Market News from FxPro

[Fxpronews]

Bitcoin formally closed last week lower, ending it near $21,100. At the time of writing, the upside momentum has built up, taking the price to 21,800, the upper end of last month's consolidation range.

Ethereum jumped 14.1% last week and is adding another 6.7% since the start of the day on Monday, rising to $1430. Finding itself one step ahead of BTC this time, ETH broke the upper bound of last month's trading range on Friday. The second cryptocurrency's steady rise underscores the heightened demand for risk among crypto enthusiasts.

Leading altcoins have gained in the last 24 hours, ranging from 1.8% (Dogecoin) to 16% (Polygon).

The total capitalisation of the crypto market, according to CoinMarketCap, rose 9.5% over the week to $998bn. Bitcoin's dominance index fell by 1.1 percentage points to 41.7% over the same period.

The Crypto Fear-and-Greed Index was unchanged for the week, returning after falling to 24 points (extreme fear). By Monday, the index was down to 20, but recent market dynamics suggest the market is set to leave "extreme fear" territory.

Bitcoin rebounded in the second half of the week from all its early declines. BTC has been consolidating below its 200-week moving average for almost a month, now running around $22,550. The first cryptocurrency cannot yet move significantly away from the $20,000 level (the high of the previous cycle). Optimists can look for a sequence of higher local lows over the past four weeks.

Ethereum showed notable gains after ETH developers approved the blockchain migration to PoS for September 19, 2022. Ethereum broke above its 200-week average late last week, which could spur early buyers to trade on technical signals.

And we also draw attention to increased investor interest in blockchain networks, as seen in the outperformance of Ethereum, Solana, Polygon, and Avalanche during the past week. In parallel, the NFT market continues to fade. This can be described as investors betting on long-term projects instead of collecting short-term speculation.

Bloomberg draws attention to the weakening correlation between bitcoin and US stock indices, which has fallen to its lowest levels since January. If BTC's dependence on the stock market weakens in the coming weeks, the expert community will discuss bitcoin as "digital gold" again.

According to CryptoCompare, cryptocurrency spot trading volume fell to its lowest since June 2020. Fairlead Strategies estimates that the bearish phase of the market could drag on for several more months.

The UN has recommended that developing countries ban cryptocurrency advertising and require all cryptocurrency wallets and exchanges to register with regulators.

 

[Fxpronews]

Minyak Mentah telah menambah 3% pada hari Isnin selepas mendapat sokongan akhir minggu lalu kerana jangkaan pertemuan antara pemimpin AS dan Saudi tidak menjadi kenyataan.



Pertemuan yang dinanti-nantikan dan banyak dibincangkan antara Biden dan Mohammed bin Salman berlangsung tanpa sidang akhbar bersama atau mengumumkan perjanjian secara rasmi. Saudi menjelaskan bahawa tindakan OPEC+ adalah baik dan enggan secara rasmi untuk komited untuk meningkatkan pengeluaran walaupun AS berminat.



Pada hujung minggu, terdapat juga komen bahawa Arab Saudi berpotensi meningkatkan pengeluaran kepada 13m BPD berbanding 10m semasa dan kemuncak 11m pada Mac 2020, tetapi mencapai tahap ini adalah tidak mampan kerana kurang pelaburan dalam industri.



Kiraan pelantar berputar mingguan dari Baker Hughes menunjukkan peningkatan secara beransur-ansur dalam aktiviti di AS kepada jumlah 756 (+4 untuk minggu tersebut), di mana 599 (+2) adalah pengeluar minyak.



Arab Saudi telah meningkatkan pelaburan dalam tenaga boleh diperbaharui, strategi yang turut diikuti oleh pengeluar utama AS dan UK. Kerana sekatan antarabangsa, Rusia, Iran, dan Venezuela sangat terkekang dalam meningkatkan pengeluaran mereka.

OPEC+ nampaknya melakukan kerja rumahnya dengan baik selepas episod "perang minyak" yang lalu pada akhir 2014 dan permulaan 2020, tidak mahu membuat sebarang langkah mengejut. Di dalam negara, ini adalah berita positif untuk harga minyak, yang menerima sokongan pada bahagian bawah.



