USD/CAD Analysis – Scenarios to Watch

The reelection of the Canadian Prime Minister Justin Tradeau didn’t have a significant impact on the Canadian Dollar. The September 8th Bank of Canada’s policy rate decision remained unchanged as Canada is still keeping rates at the lowest rate to continue the Bank’s quantitative ease program. Canada’s GDP for the second quarter depreciated by 1% which is below BoC’s estimate of July’s Monetary Policy report.

The US economic data was showing a significant growth with key metrics, which the FED is following, which are Job openings, Retail sales and Housing permits. Jobless claims demonstrate an overall decline, indicating the US economic recovery. In the first and second quarter these positive data would have worried investors with inflation fear and interest rate hike, however the FED will most likely keep the rates unchanged but will reduce its bond purchases.

Tapering bond purchases was announced by the FED Chairman Mr. Powell during the Jackson Hole Summit, despite keeping the exact date a secret, the Chairman noted that tapering will begin by the end of this year. Markets will be anticipating the announcement of the exact or estimated date of bond tapering which is most likely to happen, if it happens, during Mr. Powell’s speech after the release of economic projections.

Existing home sales and crude oil inventories data released today might play their role in the further activities of the US Dollar index, this is when the volatility begins. The crude oil inventories date is one of the key metrics for the crude oil prices and the Canadian Dollar is correlated to the global crude oil prices.

From the technical analysis point there are two main scenarios to watch for mid-term USD/CAD projection and I will add one short-term possible scenario.

The no-clue tapering asset purchases date might play a negative role to the US Dollar Index and since there will be a volatility, USD/CAD may jump to $1.2890 level and retrace to $1.2720 level pushed by the dynamic resistance of previous highs.

If the announcements are positive and the FOMC economic projection strengthens the confidence of investors in the US Dollar, then we might witness the USD/CAD’s continuation of an uptrend up to $1.29940 and $1.30900 levels, following an expanding diagonal pattern.

The second scenario looks least likely but indeed should be considered, this might take place if during the FOMC announcement rate hikes are adverted. In this case, in fear of rate hikes, the market might defect the US Dollar and USD/CAD might drop to $1.2580 and $1.2540 levels.

RSI and MACD indicators on a 4H USD/CAD signal the correction, namely a drop. RSI remains near overbought levels which show a decline when connecting the last three peaks. Key takeaways from the technical analysis are to watch the retest of the dynamic resistance of August 21, if USD/CAD closes above this level, the uptrend continuation will most likely take place with higher impulse. If there is a rejection, USD/CAD will correct to $1.2800 and $1.2720 below that.

Bitcoin’s Price – Forces Which Influence It

The nature of Bitcoin still remains unknown for many, it still holds secrets to some, and the others think that Bitcoin and the cryptocurrency is the greatest scam. But yet, news about Bitcoin is everywhere and Bitcoin’s daily trading volume has reached over $178 bln last year.

Being developed as the first low-cost cross-border payment means, which was supposed to be an alternative to a fiat currency, until today was entitled many times as a digital gold, an asset, a Ponzi scheme etc. Bitcoin drives it’s value from the funds which were invested into it, what keeps the price of Bitcoin, in other words, it’s value, is the costs associated with it. The proof-of-work consensus which is applied to Bitcoin and its popularity mainly drives its price.

But what causes the drop?

When Bitcoin is such a great tool for cross-border payments, what makes people or institutes sell it and drop its price?

Well, the first answer to this question is that no asset price can grow forever, eventually, those who purchased at a lower price will sell their Bitcoins to accumulate profits.

It’s August and Bitcoin hasn’t shown the anticipated jump to $50K USDT and the promising rise of July 21 was rejected by resistance at nearly $43K USDT. I use USDT to display the market data as in derivatives, USDT is mainly used, datafeed used is from a Licensed derivatives exchange – Bitget.

BTC/USDT quote from Bitget, chart from TradingView

According to the technical analysis, this rejection was caused by dynamic and static resistances, whereas the RSI indicator reached it’s “oversold” level. As for fundamentals the rise and fall of Bitcoin were caused by various events which any Bitcoin trader should not neglect.

Let’s see some examples: A breakdown of Key events which influenced the BTC price.

BTC/USDT quote from Bitget, chart from TradingView

1 – There was a mixed sentiment on the market during the release of the US Core CPI, PPI and Retail Sales data. Mainly these data were referring to the strength of the US dollar which was caused by the lower than expected CPI and Retail sales, which lowered the US high inflation fear. The US Dollar Index after the release of the data was up 0.01% and 0.98% the next day.

2 – June 24 and 25. Core durable goods orders, rise of GDP and a higher than expected Jobless claims. The rise of the US GDP gave another purchasing power to the US Dollar, while the higher jobless claims signalled the withholding of the purchasing power among the consumers, US consumers keep limit from spending and rather keep the USD, which also signals the containment of the inflation hike. The US Dollar index was up 0.09% and 0.03% respectively.

3 – An important release was made, which is the CB Consumer confidence which shows consumers trust in current economic activities. The positive confidence supported another consecutive gain of the US Dollar which was up 0.29% that day.

4 -5 – July 4, Independence Day, probably the confident speech of President Biden related to the US economy and it’s recovery led to this rebound. The oil to the fire was poured when Chinese central bank and Chinese authorities were reportedly taking actions against all operations related to cryptocurrencies.

6 – July 6-7-8, three consecutive days of important economic data from the US. ISM Non-manufacturing PMI, JOLTS Job openings, FOMC Meetings minutes and Initial Jobless claims. Both Job openings and Jobless claims were negative for the employment statistics but had a positive impact on DXY among investors. The FED policymakers stated that the economic growth and it’s future forecasts back up the decrease of the asset purchases, the FED also stated that it should lower to zero the money injection into the US economy.

7 – July 20 to July 31. The economic data from the US began shimmering negative outcomes to what the FED was calling as the economic growth as the Jobless claims rose significantly. Adding oil to the fire were lawful claims against one of the crypto exchanges Binance which is constantly being watched by countries watchdogs for its illegal operations.

These were the crackdown of the events which affected the Bitcoin’s price, but what does a technical analyst see when analyzing the chart?

BTC/USDT quote from Bitget, chart from TradingView

First, what a technical analyst sees is a strong resistance at point 1, which is shown on the chart above, the second is the RSI indicator’s overbought signal. What that means is that Bitcoin purchases has reached their peak and buyers will look to selling it to get profits, and since the Bitcoin derivatives is widely spread across major US banks and on other exchanges globally, large cap investors will look into opening shorts on BTC (in derivatives a trader can make profit from buying and selling).

Once the price hits the support zone and RSI reaches its oversold area, Bitcoin experiences accumulation, this is where investors and traders will look into filling their portfolio with Bitcoin to gain profits later when the price increases. However the overall market sentiment, China bans, Binance bans and the growing strength of the US economy doesn’t allow the price to retest the resistance and grow further. Hence, Bitcoin tests previous local strong resistances, tests support zones as resistance and goes down again.

Since derivatives were introduced by crypto exchanges and CME and the Bitcoin futures trading was widely spread across the US and global banks, Bitcoin now is more volatile and is more sensitive to the global economic data. Large cap investors which inject their funds into Bitcoin futures trading are always keeping track of the US economic data and the volumes generated from derivatives trading surged heavily and will in the nearest future outperform the spot trading.

Data from CME Group

Although it might seem that the trading volume on CME is low, on the global markets, daily Bitcoin derivatives trading volume is more than $55 bln.

What is next for Bitcoin’s price?

As the chart below suggests, Bitcoin still hasn’t reached the accumulation zone, and the RSI’s buy signalling oversold levels.

BTC/USDT quote from Bitget, chart from TradingView

However there is a large open interest at $37K and the impulse of July 21 looks very strong, hence Bitcoin might not go below $35K. Rather, it might test the 50-day Exponential moving average at levels $37000 – $37500 and continue the uptrend with a higher pace. The higher pace and large purchasing power is required to break the monthly dynamic resistance of April 2021, otherwise Bitcoin will struggle near the $40800 and if no impulse is shown there, it might resume the correction.

