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[Zforex]

Nasdaq Faces Uncertainty with Economic Indicators and Fed Speeches

Futures for the S&P 500 and Nasdaq 100 each fell by around 0.3%, although the Dow and S&P 500 will end the month up 6.9% and 8.5% respectively, while the Nasdaq, which focuses on technology stocks, rose 10.8% in November. During Cyber Monday, investor attention turned to e-commerce stocks, with Affirm, a "buy now, pay later" company, up nearly 12%, Shopify up nearly 5% and Amazon up 0.7%. On Tuesday, traders await economic data on housing prices and consumer confidence, as well as earnings from CrowdStrike. In addition, Federal Reserve officials, including Chicago Fed President Austan Goolsbee and Fed Governors Christopher Waller and Michelle Bowman, will deliver speeches later in the day, keeping investors alert.

The Nasdaq, like other major US indices, is currently in a state of uncertainty, awaiting crucial data, including this week's PCE data and other economic indicators, to determine its future direction. Prices have entered the overbought territory, as evidenced by the RSI indicator. Investors are carefully monitoring these factors before making decisions on market direction.

Bitcoin Retreats from Recent Highs, Yet Bullish Sentiment Persists

Bitcoin and other cryptocurrencies experienced a slight decline, pulling back from recent highs, yet the overall sentiment among crypto traders remains bullish. Bitcoin's moving away from the 18-month high above $38,000 achieved last week, marking a 30% surge since early October. This rise in Bitcoin's value is primarily attributed to optimism surrounding the potential approval of the first spot Bitcoin exchange-traded fund (ETF) by U.S. regulators, which is expected to attract more investors to the crypto market.

In addition to the ETFs' outlook, Bitcoin has been supported by an improving macroeconomic environment, driven by the assumption that the Federal Reserve has completed its interest rate hikes and could lower borrowing costs early next year. Such a move would favor risk-sensitive assets such as cryptocurrencies and tech stocks. From a technical perspective, the analysts note that despite the recent pause in price action, Bitcoin remains solid and is holding above key support points. Overall, both fundamental and technical factors are contributing to the prevailing positive sentiment in the cryptocurrency market.

Bitcoin is retracting from the $38,000 level and is currently seeking further direction in an environment marked by continuing uncertainty, forming a price range between $38,000 and 35,500.

 

[Zforex]

US Indices

Nasdaq Continues Uncertain Movements, Investors Await Fed Chairman's Comments

S&P 500 futures and Nasdaq 100 futures declined by 0.1% and nearly 0.3%, respectively. Traders were eagerly awaiting today's comments from Federal Reserve Chairman Jerome Powell. The sharp rally in November was partly due to traders beginning to believe that the Fed had completed its rate hikes and could even start cutting rates in the first half of next year. The Federal Reserve's next interest rate decision is scheduled for December 13.

Stock markets ended a record-breaking November on Thursday, breaking a three-month losing streak. The S&P and Nasdaq posted gains of 8.9% and 10.7% respectively, their strongest monthly performance since July 2022.

The Nasdaq continues its uncertain movements and clearly shows that neither the bullish nor the bearish side can determine the direction of the market. The market has entered an overbought state, as indicated by the Relative Strength Index (RSI). Investors are closely monitoring these developments to guide their decisions on market direction.

Crypto

SEC Engages with Asset Managers Ahead of Potential Bitcoin ETF Approval

The US Securities and Exchange Commission (SEC) is actively engaging with asset managers in the lead-up to a crucial decision on the approval of a Bitcoin exchange-traded fund (ETF). Memos reveal that the SEC recently met with Grayscale to discuss the potential conversion of the Grayscale Bitcoin Trust into an ETF, a move previously blocked but successfully challenged by Grayscale in court. Separate memos indicate meetings with BlackRock and Nasdaq representatives regarding their respective plans for a Bitcoin ETF. Despite the possibility of the SEC blocking crypto ETFs, industry experts anticipate their launch in the US early next year. SEC Chair Gary Gensler, a crypto critic, has indicated a willingness to consider his staff's input on a potential Bitcoin ETF. The market's growing confidence in ETF approval has contributed to a rise in Bitcoin prices, reaching above $37,000. Grayscale's recent hiring of John Hoffman, an ETF executive, suggests preparation for a fund launch if approved. The prevailing sentiment is that a Bitcoin ETF approval could occur in the coming months, impacting the cryptocurrency market positively.