Dari segi analisis teknikal, sokongan belian telah mengukuh pada bahagian bawah kepada purata bergerak 200 hari dalam WTI. Sejak Selasa lalu, penurunan harga dalam sehari telah meningkatkan pembelian, dan Minyak telah menutup hari di atas garis ketara ini yang mentakrifkan arah aliran jangka panjang.



Brent kini berdagang di atas $100, juga cuba untuk bergerak ke atas daripada purata bergerak 200 hari. Kita mungkin melihat percubaan serius oleh kenaikan harga minyak untuk kekal dalam aliran kenaikan harga jangka panjang. Kami hanya boleh mengatakan bahawa mereka berjaya dalam kes pertumbuhan kukuh melebihi $105 untuk Brent dan $101 untuk WTI. Dalam kes itu, lantunan daripada aliran terakhir akan melebihi 61.8% Fibonacci dan menghantar Minyak ke kawasan di atas paras tertinggi tempatan sebelumnya.



Walau bagaimanapun, aktiviti ekonomi yang semakin berkurangan, dengan trend pengeluaran yang meningkat dan kadar faedah, menjadikan senario penurunan selanjutnya dalam Minyak sebagai perkara utama yang perlu dipertimbangkan.

 

[Fxpronews]

Bitcoin rose 2.9% on Monday, ending the day around $21.5K, and continuing to test the $22K level on Tuesday morning. So far, we are seeing an intensification of selling as buyers push the price up into the 23K area. Ethereum jumped 9.9% to $1480 and is already above $1500 in early Tuesday trading.



The rise in recent days is almost a mirror image of the decline from June 10 to 18. Except for XRP, which is down 1.5%, the top altcoins add between 0.6% (BNB) and 4.3% (Solana). The total capitalisation of the crypto market, according to CoinMarketCap, rose 2% overnight to $1.02 trillion.



Bitcoin is encountering increased resistance to its 50-day simple moving average approach. This line often acts as an indicator of a short-term trend in the markets. Notably, the Nasdaq100 sold off profusely on Monday night to climb above its line but closed the day below it. The market dynamics so far suggest a continued bearish trend in the financial markets’ most closely monitored retail investors and media sectors.


Nevertheless, it is worth noting that Ethereum has successfully surpassed its 50-day average, while the dollar index is losing for the third consecutive trading session, indicating a timid recovery in demand for risky assets. The cryptocurrency Fear and Greed Index climbed 10 points to 30, its highest level since April 11 and moving away from ‘extreme fear’ territory to ‘fear’.



A June report by Coinbase indicates that speculators were behind the fall in the crypto market, taking massive loans. In addition, according to Arcane Research, miners sold about a quarter of their bitcoin holdings last month to cover running costs. At the same time, long-term holders of bitcoin hardly ever sell it. Former top Blackrock executive Edward Dowd said that, over time, Bitcoin may surpass gold due to its unique characteristics, such as ease of transaction, transparency, and decentralisation.

 

[Fxpronews]

The British pound is trying to return to levels above 1.2000. The pressure on the pound intensified on Monday evening, along with the reduced demand for risk assets after the US market. Today the pound will have to fight new headwinds in the form of local macroeconomic statistics on the UK labour market.

The number of people receiving unemployment benefits fell by 20k in June, half the number expected and 34.7k a month earlier. The number of job openings for the three months to June was 1,294k compared to 1,297k for March-May and 1,295k for February-April. The overheated labour market has begun to cool down.

Wage figures also indicate this. Considering bonuses’, earnings rose 6.2% in the three months through June compared to the same period a year earlier. Official inflation data showed a 9.1% YoY increase in May, while June’s data, released on Wednesday, is expected to accelerate to 9.3%, marking an acceleration of the fall in workers’ actual earnings. In addition, these statistics came out weaker than expected, which may additionally work to weaken the pound against its competitors.

