Daily Market Analysis from NordFX

USD/JPY: Awaiting the Pair at 152.80?

The Japanese yen remains the weakest among the currencies of developed nations. USD/JPY  has been rising throughout the year, and on Thursday, October 26, it reached a new annual high of 150.77. The primary reason for this trend, as we have frequently emphasized in our reviews, is the disparity in monetary policies between the Bank of Japan (BoJ) and other leading central banks. The BoJ shows no signs of relinquishing its ultra-accommodative monetary policy, maintaining its interest rate at a negative -0.1%. With the Federal Reserve's rate standing at +5.50%, a simple carry-trade operation exchanging yen for dollars provides substantial returns due to this rate difference.

The yen is also not helped by the easing control over the yield curve of Japanese government bonds. Currently, the yield on 10-year bonds can deviate from zero by no more than 0.5%. At its July meeting, the BoJ decided that this range would be more of a guideline than a hard boundary. However, subsequent experience has shown that any notable deviation from this range triggers the BoJ to buy bonds, which again leads to yen weakening.

Even the currency interventions conducted on October 3, when USD/JPY exceeded the 150.00 mark, failed to support the yen. The pair was temporarily brought down to 147.26, but it quickly rebounded and is now once again approaching the 150.00 level.

Leaders of Japan's Ministry of Finance and the Central Bank continually attempt to bolster their currency with reassuring yet rather vague statements, asserting that Japan's overall financial system remains stable and that they are closely monitoring exchange rates. However, as evident, their words have had limited impact. On the past Friday, October 27, Hirokazu Matsuno, the Chief Cabinet Secretary, added to the ambiguity. According to him, he expects the Bank of Japan to conduct appropriate monetary policy in line with objectives for achieving stable and sustainable price levels. While this sounds very good, understanding its implications is also very challenging. What exactly constitutes "appropriate" policy? And where does this elusive "target price level" stand?

According to experts at Germany's Commerzbank, "not everything in Japan's monetary and foreign exchange policy is always logical." "The market is likely to continue testing higher levels in USD/JPY," forecast the bank's economists. "Then there are two possible scenarios: either the Ministry of Finance conducts another intervention, or the yen's depreciation accelerates as the market starts to price out the risk of intervention."

"In the medium to long term," Commerzbank analysts continue, "an intervention won't be able to prevent a depreciation of the currency, especially if the Bank of Japan keeps exerting pressure on the yen by maintaining its ultra-expansionary monetary policy. Therefore, the only logical response would be, at the very least, a gradual normalization of monetary policy, possibly through further easing of the yield curve control (YCC). However, there is no certainty that easing the YCC would be sufficient, nor is there any certainty that the Bank of Japan will change anything in its meeting on Tuesday [October 31]."

As a result, analysts at the French bank Societe Generale believe that current dynamics favour a continuation of the upward movement. The next potential hurdles, in their opinion, lie at the 151.25 level and in the zone of last year's highs of 152.00-152.80. A key support zone is at 149.30-148.85, but overcoming this area would be necessary to confirm a short-term decline.

USD/JPY closed the past trading week at a level of 149.63. When discussing its near-term prospects, analysts are evenly split: 50% predict the pair will rise, and 50% anticipate a decline. Trend indicators on the D1 chart show 65% in green, indicating bullishness, and 35% in red, signalling bearishness. Among oscillators, there is unanimous lack of sentiment for a downward move. 50% point north, and the remaining 50% indicate a sideways trend. The nearest support levels are situated in the zones of 148.30-148.70, followed by 146.85-147.30, 145.90-146.10, 145.30, 144.45, 143.75-144.05, and 142.20. The closest resistance lies at 150.00-150.15, then 150.40-150.80, followed by 151.90 (October 2022 high) and 152.80-153.15.

No significant economic data pertaining to the state of the Japanese economy is scheduled for release in the upcoming week. Naturally, attention should be paid to the Bank of Japan's meeting on Tuesday, October 31, although no major surprises are expected. Traders should also be aware that Friday, November 3, is a public holiday in Japan as the country observes Culture Day.

A bit of reassuring information for proponents of the Japanese currency comes from Wells Fargo. They anticipate that "if the Federal Reserve does indeed cut rates, and even if the Bank of Japan continues to gradually tighten monetary policy, the yield differential should shift in favour of the yen in the long term." Wells Fargo strategists forecast that "by the end of next year, USD/JPY could be heading toward 146.00."

This American bank's outlook may instil optimism in traders who opened short positions at 150.00. However, what course of action should be taken by those who pressed 'Sell' in January 2023 when the pair was trading at 127.00?

CRYPTOCURRENCIES: Start of a Bull Rally or Another Bull Trap?

Today's cryptocurrency market review is decidedly optimistic, and for good reason. On October 23-24, bitcoin surged to $35,188 for the first time since May 2022. The rise in the leading cryptocurrency occurred amid a mix of tangible events, speculative buzz, and fake news related to the U.S. Securities and Exchange Commission (SEC).