Bitcoin is breaking the 38,000 level, and the next target could be 42,000, while 46,750 represents the strongest resistance level.

 

[Zforex]

US Indices

S&P 500 and Nasdaq Futures Edge Up, Mega-cap Stocks Show Mixed Performance

S&P 500 and Nasdaq 100 futures both showed a modest increase of 0.2%, reflecting a cautiously optimistic sentiment in the US market. This increase comes after a mixed performance in the previous session, where positive labor market data contributed to a stronger finish for the Nasdaq. Despite some overall weakness in the S&P 500, a standout performance was observed in the group known as the Magnificent Seven, a collection of major tech stocks, with Apple (AAPL) notably advancing by 2%.

In premarket trading, most mega-cap stocks have seen a rise. Nvidia, for instance, gained 1.1% following its announcement of collaboration with the US government. This partnership aims to ensure that their new chips destined for the Chinese market adhere to export restrictions.

Key employment data is under the spotlight this week, with a keen focus on the upcoming Non-farm Payrolls report for November, scheduled for release on Friday. This report is expected to be a significant factor in shaping market expectations regarding the future trajectory of interest rates. The anticipation surrounding this data highlights its potential impact on market movements and investor sentiment.

The Nasdaq continues its uncertain movements, awaiting further confirmation to either revert back to the 15500 level or ascend towards the 16600 resistance level. Data released this week, coupled with the Federal Reserve meeting next week, will significantly influence the market's direction, particularly given its current overbought condition.

Crypto

Bitcoin Surges Above $44,000, Major Holders Increase Activity

In recent weeks, Bitcoin's price has impressively surged, breaking through resistance levels to reach new yearly highs. It peaked above $44,000, a 15% gain in just seven days, partly fueled by excitement around spot Bitcoin ETFs. On-chain data reveals increased activity among major holders, with wallets holding over 100 BTC growing steadily for four weeks, according to Santiment analytics.

October saw Bitcoin's remarkable gains, and the number of wallets with 100 to 1,000 BTC increased by 16, pushing BTC towards $30,000. However, early November witnessed a dip in large wallets, coinciding with profit-taking, leading Bitcoin to drop to $35,500 by November 15. This trend reversed by mid-November, indicating persistent bullish momentum, as the count of whale addresses holding 100 BTC or more began to rise again, adding 48 wallets in four weeks.

This surge is unique, given factors like the upcoming halving and pending US spot Bitcoin ETFs. Santiment's analysis suggests this could be the start of an extended bull run into 2024, diverging from previous rallies. Bitcoin is breaking the 38,000 level, and the next target could be 42,000, while 46,750 represents the strongest resistance level.

Bitcoin's price is exhibiting strong momentum, with the potential to continue advancing toward the resistance level of 46755. The reversal has been as strong as anticipated, and further progress is expected.

 

[Zforex]

US Indices

Nasdaq 100 Futures Show Modest Gain with Labor Market Concerns

S&P 500 futures remained steady, while Nasdaq 100 futures saw a slight 0.2% increase. Investor focus has been on the job market, with recent data showing a slowdown. Wednesday's private payrolls report indicated fewer jobs added than expected, and Labor Department data revealed job openings in October were at their lowest since March 2021, prompting questions about continued labor market cooling.

In the stock market, Alphabet's shares rose 2.9% in premarket trading following its latest AI model release. Other major tech stocks showed mixed performance. Advanced Micro Devices experienced a 2.2% premarket increase after forecasting a significant market for its data center AI processors.

Looking ahead, traders largely anticipate the Fed to maintain interest rates at the upcoming meeting, with a 61% probability of a rate cut by March 2024, as per CME Group's FedWatch tool.

The Nasdaq is displaying uncertainty and indecisiveness in the markets ahead of tomorrow and next week's significant events. If a comeback occurs, the index could aim for the 15600 level, followed by 15220. Conversely, a bullish continuation could target the peak of 16600 seen in November 2021.

