USD/RUB and Brent Analyses. Daunting Correlations

Ruble and Brent Fundamental Analysis

Throughout the past week, the ruble has been strengthening, in particular, against the backdrop of news from the start of Russian gas exports for rubles. It is noteworthy that the plan to release oil contributed to the decline in oil prices on the global market, but also weakened the dollar against the ruble.

By the end of last week, namely on the closing day of April 8 this year, the dollar against the ruble fell to 75.98 on the global market, according to IDC, and even to 75.087 on the Moscow Exchange. Brent oil continued to fall, falling below $99 per barrel, but managed to bounce back by the close of the markets and closed just above $102.

On April 11, the price of Brent oil fell by 2.9%, the ruble reacted negatively and lost a little more than 5% against the dollar.

The reason for this fall of the ruble was the publication in The Times of an article about the entry of Finland and Sweden into NATO. The fall of the ruble continued as the noise around this message increased. The market immediately reacted and judging by the dollar versus ruble and oil charts higher, the market expected an escalation of disagreement between the Alliance and Russia.

Historical Correlation and Recent Changes

Pay attention to the last two candles on the charts of the dollar against the ruble (above) and oil (below).

Under normal conditions, a healthy correlation between the price of oil and the ruble was as follows: the price of oil rises, the ruble strengthens. However, in this case we see a complete opposite, and this opposite is justified precisely by the aggravation of the conflict between Russia and NATO. Videos appeared on the network about the rapprochement of military forces near the borders of Finland, which stated that its air borders were violated several times by the Russian Air Force.

US Dollar, Ruble and Crude Oil Forecast

So far, uncertainty keeps the price of oil and the dollar in a very tight range, but the likelihood of growth in both assets remains quite high. The dollar, as well as the price of Brent oil, is at critical resistance, dollar against ruble at 85 and Brent 105. MACD and RSI on both daily USDRUB chart and daily Brent crude oil chart are bullish. If they close above these levels, the dollar will rise to 88.2 – 90 and Brent to 108 this week.

USD/RUB – 130 this Week, 150 by the Next Week

Despite the fact that Minister of Foreign Affairs Dmitry Kuleba said in advance that his expectations are restrained.

The experience of negotiations between the delegations of Russia and Ukraine shows us that both sides are currently insisting on their own and progress in resolving the conflict is still standing and is unlikely to move in the near future. In this regard, I do not expect a further downtrend of the USD/RUB pair.

The price of WTI oil also reacted to the beginning of the negotiations, which yesterday, on March 9, fell by 12.14% from $129 per barrel to $108 per barrel, today it is already trading at the 2011 high of $113 per barrel.

Gold also reacted to the beginning of the negotiations, the price of the precious metal yesterday fell by 2.87% from $2059 per ounce to $1991. As long as the conflict, in which the whole world is indirectly drawn in, continues, the prices of raw materials will rise, especially the price of gold.

Gold may regain its safe-haven status for investors, not only amid conflict but also amid soaring inflation. This cup and handle pattern on a monthly Gold chart suggests that the $2500 estimates are most likely to be achieved.

For Russia, it will be important not only to provide the domestic market with food but also to countries that support Russia in conducting the “special operation” in Ukraine. Turkey is one of the world’s top exporters of wheat flour, and Turkey buys wheat mainly from Russia and Ukraine, so losing export capabilities means losing grasp for Russia.

The pressure on Russia will continue, although it seems that all possible sanctions have been adopted, and now everything should gradually improve, but everything is not so. The West will now wait for the impact of these sanctions on the Russian economy, therefore, in the next month or two, this is still very optimistic, the parties will still insist on their own.

The dollar exchange rate, at the time of this writing, is traded on world markets in near 126.5.

The market is waiting for official statements by ministers Lavrov and Kuleba after the talks. I assume that both sides admit that no agreements have been reached, but there are some positive notes, which does not quite suit the market and the Russian ruble at the moment. In this regard, I believe that by the end of this week the dollar will return to 130, and at the beginning of next week we will again see the growth of the dollar to 150 rubles.