For instance, Reuters and Bloomberg reported that the SEC will not appeal a court ruling in favour of Grayscale Investments. Additionally, news emerged that the SEC is discontinuing its lawsuit against Ripple and its executives. Speculation also abounded regarding potential SEC approval of an Ethereum ETF and rumours of a spot BTC-ETF approval for BlackRock. Last week, BlackRock confirmed that the latter news was false. However, the short squeeze triggered by this fake news facilitated the coin's rise, shaking up the market. The initial local trend was amplified by a cascade of liquidations of short positions opened with significant leverage. According to Coinglass, a total of $161 million in such positions was liquidated.

While the news was fake, the saying goes, "Where there's smoke, there's fire." BlackRock's spot bitcoin exchange-traded fund, iShares Bitcoin Trust, appeared on the Depository Trust and Clearing Corporation (DTCC) list. BlackRock itself informed the SEC about its plans to initiate a test seed round in October for its spot BTC-ETF, potentially already beginning its cryptocurrency purchasing. This too fuelled speculation and rumours that the approval of its ETF is inevitable.

Moreover, according to some experts, technical factors contributed to the rise in quotes. Technical analysis had long pointed to a possible bull rally following an exit from the sideways trend.

Some analysts believe that another trigger for bitcoin's surge was the decline of the Dollar Index (DXY) to monthly lows on October 23. However, this point is debatable. We have previously noted that bitcoin has recently lost both its inverse and direct correlations, becoming "decoupled" from both the U.S. currency and stock market indices. The chart shows that on October 24, the dollar reversed its trend and began to rise. Risk assets like the S&P 500, Dow Jones, and Nasdaq Composite indices responded to this with sharp declines. But not BTC/USD, which shifted to a sideways movement around the Pivot Point of $34,000.

While the S&P 500 has been in a bearish trend for 13 weeks, BTC has been rising since August 17 despite challenges. During this period, the leading cryptocurrency has gained approximately 40%. Looking at a more extended timeframe, over the last three years, bitcoin has grown by 147% (as of October 20, 2023), while the S&P 500 has increased by only 26%.

Last week, the average BTC holder returned to profitability. According to calculations by analytics agency Glassnode, the average acquisition cost for investors was $29,800. For short-term holders (coins with less than 6 months of inactivity), this figure stands at $28,000. As of the writing of this review, their profit is approximately 20%.

The situation is somewhat different for long-term hodlers. They rarely react to even significant market upheavals, aiming for substantial profits over a multi-year horizon. In 2023, over 30% of the coins they held were in a drawdown, but this did not deter them from continuing to accumulate. Currently, holdings for this investor category amount to a record 14.9 million BTC, equivalent to 75% of the total circulating supply. The most notable and largest among such "whales" is MicroStrategy Incorporated. The company purchased its first batch of bitcoin in September 2020 at a price of $11,600 per coin. Subsequent acquisitions occurred during both market upswings and downturns, and it now owns 158,245 BTC, having spent $4.7 billion on the asset. Therefore, MicroStrategy's unrealized profit stands at approximately $0.65 billion, or roughly 13.6%.

The anticipation of the imminent launch of spot BTC ETFs in the U.S. is fuelling institutional interest in cryptocurrency. However, due to regulatory hurdles posed by the SEC, this interest is mostly deferred, according to analysts at Ernst & Young. By some estimates, this pent-up demand amounts to around $15 trillion, which could potentially drive BTC/USD to $200,000 in the long term. What can be said for certain is that open interest in futures on the Chicago Mercantile Exchange (CME) has surpassed a record 100,000 BTC, and daily trading volume has reached $1.8 billion.

Another driver of increased activity, according to experts, is the inflationary concerns in the U.S. and geopolitical risks such as the escalating situation in the Middle East. Zach Pandl, Managing Director of Grayscale Investments, explained that many investors view bitcoin as "digital gold" and seek to minimize financial risks through it. According to CoinShares, investments in crypto funds increased by $66 million last week; this marks the fourth consecutive week of inflows.

According to experts at JPMorgan, a positive decision from the SEC on the registration of the first spot bitcoin ETFs can be expected "within months." The specialists noted the absence of an SEC appeal against the court decision in the Grayscale case. The regulator has been instructed not to obstruct the transformation of the bitcoin trust into an exchange-traded fund. "The timelines for approval remain uncertain, but it is likely to happen [...] by January 10, 2024, the final deadline for the ARK Invest and 21 Co. application. This is the earliest of various final deadlines by which the SEC must respond," noted the experts at JPMorgan. They also emphasized that the Commission, in the interest of maintaining fair competition, may approve all pending applications simultaneously.

The future price behaviour of bitcoin is a topic of divided opinion within the crypto community. Matrixport has published an analytical report discussing the rising FOMO (Fear of Missing Out) effect. Their analysts rely on proprietary indicators that enable them to make favourable predictions for digital assets. They believe that by year-end, bitcoin could reach $40,000 and may climb to $56,000 if a bitcoin ETF is approved.

Many market participants are confident that a positive news backdrop will continue to support further cryptocurrency growth. For instance, Will Clemente, co-founder of Reflexivity Research, believes that the coin's behaviour should unsettle bears planning to buy cheaper BTC. A trader and analyst known as Titan of Crypto predicts the coin to move towards $40,000 by November 2023. Optimism is also shared by Michael Van De Poppe, founder of venture company Eight, and Charles Edwards, founder of Capriole Fund.

