Market News from FxPro

According to Alex Kuptsikevich, a senior analyst of FxPro, US secondary home market continues to shrink. Over July, they have fallen by a further 5.9%. The uninterrupted fall has been going on for the last six months, during which annualised home sales have fallen from 6.49 million to 4.81 million.

The inventory of unsold homes is back to a historical norm of around 4, at 3.3 months of current sales. The optimistic outlook suggests that we are now seeing "averaging", meaning that sales will be below average for a while after a period of excessive activity and lots of logistical congestion.

The pessimistic view puts rising interest rates in the debt markets into the equation, knocking down interest in home purchases. And this situation promises to get even worse in the coming months because the Fed intends to raise rates even more.

So far, we are more on the side of the pessimists, suggesting that the housing market will cool down further in the coming months. The real estate market often outperforms and directs capital market trends, and its sustained cooling strengthens the case for a US recession.
Market picture

According to Alex Kuptsikevich, a senior analyst of FxPro, Bitcoin was almost flat on Thursday but started Friday with a 6% plunge, momentarily dropping to $21.5K. Ethereum is losing 4.5% overnight to $1760. Leading altcoins are down 7% (XRP) to 12% (Solana).

Total crypto market capitalisation is down 4.2% to $1.07 trillion, according to CoinMarketCap.

Bitcoin's fall below $22.5K is a formal break of the upward corridor of the past two months, as a sequence of increasingly higher local lows is broken. Currently, BTCUSD is testing the 50-day moving average, which could act as an uptrend indicator.

The current dip has made the fight for the 200-week average, which is now near $23K, relevant again. Closing the week below this level risks triggering another round of liquidation.

Altcoins are losing even more significantly, reflecting a dramatic shift in enthusiast sentiment from cautious buying to simultaneously locking in quick profits across a wide range of coins.

Additionally, the weakening of global equity indices and the deteriorating macroeconomic backdrop is worrying factor. At the same time, the crypto market is no longer oversold but not yet attractive to long-term investors.

We believe we will see similar sharp market movements again in the coming months.

News background

Arthur Hayes, former head of crypto exchange BitMEX, talked about two scenarios after Ethereum moves to the Proof-of-Stake (PoS) mining algorithm. If the fork is unsuccessful, ETH could fall sharply but hold above $800. If the merger is successful, an ETH rally should be expected, although it may be delayed, as in the case of bitcoin halving.

Korean authorities are investigating 16 crypto exchanges that are accused of breaking local laws and providing digital asset trading services to Korean citizens.

Tether, the issuer of the largest USDT stablecoin by capitalisation, has announced a partnership with accounting firm BDO Italia. Tether plans to move from reporting quarterly financial results to monthly reporting.
Big drop across the board today and possibly the start of the next big leg down. If we see rejection of that and a continuation of bullishness then it bodes well but the last time we saw a candle on BTC this large (still pending) was bak in June which was also bearish. For now at least momentum still firmly towards the downside.
Market picture

Bitcoin has declined 12.2% in the past seven days, trading at $21,500. Ethereum has lost 17.8%, down to $1560. Other leading altcoins from the top 10 have fallen from 7.8% (BNB) to 22% (Solana).

The total capitalisation of the crypto market, according to CoinMarketCap, dipped below $1 trillion over the weekend, losing $150 billion over the week. Near this level, the crypto market lingered in mid-year and early 2021.

Bitcoin's inability to develop growth above $25K showed that in the previous two months, we had only seen a rebound in a falling market, but not the start of a rapid recovery. BTC is showing negative technical signals, having fallen below its 200-week moving average, now passing around $23K.

Most of Bitcoin's decline came on Friday, and its catalyst may have been a drop in stock indices. After four weeks of gains, the S&P 500 began a correction, with its biggest fall in almost two months.

Pressure on risky assets came from the minutes of the US Federal Reserve's July meeting published on Wednesday, which showed the regulator's determination to fight inflation. Having broken the upward channel support, BTCUSD is now stomping around $21K, where the price direction has reversed four times in the past four months.

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The recent announcement by the US House of Representatives Energy and Commerce Committee that lawmakers are "deeply concerned" about the popularity of Proof-of-Work cryptocurrency mining may have affected the negative market dynamics. The members of Congress requested four mining companies to provide data on the environmental impact of their activities.

The European Central Bank (ECB) outlined its plan to license cryptocurrency activities and create a regulatory framework governing the industry in the EU.

On 12 September, the Chicago Mercantile Exchange (CME) will launch options on Ethereum futures ahead of The Merge. This will happen after regulators approve the initiative.


Finally, the Accounting firm BDO Italia has provided an opinion on the adequacy of Tether Holdings' reserves to collateralise the USDT stablecoin fully.
Market picture

Alex Kuptsikevich, a senior analyst of FxPro,
Bitcoin has added 2% in the past 24 hours to $21,400. Ethereum added 4.6% to $1640, while top altcoins added between 0.9% (Dogecoin) and 4.4% (Polkadot).