We might also refer to the similarity of price actions to calculate our estimate and make forecasts. There is a similar price action spotted on Bitcoin’s price chart and as seen on the chart, the uptrend resumed even though the RSI was in a mid range.

BTC/USDT quote from Bitget, chart from TradingView

What could cause Bitcoin’s surge?

It pains to say but the spread of the Delta variant could support Bitcoin’s surge as it was during all lockdowns. Lockdowns per se hold consumers’ expenditures and increase a risk appetite among investors and traders, if lockdowns continue this will signal the delay of the economic growth forecasted by the FED and will decrease the Consumer confidence, which will be a major hit to the US Dollar index. Another fact that Bitcoin’s price may surge is the regulation and the ban of problematic exchanges which are constantly under investigation and of course the migration of miners from China to other countries, mainly the US, where in some states operations with cryptocurrency and its mining is regulated.

When the breakout from the dynamic resistance is confirmed, i.e. Bitcoin closes above $40800 or at any level above the dynamic resistance, the surge will most likely continue up to $47300 and $50800, where it might drop to the previous resistance to retest it as support and continue the uptrend.

BTC/USDT quote from Bitget, chart from TradingView

My anticipation of the price to hit $72K by October remains but we should analyse the future price action of BTC starting from now. There will be a huge update to Bitcoin’s mainnet which should reduce the transaction cost and time and also implement NFT features to Bitcoin. With the growing demand of NFT’s and it’s large cap total volume capped, Bitcoin might dominate the NFT market as well and increase its overall market dominance.

For the time being, I highly recommend you to follow the US Economic data, follow the market sentiment and trade wisely. When trading refers to what large cap investors analyse and follow as they are in control of the market right now. Today we are expecting important data from the US – ISM non-manufacturing PMI and employment and the US Dollar index already reacted to the positive expectations and started to rise, so watch the release closely.

Bitcoin Price, Forces Which Influence It

The nature of Bitcoin still remains unknown for many, it still holds secrets to some, and the others think that Bitcoin and the cryptocurrency is the greatest scam. But yet, news about Bitcoin is everywhere and Bitcoin’s daily trading volume has reached over $178 bln last year.

Being developed as the first low-cost cross-border payment means, which was supposed to be an alternative to a fiat currency, until today was entitled many times as a digital gold, an asset, a Ponzi scheme etc. Bitcoin drives it’s value from the funds which were invested into it, what keeps the price of Bitcoin, in other words, it’s value, is the costs associated with it. The proof-of-work consensus which is applied to Bitcoin and its popularity mainly drives its price.

But what causes the drop?

When Bitcoin is such a great tool for cross-border payments, what makes people or institutes sell it and drop its price?

Well the first answer to this question is that no asset price can grow forever, eventually those who purchased at a lower price will sell their Bitcoins to accumulate profits.

It’s August and Bitcoin hasn’t shown the anticipated jump to $50K USDT and the promising rise of July 21 was rejected by a resistance at nearly $43K USDT. I use USDT to display the market data as in derivatives, USDT is mainly used, datafeed used is from a Licensed derivatives exchange – Bitget.

BTC/USDT quote from Bitget, chart from TradingView

According to the technical analysis this rejection was caused by dynamic and static resistances, whereas RSI indicator reached it’s “oversold” level. As for fundamentals the rise and falls of Bitcoin were caused by various events which any Bitcoin trader should not neglect.

Let’s see some examples: A breakdown of Key events which influenced the BTC price.

BTC/USDT quote from Bitget, chart from TradingView

1 – There was a mixed sentiment on the market during the release of the US Core CPI, PPI and Retail Sales data. Mainly these data were referring to the strength of the US dollar which was caused by the lower than expected CPI and Retail sales, which lowered the US high inflation fear. The US Dollar Index after the release of the data was up 0.01% and 0.98% the next day.

2 – June 24 and 25. Core durable goods orders, rise of GDP and a higher than expected Jobless claims. The rise of the US GDP gave another purchasing power to the US Dollar, while the higher jobless claims signalled the withholding of the purchasing power among the consumers, US consumers keep limit from spending and rather keep the USD, which also signals the containment of the inflation hike. The US Dollar index was up 0.09% and 0.03% respectively.

3 – An important release was made, which is the CB Consumer confidence which shows consumers trust in current economic activities. The positive confidence supported another consecutive gain of the US Dollar which was up 0.29% that day.

4 -5 – July 4, Independence Day, probably the confident speech of President Biden related to the US economy and it’s recovery led to this rebound. The oil to the fire was poured when Chinese central bank and Chinese authorities were reportedly taking actions against all operations related to cryptocurrencies.

6 – July 6-7-8, three consecutive days of important economic data from the US. ISM Non-manufacturing PMI, JOLTS Job openings, FOMC Meetings minutes and Initial Jobless claims. Both Job openings and Jobless claims were negative for the employment statistics but had a positive impact on DXY among investors. The FED policymakers stated that the economic growth and it’s future forecasts back up the decrease of the asset purchases, the FED also stated that it should lower to zero the money injection into the US economy.

7 – July 20 to July 31. The economic data from the US began shimmering negative outcomes to what the FED was calling as the economic growth as the Jobless claims rose significantly. Adding oil to the fire were lawful claims against one of the crypto exchanges Binance which is constantly being watched by countries watchdogs for its illegal operations.

These were the crackdown of the events which affected the Bitcoin’s price, but what does a technical analyst see when analyzing the chart?

BTC/USDT quote from Bitget, chart from TradingView

First, what a technical analyst sees is a strong resistance at point 1, which is shown on the chart above, the second is the RSI indicator’s overbought signal. What that means is that Bitcoin purchases has reached their peak and buyers will look to selling it to get profits, and since the Bitcoin derivatives is widely spread across major US banks and on other exchanges globally, large cap investors will look into opening shorts on BTC (in derivatives a trader can make profit from buying and selling).

Once the price hits the support zone and RSI reaches its oversold area, Bitcoin experiences accumulation, this is where investors and traders will look into filling their portfolio with Bitcoin to gain profits later when the price increases. However the overall market sentiment, China bans, Binance bans and the growing strength of the US economy doesn’t allow the price to retest the resistance and grow further. Hence, Bitcoin tests previous local strong resistances, tests support zones as resistance and goes down again.

Since derivatives were introduced by crypto exchanges and CME and the Bitcoin futures trading was widely spread across the US and global banks, Bitcoin now is more volatile and is more sensitive to the global economic data. Large cap investors which inject their funds into Bitcoin futures trading are always keeping track of the US economic data and the volumes generated from derivatives trading surged heavily and will in the nearest future outperform the spot trading.

Data from CME Group

Although it might seem that the trading volume on CME is low, on the global markets, daily Bitcoin derivatives trading volume is more than $55 bln.

What is next for Bitcoin’s price?

As the chart below suggests, Bitcoin still hasn’t reached the accumulation zone, and the RSI’s buy signalling oversold levels.

BTC/USDT quote from Bitget, chart from TradingView

However there is a large open interest at $37K and the impulse of July 21 looks very strong, hence Bitcoin might not go below $35K. Rather, it might test the 50-day Exponential moving average at levels $37000 – $37500 and continue the uptrend with a higher pace. The higher pace and large purchasing power is required to break the monthly dynamic resistance of April 2021, otherwise Bitcoin will struggle near the $40800 and if no impulse is shown there, it might resume the correction.

We might also refer to the similarity of price actions to calculate our estimate and make forecasts. There is a similar price action spotted on Bitcoin’s price chart and as seen on the chart, the uptrend resumed even though the RSI was in a mid range.

BTC/USDT quote from Bitget, chart from TradingView

What could cause Bitcoin’s surge?

It pains to say but the spread of the Delta variant could support Bitcoin’s surge as it was during all lockdowns. Lockdowns per se hold consumers’ expenditures and increase a risk appetite among investors and traders, if lockdowns continue this will signal the delay of the economic growth forecasted by the FED and will decrease the Consumer confidence, which will be a major hit to the US Dollar index. Another fact that Bitcoin’s price may surge is the regulation and the ban of problematic exchanges which are constantly under investigation and of course the migration of miners from China to other countries, mainly the US, where in some states operations with cryptocurrency and its mining is regulated.