However, there are those who believe that BTC will not make further gains. Analysts Trader_J and Doctor Profit, for example, are certain that after reaching a new local maximum, the coin will enter an extended correction. Their forecast does not rule out a decline of BTC/USD to $24,000-$26,000 by year-end. A trader known as Ninja supports this negative bitcoin outlook. According to him, the technical picture, which includes an analysis of gaps on CME (the space between the opening and closing prices of bitcoin futures on the Chicago Mercantile Exchange), suggests the likelihood of BTC falling to $20,000.

As of the time of writing this review, on Friday, October 27, BTC/USD is trading at $33,800. The overall market capitalization of the crypto market stands at $1.25 trillion, up from $1.12 trillion a week ago. The Crypto Fear & Greed Index has risen over the week from 53 points to 72, moving from the Neutral zone into the Greed zone. It recorded its 2023 peak before slightly retreating and currently stands at 70 points. It's worth noting that just a month ago, the Index was in the Fear zone. Similar explosive rises in market sentiment were previously recorded in mid-2020 and mid-2021, correlating with price increases.

In conclusion of this generally optimistic overview, let's introduce a bit of pessimism from Peter Schiff, President of Euro Pacific Capital. This long-time critic of the leading cryptocurrency stated that bitcoin is "not an asset, it's nothing." He also likened bitcoin holders to a cult, saying, "No one needs bitcoin. People buy it only after someone else convinces them to do so. After acquiring [BTC], they immediately try to draw others into it. It's like a cult," wrote Schiff.

However, it's worth noting that this is a very large and rapidly growing "cult." If in 2016 the number of BTC holders was just 1.2 million, by May 2023, according to various sources, global ownership is estimated at 420 million, or 5.1% of the world's population.


NordFX Analytical Group


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

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Forex and Cryptocurrencies Forecast for November 06 - 10, 2023


EUR/USD: A Bad Week for the Dollar

Throughout the week, the Dollar Index DXY, along with EUR/USD, appeared to be riding the waves, moving up and down. At the beginning of the week, preliminary data for Europe was released. In terms of annual growth, the GDP of the Eurozone in the third quarter was only 0.1%, which fell short of both the forecast of 0.2% and the previous figure of 0.5%. In addition, inflation took a downward turn ? in October, the Consumer Price Index (CPI) stood at 2.9% (year-on-year), missing the forecast of 3.1% and the previous month's 4.3%.

The European Central Bank meeting took place on October 26, during which the members of the Governing Council unsurprisingly left the interest rate unchanged at 4.50%. Now, market participants were eagerly anticipating the decision of the Federal Open Market Committee (FOMC) of the Federal Reserve, scheduled for Wednesday, November 1. On the eve of the FOMC meeting, the dollar, regarded as a safe-haven asset, received support due to increased geopolitical tensions in the Middle East. Additionally, strong macroeconomic data from the United States favoured the American currency. The country's GDP in the third quarter surged by 4.9%, significantly surpassing the previous figure of 2.1%. Another surprise came from the ADP private sector employment data: the change in the number of employed individuals in the private sector reached 113K, compared to 89K the previous month.

Market participants had a sense that in such a situation, the Federal Reserve (FOMC) might well continue tightening monetary policy, especially since inflation is still far from the target level of 2.0%. Against this backdrop, the yield on 10-year Treasury bonds once again approached the 5.0% level, and the Dollar Index (DXY) rose to 107.00.

However, November 1 brought complete disappointment to the dollar bulls. For the second consecutive month, the FOMC left the key interest rate unchanged at 5.50%. What's worse is that if after the September meeting, the market believed that the cost of borrowing would rise to 5.75% by the end of this year, the probability of such an increase has now plummeted to 14%. The Dollar also received no support from the rhetoric of Federal Reserve Chairman Jerome Powell during the press conference following the current meeting.

The situation could have been rectified by the data from the U.S. Bureau of Labor Statistics (BLS), traditionally published on the first Friday of the month, which was on November 3. However, the number of non-farm payroll (NFP) employees in the country only increased by 150K in October. This figure turned out to be lower than both the market's expectations of 180K and the revised September growth, which was adjusted from 336K to 297K. The unemployment rate rose during the same period from 3.8% to 3.9%. The annual inflation, measured by the change in the average hourly wage, decreased from 4.3% to 4.1%. As a result of this disappointing data for Dollar bulls, the Dollar Index (DXY) plummeted to 105.09, while EUR/USD reached a six-week high at 1.0718.

Towards the end of the workweek, the publication of the ISM Services PMI index revealed that business activity in the U.S. services sector was growing at a slower pace in October. The PMI declined to 51.8 from 53.6 in September. This value was below the market's expectation of 53.0. More detailed data showed that the index of service prices (the inflation component) decreased slightly from 58.9 to 58.6, and the employment index dropped from 53.4 to 50.2. As a result, the Dollar continued its descent, and the final note of the week for the currency pair was heard at the level of 1.0730.