Despite unimpressive labour market data, GBPUSD is gaining for the third trading session, which should be attributed to the market’s desire to take profits from the previous rally in the dollar.

The US currency rose too far too fast and is now subject to short-term technical pressures. Until the Fed meeting on July 27, we may see a corrective rebound capable of flattening market positioning and providing the potential for a two-way move at the outcome of the critical FOMC meeting.

Locally, despite weak data today and potentially worrisome inflation readings on Wednesday and retail sales on Friday, GBPUSD may not have significant headwinds for a rebound up to 1.2200 - a support area in May and a 76.4% Fibonacci retracement level from the February-July downtrend. This would relieve some of the pair’s oversold position but is hardly enough to break the pair’s medium-term downtrend as the UK economy is slowing more quickly than the US, suffering from high imported commodity and energy prices.
Despite unimpressive labour market data, GBPUSD is gaining for the third trading session, which should be attributed to the market’s desire to take profits from the previous rally in the dollar.

The US currency rose too far too fast and is now subject to short-term technical pressures. Until the Fed meeting on July 27, we may see a corrective rebound capable of flattening market positioning and providing the potential for a two-way move at the outcome of the critical FOMC meeting.

Locally, despite weak data today and potentially worrisome inflation readings on Wednesday and retail sales on Friday, GBPUSD may not have significant headwinds for a rebound up to 1.2200 - a support area in May and a 76.4% Fibonacci retracement level from the February-July downtrend. This would relieve some of the pair’s oversold position but is hardly enough to break the pair’s medium-term downtrend as the UK economy is slowing more quickly than the US, suffering from high imported commodity and energy prices.

 

[Fxpronews]

Bitcoin jumped 8.5% to $23,300 on Tuesday, showing a 20.8% gain over the last seven days. Ethereum is trading around $1570 on Wednesday morning, adding 3.4% in 24 hours and an impressive 49% for the week.



The top altcoins are also rising nicely, adding between 3.9% (Polygon) and 11% (Cardano) for the day. Total crypto market capitalisation, according to CoinMarketCap, rose 4.7% overnight to $1067bn. Bitcoin on Tuesday posted its highest gains in a month on the back of a rebound in US stock indices and a weaker dollar.

BTC has tested the highs since June 13 near $23,700, and on Wednesday, it is trying to consolidate above its 50-day moving average. The dynamics near that line often acted as a reliable medium-term trend indicator.



Only a strong buy above this level can serve as a firm reversal indicator in the next few days. If the upside momentum stalls, as it did in February and March this year, we should be prepared for a sharp increase in selling. BTCUSD also exceeded the 200-week average during the last growth wave but fixing above this level at the end of the week should be considered a reliable signal.

The cryptocurrency Fear & Greed Index climbed to 31 by Wednesday after more than two months in "extreme fear" territory. After waves of capitulation in May-June 2022, bitcoin quotes have been below the realised price for a month now. Other signals of a potential bottom forming have also emerged, Glassnode notes. CryptoQuant, the research firm, has warned investors that further sales of BTC miners in a falling market could return pressure on prices.

 

[Fxpronews]

Gold is mostly missing the latest party of financial markets, where risk appetite has increased. The value of the troy ounce has changed little since last Friday, mostly hovering in a narrow range of $1702-1716, near the lows since April 2021.



On the technical analysis side, gold is oversold on the daily charts, as RSI has been below the 30 mark for the past two weeks. This disposition creates an impressive potential for a bounce, following the example of the stock and cryptocurrency markets, as we have seen in recent days. Interestingly, gold investors seem to have forgotten about the long-term correlations and are in no hurry to ramp up their precious metal purchases.

For investors in such circumstances, it is crucial to understand where the more reliable signals are now: is gold's apathy justified or the optimism of stock and cryptocurrency buyers? A correction of more than 17% from historical highs makes gold an attractive investment at current levels. However, short-term speculators maintain a wait-and-see attitude. Gold needs to undergo a final surrender for an apparent reversal to the upside.