When the breakout from the dynamic resistance is confirmed, i.e. Bitcoin closes above $40800 or at any level above the dynamic resistance, the surge will most likely continue up to $47300 and $50800, where it might drop to the previous resistance to retest it as support and continue the uptrend.

BTC/USDT quote from Bitget, chart from TradingView

My anticipation of the price to hit $72K by October remains but we should analyse the future price action of BTC starting from now. There will be a huge update to Bitcoin’s mainnet which should reduce the transaction cost and time and also implement NFT features to Bitcoin. With the growing demand of NFT’s and it’s large cap total volume capped, Bitcoin might dominate the NFT market as well and increase its overall market dominance.

For the time being, I highly recommend you to follow the US Economic data, follow the market sentiment and trade wisely. When trading refers to what large cap investors analyse and follow as they are in control of the market right now. Today we are expecting important data from the US – ISM non-manufacturing PMI and employment and the US Dollar index already reacted to the positive expectations and started to rise, so watch the release closely.

For a look at all of today’s economic events, check out our economic calendar.

Crypto Trading Beginner’s Guide

Sentiment about cryptocurrencies was split among users after the market drawdown in May. More experienced traders were ready for the fall, and mainly newbies and enthusiasts lost their funds and exited the market in anger.

In this review, I will try to tell, based on personal experience and knowledge, all the subtleties of trading on the crypto market.

Cryptocurrency trading spot or derivatives

Today, exchanges and marketplaces offer many trading tools for trading in the cryptocurrency market. Crypto markets offer different contracts, like spot and derivatives. A significant difference between trading on the spot market and the derivatives market is the actual acquisition of an asset. So, for example, when trading on the spot market, a person acquires an asset for the purpose of selling it in the future to generate profit from a difference in price.

Trading in the spot market can be compared to trading in the stock market, and the person trading in this market will be considered an investor. To fix profits on the spot market, you can set only one order – a sell order, and place a buy order to buy putting the amount of the purchased or sold the asset. The most popular exchanges for spot trading are Coinbase, Kraken, Gemini, Binance.

Coinbase

Unlike the spot market, when trading in the derivatives market, a person does not actually acquire an asset but opens a position for the purpose of price speculation, and a person trading in this market is classified as a trader. The advantage of trading in the derivatives market is trading in both directions, that is, profits can be obtained even if the price of an asset falls, comparable to trading contracts for differences (CFDs) and trading futures (also a class of derivatives). Derivatives trading platforms provide a fairly high leverage, which allows a trader to increase his capital and reap great benefits, but also implies the risk of losing all funds in the position.

It is also important to take into account that trading on the derivatives market, a trader can set various orders to make a profit from the trade or accept a loss for the trade: take profit and stop loss functions. That is, since the asset is not actually purchased, two orders can be placed simultaneously. The advantage is that a trader, when the price reverses, will be able to close the position with an insignificant loss, and if the price continues to move in the predicted direction, close the position and fix the profit automatically. Popular exchanges and platforms for trading crypto derivatives: FTX, Bybit, Overbit, and Bitget.

Overbit

Market analysis and education

There are several types of analysis for predicting price movement: technical, fundamental, market sentiment analysis.

Technical analysis

The most popular type of market analysis, which includes the study of asset price movements and trading volumes. Everyone determines for themselves a trading strategy based on technical analysis, but mainly Dow theory, Elliott Wave theory, and Fibonacci mathematical tools are used. The best tool for technical analysis nowadays is considered TradingView.

TradingView

Fundamental analysis

The study includes an analysis of such fundamental data as the financing of the project, reports on the updates made, deposit/withdrawal of funds to/from the exchange, the open interest ratio, the funding rate, as well as, if the asset is traded against a currency, economic data affecting this currency (more often the US dollar).

Market sentiment analysis

The second most popular analysis method in the cryptocurrency market. Market sentiment is calculated using algorithms that wander popular social networks and all over the Internet looking for positive and negative comments about the cryptocurrency. Such algorithms are used to calculate one of the important indexes – the “Fear and Greed” index.

Education

Most crypto exchanges and cryptocurrency trading platforms provide their own training materials, but they are more introductory and do not contain detailed information. Therefore, after reading materials on any type of analysis of the cryptocurrency market, you should not consider yourself a pro and open positions that exceed 50% of your deposit. Coinbase is a good example of providing educational material. To start trading after completing the training, you can use indefinite demo trading on HitBTC for spot, Binance and Bitget for derivatives, the latter provides only a few pairs, but the balance can be replenished with an unlimited number of times.

Coinbase

Signals

There are groups and traders, as well as various applications/indicators that sell signals for a certain fee. Signals are calls to open a position or place an order when a certain price is reached. You must study each received signal yourself, if you are ready to use such services, then do not disregard your own analyses, so you can learn how to trade yourself even faster.

Copy-trading

You can use signals and enter manually into the market, or you can copy the orders of popular traders. Copy trading is based on the automatic opening of a position with the copying of all settings: entry price, take profit, stop loss. The world leader and first social trading platform, eToro pioneered copy trading in the forex market, and now provides the same platform with minor modifications for trading cryptocurrencies. Copy-trading can also be used to conduct your own analysis, to consider why the trade was successful and vice versa.

On BitGet platform, which claims to have a higher copy trading turnover than eToro, it is possible to view all traders in detail, consider the trading strategy and positions, which can also be used to study trading in the market. Just like trading with other tools, copy-trading has its own risk of account drawdown, therefore, before subscribing to a trader to copy his trades, you need to view the history of his trades in detail, as well as find information about him on the Internet, in social networks.

BitGet

Conclusion

Trading in the cryptocurrency market has its risks, but so does the reward. You should always take a cold-blooded attitude towards all market situations. To begin with, study the market, study and possibly start using signals and copy trading on small volumes, but always strive for an independent understanding of the market and analyze. Study carefully risk management, never trade more than 50% of the balance at the initial stage. Do not get upset about low profits, a small profit is better than any loss.

USD/JPY Analysis: US Dollar Above an Important Support

The US Dollar index dropped below 90 with the start of this trading week and remains at the lowest levels, while Gold is traded above $1900. High manufacturing PMI data will be a positive signal for the USD if there is a rise in export volumes. Last month the trade balance showed a growing number of trades in the US, though imports were prevailing and cheaper US Dollar was aimed to shift the ratio towards exports of goods.

Japan’s last week PMI data didn’t show any growth and the country is still fighting the Covid-19 with very strict measures. Despite the dropping number of daily new Covid-19 cases, officials are not planning to ease the lockdown, probably if the cases continue to drop, officials might ease restrictions only after the Olympics. Until then, Japanese yen remains under high pressure.

The 4-Hour USD/JPY chart suggests that the pair may continue the bullish run up to $110.8, if the pair is able to break the $109.7 resistance.

USD/JPY quote on Overbit

As seen on the chart below, the pair lacks momentum and the ascending triangle gets tighter. Closing below the mid-term dynamic support of January 5 will lead to a deeper correction down to $105.78.

USD/JPY quote on Overbit

NZD/USD Analysis: Kiwi Will Go Higher Only Above This Level

However, things may drastically change as Australia recorded a new Covid19-positive man, who returned from India.

The Indian variant of the virus B.1.617 has a mutation that allows the virus to evade antibodies and there is not much data about this variant, and it will soon be added to the “variant of concern” list. Although the officials of Australia are not urging new lockdowns based on one case, there is a chance that it’s already been spread and might have traveled to neighboring New Zealand. Despite the possible appearance of the Indian variant in New Zealand is theoretical, any news on the virus’s spread would hit hard the local currencies of both Australia and New Zealand.

Tuesday’s monthly New Zealand electronic card retail sales demonstrated growth in purchases, sales in April were up NZD 4%, which is significantly higher than February’s 0.8%. Despite the positive news, was not able to show significant growth against USD and lost in value against the Japanese Yen. US Jolts New Job openings as per March hits a record high with 8.132M jobs and puts the USD again in the “fear of high inflation” zone, US Dollar Index is down 0.12% and is below 90 for the first time since February 2021. Nevertheless, NZD/USD after the release of positive data which should boost NZD, Kiwi against the US Dollar remains steady.