Total cryptocurrency market capitalization, according to CoinMarketCap, rose 2.2% to $1.03 trillion overnight. The Cryptocurrency Fear and Greed Index fell 3 points to 25 by Wednesday and went from "fear" to "extreme fear".

Unlike stock indices, Bitcoin has not fallen but has appeared as if it is disconnected from the market, having reached an equilibrium between the sell-off lows of late July at $20.5K and $22.5K.

The technical picture looks like a consolidation before a new downward momentum, potentially to the lows near 17600. BTCUSD could update that low if the decline gets caught up in the storm of falling stock markets. But it is too early to bet on this.


News background

CoinShares strategy director Meltem Demirors believes that because of the holiday season, we should not expect significant changes in the cryptocurrency market until the end of September.

According to SkyBridge Capital CEO Anthony Scaramucci, bitcoin cannot yet act as an asset to hedge inflation as adopting the first cryptocurrency is not enough.

According to Arcane Research, Bitcoin could become one of the world's leading power consumers by 2040.

Developers of the Dogecoin Foundation have reported that a DOGE-ETH bridge will be launched by the end of the year to move DOGE from the Dogecoin blockchain to the Ethereum network and back again.
Alex Kuptsikevich, a senior analyst of FxPro,
The value of US durable goods orders (DGO) for July was almost unchanged, against an expected 0.9% rise. It is also worth bearing in mind that an overly steep jump in June could cause July's sluggishness.

Moreover, the core metric smoothed out this difference between expectation and fact in the overall figure. Excluding the transportation sector, we see a continuation of the growth rate of 0.3% in the last two months, continuing the trend of the previous two years.

Thus, the current DGO report could be another argument for Fed hawks and Dollar bulls. The business behaviour so far indicates long-term investments by American businesses, from the labour force to durable goods, despite some material evidence that the economy might be heading for a recession.

However, traders must not forget that the housing market remains the Achilles' heel now, which, as in 2006-2008, has the potential to turn the US economy from growth to decline.
According to Alex Kuptsikevich, a senior analyst of FxPro, Brent is hovering around $100, a psychologically crucial round level. However, it would be a mistake to call it a lull. In our view, the current equilibrium could break at any moment, as geopolitics is now working for the bulls, while the economy, monetary policy, and technical market analysis are on the bears' side.

Oil is performing better than the market, thanks to unexpected comments from Saudi Arabia about its willingness to cut production when the world is suffering from energy shortages.

This was a clear signal that OPEC continues to target historically high oil prices, preferring not to fight for market share as it did in 2014. Back then, however, Saudi Arabia had to compete for the market with the rapidly gaining US and Russian production. The latter has now moved into the lame duck category, where a 5-15% drop in output over the next 12 months would be excellent news.

The United States is clearly failing to seize the initiative and start aggressively ramping up its production. According to figures published on Friday evening from Baker Hughes, the number of working rigs rose by three last week to 765, of which 605 (+4 for the week) produce oil. However, we saw a much higher production growth rate in 2009 and 2016, even though the world was by no means suffering from an energy crisis at the time.

At the same time, the technical picture does not yet allow for a recovery of the bullish rally. WTI fell under the 200 SMA at the beginning of August, and despite the bullish comments of OPEC, it did not manage to go back above that level.

The price managed to bounce back from the August lows to levels of 76.4% from the June lows, which fits into the traditional retracement pattern.

The oil market is now focused on the upcoming OPEC meeting on September 5, where the cartel will discuss production quotas after September. CME's OPEC+ Watch Tool indicates that markets are laying down an 18.7% chance of production cuts, creating a potential selling overhang if these forecasts do not materialise.

In addition, we need to pay attention to the continuing deterioration in GDP growth forecasts for the global economy and Europe's drive to save energy.

Over the medium to long term, economics invariably emerges as the winner compared to geopolitics. And now, the situation is shaping up for where the fight reaches intensity, followed by a turning point. The next few days will likely determine the trend for many months.

Market picture

According to Alex Kuptsikevich, a senior analyst of FxPro, Bitcoin managed to claw its way to a meaningful round level early in the week, trading at $20,400 on Tuesday morning (+2.8% in 24 hours). Ethereum showed an even more decisive rebound, adding 8.5% at once to $1580. Top altcoins are up 3.5% (Dogecoin) to 7.1% (Solana).

Total cryptocurrency market capitalisation, according to CoinMarketCap, rose 4.2% overnight to $992bn. The cryptocurrency Fear and Greed Index rose 3 points to 27 by Tuesday and moved into "fear" from "extreme fear".

Bitcoin was getting support on Monday on declines under 19500. It attracted buyers roughly at the same levels in July. One can cautiously state that the bears' impulsive attack has been stopped, preventing the first cryptocurrency from updating lows. Such buybacks slowly create a sense that the bottom is near. This dynamic has encouraged a broad layer of buyers, who quickly returned to buying one of the robust fundamentals of recent months, Ethereum.