Bitcoin Analysis – $72K on Sight

The winter was distressing for Bitcoin and the cryptocurrency market. Since December Bitcoin lost nearly $20K in price setting a new yearly low at $33000. Crypto-winter was followed by the Fear and Greed Index being at Extreme fear. Many on-chain and off-chain data indicated the coming uptrend in the nearest time, however that didn’t happen.

Although signs were signs and attempts of a bullish run back in February, when Bitcoin retested $45000, although resistance pushed the price back below $40K.

Noticeably, the latest jump was on February 28, the last day of winter, which encourages us that the crypto-winter might be over, and it is time for Bitcoin to continue the upward move. Another reason for the hike of cryptocurrencies could be the fact that during this crisis, cryptocurrencies might be a preferred means of payment and money transfers.

Online retail stores and marketplaces already are exploring and adding Bitcoin as a means of payment. Bitcoin could also be considered as a safe-haven asset just like it was considered back in 2020. Rates will be hiking globally and it is the best time for investors to consider diversifying their portfolios and Bitcoin will surely be among them.

From the technical point of view, Bitcoin is following a parallel channel pattern on a daily BTCUSD chart.

On January 24, Bitcoin retested the bottom line of this channel and bounced back leaving enough room for us to assume that BTC is getting ready for another jump. Juxtapositions of previous impulses, which are identical, accompany the idea that Bitcoin’s next ATH is at $72180.

MACD remains bullish on a daily BTCUSD chart, RSI signals a possible short correction but the general overview remains the same – To continue the uptrend Bitcoin must close above $45000. There is another important resistance at $52000 and if this resistance is overtaken, then bulls will surely push BTC to $72K.

USD/RUB – Escalation and Breakpoint on a Weekly Chart

The reaction of the markets turned out to be immediate, the ruble collapsed by more than 6% against the dollar, Brent oil for the first time in 8 years exceeded $100 per barrel. Prices will also rise for other commodities in fear of markets disrupting their supply, in particular for aluminum, wood, soybeans, wheat, corn, and, accordingly, gold and silver, because. they are assets – a “safe haven”.

Following the technical analysis, we can say that the dollar exchange rate at a level below 81 rubles remained positive for the ruble with its possible strengthening, because. The further growth of the dollar was held back by dynamic resistance on the weekly chart.

Following the principles of technical analysis, we can say that at the moment there is still a possibility of the growth of the dollar to 100 – 112 rubles.

Russian President Vladimir Putin has stated his goal, which is the demilitarization of Ukraine, therefore the end of the conflict may not be as close as we would like. I suppose that next week the dollar will still reach 98 – 100 rubles.

Ruble Takes a Deep Breath Before a Deeper Dive

Developments in Kazakhstan, a neighboring country with Russia, had a negative impact on the Russian ruble. The Russian ruble no longer was aligned to the price movement of crude oil. Whilst the uptrend of crude oil since October 2021, the Russian ruble was heading to the opposite direction and correlation of the currency was slackening.

The USA and NATO Vs Russia

The situation worsened when the US and the North-Atlantic Treaty Organization supported Ukraine to defend against an invasion from Russia. The US, UK and other participants of the Alliance warned Russia about the heavy sanctions bombardment from the West in case the tension with Ukraine escalates.

Russia on the other side demanded the US and the Alliance to guarantee that NATO will not continue its expansion in Eastern Europe during the Geneva talks on January 10, 2022. While waiting for an official reply from the US, Russian currency experienced a massive drop, and USD/RUB for the first time since April 2021 closed above 78. The pressure on the Ruble continued this week as the US, UK and other officials started the evacuation of their embassy employees from Ukraine’s capital – Kyiv.

Officials from both Russia and Ukraine reported a military build-up near their borders. The tension was high and it led to the further weakening of the Russian ruble, the Ministry of Finance announced a halt of foreign currency purchases, to withhold the further downslide of the ruble.