According to the chart analysis, there are two main scenarios to watch for NZD/USD. An uptrend continuation is backed by the test of major support at $0.71200 and a test of MA200, MA100 and EMA50 as support on a 4-hour chart.

NZD/USD quote on Overbit

The Inverted Head and Shoulders pattern also suggests that NZD/USD must continue to be bullish, however there is an important resistance which the pair should overtake. The resistance lies at $0.73000 which is also strong and holds another chart pattern, which signals the bearish move.

NZD/USD quote on Overbit

As seen on the chart above, $0.73000 holds both static and dynamic resistances, and while it’s not overtaken, NZD might proceed with a correction down to $0.72500 – $0.71700. An uptrend continuation will be confirmed only above $0.73000, whereas upon a breakout of the aforesaid resistance, NZD/USD will jump to $0.74400. One of the backers of the uptrend could be strong CPI data, which will be announced later today.

Gold Analysis: Gold in Spotlight as Uncertainty Fills The Market

The US trade deficit hits surged by 5.4% to set a new all-time-high at $74.4 billion in March. Imports also increased by 6.3% as the $1.9 trillion relief increased the demand which the US manufacturing is not yet capable of accommodating. The first quarter GDP growth had the highest pace in more than a decade at an annual rate of 6.4%. While the fast economic growth of the US sounds optimistic, investors’ anxiety over the rate hikes increases.

Janet Yellen this Tuesday said that the interest rate might need to increase to hold the economy from overheating, leading the US Dollar to a slight drop but soon after the DXY recovered as the US Treasury Secretary said that she is not predicting anything. The interest rate increase might be the subject of discussion this quarter as GDP is forecasted to increase. Since the import and export increase, so does the demand in the US, it is more advantageous for the US to hold on to the cheap US Dollar.

Russia and China were one of the main topics during the G7 Foreign and Development Ministers meetings in London. While in early April the United States officials were more rigorous in opposing Russia and China, Russia for military maneuvers near Ukrainian borders and China for the same near the borders of Taiwan, the comments of Mr Blinken sounded softer regarding the ones in April. This increases the uncertainties in the future measures taken by the US to counterpoise both countries. The rising threat of China invading Taiwan troubles Japan the most which currently has a coronavirus spread to care about. The authority of the US in confronting China and Russia would weigh on the strength of the US Dollar, so far China shows no signs of stepping back and asking not to interfere in its affairs.

The uncertainty increases as coronavirus spread and its mutations force stricter lockdowns in Japan and Turkey. Turkey goes into lockdown right before its most profitable season – tourism. Central Banks of both countries increased their Gold reserves to withhold the strong devaluation of their local currencies. Thus, in March only Japan’s CB purchased 80 tons of Gold, Turkish CB 12.9 tons, and India with the highest coronavirus infection and death rates increased its reserves by 7.5 tonnes. The second largest gold purchase in March was made by the Hungarian CB as said to hedge over the US inflation, 63 tonnes of gold were added to the MNB reserves.

The aforementioned are some of the factors that might support the further surge of Gold. All stating the laying uncertainty ahead and alertness of investors to hedge. However, as the data from the World Gold Council revelas, in the two last quarters there was an increasing demand for gold jewelry.

Source: World Gold Council

Daily XAU/USD chart still has two patterns dragging in attention – the double bottom and the bullish flag.

Gold price on Overbit

As of time of writing this article Gold on Overbit is traded at $1778.6 per oz and is still below the resistance of $1798 and above the dynamic support (dashed line). For Gold to resume the bullish, it must break above the resistance to proceed towards stronger resistances at $1850 – $1866.

Gold price on Overbit

Besides the static resistance of $1798, there are two other short-term bearish signs MA100 and MACD. MA100 as a resistance is the most unfavorable signal for Gold’s bullish run, as it could push XAU/USD down.

However, in the current state, while Gold is both above EMA55 and MA100, it still looks bullish as the historical chart suggests.

Gold price on Overbit

Key notes to take from these charts are, for bullish continuation, Gold must remain above EMA55, break above MA100 and above the $1798 resistance. Failing to do so, might result in another heavy drop, especially if Gold closes below EMA55.

USD/JPY Analysis: The Concentration of $107.7 Support Gives Bullish Signals

The slide of the US Dollar index is primarily based on the rising inflation threat, however, the economic recovery of countries whose currencies are in the basket of DXY has an impact as well.

The BoJ kept the interest rates unchanged, leaving the rates 10 bp below 0. This probably is a result of the rising Covid-19 cases in Japan, where the growing number of new Covid-19 infections redound to new public restrictions and State of Emergency declarations in Tokyo, Kyoto, Osaka, and Hyogo.

The rising Covid-19 cases in the states which held the first waves of Covid-19 pandemic is related to the slower vaccine distribution. Japan has the lowest vaccine distribution compared to other countries, thus the rate is 1.6% only compared to the 49.7% in the UK and 41.8% in the US. The 4-th wave of Covid19 in Japan puts the main question before the Government on whether to hold the Olympics this year or postpone it. The situation in Japan will get worse before it gets better, and further restrictions will be implied, to withhold the virus spread until Japan has enough vaccines rolled-out to stay at least near the 40% level as in the US.

USD/JPY after almost a month-long downtrend is about to end the correction and move upwards. There was a strong concentrated support level at $107.7 which the pair has tested and rebounded.

USD/JPY quote on Overbit

As seen on the chart above, the support level is pretty solid and signals the end of the correction. MACD already is heading upwards above the signal line, EMA55 is the current MA resistance, though the impulse shows that it will be overtaken soon.

The reason why I call the $107.7 a concentrated support is because there are way too many static and dynamic supports and resistances which turned support at this level. Such concentrated support should never be ignored.

USD/JPY quote on Overbit

By the time writing of this article USD/JPY on Overbit is traded at $108.4 and is currently testing a very important support area as resistance, if the resistance withholds, USD/JPY will probably drop to test the dynamic support, down to $107.8, if not, there is a high chance that the pair will continue upwards up to $109.2 – $109.3 and beyond if the situation in Japan doesn’t get better.

USD/JPY quote on Overbit

FED’s press conference could be decisive tomorrow and shift the US Dollar traded currencies, it is clear that the Interest rate will remain unchanged, though key notes from the economic situation, inflation and interest rate forecasts would be essential.

For a look at all of today’s economic events, check out our economic calendar.

Bitcoin Is Not Bearish Though a Drop to $41K Is Possible

Bitcoin is bearish, cryptocurrencies are on a downtrend, April 2021 is going to be a replay of December 2017 for Bitcoin. The gossip about the end of the crypto starts with Bitcoin’s drop on April 18, days after reaching a new ATH and the listing of COIN.

The mystery of Bitcoin’s dump is unknown, though there are several versions of possible causes. The first version is a tweet by a FXEdgers about the US Treasury pressing charges on the money laundering scheme of companies that purchased Bitcoin. The US Treasury never made an announcement of such since then nor commented, but the same tweet of FXEdgers was soon deleted. The second version is that Bitcoin was sold by a Chinese miner when a province of Xinjiang was blacked out for safety inspections, due to an accident on one of the coal mines. The power outage caused a massive dump in the Bitcoin network’s hashrate. The hashrate is a computational power provided by miners to keep the blockchain running and generate new blocks, higher hashrate stands for miner’s greed to receive higher reward for providing the computational power.

According to the data from the CBECI, China holds 65.08% of the total Bitcoin hashrate, and Xinjiang province holds 30.13% of the total Bitcoin hashrate, making the province the largest mining pool of the World, due to it’s cheap energy.

Source: CBECI

The situation went noticeable on the market on April 16, when there were several reports about Chinese mining pools going down by over 20%. These reports caused a slippage of Bitcoin price down by 2.89% on April 16 and by 2.17% on April 17, until there was a panic sell of BTC on April 18, causing Bitcoin to plummet by %6.43 even though the hashrate was slightly resoterd. Bitcoin dropped from $64 000 to $52 000, resulting in a $4.87b long liquidations, but soon was able to regain some of the losses intraday.