According to strategists at the Canadian Scotiabank, in the short term, EUR/USD could rise to 1.0750. In general, expert opinions regarding the near future of the currency pair are divided as follows: 45% voted for a stronger Dollar, while 60% sided with the Euro. As for technical analysis, 35% of the D1 oscillators are pointing south, while 65% are pointing north, although a third of them signal overbought conditions for the pair. Among trend indicators, priorities are clearer: 85% are looking north, with only 15% looking south. The nearest support for the pair is located around 1.0675-1.0700, followed by 1.0600-1.0620, 1.0500-1.0530, 1.0450, 1.0375, 1.0200-1.0255, 1.0130, and 1.0000. Bulls will encounter resistance around 1.0745-1.0770, then 1.0800, 1.0865, 1.0945-1.0975, and 1.1090-1.1110.

Unlike the past five days, the economic calendar for the upcoming week anticipates significantly fewer important events. On Wednesday, November 8, data on inflation (CPI) in Germany and retail sales in the Eurozone will be released. Additionally, on this day, Federal Reserve Chairman Jerome Powell is scheduled to give a speech. He can also be heard again on Thursday, November 9. As is customary, Thursday will also bring data on the number of initial jobless claims in the United States.

GBP/USD: A Good Week for the Pound

Looking at the results of central bank meetings in many countries, there is a sense that the global trend of tightening monetary policy has come to an end. Both the ECB and the Fed left interest rates unchanged. The Bank of England (BoE) also did the same on November 2 at its meeting, leaving the key rate unchanged for the second consecutive time at 5.25%. According to the regulator, such a decision should support the recovery of the economy and employment levels in the United Kingdom. The short-term inflation forecast was revised upwards. However, the central bank leaders noted that inflation in the third quarter had decreased to 6.7%, which was better than expected in August, and its target level of 2.0% is likely to be reached by the end of 2025.

Despite the BoE keeping the rate unchanged, the market perceived this decision as hawkish because three out of nine members of the bank's leadership voted for an increase. Furthermore, the Governor of the Bank of England, Andrew Bailey, emphasized during a press conference that considering a rate cut would be premature. He stated, "Monetary policy is likely to remain restrictive for an extended period." Investors are aware that central banks use such forward guidance as a tool to influence the market, so it is unlikely that the regulator will switch to a soft monetary policy anytime soon. Of course, there are no guarantees that the BoE will stick to its promises if inflation does not move towards the target level. However, at the moment, the market believes Andrew Bailey, which has supported the British currency.

The pound received its strongest bullish impulse after the release of US labor market data on November 3. At that moment, GBP/USD surged upwards, continued its ascent, and closed the week at 1.2380. According to Scotiabank economists, the short-term trading model for the British currency looks promising. They note an increase in demand for the pound amid its weakening since mid-July and do not rule out a rise of GBP/USD to the 1.2450 level. As for the median forecast for the near future, 35% of analysts voted for the pair's rise, 50% believe that the pair will resume its movement towards the 1.2000 target, and the remaining 15% remain neutral. On the D1 timeframe, 75% of trend indicators point to a pair's rise and are coloured green, while the remaining 25% are red. Oscillators show the same readings: 75% point upwards (a quarter of them are in the overbought zone), and 25% voted for a decline. In case the pair moves south, it will encounter support levels and zones at 1.2330, 1.2210, 1.2145, 1.2040-1.2085, 1.1960, and 1.1800-1.1840, 1.1720, 1.1595-1.1625, 1.1450-1.1475. In the event of an upward movement, the pair will face resistance at levels 1.2390-1.2425, 1.2450-1.2520, 1.2575, 1.2690-1.2710, 1.2785-1.2820, 1.2940, and 1.3140.

The speech by the Governor of the Bank of England, Andrew Bailey, scheduled for November 8, and the release of preliminary GDP data for the country for Q3 on November 10 can be highlighted in the events of the upcoming week related to the United Kingdom's economy.


continued below...

NordFX Wins Again in the Best Crypto Broker Category at the AllForexRating Awards


Starting from 2017, the brokerage firm NordFX has received numerous awards for achievements and innovations in the field of cryptocurrency trading. These awards were given by both authoritative professional juries and through open voting by traders. This time, based on the results of voting by visitors to the AllForexRating portal, NordFX has once again achieved a resounding victory in the category of Best Crypto Broker. Receiving this award for the second year in a row underscores the high level and safety of the financial services that the company's clients receive.

The recent years have been quite challenging for the crypto industry. Factors such as the COVID-19 pandemic, a series of bankruptcies among major industry players, pressure from the U.S. Securities and Exchange Commission (SEC), the monetary policies of the Federal Reserve (FRS), and central banks of other leading countries have all had a significant impact on the cryptocurrency market capitalization, volatility, and digital asset quotes. In these conditions, NordFX clients have highly appreciated the reliability of the services offered, the opportunity to profit not only from the rise but also from the decline of cryptocurrencies, and the advantages of margin trading that allow for substantial profits even with a relatively small starting capital. For example, traders only need $150 to open a position of 1 Bitcoin, $15 to open a position of 1 Ethereum, $0.3 to open a position of 1 EOS, $0.02 to open a position of 1 Ripple, and $0.001 to open a position of 1 Doge.

The NordFX Savings Account has also gained significant popularity among traders and investors. It is a unique innovation based on DeFi technology. The benefits of DeFi allow account holders not only to earn passive income of up to 35% annually but also to increase their profits through independent trading on financial markets. You can easily take an instant trading loan at just 3% against the funds held in the Savings Account. The account balance can be in USD, BTC, ETH, USDT, DAI, BUSD, or other stablecoins.


