained there until April 2005. Back in 2000, Ueda spoke out against the Central Bank's abandonment of the zero-rate policy. It seems that even now he will not rush to curtail the ultra-soft monetary policy. This is confirmed by Ueda himself, who stated on February 10 that the current policy of the regulator is adequate, and that it is necessary to continue to adhere to it.

Despite such statements, the question of what this policy will be like under the new leader remains open at the moment. The majority of experts (60%) have taken a wait-and-see attitude. 15% are counting on the growth of USD/JPY in the near future, and 25% expect it to fall. If we talk about a three-month perspective, only 10% of analysts talk about a further weakening of the Japanese currency, 25% are still neutral, but 65% are waiting for tightening monetary policy (QT) and strengthening the yen, contrary to the statements of Kazuo Ueda.

For example, Danske Bank economists predict that the USD/JPY rate will fall and reach 125.00 in three months. A similar position is shared by strategists at BNP Paribas Research. “We expect the strength of the US dollar to end up short-lived,” they say. “We believe that the US dollar has entered a multi-year bearish trend, and portfolio flows are becoming increasingly negative for the currency.” BNP Paribas predicts that positive yields in Japan could encourage the repatriation of funds by local investors, as a result of which USD/JPY will fall to 121.00 by the end of 2023.

Among the oscillators on D1, 100% points north (15% of them are in the overbought zone). For trend indicators, 75% look north, and 25% look in the opposite direction. The nearest level of support is located in zone 134.00, followed by levels and zones 133.60, 132.80-133.20, 131.85-132.00, 131.25 130.50, 129.70-130.00, 128.90-129.00, 128.50, 127.75-128.10, 127.00-127.25 and 125.00. Levels and resistance zones are 134.40, 134.75-135.10, 135.60, 136.00, 137.50, 139.35, 140.60, 143.75.

No important macro data on the state of the Japanese economy is expected this week. In addition, it must be borne in mind that Thursday, February 23, is a day off in Japan, the country celebrates the Emperor's Birthday.

CRYPTOCURRENCIES: Five Reasons for BTC's Growth

The topic of regulating the cryptocurrency market has been getting louder and louder since last spring. Many influencers argue that one can count on a massive influx of funds from institutional investors only if a clear regulatory framework is in place. Here is just one of the latest statements by MicroStrategy co-founder Michael Saylor. “What is really needed,” he said, “is oversight. [...] Clear guidance from Congress is needed. We need clear rules of conduct from the SEC (Securities and Exchange Commission) of the United States.” And it must be said that such calls from representatives of big capital respond to the minds and actions of government officials. For example, Senator Elizabeth Warren is already actively recruiting conservative Republicans in the US Senate to support her bills, which significantly tighten the regulation of the crypto industry.

We note that the tragic events of 2022, caused by the collapse of a number of leading representatives of the industry, caused a sharp surge in the activity of US supervisory authorities. And the regulators began to work with redoubled energy this year. To begin with, they attacked the Kraken crypto exchange, which was actually banned from providing staking services. But the truck did not stop there and ran into the infrastructure company Paxos, which is responsible for issuing USDP, PAXG and Binance BUSD stablecoin. This is an investigation launched by the New York State Department of Financial Services (NYDFS) against this company. The regulator later ordered the firm to stop issuing the BUSD stablecoin. The SEC also announced its readiness to sue Paxos.

This situation led to a massive outflow of funds from the stablecoin. Many users have started exchanging BUSD for USDT. But it's still half the trouble. Some frightened users simply decided to leave Binance. On February 14 alone, the net outflow of funds from this exchange amounted to $831 million, a record since the collapse of FTX.

Binance CEO Changpeng Zhao responded to pressure from the US authorities by calling on industry participants to consider moving to another country. He considers Dubai (UAE), Bahrain and France to be jurisdictions with favorable regulation. The CEO of Binance was supported by Uniswap founder Hayden Adams. “It's a shame to watch the US efforts in the cryptosphere,” he wrote. “Innovative companies get an additional incentive to go abroad. It’s as if the government banned the development of the Internet 30 years ago.”

Surprisingly, against this frankly negative background, the price of bitcoin went up, reaching $25.241 on February 16. The last time BTC/USD climbed this high was in mid-August 2022. There have been several reasons for the current rally.

The first of these, paradoxically, is the mentioned attack by the NYFDS and SEC on Kraken and Paxos. US regulators treat PoS coins as toxic assets due to passive income from staking (expectation of profit). Based on this, such coins can receive the status of a security, with all the ensuing legal consequences. Bitcoin, on the other hand, is still the result of the work of miners, which allows it to avoid (at least for now) a similar fate. The network hashrate continues to set records.

Another driver for the growth (and subsequent fall) of digital “gold” quotes is its correlation with the stock market ( S&P500, Dow Jones and Nasdaq).

The third reason is that the main cryptocurrency was oversold in 2022, which caused the average production cost to fall below the market price. And most of the miners were forced to sell off BTC stocks in order to cover operating costs and ensure payments on accounts payable.

The next reason is the Ordinals protocol launched at the end of January, which allows not only to conduct financial transactions in the bitcoin network, but also to transfer any digital objects, including images, audio and video files. The launch of this protocol also resulted in an increase in network activity. The number of non-zero wallets set a new record, and miners received $876,000 in additional income in the form of commissions in less than a month.

The beginning of the BTC rally forced short-term speculators to close short positions, which further stimulated the growth of bitcoin. And that was reason number five.

According to Glassnode specialists, the current fair value of the flagship cryptocurrency is $33,000. This is the figure bitcoin should aim for. A similar figure of $30,000 is cited by Kaleo, a popular analyst with 563,000 Twitter followers. His forecast for the leading altcoin was also quite optimistic. According to Kaleo calculations, the target level for ETH/USD is located in the $3,000 area. Former Goldman Sachs CEO Raoul Pal also gave his forecast for ethereum, setting a target price of this coin around $10,000. Although, such growth will take more time of course.

If we talk about a three-year horizon, according to well-known analyst Willy Woo, the number of users of the first cryptocurrency will grow from the current over 300 million to 1 billion during this time. This will approximately correspond to 12% of the world's population. Willy Woo recalled that it took six months for bitcoin to form an audience of the first 1,000 users. It took five years for that number to rise to 1 million. The network achieved its current figures of more than 300 million, 13.8 years after the formation of the genesis block.

SkyBridge Capital hedge fund founder Anthony Scaramucci called 2023 a “recovery year” for bitcoin. However, his forecast looks rather modest. In his opinion, the value of BTC may “only” double over the next two to three years, up to $50,000.

As for another influencer, best-selling author of Rich Dad Poor Dad, Robert Kiyosaki, he claims that bitcoin will rise to a fantastic $500,000 by 2025. “A giant crash is coming. Depression is possible. The Fed has been forced to print billions in counterfeit money. Gold will be at $5,000, silver at $500, and bitcoin at $500,000 by 2025,” Kiyosaki wrote. And he added that gold and silver are the money of the gods, and bitcoin is like a dollar for ordinary people.