Bitcoin price on Overbit

The situation and the cryptocurrency market didn’t go unnoticed and soon after the Deputy governor of the PBOC Li Bo called Bitcoin as an investment alternative, the US President Joe Biden urged cryptocurrency regulations. The battle for the mining capacity between China and the US ongoes, with the US building up pools and states legalizing mining, so does the battle for Bitcoin’s market cap. US Global hashrate share in January was 3.44% and in April that number grew to 7.24%. With more companies holding Bitcoin and accepting Bitcoin as a payment, with tensions between US and China growing, for the US economy the Bitcoin and cryptocurrency market becomes fragile without proper regulation, especially looking at what the malfunction of the hashrate can cause. The SEC will more likely approve Bitcoin ETF’s and as a part of the US regulation, Bitcoin ETF will be a less risky asset to invest in.

Coinbase IPO was a black swan for many retail investors, as many went to buy stocks of the first publicly traded crypto exchange, the price of the COIN plummeted. Starting price of the stock higher than the disclosed earlier was an early signal of stock prices drop but things went further when Coinbase’s executives sold nearly 100% of their shares worth over $4.6 bln, which led to a growing fear sentiment in the market, forcing investors and traders to apply more conservative strategies in crypto-investing and crypto-trading.

Source: Twitter, Dereck Coatney

As a result of these happenings during the last days, cryptocurrency market sentiment calculated by the “Fear and Greed” indicator is below 50 since January 22, when Bitcoin was trading at $32K, and is in “Fear”.

Source: Btctools

This indicator usually signals the arrival of the bullish run, however as the daily Bitcoin trades show on the chart, the market awaits a strong bullish signal. Another reason why investors do not want to rush purchasing Bitcoin is the approaching of Bitcoin futures on April 30th, the previous futures expiry led to a 21% correction of BTC.

As per the technical analysis, Bitcoin on a daily chart approaches the bottom line of the RSI indicator, and below the EMA50.

BTCUSD is below the ascending parallel channel, though has found support at 1.75 Fibo level of the Pitchfork. If Bitcoin closes above this level, it will continue the downtrend towards $50700 and below that towards a strong accumulation zone located at the $41000-$43000 area.

There is a symmetrical triangle formed on a 4H BTC/USD chart and the triangle is in a downtrend, hence might be a continuation of the correction to $50700.

Bitcoin price on Overbit

There is no signal of Bitcoin entering a bearish period, these moves are still considered as a correction, accumulation of a purchasing power among investors to bring Bitcoin higher. Cryptocurrency market and Bitcoin became part of the Global financial system, hence Bitcoin and the whole market still impose value with a market cap of $2.127 trillion.

For a look at all of today’s economic events, check out our economic calendar.

 

GBP/USD Analysis, These Charts Suggest That Pound Is Bullish

Pound gains as the US dollar shrinks on fears of an inflation hike. While the economic data from the rest of the world is considered positive, investors watch the economic data from the US closely as positive data, growing debt, surging inflation alarm investors on interest rate change by the FED.

Despite the lower GDP announced yesterday, higher than expected manufacturing production gives confidence on the economic recovery of the UK. New Coronavirus cases in the UK sank amid several harsh measures taken by the Government, the average number of daily new Covid-19 cases reached August 2020’s lows, while the daily new cases in the US grew and vaccines were questioned for their effectiveness.

Source: Worldometers.info

With the Covid-19 becoming less weighted, the UK can now completely focus on the full recovery.

GBP/USD daily chart suggests that the British pound could enter into another bullish cycle soon as the pair hits the lower threshold of the ascending parallel channel.

GBP/USD quote on Overbit

Both indicators RSI and MACD are bullish on a daily chart and the pair has a strong support from MA100.

Double bottom pattern on the 4H GBP/USD chart also suggests that the pair should continue the uptrend.

GBP/USD quote on Overbit

The first resistance to test lies at £1.38660 which is a decisive level where a local dynamic resistance is located. If the resistance withholds, GBP may retrace to £1.36550, though if GBP is able to break the £1.38660, we might witness another bullish run and tests of resistances at £1.39885 and £1.41780.

Bullish continuation of the Pound will be supported by a weaker Dollar. Not only the inflation hikes but the growing tension between the US and China may weaken the US Dollar Index.

 

AUD/USD Analysis, An Important Breakout Is Finally Here

The US Inflation data once again beat expectations and brings anxiety to the market, slacking the US Dollar index. DXY lost 0.28% yesterday and is down 0.12% today, while commodities like gold and silver are looking to rally. The Australian Dollar which is mainly correlated to Gold is on the main spot light.

US MoM inflation data as per March closed at 1.6% which is above the anticipated 1.5%, CPI YoY as per March closed at 0.3% above the anticipated 0.2%. Annual inflation rate in March exposed 2.6% which is far beyond the FED’s desired 2%. Hence, investors worry that the FED may reconsider the interest rates sooner than expected.

AUD/USD started the month positively, adding 1.06% to its value, as a currency correlated to the price of Gold and Gold is considered as an “inflation rescuer” for investors, it is fair to say that AUD/USD will continue gaining through the month. Australian Consumer sentiment index in April surged to 6.2% (previous 2.6%) as consumers tend to show confidence in the economic growth of Australia.

The bullish continuation of AUD/USD is confirmed by the breakout from the ending diagonal and the downtrend channel which the pair was following since February 25.

AUD/USD quote on Overbit

MACD remains bullish on the Aussie, whereas RSI is approaching an overbought zone and the pair is testing the 200MA as resistance. If the Aussie remains above the $0.76635, it will continue the uptrend and test resistances at $0.77685 and $0.78300.

 

Gold and Silver Will Shine Again

Global Gold ETF has witnessed a severe loss in February which was the second largest loss since March 2020 and the seventh all-time-loss. The total amount of Gold’s ETF losses is approximately $207 bn, or 87.4 tonnes, whereas North America was the largest seller selling $4.1 bn.

Source: goldhub

The result of this sell-off was reflected on Golds price as a monthly 6.16% drop, heaviest since 2017. Economic recovery and a defeat of Covid-19 played key roles in switching investors’ interest from the “safe-haven” Gold towards other assets. However, the faster recovery signalled a fear of inflation, and “Gold” and “Silver” are well-known hedge assets against inflation.

The spread between the CFTC Gold total short and long gets tighter, the gap between the total percent of open interest is now only 5.1. CFTC Non-reportable long positions outperform short positions by 2x. The overall changes in total net positions since the last week displays that Gold’s bullish better number is increasing.

In March 2021, after the February sell-off, Gold rebounded from a dynamic support as seen on the daily XAU/USD chart below.

Gold price on Overbit

The support worked well as the precious metal started gaining, however the uptrend continuation was halted at $1756, when the US Dollar Index was surging. The $1756 resistance sent XAU/USD back to the March support at $1680 where Gold rebounded with a higher pace. This recovery caused Gold to form a “double bottom” pattern, which signals the trend reversal. MACD and RSI indicators are bullish on Gold, whereas Moving averages still act as resistance.

Gold price on Overbit

Despite the bullish outlook of Gold on a daily chart, Gold still has to close above $1756 to continue upwards. If the breakout from the $1756 is confirmed, Gold will continue the uptrend up to $1814 and $1868.

Silver is set to outperform Gold, although the gap between the CFTC long and short positions is higher.

Silver is a cheaper “safe haven” asset than gold and attracts investors by its more affordable price and historically moves alongside gold, while sometimes outperforming the yellow metal in gains and losses. While March ended with a 1.45% loss for Gold, silver had a 8.52% loss.

Silver has touched it’s support level later than Gold, though was able to get back to it’s ascending parallel channel.

Silver price on Overbit

As seen on a daily XAG/USD chart above, the bullish run of Silver was stopped when the price hit the upper edge of the “Descending ending diagonal or “Wedge” pattern. As the space in this wedge gets tighter for the price, it is expected that the price will break out from this wedge very soon.