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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USD/JPY: The Near Future of the Yen Lies in the Hands of the Fed

The momentum gained by USD/JPY after the release of the U.S. inflation report on November 14th proved to be so strong that it continued into the past week. On Tuesday, November 21, the pair found a local bottom at the level of 147.14. Once again, news from the other side of the Pacific, specifically the release of the Federal Reserve's minutes, served as a signal for a northward reversal.

As the primary catalyst for the yen revolves around speculations about changes in the Bank of Japan's (BoJ) policy, markets awaited the release of national inflation data on Friday, November 24th. It was anticipated that the core CPI would increase by 3.0% (year-on-year) compared to the previous value of 2.8%. However, it grew less than expected, reaching 2.9%. The rise in the overall national CPI was 3.3% (year-on-year), exceeding the previous figure of 3.0% but falling short of forecasts at 3.4%. As a result, this had little to no impact on the Japanese yen's exchange rate.

According to economists at Commerzbank, the inflation indicators suggest that the Bank of Japan is unlikely to aim for an exit from its ultra-easy monetary policy in the foreseeable future. The dynamics of USD/JPY in the coming weeks will likely depend almost entirely on the movement of the dollar.

This stance is probably acceptable to the Japanese central bank, reflecting the market's low expectations regarding a tightening of its passive and dovish policy. This sentiment was reaffirmed by Japan's Prime Minister Fumio Kishida, who addressed Parliament on Wednesday, November 22nd. Kishida stated that the BoJ's monetary policy is not aimed at directing currency rates in a particular direction. From this, it can be inferred that the country's leadership has entrusted the Federal Reserve of the United States with this function.

The closing note of the week for USD/JPY settled at the level of 149.43, maintaining its position above the critical 100- and 200-day SMAs. This suggests that the broader trend still leans towards bullish sentiments, despite recent local victories for bears. Regarding the immediate prospects of the pair, only 20% of experts anticipate further strengthening of the dollar, another 20% side with the yen, while the majority (60%) refrain from making any forecasts. As for the technical analysis on the daily chart (D1), the forecast remains uncertain. Among trend indicators, the ratio is evenly split between red and green (50% each). Among oscillators, 60% favour red, 20% favour green, and 20% are neutral-grey. The nearest support level is located in the zone of 149.20, followed by 148.90, 148.10-148.40, 146.85-147.15, 145.90-146.10, 145.30, 144.45, 143.75-144.05, and 142.20. The nearest resistance is at 149.75, followed by 150.00-150.15, 151.70-151.90, then 152.80-153.15 and 156.25.

There is no planned release of any significant statistics regarding the state of the Japanese economy next week.

CRYPTOCURRENCIES: "Modest" Fine of $7,000,000,000


From the events of the past week, one stands out. It has been reported that the largest crypto exchange, Binance, reached a global settlement with the US Department of Justice, the Commodity Futures Trading Commission, the Office of Foreign Assets Control, and the Financial Crimes Enforcement Network, related to their investigations into registration issues, compliance, and violations of anti-Russian sanctions.

As part of the agreement, on November 21, 2023, CZ (Changpeng Zhao) stepped down as the CEO of the exchange. Additionally, under the agreement, Binance will pay regulators and law enforcement substantial amounts (around $7 billion) in the form of fines and compensations to settle charges and claims against them. In addition to the financial settlement, Binance has agreed to completely withdraw from the US markets and will "comply with a set of stringent sanction requirements." Furthermore, the exchange will be under a five-year observation by the US Treasury with open access to its accounting books, records, and systems.

The $7 billion payouts are a substantial amount that will significantly impact the company. Can it survive this? After news of these fines, a wave of panic sentiments swept through the market. According to DeFiLlama data, Binance's reserves decreased by $1.5 billion in two days, with an outflow of $710 million during the same period. These are substantial losses. However, looking at history, such withdrawal rates are not extraordinary. In June, after the SEC filed a lawsuit, the outflow exceeded $1 billion in a day, and in January, amid the BUSD stablecoin scandal, the outflow reached a record $4.3 billion for 2023. So, there is likely no catastrophe, and the exchange will face local difficulties.

Representatives of Binance stated that they firmly believe in the crypto industry and the bright future of their company. Many experts view the exchange's agreement with US authorities as a positive event, considering Binance's leading role in the crypto industry. Confirmation of this was the bitcoin dynamics: in the first hours, BTC/USD dropped by 6%, but then rebounded: on Friday, November 24, it even broke through resistance in the $38,000 zone, reaching a high of $38,395.

According to several experts, the fundamental indicators of the leading cryptocurrency have never looked better. For example, 70% of the existing BTC supply has not moved from one wallet to another during this year. "This is a record level in bitcoin's history: such withdrawal rates are extraordinary for a financial asset," summarizes a group of analysts led by Gautam Chhugani.

Glassnode, an analytical company, also notes a consistent outflow of BTC coins from exchanges. The total supply of the leading cryptocurrency is becoming increasingly scarce, and the circulating supply is currently at an all-time low.

In a recent Glassnode report, it is stated that 83.6% of all circulating bitcoins were acquired by current owners at a lower cost than the current value. If this figure surpasses the 90% mark, it could indicate the beginning of the euphoria stage, where almost all market participants have unrealized profits.