Risky assets sank sharply down in the last days of the past week. Following the stock indices, the quotes of crypto-currencies also fell, but then recovered quite quickly. At the time of writing this review (Friday evening, February 16), BTC/USD is trading in the $24,600 zone. The total capitalization of the crypto market is $1.106 trillion ($1.010 trillion a week ago). The Crypto Fear & Greed Index rose from 48 to 61 points in a week and moved from the Neutral zone to the Greed zone.


NordFX Analytical Group


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

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[Stan NordFX]

CryptoNews of the Week

- FTX CTO Nishad Singh plans to plead guilty to fraud for his role in the crashed exchange and is discussing a possible deal with prosecutors, Bloomberg reports. Two other associates pleaded guilty to charges related to the collapse of FTX in December, but the head of the exchange, Sam Bankman-Freed, has not made a deal with the investigators.
Singh created the platform software and played an important role in the daily operations of FTX. He was part of Bankman-Freed's inner circle, living with him in a penthouse in the Bahamas. Singh has donated over $9.3 million to US Democratic candidates since 2020 and has also received hundreds of millions of dollars in loans from Alameda.

- The number of addresses with a balance of 1000 BTC or more has dropped to August 2019 levels. According to the analytical company Glassnode, there are 2,024 such whales (as of February 20, 2023). The number of addresses in this category peaked in February 2021, about 2,500. Then, despite the rally of bitcoin to an all-time high near $69,000, the indicator began to decline.
The number of addresses with a balance of 10,000 BTC or more (from $240 million at current prices) is stable near the peaks corresponding to the values of November 2022 and October 2018. There are currently 115 such “mega-whale” wallets in total. But the number of smaller addresses (from 1 BTC) keeps to update the highs. Their number increased by 20% during the year, approaching 982,000.

- The Russian Bureau of Interpol officers, at the request from the United States, detained in Moscow a 31-year-old Briton who helped North Korea circumvent sanctions and advised members of the DPRK government on ways to withdraw funds abroad using cryptocurrencies.

- Vice Chairman of the legendary holding company Berkshire Hathaway Charlie Munger, who is Warren Buffett's right-hand man, called those who disagree with him on the cryptocurrencies ban "idiots". “I'm not proud of my country [USA] for allowing this crap. It's just ridiculous that someone is buying this [digital assets]," the 99-year-old billionaire said. - This is not good. It's crazy. It only hurts. And it's antisocial." Munger has previously urged the US authorities to follow China's lead and ban digital assets. In his opinion, they cannot be attributed either to currencies, or to goods, or to securities.

- Kevin O'Leary, investor, journalist and host of the hit show Shark Tank, called on crypto exchanges to work more closely with government regulatory agencies. He stated that “American financial regulators are tired” of watching the wave of company bankruptcies in the cryptocurrency industry. And they treat such firms much more harshly now. Therefore, any business in this area should be more careful.
“You should work with regulators. No need to stand in the way of the SEC and other agencies. These guys in Washington are pretty mean. The collapse of FTX kicked the bear. It woke up and was furious. Senators are really tired: they are tired of meeting every six months when another large cryptocurrency firm collapses. They are fed up with the fact that the industry is not regulated, and everyone can issue their own useless tokens,” said this Canadian entrepreneur.
Kevin O'Leary believes that regulated companies will attract significantly more investment than their unregulated rivals. And in general, unregulated companies run the risk of going bankrupt through the actions of officials. Kevin O'Leary had earlier stated that most crypto assets have no intrinsic value and will collapse to zero in the near future.

- Alex Gladstein, the director of the Human Rights Foundation, said In a recent interview that the first cryptocurrency is able to limit the power of states with "collapsed democracy" and deprive them of the ability to control people. According to him, bitcoin prevents "tyrannical governments" from imposing their will on the people. “Bitcoin restores democracy. Bitcoin is about free speech, property rights, and open capital markets. What do authoritarian countries need? Quite the opposite: censorship, confiscation and closed capital markets,” Gladstein said.

- Tim Berners-Lee, a British scientist and creator of the Internet, URL, HTTP and HTML, has criticized cryptocurrencies as dangerous speculative tools for market manipulation. According to the inventor, the Internet should exist without blockchain. The engineer is sure that this technology is not so fast and safe.
In his opinion, crypto assets are very similar to the dot-com bubble, when a large number of Internet companies closed 20 years ago without a fundamental basis for business development. Berners-Lee believes that digital currencies can only be suitable for money transfers if they are immediately converted into fiat currencies upon receipt.

- Bitcoin has the potential to become the digital gold of the 21st century, Deutsche Bank analyst Marion Laboure says, adding that it is important to be mindful of the risks associated with the first cryptocurrency. She recalls that people have always looked for assets that were not controlled by governments, and gold has played this role for centuries.
Laboure is sure that the main problems of cryptocurrencies are the lack of regulation and the environmental consequences of mining. “For example, bitcoin mining requires about the same amount of electricity in a year as the entire population of Pakistan uses, about 217 million people!”

- Asian investors may push bitcoin quotes up, Cameron Winklevoss, co-founder of the Gemini crypto exchange, thinks. His thesis is that the next phase of price growth will occur in the East, and the US will have to adjust to new conditions. Recall that according to Chainalysis, the Asia-Pacific region already ranks third in the world in terms of cryptocurrency investments.

- According to Matrix analysts, the price of bitcoin is able to rise to $29,000 by the summer and to $45,000 by the end of this year. However, this will happen under the condition of a further slowdown in the growth rate of consumer inflation in the United States. Matrix notes that the price of the cryptocurrency has recently risen above $25,000 several times. Analysts see this as a positive signal, as BTC's rise has taken place despite the negative news on the tightening of cryptocurrency regulations in the US and Europe.
Speaking about their forecast, Matrix also refers to the “January effect”: price success in the first month often predetermines the movement of the main cryptocurrency throughout the year. In addition, experts recalled that historically, the price of bitcoin tests the lows 12-15 months before the next halving. This time, such period was December 2022 - March 2023.
Plan B also speaks about a possible rally. According to his estimates, bitcoin could test the $42,000 level as early as March.


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

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[Stan NordFX]

Forex and Cryptocurrency Forecast for February 27 - March 3, 2023​

EUR/USD: FOMC Protocol Strengthens the Dollar

Macroeconomic statistics in both the US and the Eurozone look mixed. In both regions, inflation is slowing down (which is good), but GDP growth is also decreasing (which is bad for the economy). According to the US Department of Commerce, the pace of consumer spending growth in the country for Q4 was +1.4% after +2.3% in Q3 (forecasted at +2.1%). The US GDP growth rate on an annual basis, according to preliminary estimates, will be lower than expected, +2.7% (forecast and previous value +2.9%). However, despite this, labour market statistics look positive enough. The number of initial claims for unemployment benefits, forecasted at 200K, actually decreased from 195K to 192K. According to final data from Eurostat, inflation in the Eurozone slowed down to +8.6% YoY in January (+9.2% a month earlier). Things are becoming more difficult in Germany, the main locomotive of the European economy. According to January data, the annual inflation rate was +9.2% compared to +9.6% in December, but at the same time, the country's GDP also went down, with a decline of -0.4% (forecast and previous value -0.2%). The very fresh February CPI data did not please either, showing an increase from +8.1% to +8.7%.