Crypto

Bitcoin Faces $190 Million in Trader Liquidations Due to Volatility and Regulatory Expectations

Bitcoin's recent pullback led to unexpected trader losses, with liquidations totaling $190 million in a day amid market uncertainty. A price dip to around $43,600, followed by a rebound to $44,000, caused over 81,000 traders, mainly in long positions, to face losses. Most liquidations occurred on the Binance and OKX exchanges, with the largest single event valued at $2.12 million. Despite a brief dip below $43,000 and a subsequent recovery to around $43,400, the market remains volatile, with Bitcoin struggling to maintain support above $43,000, yet bullish sentiment persists.

Several factors have supported Bitcoin's march to 20-month highs, including optimism that U.S. regulators will soon approve the first spot Bitcoin exchange-traded fund (ETF), which would be expected to fuel a new wave of investor interest. Expectations that interest rates will fall significantly next year have helped—a trend that has also supported the stock market in recent weeks, though Bitcoin has blown past the Dow Jones Industrial Average and S&P 500.

Against a strong technical market backdrop and amid historically tight token supply, analysts see more strength in Bitcoin—if the many crypto traders who have bought and held the digital asset can resist taking profit after such a run-up.

Bitcoin's price underwent a small correction as tomorrow's data are significant for markets and sentiment. The next target will be 46755.

 

[Zforex]

US Indices

U.S. Stock Futures Rise After Fed Hints at Potential Rate Reductions in 2024
U.S. stock futures rose on Thursday, supported by a significant drop in Treasury yields. This upturn followed the Federal Reserve's indication of potential rate reductions in 2024, which propelled the Dow Jones Industrial Average to an all-time high closing. Futures for the S&P 500 and the Nasdaq 100 also saw gains, increasing by 0.3% and 0.4% respectively.
Amid an easing inflation rate and a stable economy, the Federal Open Market Committee unanimously decided to maintain the benchmark overnight borrowing rate within the 5.25%-5.5% range. The committee members forecasted at least three rate cuts in 2024, each by a quarter percentage point. This projection is less than the market's expectation of four cuts but is more assertive than previous statements from officials.
Both the S&P 500 and the Nasdaq Composite hit new 52-week highs on Wednesday. The S&P 500 is just 2% shy of surpassing its highest closing record of 4,796.56, set in January 2022. The Nasdaq, 9% below its closing record, needs to rise by an additional 10% to reach its peak intraday record.
Investors are now focusing on economic data releases scheduled for Thursday, including weekly jobless claims and November’s retail sales figures.
The Nasdaq has reached its resistance level, close to the 16,600 mark, which represents a historical level from 2022. The trend is bullish, and further advancement may occur if the risk-taking sentiment continues. The next target could be around 17,300.

Crypto

Bitcoin Surges 6% Following FASB’s Accounting Standards Update
Bitcoin surged nearly 6% after the Financial Accounting Standards Board (FASB) released an Accounting Standards Update (ASU). This ASU aims to enhance accounting and disclosure for crypto assets, including Bitcoin. Michael Saylor, MicroStrategy's founder, believes this will boost Bitcoin's adoption as a treasury reserve asset by corporations worldwide.
FASB Chair Richard R. Jones stated that this move was prompted by feedback from various stakeholders who emphasized the need to improve crypto asset accounting and disclosure. Jones believes it will provide investors and capital allocators with more relevant information while reducing complexity in accounting.
As per the ASU, starting after December 15, 2024, Bitcoin will be accounted for using Fair Value Accounting. Entities will measure crypto assets at fair value each reporting period, recognizing changes in fair value in net income. They will also disclose significant holdings, contractual sale restrictions, and changes during reporting periods.
The Bitcoin price has rebounded from the median line and is progressing toward the upper parallel of the bullish channel, approaching the $45,000 target. Meanwhile, $46,755 is the next resistance level that Bitcoin may attain.