According to the rules of this formation, this corrective-wave pattern consists of a 5-wave structure, as seen on the chart. Based on this rule, we can say that Silver has completed its correction, is tired of being inside this wedge and is about to start a new uptrend impulse.

Silver price on Overbit

An hourly XAG/USD suggests that Silver is currently bullish and should reach at least $26.40 when breaks above $25.30, and $27 when breaks above $26.40.

Not only the peaking inflation fear might support the uptrend of these two “safe haven” assets but the Wave 3 and 4 of Covid19 pandemic. The number of new cases is rising dramatically again, making a curve in new cases Worldwide.

Many countries question the effectiveness of vaccines and there are so many reports that vaccines had an absolutely negative effect and even were lethal for some patients. Positive economic data brings in an inflation fear and the growing Covid-19 cases principles the fear of new Covid-19 waves, if there was any fear in the market then “safe-haven” asset has always been a choice.

For a look at all of today’s economic events, check out our economic calendar.

EURUSD Analysis: Euro Rebounds from The Major Support

The week’s US economic data was mainly positive, showing the signs of the economic recovery boosted by the $1.9 trillion stimulus pack. The US Consumer confidence hits its highest level since the Covid hit in March 2020, while Manufacturing PMIs and manufacturing employment in March also surged.

Initial jobless claims reported on April 1st told us that the Labor part of the economic recovery is still behind and needs attention, Initial jobless claims reported were at 719K, which is 61K higher from the previously reported 658K. Nevertheless, anxiety of investors over the inflation hike backed by the sharp economic growth remains. The inflation hike could force the FED to review the current policy and increase the interest rate ahead of time.

Germany, the EU’s largest economy, reported the highest unemployment change in February, whereas the unemployment in March remained at 6%. European Manufacturing PMI as well as the Manufacturing PMI in all four largest economies of the Commonwealth continued to grow, some outshining the expectations. The positive note of the week for the Euro is blanked out not only by the rising Covid-19 cases and further lockdowns but by the quote from the President of the ECB Christine Lagarde, who during her interview for Bloomberg said that the “economic situation in Europe is covered by uncertainty”.

What does the chart say?

The Euro against the US Dollar reached an important support and was able to stay above that level. As seen on the chart daily, EUR/USD chart below, the pair is currently testing the lower edge of the ascending parallel channel and the dynamic support of January 15.

EUR/USD quote on Overbit

RSI indicator shows that Euro is oversold and should retrace from here. Based on the price action principle, and following the levels of the RSI indicators, I believe that Euro will reach $1.18455 if it remains above the support and above $1.1700.

EUR/USD quote on Overbit

The $1.1800 bears a very strong resistance power. The chart above has some indications of the importance of RSI’s resistance at 50, after each test of the bottom line of the RSI price moves upwards to test this resistance and the distance of each upwards move from the bottom of RSI until the 50 on the price chart is roundly the same.

On the lower time-frame, i.e. an hourly EUR/USD chart, both MACD and RSI indicators are signalling the short-term bullish continuation of the pair. Whilst the chart pattern analysis suggests that Euro is about to hike towards $1.1990 and $1.21300, closing above the $1.1800 is extremely important, otherwise it would be a retest of the support as resistance and Euro will resume the downtrend.

EUR/USD quote on Overbit

The pair is following the ending diagonal pattern on an hourly, which in general suggests the local trend reversal. According to the five-wave structure of this pattern, it is assumed that the Euro should have one more leg down before it can breakout from the dynamic resistance. However, if Euro keeps the bullish pace of March 31, we could witness a breakout and an advancement towards $1.18455 and $1.19930 anytime soon.

As the Covid-19 cases rise in the EU, with France leading the daily Covid cases by country in the World, the ECB will most likely keep the monetary policy and the inflation hike is not expected in the EU until Q3 2021, Euro could have an edge over the USD as investors’ fear over the inflation hike in the US rises every time US economic data is positive.

This week will host announcements of important data on Job openings from the US as well as Non-manufacturing PMIs. Keep track on German manufacturing orders and Services PMIs of Europe’s four largest economies and the EU as a whole, and German factory orders.

For a look at all of today’s economic events, check out our economic calendar.

Bitcoin Analysis. BTC has to Surge, Here is Why.

This year Bitcoin had the second best performing March ever in the history of Bitcoin, the first was 8 years ago when Bitcoin gained 178.70%. Overall, the first quarter of 2021 was Bitcoin’s best quarter in terms of gains. However a massive sell-off which started on March 24 played havoc with the bullish hoping investors. The sell-off was mainly caused by the end of the Bitcoin futures contracts and options.

Speaking of futures, CME will be launching Bitcoin micro futures this May, which should attract retail investors to the exchange. The BTC micro futures contract will be only 1/10 of the original notional value of BTC. The launch of the BTC micro futures is scheduled for May 3 after the settlement of BTCCJ1 futures and options on the exchange. This move from the CME group might be backed by the fact that Bitcoin inflows from retail investors in Q1 2021 outnumbered the inflow from institutional.

Bitcoin and cryptocurrency payments are being accepted by more and more companies, airBaltic, the first airline to accept Bitcoin payments, has announced that it will expand the cryptocurrency payments and will add Ethereum, Doge, BCH. PayPal enables cryptocurrency payments in millions of stores. As Bitcoin’s transactions increase so does the Bitcoin’s hashrate, and it just hit a record high with more than 166.4M TH per second. The hashrate and the price are strongly correlated, as miners expect a higher reward for the higher computational capacity provided by them. The previous ATH of Bitcoin’s hasrate was on February 9, 2021 when BTC/USD hit $48 142 setting a new high, and after a slight correction set a new straight uptrend, which continued up to February 21 and halted at $58 352. With that being said it is estimated that Bitcoin is entering into a new bull cycle and a new heavy correction based on miners sentiment is expected. Verdict, Bitcoin is bullish.

There issue of Bitcoin polluting the environment due to it’s PoW (Proof-of-work) mechanism remains, and when the number of Bitcoin transactions rise, so will the power to maintain the network. Carbon footprint of Bitcoin is heavily discussed and could force miners to work on safer and carbon neutral Bitcoin mining farms. Such a requirement will force smaller players to leave the mining and larger institutions to invest in clean energy. The state of Kentucky in it’s “Incentives for Energy-related Business” program proposes tax incentives for miners using clean energy for cryptocurrency mining.

First to step in into the carbon free Bitcoin movement are Argo Blockchain and DMG Blockchain Solutions, which have signed a memorandum of understanding to build the first carbon-neutral mining pool. The pool will be powered solely by the hydroelectric power, which has lesser emissions. This is to avert fears of Bitcoin getting banned due to its carbon emissions. Stricter regulations – yes, increasing scarcity – yes, increasing investment – yes, ban – no. This could be a good opportunity for developing countries that have great water resources to invest into providing clean energy for the evolving cryptocurrency industry. Verdict, Bitcoin is bullish.

As for the chart analysis, Bitcoin resumed uptrend after a sell-off of March 24. BTC/USD on Overbit is currently traded at $57 626 and is above the dynamic resistance of March 14 and the current All-time-high at $61 677.

Bitcoin price on Overbit

Bitcoin’s uptrend was rejected by a strong resistance at $59 280 yesterday, the drop continued today until BTC tested the dynamic resistance and support and retraced. There are two scenarios to watch for the upcoming price action.

The first is – Bitcoin bulls do not get enough momentum and bears bring down the price to the support zone at $54 450 – $54 100 levels, where bulls regain power to push the price upwards, forming a perfect Inverted Head and Shoulders pattern and testing the MA200 as support. This scenario is supported by RSI and MACD indicators,

Bitcoin price on Overbit

The second, bulls push the price upwards break above the $59 290 resistance and Bitcoin tests $62 300 and sets a new all-time-high at $65 000. This scenario is supported by the current price action and the last candle formed on a 4H chart. The candle reads that buyers are not giving up and were able to push the price higher. The current price is also above the dynamic resistance and above EMA50 and MA100.