On January 26, during the FED interest rate decision, USD/RUB reached November 2020’s average of 80 rubles per US Dollar. Russian Minister of Foreign Affairs Sergey Lavrov informed the press that they have received an official reply to their concerns from the US and the Alliance and there are points that are ready for a serious discussion.

Despite the Russian officials calling the reply as less positive as the main question remained unanswered, the market responded positively and the ruble gained 1.87% in a day, USD/RUB dove from 79.84 to 77.4.

Though it might sound very optimistic, the issue is still not resolved and will take some time and effort, leaving a high pace of volatility to the USD/RUB.

RUB/USD Technical Analysis

From the technical analysis point of view, there is still room for growth for the US Dollar. Despite being extremely overbought on RSI on daily and weekly timeframes, the price action of USD/RUB will be solely bound to the developments in the Ukraine.

A weekly USD/RUB chart suggests that the pair could climb to 81.60 to retest the major monthly dynamic resistance. The pair has already made a breakout from a weekly symmetrical triangle of March 16, 2020 and today’s slide looks more like a retest of this triangle’s dynamic resistance as support.

If USD/RUB closes above 80.60 it will continue up to 83.9, whereas the Russian Ministry of finance to withhold the further devaluation of Ruble might decide to sell-off some of its foreign currency and gold holdings.

The same is confirmed on an hourly USD/RUB chart. The pair has tested the local hourly dynamic support and the weekly triangle’s upper edge as support. Hence, the upside potential is still back on.

The upside potential of the pair should not be considered as a probable escalation of the conflict but there are other factors that might take place, such as the oil price. High oil prices are becoming a concern, hence it is expected that OPEC might increase the production to decrease oil prices and fulfill the demand.

Crude Oil Wave Analysis – There Should Be a Correction

Brent got closer to the $90 per barrel checkpoint closer last week than it was in the past 7 years. Supply shortages, attacks on Saudi oil rigs are considered to be the main drivers of crude oil’s uptrend. OPEC’s monthly oil report highlighted the increasing demand for crude oil this year, yet the organization called to keep the production at current levels.

Hence, the increasing demand with a steady supply motivates the oil price to climb higher. It has also been said that despite Omicron being highly sustainable to nowadays vaccines and being highly contagious, many scientists sealed it as “not dangerous”, which encouraged tourists and travelers to head to a journey. Yet, this variant is not completely studied, we can still expect surprising discoveries.

However, increasing oil prices along with the high pace of rising inflation could cut the demand rapidly. Oil is considered to be the second-largest expense for all airlines, after labor. “Higher jet fuel prices lead to higher ticket prices,” United CEO Scott Kirby told CNBC. Hence, to withhold the oil crisis, OPEC might as well reconsider the production in February.

Indeed the higher the price the more profit oil-producing countries make but with the inflation growing so fast globally, keeping the oil prices as is will lead to a severe drop in demand.

From the technical analysis point of view, a correction is discernible. Crude, in this case, Brent oil, is extremely overbought on all time-frames, especially on a weekly chart.

Taking a closer look at the chart you might notice a divergence between the price action and the RSI movement. MACD has also been performing theatrically since April 2021, signal and MACD lines are since then heading downwards, whereas the price is heading upwards. The same is noticed with RSI, which in technical analysis signals a steep correction ahead. Brent oil is completing a 5-wave move finishing the expanding diagonal formation.

To finish the month with a high profit before the next OPEC meeting Brent might climb up to $92 where it will face high pressure and head towards a correction. To stabilize the supply and demand by the start of the tourist season, I believe Brent will continue correction down to 76.3 and 72.8.

GOLD Analysis – Bearish Indicators in Place

Gold remained silent even after the FED’s multiple announcements on rate hikes. Gold price will be on the watch this week during the testimony of FED Chair Jerome Powell.