That could be a touch of the 200-week moving average, which now passes through $1652 and almost coincides with the local retracement lows set in early 2021. The logic behind the gold sellers is now quite clear: Central banks are sharply tightening monetary policy, rising bond yields and taking control of long-term inflationary expectations.

However, it is also worth remembering that gold's bearish cycle after the global financial crisis ended on the day that the Fed raised rates for the first time in that cycle. In the current environment, signals from leading central bankers regarding measures and interest rate levels they believe are sufficient to control inflation could kick-start a rise in gold. Signs next week that the Fed is already thinking about where it stops in its current rate hike cycle could loosen the bears' grip on gold and stop the flow from it into bonds.



After all, central bankers must realise that because of the huge debt burden and chronic fiscal deficits, the economy is now prepared to endure much lower rates than it did in the early 1980s. And that forms a very bullish environment for precious metals. It should not be forgotten that emerging market central banks are now probably placing more emphasis on gold reserves than on dollars and euros. All of the above means that gold investors are not yet in a hurry to win back the market ripples but are preparing for a notable and sustained upward reversal, which could start in the next two months.

 

[Fxpronews]

A fresh set of statistics from the UK showed that inflation is still not slowing down. The rate of consumer price growth climbed to 9.4% y/y in June after they added 0.8% for the month, four times the long-term average monthly increase of 0.2%.



But, even more worryingly, the leading inflation indicators do not cease to surprise. The Producer Purchasing Price Index added 1.8% in June against expectations of 1.2%, to 24% y/y. Producer Output Price Index rose by 1.4% (expected 1.0%), to 16.5% YoY.

A separate publication noted an acceleration in house price growth from 11.9% YoY to 12.8% in May. Earlier, Bank of England officials spoke about the need to accelerate policy tightening to fight inflation. Fresh reports indicate that the Monetary Policy Committee will assess the need to raise the rate by 50bp or more in the next two weeks, moving away from the measured 25bp step.



While accelerating monetary policy normalisation has the potential to support the pound, this is bullish news for the stock market and overall risk demand. The pound is sensitive to fluctuations in risk appetite, so do not expect it to make a sustained return to growth against the dollar without a stock's bull market first.

 

[Fxpronews]

How long does forever last? Just over a year, if you're Elon Musk. Tesla has indicated in its quarterly report that it has sold three-quarters of its Bitcoins, citing uncertainty. The past selling does not change the market disposition, as all transactions have already been made. However, investor sentiment is perhaps the main driver in this market, where a mathematical algorithm governs issuance.

And this sentiment has been hit at a rather crucial moment. As a result of short-term investors' frustration, BTCUSD failed to break away from its 50-day moving average. The price stabilised at 23000 at the time of writing, hovering around this trendline. Failure to cross this line in a sharp move is a bearish signal. The closest development would be Bitcoin's return to the local support area at 19000.

Ethereum has lost 5.7% in the past 24 hours, to $1480. Leading altcoins have fallen even further, from -4% (Dogecoin) to 11% (Solana). Total crypto market capitalisation fell 3.6% to $1.03 trillion, according to CoinMarketCap.

According to CoinShares, capital inflows into crypto funds last week were $12.2m, with $14.8m coming into the funds on bitcoin shorts. Regular bitcoin products saw a net outflow of $2.6m.

The fall of the crypto market was caused by "greed, ignorance and misguided risk management", Galaxy Digital CEO Mike Novogratz said. He noted the collapse of the Terra ecosystem, which was the trigger for the subsequent problems of Celsius Network, Voyager Digital and Three Arrows Capital.

A bipartisan bill to regulate the crypto industry in the US could pass as a full-fledged document in 2023, Wyoming Senator Cynthia Lummis said. She said that some lawmakers would need more time to handle the topic.

SEC chief Gary Gensler said the crisis in the crypto market would require a reworking of investor protection laws.

 

[Fxpronews]

The differences between the actions of monetary authorities in various developed countries are becoming increasingly apparent. Until we see real work by the governments and central banks of the USA, Japan, or the Eurozone to change the trend, it is hardly prudent to bet on a peak in the USD.