 

[Zforex]

US Indices

Slight Dips in S&P 500 and Nasdaq 100 Futures on Rate Cut Speculations
S&P 500 futures experienced a slight decline of 0.2%, while Nasdaq 100 futures saw a slightly larger decline of 0.3%. Market optimism was bolstered on Tuesday by comments from Richmond Fed President Thomas Barkin. He pointed out that the US central bank is prepared to react appropriately if the recent positive inflation trends were to continue. This statement prompted the money markets to price in an almost 50% probability of a rate cut in the euro area next March and an even higher probability of a similar move by the Fed in the same month.
In corporate news, FedEx fell sharply by 11% in pre-market trading. This decline came after the company released a revenue forecast for the fiscal year that failed to meet expectations. In addition, FedEx's second-quarter results fell short of Wall Street forecasts, both in terms of revenue (top line) and profit (bottom line).
The Nasdaq broke its historical level to make a new high and the momentum is still strong as the Santa rally seems close while the trend is super bullish.

Crypto

Institutional Interest in Bitcoin Surges Ahead of Anticipated Spot ETF Approval
The latest analysis by K33 research analysts has brought to light a significant uptick in institutional interest in Bitcoin, particularly in the context of the anticipated approval of a Spot Bitcoin Exchange-Traded Fund (ETF). K33's data shows that the open interest at the Chicago Mercantile Exchange (CME) for Bitcoin has increased significantly, by over 3,400 BTC in the last week, maintaining levels near historical highs at approximately 110,000 BTC. This surge is largely attributed to traders positioning themselves to capitalize on the expected favorable ETF decision.
The report underscores the eagerness of traders to leverage the anticipated approval of the Bitcoin ETF, seeing it as an opportunity for profit. Furthermore, it notes that some investors have developed a bullish outlook on Bitcoin and are seeking exposure through the CME considered a convenient and accessible avenue for such investments.
K33's analysis also draws a connection between the rise in CME's open interest and the general rally seen in the cryptocurrency market, which could be partly fueled by speculations regarding the Spot Bitcoin ETF. The report highlights the importance of ETF marketing in the cryptocurrency space, as emphasized by industry expert Samson Mow. Mow points out the significance for the 12 applicants of the Bitcoin ETF product to differentiate their offerings. The goal is to capture a larger share of Assets Under Management (AUM) in this emerging asset class.
The Bitcoin price has rebounded from the median line and is progressing toward the upper parallel of the bullish channel, approaching the $45,000 target. Meanwhile, $46,755 is the next resistance level that Bitcoin may attain.

 

[Zforex]

US Indices

S&P 500 futures have declined by 0.4%, alongside a drop in Nasdaq 100 futures. These movements follow a robust session for equities, where on Monday, the S&P 500 and the Nasdaq Composite surged over 1% and 2%, respectively. This rally was led by a rebound in mega-cap tech stocks, with Nvidia's shares hitting a record high after a 6.4% climb.
The strong performance of mega-cap tech stocks comes as investors took advantage of the previous week's sell-off to 'buy the dip.' Despite earlier concerns that leading names like Apple might falter following their stellar performance last year, the sentiment has shifted with many traders now optimistic about the sector's prospects.
In the coming days, the market's attention will turn to crucial inflation reports, which will provide insights into the Federal Reserve's interest rate trajectory. Investors are particularly focused on the consumer price index scheduled for release on Thursday and the producer price index due out on Friday. These data points are expected to be instrumental in shaping expectations for future rate cuts.
The Nasdaq index made a rebound yesterday erasing a significant part of last week's selloff. The momentum is still strong but volatility may intensify as this week's economic data and the beginning of the Q4 earnings may impact risk sentiment.

Crypto

The Crypto Fear and Greed Index has entered the "extreme greed" territory as anticipation builds for an approved spot Bitcoin ETF. The index places Bitcoin's market sentiment at a high of 76 out of 100, matching levels last seen when Bitcoin approached its all-time high of $69,000 in November 2021.
Bitcoin mining stocks have seen a remarkable increase in trading volume, with transactions exceeding $3.5 billion on January 8. Marathon Digital Holdings and Riot Blockchain were at the forefront, with Marathon Digital notably becoming the most traded stock in the U.S. market, surpassing tech giants such as Tesla, AMD, Nvidia, and Apple. Grayscale Bitcoin Trust (GBTC) also made a significant impact with nearly $500 million in trading volume, outstripping 99% of other ETFs.
This surge in mining stocks aligns with the overall expansion in the Bitcoin mining industry. Core Scientific has received a $55 million equity investment, and CleanSpark has signed a strategic agreement that could lead to the acquisition of up to 160,000 miners by the end of 2024. The increased trading activity underscores the rising importance of the Bitcoin mining sector within the broader financial landscape.
Bitcoin's price hit the target of $47,000 before experiencing some profit-taking, as this resistance level is significant. The momentum remains strong and healthy, although a potential correction could occur before the uptrend resumes.