XAUUSD closed the first week of 2022 with a 1.76% loss compared to its closing price of December 2021 at $1830. Inflation hedge – Gold seems to have a weaker edge over the strengthening US Dollar. Investment volumes of Gold decreased in Q3 2021, whilst in Q3 2020 total Gold bound to Investment was 495t a year after that number decreased to 235t. Gold tied to the investment had a dominating demand in Q3 2020 and has been decreasing since then.

Despite an increased purchases of Gold by global Central Banks in 2021, many CBs parted with their precious metal purchases to withhold the deflation of their local currencies as the US Dollar was gaining momentum by the end of 2021. Thus, Turkey had to sell 35.1 tonnes in 2021 to hold Lira from being depreciated, in 2020 Turkish CB purchased 163.1 tonnes of Gold. Largest Gold purchases in 2021 according to the data from the World Gold Council were made by Brazil 62.3 tonnes, Hungary 63 tonnes, India 73.8 tonnes, Japan 80.8 tonnes, Thailand 90.2 tonnes.

Largest CB increase/decrease in Q3 2021 looks as follows.

Based on this data, it is obvious that these Central Banks are hedging against the hike of the US Dollar Index. Kazakhstan, Uzbekistan and Russia will be more vulnerable during recent days against the US Dollar due to developments in Kazakhstan and these states will probably use their Gold purchases to withhold their currencies from depreciation, following the Turkish CB.

Left to right first row – USD/INR, USD/KZT, USD/UZS

Left to right second row – USD/BRL, USD/RUB, USD/TRY

While rate hike news in late 2020 and mid 2021 were referred to as a bullish signal for gold and bearish for the US Dollar Index, since mid 2021 markets more rely on FED’s redemption of goals, promises and forecasts. Despite some forecasts being flickering, achieving one of the main goals is considered bullish for the US Dollar. Positive economic data during this weeks release and Mr. Powell’s positive outlook on the economic recovery of the United States will ignite the bullish momentum of the DXY.

Daily XAUUSD chart projects a triangle pattern, and signals the retest of the lower edge of the triangle, based on the pattern’s rule.

MACD and RSI also signal a bearish trend continuation of XAUUSD up until the end of this winter.

Moving averages on a daily XAUUSD chart also do not favor the Gold bulls. MA200 and MA50 both are above the closing price of XAUUSD. Remarkably, the 200-day moving average is above the 50-day MA. This formation in technical analysis is referred to as a “Death Cross’ and always is a bearish signal.

There still is a dynamic support which was able to withhold Gold from sliding below $1700, however the lack of impulse and a pressure from the USD could force XAUUSD to break this support and go down to $1724 and $1680 below that.

Bitcoin Analysis, The Next Target Is $77K

The news about the spreading of a new COVID19 variant hit the markets globally on November 26 and the cryptocurrency market was no exception. The reason for such a reaction is that the Delta variant, which accounted for the majority of Covid cases, is still spreading and is not completely studied. Not only the two additional mutations the Delta variant has but another COVID19 mutation is now spreading.

The effectiveness of the available vaccines were many times questioned against the Delta variant and its mutations, anxiety grows with Omicron spreading globally. Japan already imposed restrictions to foreign travellers for one month and other countries which suffered the most from the Covid19 outrage most likely will follow the lead. We might get back to a lighter version of global lockdowns of early 2020 if the new variant is proven to be resistant to the available vaccines.

Nevertheless, the FED is concerned about the spread of the new variant and the path to the economic recovery and inflation for the Federal Reserve is once again “uncertain”. The FED Chair Mr Powell this Monday in his speech confirmed – “The recent rise in Covid-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation.” Sounds like the FED found its best tool to hold down the uncontained inflation hike.

The Federal Reserve will likely reconsider its recovery plan and probably some shifts in previously forecasted dates will be introduced. Until then, markets might concentrate on risk hedging assets like Gold and Bitcoin. Since the pandemic Bitcoin has proven to be the most effective investment based on the ROI, hence this could be the best time for Bitcoin’s new uptrend.