Bitcoin price on Overbit

It is important to note that the confirmation of the bullish continuation will be signalled by closing above the $59 290 resistance.

Will Tesla’s Bitcoin Payment Integration Electrify the BTC Price

Soon after the release of the tweet, Bitcoin price climbed to $56 250, adding 3% to the daily gain of the price. On March 14, Bitcoin set a new record high at $61 779 and retraced, not reaching $62 000 long-awaited by many investors. Since March 14 Bitcoin has been following a 10-day downtrend. Some stats show speculative activities before the March 14 dump. There was a high exchange inflow of BTC and approximately 17.9K BTC entered the exchanges. From March 14 up to March 21, the inflow volume dropped from 48 480 BTC to 18 200 BTC forming a slide of 30 280 BTC, leading a 30-Day exchange inflow volume to drop by 32.70%.

Source: IntoTheBlock

As seen on the chart above the exchange outflow didn’t affect the price of Bitcoin much, as the amount of Bitcoin was going out of exchanges, the price looked stabilizing. Bitcoin could have started the new hike sooner if it wasn’t the gaining US Dollar. Even the quote from the FED Chairman Mr. Powell on Monday couldn’t support the jump of Bitcoin and the reason is during this quote Mr. Powell gave an edge to the US Dollar while saying “It’s more of a speculative asset, it is essentially a substitute for gold, rather than the US Dollar”. In his speech, Mr. Powell also claimed that cryptocurrencies are not backed by anything and that they are particularly not in use as a means of payment.

Now with Tesla, the 6th ranked US company by market cap, integrating payments in Bitcoin it will be interesting to watch how FED will act in this case. Surely Bitcoin will be accepted by many and become the payment instrument by the time, the question remains is when the governments admit the value driven by Bitcoin. The fact that Bitcoin is mined and the World’s largest economies have agreed to go for a carbon-neutral power, will give Bitcoin a heavier scarcity for the upcoming years.

Bitcoin’s energy consumption has a negative impact on the environment and eventually mining will be regulated firstly to eliminate the carbon-footprint of Bitcoin into the Global environment. Currently Bitcoin mining consumes 87.168 TWh per year, and according to the Cambridge Bitcoin Electricity Consumption Index the total consumption could reach 136 TWh per year this year, taking out the entire Sweden in this race.

Source: CBCI

The regulation on mining and the new global carbon-neutral movement will have an impact on miners which will bring the scarcity to Bitcoin and eventually increase the transaction speed and fees, as a result Bitcoin price is expected to rise.

Before getting too futuristic and thinking of ways to get mining to space, let’s take a look at the Bitcoin chart to see the patterns and levels for mid-term.

As seen on a 4 hour BTC/USD chart below, Bitcoin retraced from the dynamic support of the first impulse wave, beginning on January 27.

Bitcoin price on Overbit

There is a falling wedge being formed on an hourly Bitcoin chart and according to the rules of this pattern, when the breakout from the wedge is confirmed, the price will jump towards $66 950 if the breakout is confirmed soon and the February’s high is tested as support and towards $65 825 if the breakout is delayed and Bitcoin follows 5-wave correction formation.

Bitcoin price on Overbit

According to the Elliott waves theory, Bitcoin is still in the completion of an Intermediate wave 5, which should be completed soon as there are signs of the end of the Minor count’s wave 4 formation.

Bitcoin price on Overbit

By the time writing of this article Bitcoin on Overbit is traded at $56 267 and is caged between MA200 and MA100 on a 4-hour timeframe. There are several resistance lies ahead, the first would be at $58 450.

The ascending ending diagonal suggests that the following new ATH could be at $64 300 if Bitcoin keeps the pace and breaks above the local dynamic resistance.

Bitcoin price on Overbit

While the Wave analysis is entertaining by it’s virtue, it sometimes is hard to define the exact completion of the impulse wave formation. Hence, I highly recommend to keep an eye on dynamic and static support and resistances.

USDCHF Analysis: Swiss Franc Weakens Ahead of FOMC

The US building permits dropped significantly in February, 1,682M building permits issued in February which is 204M lower than in January. The US 10Y bond yield nears the 2018 lows, and notwithstanding to that fact the US Dollar Index continues to gain nearing 92 today.

Source: TradingView

The year has started unfortunate for the Swiss Franc as the CHF lost 6.33% to GBP, 2.15 to Euro and 5% to Australian Dollar.

The negative rates kept by the SNB, causing the inflation to remain negative, for the second month in a row the inflation in Switzerland remains -0.5%. Though the deflation has significantly improved, according to the data the state is still in deflation mode for a consecutive year. Incomes of the Swiss National Bank have dropped significantly in 2020, resulting in a total loss of 27,982.1M CHF.

Source: Tradingeconomics

USD/CHF is in a correction mode in a whole week since March 10, after a trend reversal early this year. The breakout from the descending ending diagonal supported the uptrend of the US Dollar against the Swiss Franc.

USD/CHF quote on Overbit

4-Hour chart of the pair suggests that the uptrend continuation of the pair is possible after a confirmed breakout from the triangle.

USD/CHF quote on Overbit

By the time of writing this article, USD/CHF on Overbit is traded at $0.92800 and is testing the upper edge of a triangle pattern. The breakout from this triangle will trigger a jump towards $0.93760 and $0.94750 above the local high. The uptrend is supported by RSI and MACD indicators as well as the EMA50. The volatility during the FOMC meetings will create a bumpy road for the price’s ongoing trend-continuation, hence it is highly recommended to keep eye on key levels, supports and resistances, one important resistance lies at $0.93140.

Silver Outlook – Short Positions Rise as Silver Approaches Strong Resistance

Investors keep to see how the FOMC Chair Mr. Jerome Powell in his statement will forecast the progress of the economic recovery of the US and see if the inflation is held below 2% as expected. Although there are no doubts that the Fed Interest Rate decision will remain unchanged, the inflation data is what investors see as their pinpoint.

It is expected that Core Retail Sales and Retail Sales data as per February will slip heavily related to the January, which might ease the fear of hiking inflation. Although the inflation currently is slightly above the planned 2%, Mr. Powell in the FED’s January statement pointed out that the central bank will allow inflation to stay above the 2% for some time to stabilize the economy and keep the interest rate unchanged.

Silver once again outperformed Gold today by gains, Silver is up just over 1%, while Gold gained only 0.24%. According to the CFTC data as of March 9, there is a 20,000 spread between the overall net positions on Silver Futures, with an edge going to short positions. The update of the CFTC data on Silver will be released later tomorrow, worth checking it out.

As per the technicals, silver seems bearish below the ascending channel, the retest of the channel’s dynamic support as resistance, on March 11 adds fuel to the bearish sentiment of XAG/USD.

Silver price on Overbit

Although Silver might look ascending in a short uptrend, supported by a signal from MACD, MA100 and MA200 act as a strong resistance lying right next to the dynamic level which acted as a strong resistance previously, there is a key level and a pattern which might halt the uptrend for a longer period.

Silver price on Overbit

A falling wedge pattern formed on a 4H XAG/USD chart suggests that there should be one more leg down before Silver could regain power and continue upwards. There is a strong resistance at levels $26.60 and $26.75, which should be tested soon enough, the area of this resistance’s strong repulsing force is backed by multiple static resistance points, upper edge of the wedge pattern and the upper edge of the local ascending channel.

If Silver is not able to break and close above $26.75 and is rejected by this resistance area, the sharp fall may send it back to $24.90 and $24.35. If Silver is able to close above $26.75, then it might signal the bullish continuation of the precious metal, however the first scenario looks more relevant based on the chart analysis and the data from CFTC.

For a look at all of today’s economic events, check out our economic calendar.

Bitcoin’s New Records $9.5B in BTC in DeFi, $9.6 in Public Company Holdings

Bitcoin attracts more investors after a series of BTC purchases by Microstrategy and a groundbreaking $1.5B investment in Bitcoin by Tesla. Microstrategy first purchased Bitcoin in august 2020 buying $250 million worth of BTC, the company continues to invest in Bitcoin with the latest purchase made on February 24, adding 19,452 BTC equivalent to more than $1 billion, to their holdings. The amount of 91,064 Bitcoin held by the company at the current price is equivalent to $4,894,972,298.