Against this backdrop, market sentiment remains in favour of the US dollar. This is primarily due to the Federal Open Market Committee's (FOMC) meeting minutes, which were published on Wednesday, February 22 by the US Federal Reserve. The minutes did not bring any surprises. However, market participants saw once again that the regulator is not going to stop its fight against inflation.

United Overseas Bank (UOB) summarized the main conclusions from the minutes as follows: 1) Despite progress in the fight against inflation, it remains significantly above the target level of 2%. 2) All Committee members agreed that achieving inflation targets will require more interest rate hikes and keeping it at a high level until the Fed is confident that inflation is sustainably going down. 3) Although the FOMC voted in February to raise the rate by 25 basis points (bps), several participants wanted it to be increased by 50 bps. 4) The Fed is still more concerned about inflation than slowing economic growth.

US Treasury Secretary Janet Yellen confirmed these conclusions. She stated at the G20 finance ministers and central bank governors meeting on Friday, February 24 that "inflation is coming down, measured on a 12-month basis, but core inflation is still above 2%". According to Janet Yellen, a "soft landing" for the economy without a recession is possible thanks to the strong labour market and strong US balances.

All of the above has led to the US dollar index, DXY, continuing its rise, reaching a local high of 105.26 points, while EUR/USD ended the workweek at the level of 1.0546 (week low at 1.0535).

Most likely, the main factor determining the dynamics of the dollar until the next FOMC meeting on March 21-22 will be speculations on how far the regulator is willing to go in its "crusade" against inflation. According to UOB's forecast, the rate may be raised by 25 bps in March and May, ultimately reaching 5.25%, and remain at this level until the end of the year. According to some other estimates, the peak federal funds rate by July could be 5.38%.

According to specialists at ING, the largest banking group in the Netherlands, February and March are seasonally strong months for the dollar, and the rate of 4.50% for overnight deposits may still slightly support the dollar. However, according to their colleagues at Commerzbank, it will become increasingly difficult for the US currency to strengthen against the euro. Much has already been priced in, and there are no strong new drivers in sight. Especially since the ECB is not standing still in tightening its monetary policy. The final data on consumer prices in the Eurozone, which were revised upwards to 5.3% in the core index, published on February 23, will be the next stimulus for such QT.

At the time of writing this review (evening of February 24), 40% of analysts expect further strengthening of the dollar (half as many as a week ago), 50% expect a correction of EUR/USD to the north, and the remaining 10% have taken a neutral position.

All 100% of D1 oscillators are painted red, although a quarter of them are signalling the pair is oversold. Among trend indicators, 75% recommend selling and 25% buying. The nearest support for the pair is located in the zone of 1.5000-1.0525, then come levels and zones of 1.0440 and 1.0370-1.0400, 1.0300, 1.0220-1.0255. Bulls will encounter resistance in the region of 1.0560-1.0575, 1.0600-1.0620, 1.0680-1.0710, 1.0745-1.0760, 1.0800, 1.0865.

Events of the upcoming week include the publication of data on orders for capital goods and durable goods in the US on Monday, February 27. Wednesday, the first day of March, will bring a large volume of macro statistics from Germany. This includes the Harmonized Consumer Prices Index (CPI), the Purchasing Managers' Index (PMI) in the manufacturing sector, as well as the change in the number of unemployed in the country. In addition, the value of the PMI in the US manufacturing sector will be announced on this day. We are expecting the February CPI for the Eurozone, the ECB's statement on monetary policy, and data on unemployment in the US on Thursday, March 2. And there will be another portion of American statistics, including the Purchasing Managers' Index (PMI) in the service sector, at the very end of the workweek.

GBP/USD: Business Activity Grows, but the Pound Falls

The British pound is struggling to resist the advance of the dollar. Despite regular counterattacks, it is retreating step by step. Starting the week at 1.2040, GBP/USD reached a local peak at 1.2147, but then went down and ended the five-day period at 1.1942.

It is worth noting that the UK economy managed to avoid a recession at the end of 2022, and the data on business activity in the United Kingdom, published on Tuesday, February 21, is quite optimistic. The Composite PMI Index, with a forecast of 49.0, should grow from 48.5 to 53.0 points over the month. However, these are only preliminary data, with the final ones becoming available on March 1 and 3. At the same time, the confidence of British consumers is lower than during the financial crisis, the COVID-19 pandemic, and the recessions of the 1980s and 1990s.

Although inflation in the country is decreasing, it remains in double digits and is five times higher than the Bank of England's target rate. (CPI fell to +10.1% in January, with a forecast of +10.3%, and +10.5% in December). Inflation is being kept high in part due to the labour market, and there is currently no reason to believe that wage growth in the UK is slowing down.

The market expects that the Bank of England, like the Federal Reserve, will raise the key interest rate twice by 25 basis points in March and April, bringing it to a peak of 4.5%. However, many in the BoE leadership are very concerned that a significant increase in rates could overly slow down the economy. Therefore, the regulator's monetary policy, which is already ambiguous, could be adjusted at any time.

As for the median forecast of experts, 45% of them vote for further weakening of the pound, 25% expect GBP/USD to rise, and 30% prefer to refrain from making predictions. Among the trend indicators on D1, the balance of power is 85% to 15% in favour of the red. Among the oscillators, the red has a 100% advantage, 15% of which are in the oversold zone. The support levels and zones for the pair are 1.1900-1.1915, 1.1840, 1.1800, 1.1720, and 1.1600. If the pair moves north, it will face resistance at levels 1.1960, 1.1990-1.2025, 1.2075-1.2085, 1.2145, 1.2185-1.2210, 1.2270, 1.2335, 1.2390-1.2400, 1.2430-1.2450, 1.2510, 1.2575-1.2610, 1.2700, 1.2750, and 1.2940.

As for the economy of the United Kingdom, in addition to the final data on business activity (PMI) in the UK, which will be released on March 1 and 3, we can note the speech of the Governor of the Bank of England, Andrew Bailey, scheduled for Wednesday, March 1.

USD/JPY: Hopes for QT Are Weakening, but Still Remain

"It seems that the appointment of academic Kadsuo Wada as the new head of the Bank of Japan (BoJ) has not benefited the Japanese currency," we wrote in our previous review. And now, looking at the USD/JPY chart, we can only confirm this statement. In addition to the strengthening dollar, another blow to the yen was dealt by Kadsuo Wada himself. His speech on Friday, February 24, helped the pair to rise from the level of 134.04 to a height of 136.41. The comments of the future head of the central bank, who spoke in the lower house of the Japanese Parliament, in general corresponded to the current BoJ policy, and only exacerbated the disappointment of those who hoped for significant changes in the regulator's monetary policy. Investors could not discern in these comments a clear "hawkish" signal that would boost the resumption of speculative demand for the yen, which was already weakening against the backdrop of the rise of the DXY and the increase in the yield of 10-year treasuries. It should be reminded that there is a direct correlation between USD/JPY and U.S. Treasury bills. If the yield of securities rises, then the dollar rises against the Japanese yen.