 

[Zforex]

US Indices are Getting Busier after Declines

S&P 500 futures and Nasdaq-100 futures saw modest gains, rising by 0.1% and 0.3% respectively. In the cryptocurrency market, Coinbase and Marathon Digital experienced declines of 1% and nearly 3%, amid a decrease in Bitcoin prices. This downtrend was triggered by a false announcement on the U.S. Securities and Exchange Commission’s X account, mistakenly claiming the approval of Bitcoin ETFs.
Investors are now turning their attention to the latest Consumer Price Index (CPI) report, set to be released on Thursday. Economists surveyed by Dow Jones anticipate a 3.2% year-over-year increase in the CPI for December. This report is critical, as it will provide insights into the potential timing for the Federal Reserve to commence rate cuts. While there has been some recent scaling back in these expectations, the CME Group FedWatch tool indicates a 64% probability of rate cuts.
The focus on earnings will intensify on Friday, with anticipated results from major financial institutions such as JPMorgan Chase and Bank of America. Additionally, reports from UnitedHealth Group and Delta Air Lines are expected, marking a significant day in the earnings calendar.
For the Nasdaq and other US major indices, the uncertainty continues, and markets are not taking any uncalculated bets until the final data on Thursday and Friday are delivered. The momentum is still strong but volatility may intensify as this week's economic data and the beginning of the Q4 earnings may impact risk sentiment.

Volatility in the Crypto Market Today

Cryptocurrencies experienced volatility on Wednesday as the market anticipated the SEC's decision on approving spot Bitcoin exchange-traded funds (ETFs). This speculation was intensified by a false announcement on the SEC's social media account claiming the ETFs had been approved, causing Bitcoin prices to momentarily spike before falling back. The SEC later confirmed that its account was breached and clarified that no such approval had been granted.
The SEC has been cautious about approving spot Bitcoin ETFs, citing concerns over market surveillance and the potential for fraud and manipulation. The market is now at a critical juncture as the SEC faces a final deadline on Wednesday for several proposed funds. The recent incident highlights the high level of anticipation and potential market impact of such an approval.
Despite the regulatory uncertainty, the eventual U.S. approval of spot Bitcoin ETFs, could significantly boost interest in cryptocurrencies, especially among institutional investors. This approval could further drive Bitcoin prices, already supported by limited supply and strong holding by long-term investors. However, the market remains prone to volatility, with the potential for significant movements depending on the SEC's decision on ETF approvals.
Bitcoin's price reached $47,000 but corrected for the second day. The momentum is strong, but a potential correction could occur before the uptrend resumes.

 

[Zforex]

Major Banks Data Expected to Shape the Inflation Course

S&P 500 futures saw a modest increase of 0.1%, while Nasdaq 100 futures experienced a more significant advance of 0.4%. Market participants are keenly focused on the upcoming inflation data, which is expected to be a major driver for market trends. This data will be crucial in assessing the effectiveness of the Federal Reserve's monetary tightening policies in controlling inflation. The outcome will also be pivotal in aligning market expectations, which currently anticipate six rate cuts in 2024, against the Federal Reserve's projection of three cuts for the year. The December Consumer Price Index (CPI) reading might indicate that traders are prematurely expecting rate cuts from the Federal Reserve.
Investors are also closely monitoring the beginning of the fourth-quarter earnings season. Prominent banks such as Bank of America, Wells Fargo, and JPMorgan Chase are scheduled to report their results this Friday. Meanwhile, the Nasdaq showed resilience yesterday, recovering most of its recent losses. If the upcoming data is lower than expected, Nasdaq could potentially aim for a new record, targeting the 17425 mark. Conversely, if the data exceeds expectations, the Nasdaq might face significant sell-offs, with the 16200 area, which also represents the median line, likely serving as the next support level.