More than 25 publicly traded companies currently hold Bitcoin, according to the data from Bitcoin Treasuries. The total amount of Bitcoin held by these 25 public companies is equal to 178,855 which at the current price is equivalent to $9,659,046,389.50.

The list of public companies holding BTC is as follows:

The total number of Bitcoin used in DeFi hit another record today surpassing the 176,000 BTC locked in DeFi according to DeFi pulse, raising the total value locked in DeFi to $9.54B.

Source: DeFi Pulse

As the holdings of the BTC and an emerging DeFi ecosystem grow, it is assumed that Bitcoin after a crash of February 22 this year, has entered into a new bullish cycle since February 28, setting a new ascending parallel channel.

Source: Overbit

Gaining almost 5% to it’s value, Bitcoin is currently traded at $54,660 and is only $3,687 below it’s all-time-high. If such pace continues, Bitcoin might reach a new milestone of $60 000 per BTC soon and most likely set a new ATH at $66 000 by touching the upper edge of the ascending parallel channel.

What is NEM – The Full Guide

NEM

NEM is a blockchain written in Java, the double-layer blockchain supports multiple ledgers on its cryptocurrency layers. NEM’s ecosystem is built in such a way that seamlessly connects and transfers any type of digital assets between private and public blockchains. A collective growth mindset, made NEM to abdicate the POS consensus and introduce the POI. NEM is the world’s first practitioner of POI (Proof-of-Importance) consensus. Although it is similar to Proof-of-Stake which requires locking of certain amounts of coins in the ecosystem, there are several major differences.

The key difference between the POS and POI consensus is that in the POS consensus the amount of coins staked does matter, whereas a staker allocating 10% of the staked amount will be able to mine only 10% of blocks in the network. The POI consensus is used to determine network participants which are eligible enough to add blocks to the blockchain, in NEM’s ecosystem adding blocks to the blockchain is called “harvesting”.

In POS the more coins one stakes, the higher the reward and the reputation, however in POI mechanism, there are three key factors which build the reputation of the node: vesting (holding of 10000 XEM in the wallet), transaction partners, number of transactions within 30 days.

Symbol

Symbol is NEM’s project mainly focused on Enterprise. Symbol is a hybrid blockchain, which means that the blockchain is not fully accessible by anyone although it still bears features of a blockchain such as transparency, security and solidness. The hybrid blockchain is fully customizable and blockchain nodes can decide which transactions should be verifiable, who can participate in the blockchain and which transactions can be public.

The interoperability of public and private chains from what it seems like allow a cost-efficient, seamless data transfer between these two chains, avoiding third party bridges, which are used in interconnection of public and private chain protocols. Just like other blockchains built nowadays, Symbol is interoperable, which means no intermediaries needed for data transfer and token swaps between any blockchain and Symbol.

Source: Symbol Platform official website

As NEM commented, the launch of the mainnet of Symbol is scheduled on March 15, after a long 4 years of developments. On March 12, the project will pre-launch Opt-in and snapshot phase at a block height of 3,105,500.

The Opt-in means that any NEM’s proprietary token – XEM holders can receive Symbol’s proprietary token – XYM upon the mainnet launch. Basically what that means is that during the block height of 3,105,500 the system will read all wallets that have participated in the Opt-in and will allocate XYM to the Symbol account created during the Opt-in, which is exactly the same as the balance of one’s XEM wallet. In other words, hold your XEM in your NEM wallet (note: the wallet must be updated to the latest one), apply for Opt-in, create a Symbol account, for each 1 XEM in your balance you will receive 1 XYM, the XEM balance will remain intact, according to the announcement on NEM’s official website.

How is it going to impact XEM?

The Symbol is a promising project, it already made partners with some big names in the industry. The XYM token is already listed in Poloniex, Bitpanda, Gateio and others, and listing of the XYM is already on the task list of giants such as Binance, Huobi, Kucoin and 17 other exchanges. Some exchanges will support the snapshot of wallets for XYM allocation, among such are Binance, Kucoin, and recently announced Coinex.

While the excitement in this airdrop is heavy, XEM price seems to be silent and waiting for an alert to trigger. While the cryptocurrency market is in an uptrend today with Bitcoin gaining almost 4% today only according to the data of the cryptocurrency trading platform Overbit,

XEM/USD lies low like a leopard before a jump.

Source: TradingView

Based on the technical chart analysis, XEM/USD is currently in a corrective 5-wave ABCDE formation, which formed a symmetrical triangle. Based on the technical analysis, the chart pattern and the MACD indicator, XEM/USD will probably break the upper edge of the triangle and move upwards. The resistances to watch here are $0.7530 and $0.8000. Closing below the lower edge might lead to a drop to $0.6100 and $0.6000.

One should bear in mind that in most cases listings of new coins and airdrops led to massive sell-offs among the token investors. In case of NEM and Symbol such might not be the case or the so-called “dump” might not be as heavy as during the boom of ICO’s. The first reason is that in the emerging ecosystem of NEM, many might consider becoming network participants, the overall crypto market sentiment still remains bullish and tokens of cross-chain networks such as Polkadot are among the top investment appealing, enterprises are going blockchain and are integrating blockchain into their existing network another example of a project which allowed enterprises to connect their external data to blockchain is Chainlink, whose token LINK is along-side Polkadot’s DOT is an outperforming coin and still is appreciated by long-term investors. As the crypto-adoption is growing, more stores are tend to accept cryptocurrencies as payment, projects like Symbol will assist in bringing the crypto and blockchain to the IoT we got used to.

Gold Could Shine Again as Stimulus Tensions Continue

Under the new amendments, individuals who earn more than $80,000 per year, single parents earning more than $120,000 per year, and couples earning $150,000 will be disqualified from receiving the stimulus aid. The previous bill which passed the House had larger caps as $100,000 for individuals, $150,000 for single parents, $200,000 for couples.

Recuperating labor market in the US, decreasing Covid-19 cases could be the main motivator for the Biden Administration to further imply limits to the stimulus bill. Stronger US Dollar resulted in a significant drop of Gold. The Gold demand data shows that over the fourth quarter of the last year, Gold’s investment share dropped by 71% related to the third quarter of the same year.

Source: Gold Hub

Gold ETF holdings, on the other hand, had slightly increased this January after a two month loss, European funds seeing the inflow in Gold ETFs in January with 17.5 tonnes, whereas the US funds experienced an outflow of 6.3 tonnes.

Source: Gold Hub

Among the Central Banks: Turkey, India and Uzbekistan were the biggest Gold buyers this January, Turkey leading the purchase of 28.1 tonnes, followed by Uzbekistan with 8.7 tonnes and India tailing the Top 3 with 3.7 tonnes.

Debates and the postponement of the stimulus bill may weaken the US Dollar once again driving Gold prices higher. As technicals suggest Gold is ready to shine and surge again and is waiting for the signal.

As seen on the daily XAU/USD chart below, Gold has touched the lower edge of the descending parallel channel, which acts as a great support.

Gold price on Overbit

Daily RSI and MACD indicators signal the trend reversal as Gold is heavily oversold on RSI. The downtrend impulse is very strong and the support might not withstand if bears decide to push prices further.

This hourly XAU/USD chart below, also supports the downtrend, although according to the price action and an ending diagonal pattern, Gold might retrace a bit to $1737 or even to $1758.

Gold price on Overbit

However, if the price closes below $1703, the downtrend will continue down to $1672. The supports of Gold’s bullish reversal could be the ongoing debates around the stimulus check and the US labor market data. The US Initial Jobless Claims will be announced today and are expected to be higher by 20K related to the previous period, 2020’s fourth quarter productivity is expected to be improved by 0.1bp and Factory orders as per January are expected to increase by 1bp. Gold investors will be thoroughly watching the speech of the FED Chair Mr. Powell later today. Highlights on the economic state of the US could be decisive for the further trend continuation of Gold. If the economic recovery of the US is going well as planned by the FED, Democrats might place further restrictions and limits on the stimulus bill and eventually cancel the bill completely.