We already wrote a week ago that some experts expect a serious strengthening of the Japanese currency in the future. For example, economists at Danske Bank predict that the USD/JPY rate will fall and reach the level of 125.00 in three months. BNP Paribas Research strategists hold a similar position. According to their forecasts, in the event of a tightening of monetary policy, positive yields in Japan may stimulate the repatriation of funds by local investors, resulting in USD/JPY falling to 121.00 by the end of 2023. But all of these are still quite shaky assumptions, although 75% of analysts share them. As for the near-term prospects, currently only 35% of experts expect a southward movement of the pair, while an equal number look in the opposite direction, and the remaining 20% remain neutral. Among the oscillators on the D1 chart, 100% indicate a northward movement (15% of which are in the overbought zone). Among the trend indicators, 75% point to the north and 25% to the south. The nearest support level is located in the 135.90 zone, followed by levels and zones of 134.90-135.15, 134.40, 134.00, 133.60, 132.80-133.20, 131.85-132.00, 131.25, 130.50, 129.70-130.00. Resistance levels and zones are at 136.70, 136.00, 137.50, 139.00-139.35, 140.60, 143.75.

No important macroeconomic statistics regarding the state of the Japanese economy are expected next week. However, Kadsuo Wada will give another speech on Monday, February 27, but it is unlikely to contain anything new and revolutionary.

CRYPTOCURRENCIES: Bitcoin Is Under Pressure, but It Doesn't Give Up. Not yet

Regarding the past week, we can say this: bitcoin is under pressure, but it is holding up. Among the main pressure factors, we can name the financial report of the Coinbase exchange for Q4 2022 and the strengthening of the dollar. Coinbase's revenue plummeted by 75% in the last quarter of last year, which was unusually difficult for the cryptocurrency market. The reason for such a collapse is clear: customer outflows due to a series of scandals and bankruptcies of major and not-so-major industry players. As a result, Coinbase's losses amounted to $2.46 per share. (For comparison, the profit per share of this crypto giant was $3.32 a year ago). It is unknown whether Coinbase will explode like FTX. But in any case, investors should not forget about the risks associated with this market.
As for the second pressure factor, it's all about the Federal Reserve System (FRS) of the United States, as always. Increased market expectations regarding the interest rate have strengthened the quoted currency in BTC/USD and, accordingly, weakened its base part. And it should be noted that bitcoin has shown itself to be a stronger asset in this situation than stock indices, with which it usually correlates. Thus, the S&P500 returned to mid-January values, and the Dow Jones even fell to December values, while the flagship cryptocurrency has grown by 40% since January 1, 2023.

Debate over the future of digital assets continues. Vice Chairman of legendary holding company Berkshire Hathaway and Warren Buffet's right-hand man, Charlie Munger, still calls on US authorities to completely ban cryptocurrencies. The 99-year-old billionaire called anyone who disagrees with him "idiots" and added, "I'm not proud of my country for allowing this filth. It's just ridiculous that anyone buys this [digital assets]. It's no good. It's crazy. It only does harm." Kevin O’Leary, investor, journalist, and host of the popular show Shark Tank recalled this as well. He said that "American financial regulators are tired" of watching waves of bankruptcies in the cryptocurrency industry. "These guys in Washington are very angry. The FTX collapse woke up the bear. It woke up in a rage. Senators are really tired of having to gather every six months when another major cryptocurrency firm collapses. They're tired of the industry being unregulated and anyone being able to issue their absolutely useless tokens," said the Canadian entrepreneur. His conclusion was much softer than Charles Munger's choking calls. O'Leary called on all industry participants to cooperate with the SEC and other government agencies and said that regulated companies would attract significantly more investment than their unregulated competitors.

Bitcoin quotes are mainly supported by small and medium investors at the moment. According to the analytics company Glassnode, the number of wallets with a volume of at least 1 BTC is constantly reaching new highs. Their number has increased by 20% over the past year, approaching 982,000. As for addresses with a balance of 1000 BTC or more, it has fallen from its peak in February 2021 (about 2,500) to levels in August 2019. And now (as of 20.02.2023) there are only 2,024 such whales. However, the number of addresses with a balance of 10,000 BTC or more (worth $240 million at current prices) has consistently remained near peak levels, corresponding to November 2022 and October 2018 values. Currently, there are 115 such "mega-whale" wallets.

According to co-founder of the Gemini crypto exchange Cameron Winklevoss, Asian investors may push bitcoin prices up. Winklevoss believes that the next phase of price growth will occur in the East, and the US will have to adapt to the new conditions. According to Chainalysis, the Asia-Pacific region already ranks third in the world in terms of cryptocurrency investment volume.

Several experts believe that it is crucial for the market for bitcoin to maintain levels above the intermediate resistance at $24,500. This will allow the coin to rise to $25,000 first and then to the $29,000-30,000 range. According to analysts at Matrix, the rise to $29,000 is possible by the summer, and BTC could reach $45,000 by the end of this year. However, they note that this will happen only if the pace of consumer inflation in the US continues to slow. Matrix analysts also point out that the cryptocurrency's price has already risen above $25,000 several times in recent days, despite negative news about tightening cryptocurrency regulations in the US and Europe, which they see as a positive sign.

Speaking of their forecast, Matrix also refers to the "January effect": a price success in the first month often determines the movement of the main cryptocurrency price for the entire year. In addition, experts note that historically, 12-15 months before the next halving, bitcoin's price tests its minimums. This time, such a period fell on December 2022 - March 2023.

Well-known analyst Plan B also suggests a possible rally, estimating that bitcoin may test the $42,000 level in March. As of the time of writing (Friday evening, February 24), BTC/USD is trading around $23,100. The total market capitalization of the crypto market is $1.059 trillion ($1.106 trillion a week ago). The Crypto Fear & Greed Index fell from 61 to 53 points over the week and returned from the Greed zone to the Neutral zone.


NordFX Analytical Group


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

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[Stan NordFX]

Mega Super Lottery: NordFX to Give Away Another $100,000 to Traders in 2023

On March 1 of this year, broker company NordFX launched another Mega Super Lottery for its clients. The lottery will run until the end of 2023 and will offer a variety of cash prizes ranging from $250 to $5000, with a total prize pool of $100,000.

The slogan "Your 202+3 Chances to Win in 2023" was chosen for the lottery because winners will receive 202 prizes, including three super prizes of $5000 each, in addition to smaller prizes. The total prize pool of $100,000 will be divided into three parts: $40,000 will be given away in the first and second draws, and $60,000 in the third, New Year's draw.