News background

According to CoinShares, net capital outflows from cryptocurrencies last week were $27m, with investors taking money out for the third week. Meanwhile, outflows from bitcoin funds accounted for $29 million, with investments in funds that allow shorts on bitcoin up by $1 million.

BTC is unique because it is technically one of the worst cryptocurrencies and solely a speculative asset without utility, said Cyber Capital founder and chief investment officer Justin Bones. He was previously a supporter of the first cryptocurrency but changed his view due to the community's refusal to increase the block size limit.

Cardano beat out bitcoin in MBLM's Consumer Emotional Affection ranking, ranking 26th out of 600 global brands. Bitcoin ended up in the 30th position.

Former US broker Jordan Belfort, known as "The Wolf of Wall Street", sees bitcoin and Ethereum as primarily solid digital assets because of their strong fundamentals but compares the cryptocurrency market to junk bonds from the 1980s.

Meanwhile, the Chicago Mercantile Exchange (CME Group) has launched euro-denominated futures on bitcoin and Ethereum.

According to Alex Kuptsikevich, a senior analyst of FxPro, the fall in the single European currency has paused after briefly touching the 0.99 level earlier this month. As in July, the momentum of the EURUSD decline has sparked a resurgence of verbal interventions. Judging by the tone of recent comments, the ECB is reassuring the markets that it is soon ready to raise rates more aggressively.

This sentiment supports interest in the single currency hovering around parity with the dollar. We recently heard from Lane that September would mark the start of a new phase of ECB policy.

As clearly as possible for central bankers, Rehn and Kazaks say that euro weakness worries the regulator and will influence the next rate decision.

The euro's 15% fall against the dollar over the past 12 months is an additional pro-inflationary factor on top of skyrocketing energy prices, broken supply chains and a tight labour market.

With such a macroeconomic backdrop, it is not surprising that central bankers talk about the need to "take the pain" of policy tightening to suppress price increases and, more importantly, reverse inflation expectations.

The good news for the euro is that it responds well to the reassurances and threats from central bank officials. That was difficult for the BoJ to achieve earlier this year. At the same time, it is worth realising that verbal interventions in this situation can only buy a little time. Very soon, the ECB will confirm its intentions by effectively tightening monetary policy.

The fact is that not only energy prices are now at stake but also the credibility of the debt securities of smaller Eurozone countries. Last month, the ECB was forced to launch a sophisticated mechanism to hold down bond spreads of core and peripheral euro-region countries. The widening of spreads was another signal of a loss of confidence.

Uncontrolled current-level depreciation could permanently undermine the euro's status as a reserve currency, quickly translating into higher debt-servicing costs.

The debt problem is bad news for the euro. History is also not on the side of the buyers right now. In previous episodes of overcoming parity, it was not a turning point but only a temporary stopgap. Fundamentals are also on the bears' side for now. Because, despite the attention on the euro exchange rate, the ECB is moving slower than Fed in policy normalisation and much further away from the point where policy becomes neutral.
Market picture

According to Alex Kuptsikevich, a senior analyst of FxPro, Bitcoin has stopped falling but has still not managed to gain strength to rise, remaining near $20K. Ethereum remains more interesting for buyers, increasing 1.6% overnight to above $1600. Top altcoins showed mixed dynamics: from a decline of 1.3% (Dogecoin) to a rise of 2.2% (Cardano).

Total crypto market capitalisation, according to CoinMarketCap, rose 0.2% overnight to $997bn. The Cryptocurrency Fear & Greed Index fell 4 points to 23 by Wednesday and moved into "extreme fear" status.

The upcoming move to proof-of-stake creates a speculative component to Ethereum's dynamics. While in the short term, after September 6, there could be a "sell-through," causing pressure on the price, in the longer term, such a transition will strengthen interest in using Ethereum for transactions, making them cheaper. This promises more interest in the coin, allowing it to remain "better than the market".

On the data analysis side, ETHUSD is trying to get back above the 50-day average, which is an informal indicator of the medium-term trend. A consolidation above $1620, like in July, could be a prolonged rally with possible targets at $2000-2200 in the nearest future. The opposite is also true. A reversal down from this level will weaken bulls, as it did in February and April, triggering a new decline towards $1000.

News background

Some 5,000 BTCs, which have been in "hibernation" for the past 7-9 years, are on the move, said Look Into Bitcoin founder Philip Swift, citing data from the Whale Shadows indicator. Historically, such spikes in activity have preceded significant price declines.

A link has been established between the 10,000 BTC, which on August 29 went in motion for the first time since 2013, and the bankrupt cryptocurrency exchange Mt.Gox, a Telegram channel reported.

Meanwhile, the US Federal Bureau of Investigation has advised investors to be wary of investing in decentralised finance (DeFi) projects as they are too vulnerable to hacking.

Iranian authorities have approved a comprehensive law regulating cryptocurrency transactions. In particular, imports from abroad with payment in digital assets are allowed.