In our view, governments’ ability to service their debts is an unspoken and indirect reason for this divergence. In the first instance, this depends on the level of the debt burden, and a more comprehensive set of measures also includes international investor confidence and the ability to raise money from the markets at an acceptable interest rate for the government.



From that point of view, the procrastination by the ECB, which is not expected to raise its rate until later Thursday, is understandable. Probably by as much as 50 points at once. For the ECB, it may look like a decisive move, but it is desperately lagging behind market conditions and the actions of its colleagues. Much of this has to do with questions about whether debt-ridden Italy and Greece can hold their own.

In Japan today, the central bank left Thursday’s rate unchanged at -0.1% and promised to increase QE if necessary. The debt-ridden Rising Sun Country cannot raise rates to protect against rising import prices., which has direct and obvious consequences for the currency. Since the start of 2021, the yen has lost 35% against the Dollar, about double the loss of the euro.



To investors and traders, the current euro and yen exchange rates may seem low after updating 20-year lows, but that is a dangerous approach. Rebalancing global monetary or currency policy is necessary to reverse the Dollar’s rising trend.

The ECB and the Bank of Japan allow a market devaluation of their currencies, ostentatiously delaying their policy tightening. Since they are significant reserve currencies, devaluation is proceeding smoothly despite economic problems and gloomy prospects due to dependence on energy imports.



Japan’s authorities appear to be only concerned about the pace of the yen’s decline, not about its falling. The euro region’s monetary and financial authorities have made no discernible comments to defend the euro. Only the US authorities can stop the Dollar’s rise in such circumstances.



Right now, the appreciation against peers is working to lower inflation and cool the economy, as is the policy of the Fed. Furthermore, the current situation is working on the Dollar’s credibility, which has been shaken in 2020.



In our view, in the coming months, the Dollar’s rise will only be interrupted by occasional technical pullbacks. Only the US authorities can stop this trend. The Treasury could suddenly become alarmed by the appreciation of the Dollar. The Fed could also quickly reduce the rate hikes or talk about easing plans once it is convinced that inflation has turned around. But so far, we are not at that point

 

[Fxpronews]

Bitcoin rose 5.3% over the past week, finishing near $22,300. However, the cryptocurrency's intra-week dynamics are not so rosy, as a moderate downtrend has returned to the market since July 20. Ethereum also declined for most of the week but added 6.6% at the end, to $1525.

The total capitalisation of the crypto market, according to CoinMarketCap, is back to $1009bn at the time of writing, although it was rising to $1082bn in the first half of last week. Bitcoin's dominance index fell 0.5 percentage points to 41.5% over the same period.

The cryptocurrency fear and greed index rose 10 points to 30 for the week and moved into "fear" from "extreme fear".

Bitcoin blew an opportunity to consolidate above its 50-day moving average, and for the sixth consecutive trading session, it has been circling that downward curve.

Bitcoin shot off like a rocket last Monday and Tuesday but has been on a gentle descent ever since.

This is a significant signal that the bearish trend remains dominant, and most active players stick with the "sell on the rise" strategy. The technical oversold has already been removed, so there is nothing to deter the bears from a new attack.

The medium-term market participants should prepare for a new test of last month's support of around 19000. Another bullish success could inspire the buyers. But it's still worth paying attention to stock performance. If they continue to melt away, big support won't hold on.

According to Citigroup, the acute phase of deleveraging and panic in the markets is over. According to Arcane Research, major institutions have sold more than 236K bitcoins since May 10, worth more than $5.4 billion.

Luna Foundation Guard's liquidation of BTC collateral was the largest, with more than 80,000 BTCs sold. Tesla got rid of 29,060 BTC. Another 24,500 bitcoins were sold by the Canadian exchange fund Purpose BTC. Miners sold more than 19,000 BTC between May and June.

Boston Consulting Group, Bitget and Foresight Ventures presented a joint study that estimates the number of cryptocurrency users will reach 1 billion by 2030.