In 2021 and 2022, NordFX clients had already won $200,000 through the lottery, and the participation terms lottery remain the same for the 2023. To become a participant, clients simply need a NordFX Pro account (or to register and open a new account), deposit at least $200, and start trading.

Clients who trade just two lots in Forex currency pairs or gold (or four lots in silver) will receive a virtual lottery ticket. There is no limit to the number of tickets each participant can receive. The more deposits and the more actively clients trade, the more lottery tickets they will have and the greater their chances of winning a prize.

The chances of winning also depend on the date of receiving the lottery ticket. Tickets awarded from March 1 to June 30 will be entered into the first draw, tickets awarded from March 1 to September 30 will be entered into the second draw, and tickets awarded from March 1 to December 31, 2023, will be entered into the third, New Year's draw. Tickets received earlier will have a chance to participate in all three draws, which increases the probability of winning.

It's worth noting that trading experience and success do not affect a client's chances of winning. The draw is conducted with a random numbers’ generator, so both professional traders and beginners have an equal chance of winning.

Each draw is conducted online and recorded, and anyone with internet access can monitor it from anywhere in the world. The correctness of ticket awards can be checked on NordFX's official website, where clients can also read the detailed rules for the 2023 Lottery.

Finally, it's important to note that lottery winners receive their winnings as real money, which they can use for trading or withdraw without restrictions.


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

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

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[Stan NordFX]

CryptoNews of the Week

- Regulation of the crypto market was one of the topics finance ministers and central bankers discussed at the G20 meeting chaired by India last weekend. As a result, US Treasury Secretary Janet Yellen said that regulation of the crypto industry is important, while Washington is not considering a complete ban. “It is very important to create a reliable regulatory framework. And we are working [on this] with other governments,” she said in an interview with Reuters. IMF Managing Director Kristalina Georgieva agrees with her colleague: her organization also advocates for adequate regulation of digital assets and against their complete ban.

- Michael van de Poppe, the CEO of Eight, believes that bitcoin is currently the most undervalued asset. He has released a video review in which he predicts the growth of the coin to $40,000 this year. This forecast has been made against the background of recent news, according to which inflation in the US showed its teeth again: the Personal Consumption Expenditure Index (PCE) was 4.7% against the forecast of 4.3%. It has already been said that because of this, the Fed may raise the interest rate by 50 basis points in March and not by 25 bps, as previously expected.
According to cryptocurrency screener Cryptovizor, bitcoin reached a local high on February 21, and then began to fall. However, both the aggravation of macroeconomic data and the rollback of BTC quotes failed to dampen Van de Poppe's optimism. From his point of view, a pronounced bullish divergence on the weekly chart indicates that we have already reached the bottom. What is happening now is just a bounce off the 200-week moving average and consolidating. According to the trader, a sideways movement is most likely at this stage. In the worst case scenario, BTC/USD will fall to the low of the $18,000 range, and this fall will be a great investment opportunity.
According to Van de Poppe, there is no recession at the moment, but it may begin due to the collapse of the debt market and the real estate market. But before that happens, bitcoin could rise to $40,000, as the crisis usually unfolds 6-12 months after the Fed's significant rate hike. The signal for the start of a new bull rally could be either the lifting of the mining ban in China, or the adoption of cryptocurrency in Hong Kong.

- “Despite the tumultuous events of the past year, US cryptocurrency ownership has remained largely unchanged since hitting an all-time high in early 2022. More than 50 million people in the country own cryptocurrencies, and 76% of them believe that this type of asset and blockchain technology are the future. 67% believe that the current financial system needs a major reboot. These conclusions were reached by Morning Consult experts based on the results of a survey commissioned by Coinbase.
Based on the survey results, Coinbase plans to focus on the development of the industry. The exchange intends to work with politicians and companies in the field of traditional finance, as well as launch an educational campaign explaining the role that cryptocurrencies can play in the renewal of the financial system. Coinbase CEO Brian Armstrong has previously stated that he wants to increase the global cryptocurrency user base to one billion people.

- Investors are again showing an active interest in cryptocurrencies. According to the analytical company Glassnode, the 30-day inflow of capital into the market has exceeded the outflow for the first time in 9 months and has returned to the “green” zone. The cumulative net realized market value position has also turned positive for the first time since April 2022. Over the past nine months, the metric has shown negative values.
According to analysts, another positive indicator is the fall in the number of bitcoin whale wallets to a three-year low. This means that the asset has become more distributed and less concentrated among a handful of large holders. This option is preferable for the entire ecosystem, as it eliminates the possibility of market manipulation by several players.
Glassnode also reported On February 27 that the percentage of active BTC supply just hit an all-time high of 28.2%. This suggests that the mass adoption of cryptocurrencies is steadily increasing despite the bear market and challenging times for the global economy.

- A 51-year-old American admitted during the trial that he tried to shoot down a bitcoin ATM for the benefit of the people. Last year, Matthew K. walked into the Vapor Maven store in Jefferson City, pulled out a gun, and fired five bullets at the ATM. Returning home, he told his wife about his act and called the police himself. Matthew explained his stunt by the hatred he feels for bitcoin ATMs. The unfortunate killer said that he decided to shoot the device so that "it could no longer take money from anyone." Despite such noble intentions, the court found Matthew guilty of damaging property and sentenced him to five years of probation. (For reference: the first Bitcoin ATM appeared in the US in October 2013, and there are now more than 35,000 of them).

- Robert Kiyosaki, author of a number of books on investing, including the bestseller Rich Dad Poor Dad, has long been a critic of the US Federal Reserve's monetary policy and expressed concerns about dollar devaluation. And now the writer has made a bold statement that, in his opinion, the fake dollar is leading to the decline of the American empire. This stance of Kiyosaki has drawn approval from the crypto community as it shows the benefits of bitcoin. Experts note that digital assets such as BTC, unlike fiat currencies, are not subject to inflationary pressure, since their supply is limited and predetermined by appropriate algorithms.
Recall that Kiyosaki has recently predicted that the bitcoin rate will rise to $500,000 by 2025. “A giant crash is coming. Depression is possible. The Fed has been forced to print billions in counterfeit money. Gold at $5,000, silver at $500, and bitcoin at $500,000 by 2025,” he wrote. And he added that gold and silver are the money of the gods, and bitcoin is like a dollar for ordinary people.

- Matt Hougan, chief investment officer at Bitwise, said in a recent interview that he is “epically optimistic for the next three years.” In his opinion, there will be a massive adoption of cryptocurrency in 2023-2025 and its prices will grow. “This bull market cycle is going to be the biggest cycle in terms of user adoption, in terms of the cumulative increase in market capitalization, in terms of just about every other thing we care about,” the financier says. “But it won’t happen perfectly up and to the right.” Also, “I'm actually optimistic about regulation,” Matt Hougan added.