According to analysts, statistical data can help determine the current market stage. For instance, when less than 58% of all BTC coins are profitable, the market is in the bottoming formation stage. Once the indicator surpasses the 58% mark, the market transitions into the recovery stage, and above 90%, it enters the euphoria stage.

Glassnode believes that over the last ten months, the market has been in the second of these three stages, recovering from a series of negative events in 2022, such as the collapse of the Luna project and the bankruptcy of the crypto exchange FTX.

So, the chances of entering the New Year 2024 on an upward trajectory are increasing. Positive expectations are reinforced by the upcoming halving in April. It may reduce the monthly selling pressure from miners from $1 billion to $500 million (at the current BTC rate). Additionally, the potential approval of bitcoin exchange-traded funds (ETFs) in the U.S. is a positive catalyst, easing access to cryptocurrency for major investors. According to experts at Bernstein, against this backdrop, by the beginning of 2025, the price of the first cryptocurrency could rise to $150,000.

Can one expect a significant downward correction from bitcoin in the near future? The crypto market is known for its unpredictability and volatility. However, according to renowned analyst Willy Woo, this is unlikely. He examined blockchain data reflecting the average purchase price of BTC by investors, concluding that the primary cryptocurrency is unlikely to drop below $30,000 again.

Woo shared a chart with readers, showing a dense grey band representing the price around which a significant portion of bitcoin's supply fluctuated. According to the expert, this reflects "strong consensus price." Woo claims that since the inception of bitcoin, this band has acted as a reliable price support. The chart demonstrates that such bands formed eight times throughout bitcoin's existence, always supporting its price.

However, it's important to acknowledge that not everyone trusts Woo's calculations. An analyst using the pseudonym TXMC reminded that Woo made a similar forecast in 2021, stating that bitcoin would never drop below $40,000. Yet, the next year saw exactly that happen: on November 20, 2022, BTC/USD reached a minimum in the $15,480 range.

Since that tragic date, bitcoin has appreciated by more than 2.4 times. As of the evening of Friday, November 24, BTC/USD is trading around $37,820. The total market capitalization of the crypto market is $1.44 trillion (compared to $1.38 trillion a week ago). The Crypto Fear and Greed Index has risen from 63 to 66 points and continues to be in the Greed zone.

As for the U.S. Securities and Exchange Commission (SEC), it remains proactive. Following the resolution with Binance, it has now filed charges against the cryptocurrency trading platform Kraken. According to the SEC, the platform operated as an unregistered exchange for securities, broker, dealer, and clearing agency. The SEC lawsuit alleges that since September 2018, Kraken has earned hundreds of millions of dollars by unlawfully facilitating the buying and selling of securities in crypto assets. It remains to be seen how much it will cost Kraken to settle its issues with U.S. authorities.
 

NordFX Analytical Group
 

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

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

NordFX Brokerage Company Summarizes Client Trading Performance for November 2023. Additionally, an evaluation was conducted on the social trading services ? PAMM and CopyTrading, along with the profits generated by the company's IB partners.

- The client from Western Asia with account number 1691XXX secured the highest profit this month, reaching $351,521. This remarkable achievement was attained through trading in gold (XAU/USD), euro (EUR/USD), and the British pound (GBP/USD).

- Similarly, fellow countryman with account number 1692XXX claimed the second position on the podium of distinction, accruing a profit of $91,650. The same currency pairs ? XAU/USD, EUR/USD, GBP/USD, along with USD/JPY, contributed to this impressive outcome.

- The third spot is occupied by the account holder with number 1733XXX from Southeast Asia. Utilizing the favoured NordFX trading instrument ? gold (XAU/USD), they achieved a profit of $26,713.

In NordFX's passive investment services, the following situation has developed:

- In the PAMM service, the Trade and Earn account continues to attract attention. It was opened 631 days ago but remained dormant, awakening only in November 2022. Over 13 months, its profitability approached 210% with a relatively small maximum drawdown of less than 17%. Undoubtedly, the manager of this account can take pride in such performance.
   
Two long-standing accounts on the PAMM service's showcase have persevered, previously mentioned in our past reviews ? KennyFXPRO-The Multi 3000 EA and TranquilityFX-The Genesis v3. Recall that on November 14, 2022, they suffered significant losses, with the drawdown at that moment approaching 43%. However, PAMM managers decided not to give up, and by November 30, 2023, the profit on the first of these accounts exceeded 118%, and on the second, 78%.
   
- In CopyTrading, noteworthy is the signal yahmat-forex, which, over 160 days, demonstrated a profitability of 190% with a maximum drawdown of 37%. Also catching attention is the startup with the original name $20 - ⟩ $1,000,000. One can reasonably guess that the provider of this signal intends to increase the deposit from $20 to $1 million. Currently, in its 37 days of existence, the profit stands at 101% with a moderate drawdown of less than 18%.
   
Undoubtedly, such profitability appears very attractive and far exceeds the returns on bank deposits. However, subscribers must always remember that past successes do not guarantee the same results in the future. Therefore, as usual, we urge investors to exercise maximum caution when investing their money.