Spot Bitcoin ETFs are Approved for the First Time

The US Securities and Exchange Commission (SEC) has made a groundbreaking move by approving the first-ever spot Bitcoin exchange-traded funds (ETFs). On January 10, firms including ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity, Valkyrie, BlackRock, Grayscale, Bitwise, Hashdex, and Franklin Templeton received the green light to list and trade their spot Bitcoin ETFs. This historic decision allows trading to begin on January 11.
These spot Bitcoin ETFs provide investors a new avenue to gain exposure to Bitcoin's price without directly purchasing the cryptocurrency. Instead, they can buy shares in ETFs holding physical Bitcoin. Samir Kerbage, Chief Information Officer at Hashdex, highlighted this as a monumental day for digital assets, allowing U.S. investors to engage more fully with Bitcoin.
The journey to this approval was arduous, with initial rejections due to concerns over market manipulation and a smaller market size. However, the significantly larger market in 2023 and heightened institutional interest have turned the tide. BlackRock's participation was particularly influential, enhancing the legitimacy of Bitcoin ETFs. With this approval, the approach towards cryptocurrency investment is poised to transform, potentially attracting more institutional investors and affirming Bitcoin's status as a viable investment asset.
Bitcoin's price is testing 47000 which seems possible considering the strong momentum and the bullish trend after the last approval. The next target will be at the 51000 level.

 

[Zforex]

US Indices

Futures tied to the S&P 500 gained 0.4%, while those linked to the Nasdaq-100 advanced 0.7%. Apple shares saw an increase of over 1% in premarket trading after Bank of America upgraded the stock to 'buy', predicting more than a 20% upside over the next 12 months. Investors are concerned that a strong December retail sales report, indicative of a robust consumer base, could lead to fewer rate cuts from the Federal Reserve than previously anticipated. Currently, markets are pricing in about a 56% chance of a quarter-percentage-point rate cut in March. In terms of economic indicators, weekly jobless claims, housing starts, and building permits data are scheduled for release Thursday morning. Additionally, Atlanta Fed President Raphael Bostic is set to speak.
In the premarket, U.S.-listed shares of Taiwan Semiconductor Manufacturing (TSMC) are leading gains among chipmakers with a 4.9% rise. This follows the world's largest contract semiconductor maker's report of upbeat quarterly profit and a projection of upwards of 20% revenue growth, driven by demand for artificial intelligence chips. Other chipmakers like Nvidia, Microchip Technology, and Intel saw increases ranging between 0.2% and 3.5%.
While the Nasdaq and other major U.S. indices are under pressure, today the Nasdaq may see a rebound, supported by these fundamentals. Generally, the Nasdaq is experiencing uncertainty as the bullish trend pauses, and the shift in market sentiment could be negative for the index.


Crypto

The Bitcoin price has remained stagnant in recent days, leaving investors and analysts searching for reasons behind this trend. Three key factors are contributing to Bitcoin's current sideways trading:
Spot Bitcoin ETFs, particularly Grayscale's GBTC, have been a major focus in the market. While ETF inflows continue to break records, the Bitcoin price has not seen significant gains. This is partially due to outflows from GBTC, which is considered overpriced with a 1.5% annual fee compared to 0.25% by other issuers. Thomas Fahrer of Apollo highlighted the flow discrepancies, and there is an expectation that Grayscale outflows may reduce over time as investors shift to other Bitcoin exposures.
On-chain data suggests that Bitcoin miners have increased their selling activity, which is contributing to the price stagnation. This behaviour aligns with historical trends where miners sell to manage cash flow or capitalize on price increases during market rallies.
Following the excitement around Bitcoin ETFs, which led to an 82% rally, the market is now in a consolidation phase. This phase is considered natural and resembles patterns seen in other markets, like the first gold ETF. It may take some time before asset managers' marketing efforts and new institutional investors fully embrace this new asset class.
Bitcoin has entered a period of tight price range after hitting $47,000. The trend is bullish, but reaching the upper parallel of the channel could lead to further correction.