– Apple co-founder Steve Wozniak has changed his mind about bitcoin over the past few years. He called BTC "digital gold" in 2018. However, he said a year later that the fall of the crypto market reminded him of the dot-com crisis of the early 2000s.
Steve Wozniak was once again bullish this week. He predicted a BTC surge to $100,000. In his opinion, the main cryptocurrency has a huge potential and will increase in value in the coming years. “Currently, only a small percentage of the world’s population owns bitcoin, so the infrastructure is expanding at an extremely slow pace. However, its adoption will accelerate in the future, both the number of BTC holders and users of projects deployed in the DeFi and NFT markets will increase,” Wozniak believes. At the same time, the co-founder of Apple admitted that he has less than 1 BTC, and he does not plan to make money on investments in cryptocurrency.

- The government of Ras Al Khaimah (RAK), one of the UAE's emirates, plans to create a free zone for companies in the digital asset industry. The National News writes about this. According to the statement, RAK Digital Assets Oasis will become a hub for unregulated activities of industry participants. Applications will be accepted as early as Q2 2023.

- The correlation of cryptocurrencies with US stocks and macroeconomic indicators is weakening against the backdrop of the current flat movement in the price of bitcoin. It is reported by The Block, referring to the opinion of analysts from the investment company Bernstein. According to them, the market is balancing between bulls and bears, "waiting for further catalysts", and its susceptibility to events in the world of traditional finance "is not the same as before." The first cryptocurrency's correlation with the Nasdaq Composite index has fallen from 0.94 to 0.58 since early February.
The analysts also point out that the hurdles created by regulators are bearish for the market, as is the lack of institutional adoption of cryptocurrencies. On the other hand, the weakening of the correlation with the stock market is a bullish signal.

- The crypto market performed much better at the beginning of 2023 than most of its participants and experts expected. These are the findings of Bank of America researchers. They have published a report in which they emphasize that the market capitalization of digital coins and tokens has grown by 42% to $1.1 trillion. At the same time, Bank of America strategists remain cautious about further capitalization growth, as high dollar interest rates could put serious pressure on digital assets.

- We wrote earlier that Charles Munger, vice chairman of the holding company Berkshire Hathaway and Warren Buffett's right-hand man, called “idiots” anyone who disagrees with him regarding a complete ban on cryptocurrencies. The 99-year-old billionaire said that crypto assets are nothing more than gambling and called them “rat poison”. He also urged the US authorities to follow in the footsteps of China and ban cryptocurrencies.
And now he received an answer from Elon Musk. The Tesla founder said that Munger considered investing in the company in 2008, when it was valued at just $200 million, but declined. Now, Tesla's current capitalization is about 3,000 times that amount. In this regard, Chris Burniske, an analyst and former head of cryptography at ARK Invest, noted caustically that Munger knows exactly how to miss the chance to make 1000x profit.


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

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

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[Stan NordFX]

February 2023 Results: Euro and Gold Bring Tens of Thousands of Dollars in Profits to NordFX Traders

The brokerage firm NordFX has released the results of its clients' trading performance for February 2023. In addition, the company evaluated its social trading services, PAMM and CopyTrading, as well as the profits obtained by its IB partners.

The top spot in the ranking of the most successful traders was taken by a client from East Asia, account number 1677XXX, who earned a profit of 49,130 USD on trades, with the majority conducted on EUR/USD and USD/CHF pairs. The second place belongs to the owner of account number 1597XXX from South Asia, who earned 37,244 USD in a month, with the source of their earnings coming from operations with gold (XAU/USD).

The XAU/USD currency pair allows NordFX traders to occupy positions in the top three more often than any other pair. This time, thanks to this precious metal, not only the second but also the third position on the podium of honour went to a client from South Asia, account number 1678XXX, whose profit in February was 23,994 USD. It is worth noting that this trader also showed an impressive result on their other account (number 1624XXX), earning almost 18,000 USD in profit. Therefore, in total, they may well switch places with their compatriot in second and third place in the top three.

In passive investment services:

- In CopyTrading, the signal provider KennyFXPRO - Prismo 2K continues to increase profits and delight fans. In 665 days, it has increased profits by 310%. However, despite its relative stability, it should be noted that this provider suffered a serious setback last November, with the maximum drawdown on this signal approaching 67%. This can be considered an extraordinary situation, but it is always necessary to keep in mind that trading in financial markets is a risky activity, and no one is immune to such events.
Fans of algorithmic trading may be interested in a startup called ATFOREXACADEMY ALGO 1. In just 68 days, this signal showed a return of 171%, although its drawdown was not small, 38%.
- In the PAMM service, the two leading accounts, which suffered significant losses last November, continue to recover. To the credit of both managers, they did not allow their deposits to be completely wiped out, closed losing positions, and now, albeit very cautiously, are moving forward again. The profit for KennyFXPRO-The Multi 3000 EA at the moment is 81%, and for TranquilityFX-The Genesis v3 it is 50%. The drawdown, except for that fateful November, looks quite moderate and does not exceed 20%.

Among NordFX's IB partners, representatives from Asian regions made it into the top three as well:
- The largest commission of 5,827 USD was credited to a partner from South Asia with account number 434XXX.
- Next is a partner from West Asia with account number 1645XXX, who received 5,684 USD.
- Finally, another partner from West Asia with account number 1652XXX closes the top three leaders, receiving 5,337 USD as compensation.


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

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

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[Stan NordFX]

Forex and Cryptocurrency Forecast for March 06 - 10, 2023​

EUR/USD: Pause in the 1.0600 Zone

On Thursday, March 02, the DXY dollar index broke again through the bar at 105.00 points but could not stay there. As usual, the dollar was supported by an increase in US government bond yields. The yield on 10-year securities rose to its high since November 10 at 4.09%, the yield on 2-year securities rose to 4.91% and updated its maximum since 2007. The revision of US labor market statistics in Q4 2022 and the ISM Manufacturing Business Activity Index (PMI) in the country's manufacturing sector also supported the US currency. On the other hand, the dollar was pressured by the yuan, which is getting stronger against the backdrop of macro-economic statistics from China. The PMI manufacturing index in China was the highest since 2012. Activity in the service sector has also increased, and the Chinese real estate market has stabilized.

However, the main factor determining the dynamics of the USD is still the expectation of the Fed's further actions in an attempt to curb inflation. Since the Consumer Price Index (CPI) rose more than expected in January, reaching 6.4%, market participants started talking about the fact that the regulator may raise the rate not by 25 basis points (bp) in March, but immediately by 50. (At the moment, CME's FedWatch tool estimates the probability of such a move at 23%).

This forecast was supported by hawkish comments by some FOMC (Federal Open Market Committee) members. The head of the Atlanta Fed, Rafael Bostic, said that the key interest rate should eventually be raised to 5.00-5.25% and kept at this level until 2024. Minneapolis Fed chief Neil Kashkari has yet to decide whether he will vote for a 25bp or 50bp rate hike in March, but hinted that the Fed's own dot plot could be raised. At the same time, both officials stressed the need to fight inflation, emphasizing that a strong labor market and the US economy are able to withstand the pressure caused by the aggressive monetary policy of the Central Bank. However, Rafael Bostic then softened his hawkish mood and said that the regulator may suspend the rate hike cycle in the summer. After that, the dollar slightly retreated from its gains.