Among the IB partners of the NordFX brokerage company, the top three are as follows:
- The largest commission reward once again was credited to a partner from Western Asia, account number 1645XXX. This time it amounted to $10,525.
- Next is their colleague from South Asia, account number 1675XXX, who earned $6,510 in November.
- Finally, another partner from South Asia, account number 1700XXX, closes the top three leaders, receiving $5,034 in commissions.

***

Attention! On January 5, 2024, just a month away, NordFX will host the New Year draw of its super lottery. A multitude of cash prizes ranging from $250 to $5,000 will be up for grabs among the company's clients.

There's still time to become a participant and have a chance to win one or even several of these prizes. All details are available on the NordFX website.
 

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

USD/JPY: Caution, More Caution, and Even More Caution


We mentioned in the previous overview that the dynamics of USD/JPY in the coming weeks would be almost entirely dependent on the dollar's performance. Additionally, its volatility would be influenced by the oversold condition of the yen: in mid-November, the pair reached a peak at 151.90, a level not seen since October 2022, and before that, 33 years ago in 1990. The result of the synergy between these two factors was observed last week. Following the Dollar Index (DXY), the pair initially dropped by 300 points, from 149.67 to 146.67, then rose in two waves to 148.51. On December 1, it responded with a significant red candle to the statement from the head of the Federal Reserve, finishing at 146.79.

The influence of the United States on the dynamics of USD/JPY is consistently evident. However, will the Bank of Japan (BoJ) impact the strength of its national currency? Hopes for this are diminishing. BoJ board member Toyoaki Nakamura made comments on Thursday, November 30, expressing his opinion on the possibility of transitioning from an ultra-easy monetary policy. He stated that tightening it prematurely is risky, and for now, it is necessary to patiently maintain the current course. As for the timing of when this can be done, according to the official, it is currently challenging to determine. 'We can change our policy when the Japanese economy sees sustainable growth in wages and inflation,' Nakamura explained. 'Now is the time to exercise caution in our policy.'

One might think, was the Bank of Japan not cautious before this? Judging by its monetary policy, BoJ can confidently contend for the title of the 'Most Cautious Central Bank in the World.'.

According to economists at the Singaporean United Overseas Bank (UOB), in the next 1-3 weeks, USD/JPY is likely to trade in a range between 146.65 and 149.30, then start declining. Regarding the median forecast, in the near term, only 20% of experts anticipate further strengthening of the dollar, while 60% are in favour of the yen, and 20% have refrained from making any predictions. As for trend indicators on D1, 85% favour the yen, recommending buying the pair in only 15% of cases. All oscillators are in the red, with 100%, and a quarter of them are in the oversold zone. The nearest support level is located in the 146.65 zone, followed by 145.90-146.10, 145.30, 144.45, 143.75-144.05, and 142.20. The closest resistance is at 147.25, then 147.65-147.85, 148.40, 149.20, 149.80-150.00, 150.80, 151.60, 151.90-152.15, 152.80-153.15, and 156.25.

Among the events in the upcoming week's calendar, it is worth noting Tuesday, December 5, when data on consumer inflation in the Tokyo region will be released, and Friday, December 8, when the GDP volume of Japan for Q3 2023 will be announced.

CRYPTOCURRENCIES: A Year Between a Bear Past and a Bull Future

December is upon us, making it a fitting time not only to review the week's outcomes but also to assess the entire passing year. Apparently, 2023 has the potential to serve as a transition between the bear 2022 and the bull 2023, supported by an impressive 11% growth in the leading cryptocurrency in November and a staggering 130% increase since the beginning of the year.

The share of potentially profitable bitcoins has reached 83.7% of the total supply, marking the highest level since November 2021. According to analysts at Bitfinex, the balance between short-term and long-term holders of digital gold is tilting in favour of the latter. The active supply of bitcoin has dropped to a five-year low, with only 30% of coins moving over the year. Consequently, approximately 70% of bitcoins, or an "unprecedented" 16.3 million BTC, remained stagnant throughout the year. Moreover, 60% of these coins have been motionless for two years. According to Bitfinex experts, these metrics indicate that the market is in a "relatively strong position" as coin holders are experiencing positive returns on their investments and are not rushing to liquidate assets in anticipation of even greater profits.

Positive sentiments have increased, especially among large investors (those with investments of $1 million or more). Over the first 11 months of 2023, they have increased their investments in crypto funds by 120%, bringing the total to $43.3 billion. Bitcoin remains the leader in this regard, with its volume growing to $32.3 billion, a 140% increase. Among altcoins, Solana has also attracted institutional interest. However, Ethereum had been showing negative dynamics for a while, although it has recently started to recover.

The rise in optimism in the market is attributed to: 1) the resolution of the issues between the U.S. authorities and the crypto exchange Binance, 2) the anticipation of the imminent launch of spot bitcoin ETFs, and 3) the upcoming bitcoin halving in April next year.

Regarding point 1, as a result of a settlement agreement between the U.S. authorities and Binance, bitcoin is now expected to exceed $40,000 by the end of the year, according to Matrixport. Various estimates suggested that Binance could face fines of up to $10 billion and might be accused of unauthorized appropriation of user funds or market manipulation. However, on November 21, an agreement was reached that Binance would pay a $4.3 billion fine, cease operations in the U.S., and its CEO, Changpeng Zhao, stepped down and posted a $175 million bail to remain free. This outcome is considered by Matrixport experts as a 'turning point in the crypto industry,' indicating that Binance will maintain its position among the largest crypto exchanges for at least the next two to three years.