Some analysts do not rule out that the peak USD rate will reach 5.5% in September, and maybe even 6.0%. There is no question of reducing it at the end of the year at all. And these expectations play on the side of the US currency, which is confirmed by the futures market. But when talking about EUR/USD, one cannot focus only on the actions of the Fed. They don't sleep on the other side of the Atlantic either. Inflation data for a number of European countries suggest that the ECB will also be forced to maintain a hawkish position for longer than previously expected. The opening of the Chinese economy could put pressure not only on the US, but also on Europe, making it difficult for both regulators to curb inflation. Therefore, market participants expect further tightening of monetary policy on the part of the European Central Bank, which currently keeps the pair in the 1.0600 area.

Last week's finish was at 1.0632. At the time of writing this review (the evening of March 03), the analysts' forecast looks as uncertain as the flat quotes of EUR/USD: 50% of them have taken a neutral position, 30% of experts are counting on further strengthening of the dollar, and the remaining 20% side with the euro. Among the oscillators on D1, 50% are colored red, 15% are green and 35% are neutral gray. Among trend indicators, 35% recommend selling, 65% - buying. The nearest support for the pair is located at 1.0575-1.0605, then there are levels and zones 1.5000-1.0530, 1.0440, 1.0375-1.0400, 1.0300 and 1.0220-1.0255. Bulls will meet resistance in the area of 1.0680-1.0710, 1.0740-1.0760, 1.0800, 1.0865, 1.0930, 1.0985-1.1030.

There will be quite a lot of economic statistics and events in the coming week. Data on retail sales in the Eurozone will be released on Monday, March 06. Fed Chairman Jerome Powell will address the US Congress on Tuesday and Wednesday. Also, there will be data on retail sales in Germany, Eurozone GDP and employment in the US on Wednesday, March 08. The number of initial claims for unemployment benefits in the US and the inflation rate (CPI) in China will be known on Thursday. Friday 10 March will show what is happening with consumer prices in Germany. We are traditionally waiting for a portion of important statistics from the US labor market on the same day, including the unemployment rate and the number of new jobs created outside the agricultural sector (NFP).

GBP/USD: Sentiment Color Is Red

GBP/USD has been in a sideways channel for the second week in a row, although it has demonstrated rather high volatility. The range of its fluctuations (1.1942-1.2147) exceeded 200 points, and the last chord of the week was placed in the middle of this channel, at the level of 1.2040. We described above what gives strength to the dollar. The British currency received some support from information received last week that an agreement was reached between the UK and the EU on the Northern Ireland Protocol. Trade disputes have now been resolved, and while this is positive for the UK economy as a whole, many experts believe that the positive effect of this agreement for the pound will be short-term.

Quotes of the pair are still determined by the actions of the Central Banks. And the head of the Bank of England (BoE), Andrew Bailey, speaking on Wednesday, March 01, further fogged the issue., saying that the final decision on the prospects for the monetary policy of the British Central Bank has not yet been made, and that the regulator should be flexible in the coming months so as not to scare the markets.

Experts' median forecast for the near future is as follows: 70% of experts vote for the further weakening of the pound and the fall of GBP/USD, only 10% expect the pair to grow, and 20% prefer to refrain from forecasts. Among the trend indicators on D1, the balance of power is 65% to 35% in favor of the greens. The picture is different among oscillators. The reds have a convincing advantage here, 70%, 10% side with the greens, and 20% have taken a neutral position. Support levels and zones for the pair are 1.1985-1.2025, 1.1960, 1.1900-1.1925, 1.1840, 1.1800, 1.1720 and 1.1600. When the pair moves north, it will face resistance at the levels 1.2055, 1.2075-1.2085, 1.2145, 1.2185-1.2210, 1.2270, 1.2335, 1.2390-1.2400, 1.2430-1.2450, 1.2510, 1.2575-1.2610, 1.2700, 1.2750 and 1.2940.

As for next week's economic calendar, no important macro data from the UK is expected until Friday March 10, when UK GDP and industrial production data for January are released.

USD/JPY: Patience and Only Patience

USD/JPY rose to 137.10 on Thursday, March 02 after the release of US economic data. This is the highest level since December 20, 2022. The yen was opposed by the divergence between Fed and BoJ politicians, as well as the yield spread between 10-year US and Japanese bonds, which rose to its highs in March since November 2022.

Another blow to the Japanese currency was dealt by Kazuo Ueda, who was elected as the new head of the Bank of Japan (BoJ). His position only exacerbated the disappointment of those who hoped for major changes in the regulator's monetary policy. Investors have failed to pick up a clear "hawkish" signal in his speeches, which would have spurred the resumption of speculative demand for the yen, which was already weakening against the background of the growth of DXY and the rise in yields of 10-year treasuries.

USD/JPY met the beginning of February at the level of 130.08, and now it ends at 135.84 on March 03. However, a number of experts do not lose hope that the Japanese currency will strengthen. “Since the dollar peaked at the end of September, the yen became the second best-performing G10 currency by the end of January,” economists at MUFG Bank wrote. - Some backtracking in this context is quite understandable. But we believe that inflation will decline and yields around the world are close to peaks, which indicates a recovery in the yen, especially since the policy of the Bank of Japan will also change.”

Strategists from HSBC, the largest financial conglomerate, echo their colleagues. “We will remain yen bulls in the medium term,” their forecast sounds, "but we suspect that it will take some patience for the currency to gain independent strength thanks to the Bank of Japan. For now, USD/JPY is likely to remain influenced by developments in the US, where we see the balance of risk tilting towards a weaker dollar.”

The next meeting of the Bank of Japan will take place on Friday March 10. It will last be chaired by the former head, Haruhiko Kuroda, after which he will hand the reins over to Kazuo Ueda. Analysts at JPMorgan (like most others) do not expect BoJ policy to change or signal correction at this meeting. It is unlikely that Kuroda will slam the door loudly when he leaves; most likely, the interest rate will remain at the same negative level of -0.1%. Therefore, yen supporters can only follow HSBC's advice and be patient.

So, as already mentioned, a number of experts expect a serious strengthening of the Japanese currency in the future. In addition to MUFG Bank and HSBC strategists listed above, BNP Paribas Research has a similar position, while Danske Bank economists predict that USD/JPY rate will fall to the level of 125.00 in three months. In their opinion, in the event of a tightening of monetary policy, positive yields in Japan could stimulate the repatriation of funds by local investors, as a result of which USD/JPY will be around 121.00 by the end of 2023. But these are still rather shaky assumptions, although 60% of analysts agree with them. As for the immediate prospects, only 10% of experts are counting on the movement of the pair to the south at the moment, 45% are looking in the opposite direction, and the remaining 45% stay neutral.

Among the oscillators on D1, 85% point north, the remaining 15% look in the opposite direction. For trend indicators, 65% look north and 35% look south. The nearest support level is located in the zone 134.90-135.20, followed by the levels and zones 134.40, 134.00, 133.60, 132.80-133.20, 131.85-132.00, 131.25 130.50, 129.70-130.00. Levels and resistance zones are 136.00-136.30, 136.70-137.10, 137.50, 139.00-139.35, 140.60, 143.75.

Among the events of the coming week, in addition to the above-mentioned meeting of the Bank of Japan, the calendar includes Thursday, March 9, when the country's GDP data for Q4 2022 will be published.

CRYPTOCURRENCIES: Bitcoin Awaiting a New Catalyst

The first sentence of the previous review was: “Bitcoin is under pressure, but it is holding up”. Starting the current review, we can only repeat: bitcoin is under pressure, but it is holding up. Let's talk about global news now. The good news is that the leading regulators will not completely ban cryptocurrencies. The bad news is that regulatory pressure on the industry will continue to grow.

The regulation of the crypto market was one of the topics that finance ministers and central bank representatives discussed at the G20 meeting. As a result, US Treasury Secretary Janet Yellen said that regulation of the crypto industry is important, while Washington is not considering a complete ban. “It is very important to create a reliable regulatory framework. And we are working [on this] with other governments,” she said in an interview with Reuters. IMF Managing Director Kristalina Georgieva agrees with her colleague: her organization also advocates for adequate regulation of digital assets and against their complete ban.

It should be noted here that the increase in regulatory control, while forcing a number of players out of their comfort zone, could ultimately have a positive impact on the industry, relieving shocks like the collapse of FTX. In addition, clear rules will attract a significant number of new institutional investors, raising the capitalization of the crypto market to unprecedented heights.

But this is in the future. In the present, the “herd” of whales (more than 1,000 BTC) continues to decline, reaching a three-year low of 1,663 individuals. There were almost 2,500 of them at its peak in February 2021. And this despite the fact that the crypto market showed a much better result at the beginning of 2023 than most of its participants and experts expected. These are the findings of Bank of America researchers.

At the moment, bitcoin quotes are supported mainly by small and medium-sized investors. According to analytics company Glassnode, the number of wallets with a volume of 1 BTC is constantly updating highs, approaching 1 million. The 30-day capital inflow to the market exceeded the outflow for the first time in 9 months and returned to the "green" zone. The cumulative net realized market value position also turned positive for the first time since April 2022 (the metric has been negative for the past nine months). Long-term holders have also updated their four-month high in savings.

By the way, according to Glassnode analysts, the drop in the number of whale wallets can be considered a positive factor. This means that the asset has become more distributed and less concentrated among a handful of large holders. This option is preferable for the entire ecosystem, as it eliminates the possibility of market manipulation by several players.

Another positive factor, according to some experts, is the weakening of the correlation of cryptocurrencies with US stocks and macroeconomic indicators. The flagship cryptocurrency was moving in a narrow range of $23,000-24,000 for almost the entire past week, and it sank a little only on Friday, March 03. Perhaps this was facilitated by the news that another representative of the crypto industry, Silvergate Bank from California (USA), was on the verge of bankruptcy.

According to analysts at the investment company Bernstein, the correlation of the first cryptocurrency with the Nasdaq Composite index has fallen from 0.94 to 0.58 since early February. According to them, the market is balancing between bulls and bears, "waiting for further catalysts", and its susceptibility to events in the world of traditional finance "is not the same as before."

We could also observe a weakening and then strengthening of the correlation with the stock market last August-September. And it is quite possible that the current “decoupling” of BTC from stock indices is a temporary phenomenon. It is clear that the main concerns for all risky assets are related to the continued increase in the key rate by the US Federal Reserve, which could become a catalyst for the resumption of the bearish trend of BTC/USD.

The Eight CEO Michael van de Poppe, a well-known trader, believes that bitcoin is currently the most undervalued asset. He has released a video review in which he predicts the growth of the coin to $40,000 this year. At the same time, both worsening macroeconomic data and the forecast for the Fed's rate failed to dampen Van de Poppe's optimism. From his point of view, a pronounced bullish divergence on the weekly chart indicates that we have already reached the bottom. What is happening now is just a bounce off the 200-week moving average and consolidating. According to the trader, a sideways movement is most likely at this stage. In the worst-case scenario, BTC/USD will fall to the low of the $18,000 range, and this fall will be a great investment opportunity.

According to Van de Poppe, there is no recession at the moment, but it may begin due to the collapse of the debt market and the real estate market. But before that happens, bitcoin could rise to $40,000, as the crisis usually unfolds 6-12 months after the Fed's significant rate hike. The signal for the start of a new bull rally could be either the lifting of the mining ban in China, or the adoption of cryptocurrency in Hong Kong.

Global financial disaster is also predicted by Robert Kiyosaki, author of a number of books on investing, including the bestseller Rich Dad Poor Dad. He has long been a critic of the Fed's monetary policy and has expressed concern about the devaluation of the dollar. And now the economics writer has made a bold statement that, in his opinion, the fake dollar is leading to the decline of the American empire. This stance of Kiyosaki has drawn approval from the crypto community as it shows the benefits of bitcoin. Experts note that digital assets such as BTC, unlike fiat currencies, are not subject to inflationary pressure, since their supply is limited and predetermined by appropriate algorithms.

Recall that Kiyosaki has recently predicted that the bitcoin rate will rise to $500,000 by 2025. “A giant crash is coming. Depression is possible. The Fed has been forced to print billions in counterfeit money. Gold at $5,000, silver at $500, and bitcoin at $500,000 by 2025,” he wrote. And he added that gold and silver are the money of the gods, and bitcoin is like a dollar for ordinary people.

Matt Hougan, chief investment officer at Bitwise, said in a recent interview that he is “epically optimistic for the next three years.” In his opinion, there will be a massive adoption of cryptocurrency in 2023-2025 and its prices will grow. “This bull market cycle is going to be the biggest cycle in terms of user adoption, in terms of the cumulative increase in market capitalization, in terms of just about every other thing we care about,” the financier says. “But it won’t happen perfectly up and to the right.” Also, “I'm actually optimistic about regulation,” Matt Hougan added.

Apple co-founder Steve Wozniak was also bullish last week. In his opinion, the main cryptocurrency has a huge potential and will increase in value in the coming years, reaching $100,000.

In the meantime, at the time of writing this review (Friday evening, March 03), BTC/USD is trading in the $22,250 zone. The total capitalization of the crypto market is $1.024 trillion ($1.059 trillion a week ago). The Crypto Fear & Greed Index fell from 53 to 50 points in a week and is in the very center of the Neutral zone.

And finally, news that can be attributed to our crypto life hacks section. It concerns those who do not like the regulatory press, which we talked about at the beginning of the review. So, it became known that the government of Ras Al Khaimah (RAK), one of the UAE's emirates, plans to create a free zone for companies in the digital asset industry. According to the announcement, RAK Digital Assets Oasis will become a hub for unregulated industry activity, with applications open as early as Q2 2023.


NordFX Analytical Group


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

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