In light of this news, bitcoin initially experienced a temporary correction but then bounced back from $36,000. This confirmed a strong trend, and according to Matrixport experts, a rise above $40,000 in December appears 'inevitable.' However, they assess the probability of this 'inevitable' outcome at 90%, acknowledging that unforeseen events could still impact the situation.

According to some experts, the "peaceful" withdrawal of Binance from the U.S. market should ease tensions and facilitate the approval by the Securities and Exchange Commission (SEC) of applications for the creation of exchange-traded funds (ETFs) for spot bitcoin. In November, the SEC held a series of meetings with applicants to allow them to edit their submissions in accordance with the regulator's requirements. The presence of this dialogue was viewed as a positive factor. It is not ruled out that by January 10, 2024, the Commission will approve a significant portion, if not all, of the applications for launching bitcoin ETFs. This date marks the deadline for approving the joint application from ARK Invest and 21Shares. If the regulator makes a negative decision, it risks getting involved in legal proceedings again. The SEC has already lost a legal battle with an investment giant like Grayscale, with the court deeming the SEC's actions "arbitrary and capricious." So, is it worth stepping on the same rake again and risking similar humiliations?

Trader, analyst, and founder of the venture company Eight, Michael Van De Poppe, expects the first bitcoin ETFs to be approved by the SEC in the next five to six weeks. Consequently, the price of BTC could rise in December as investors try to profit from the potential rally. The expert forecasts its growth to $48,000. However, after approval, according to Van De Poppe, BTC/USD could sharply decline. The lower target of this potential pullback is the 200-week exponential moving average (EMA) line, which is currently around $26,500. This downward trend may continue even after the upcoming halving, Van De Poppe believes. The analyst suspects that it is then that traders will actively accumulate coins, triggering the next bullish rally with a target ranging from $300,000 to $400,000.

The strategists at Standard Chartered believe that BTC could reach $50,000 by the end of this year and $120,000 by the end of 2024. The bank's initial forecast indicated a possible rise to $100,000 but was later increased. The price of $120,000 is three times higher than the current level. This optimism from Standard Chartered experts is linked to the increased profitability of mining when selling a smaller quantity of tokens to maintain the same cash flow volume, leading to price growth.

The Managing Partner and CEO of 10T Holdings, Dan Tapiero, is confident in the inevitable growth of the first cryptocurrency and believes that bitcoin is becoming an increasingly attractive means of savings. However, in his opinion, the next bullish trend will not occur in 2024 but in 2025. "And we will see bitcoin surpass $100,000," predicts Tapiero, adding that this is a rather conservative estimate. The businessman believes that negative interest rates on US Treasury bonds will be a special "mega-bull signal" for BTC.

(Note that the former CEO of the crypto exchange BitMEX, Arthur Hayes, intends to withdraw the funds he invested in US Treasury bonds and invest them in cryptocurrency in the near future, without waiting until 2025.)

We have repeatedly noted earlier that the leading cryptocurrency has "decoupled" from both stock indices and the dollar exchange rate, disrupting direct and inverse correlations. However, now analysts at the Santiment analytical company are observing an increase in the correlation between the crypto and stock markets. In November, bitcoin, Ethereum, and the S&P 500 index grew on average by 9.2%. The strengthening connection was recorded after bitcoin traded in a narrow price range in late October to early November, showing no significant fluctuations. "If bitcoin continues to grow, surpassing stocks," say the analysts at Santiment, "this will once again disrupt the correlation, which, according to historical data, is one of the factors for the formation of a bullish crypto market.

BTC/USD set a new high for 2023 on Friday, reaching $38,950, aided by the surge in risk assets, including cryptocurrencies, mentioned in this review by the Federal Reserve Chair Jerome Powell in his speech. As of the evening of December 1, BTC/USD is trading around $38,765. The overall market capitalization of the crypto market is $1.45 trillion ($1.44 trillion a week ago). The Crypto Fear and Greed Index rose from 66 to 71 points and still remains in the Greed zone.

So, December has arrived, and many members of the crypto community are once again talking about the "Bitcoin Santa Rally." This phenomenon mirrors the historical "Santa Claus Rally" in the stock market when stocks rise between Thanksgiving and Christmas. On the crypto market, a similar rally first occurred at the end of November 2013 when the price of BTC was less than $1,000. Throughout December, the price of bitcoin steadily rose, reaching a peak of $1,147 by December 23. The next significant surge happened four years later during the holiday season of 2017. Bitcoin embarked on a steep upward trajectory, surpassing $19,000 by mid-December and touching $20,000 for the first time. However, in 2021, Santa Claus didn't bring joy to traders; the result was the opposite. On November 10, the asset reached an all-time high, approaching $69,000, but in December, the price was influenced by volatility and low trading volumes during the holiday days. By the end of the year, bitcoin was trading in the $46,000 range.

Naturally, this year, members of the crypto community are hoping for a convincing rise in digital gold. It remains to be seen whether Santa Claus will fulfil these hopes.
 

NordFX Analytical Group
 

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

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