Bitcoin and COVID

Since the virus caused lockdowns globally in early 2020 Bitcoin’s price was reacting to the discoveries of new variants. The price is not entirely allocated to the new variants but to fear and actions from the governments.

For instance, the first 4 variants had the highest impacts, as the World was in lockdowns and the situation globally was critical.

Delta variant was discovered in April 2021, restrictions were less strict, and there were other factors which caused the decline of BTC. When the Delta variant was discovered, the world Central Banks were declaring that the economic recovery was foreseeable and under control. However, the Omicron now changes the situation, as the uncertainty rises again.

Bitcoin’s sentiment indicators

If the lockdowns are imposed we will witness a high volatility in the cryptocurrency market and a new uptrend moves. Metaverse projects coins will be among the hot trending coins in the cryptocurrency market, however the path will be strictly drawn by Bitcoin.

Bitcoin’s fear and greed index is one of the main indicators used by cryptocurrency investors.

Cryptomarket sentiment has been in fear since last week. Fear indicator is mainly used by professional cryptocurrency traders as a buy signal.

Bitcoin monthly ROI chart

Monthly return chart is used as one of the indicators to help identify Bitcoin’s price action within a month. Historical monthly return helps to identify whether Bitcoin’s price will close above or below the monthly open and what Bitcoin’s next month price action plans are.

Bitcoin chart analysis

Daily BTCUSD chart signals an upcoming uptrend continuation of BTC. The correction of November 10 seems to end soon, on the score of hitting the Fibo 0.5 level.

The correction of November 26-28 was also a retest of the previous major resistance of September 7 as support. This is another edge towards the upwards continuation.

The juxtaposition of the wave 3, followed by a similar to the current correction, leads to a next target for Bitcoin at $77K. MACD and RSI indicators on a daily BTCUSD chart are very bullish. MACD has turned upwards and is about to cross the signal line, while RSI is at its lowest support level.

In order to continue the uptrend Bitcoin must close above this dynamic resistance, see the 4H BTCUSD chart below.

This 4H chart suggests that Bitcoin is on a way for a slight correction locally before the possible uptrend, since RSI is close to the overbought area. The confirmation of Bitcoin’s next bull run will be when BTC breaks above and closes above this dynamic resistance. A retest of a local support at $55800 is also possible before the next jump.

It is now essential to track the progress of the new Covid19 variant and the responses of governments to its development. Mr Powell will testify before the Joint Economic Committee today and will provide an economic outlook, mainly will repeat whatever he has said earlier yesterday, November 29, 2021.

 

BTC/USD Analysis: Bitcoin Longs For a Support Near $51K

The US Dollar has been in an uptrend since January 2021, although this had less to none effect on Bitcoin’s price. However, thorough 2021 Bitcoin trading was something large cap investors wanted to legalize and more and more banks started to offer BTC futures trading to their investors. This is when Bitcoin was no longer tied to the “to the moon” motto as these investors’ decisions are mainly based on the global macroeconomic and the US economic data and the decisions made by the SEC.

The SEC seemed to have a harsh mood on Bitcoin this November. The first strike by the SEC was the denial of Van Eck’s Bitcoin spot-ETF, do not mix it up with Bitcoin futures-ETFs which were approved. Disrupting the anonymity of the cryptocurrency market is the main course the SEC wants on the table. Regulator wants to regulate, that was obvious and the denial of Van Eck’s ETF application was predicted by many analysts.

On November 12 Bitcoin seemed to change the heading and go upwards, however on November 15 the uptrend was blocked by a resistance at $65800 after the US President Joe Biden signed a $1-trillion infrastructure bill. The bill is another step towards regulating cryptocurrencies, obliging all businesses and brokers to report about all transactions more than $10,000 to be reported to the IRS.

With all these mid November events Bitcoin bulls seem to lose power and take Bitcoin to new highs. Nearing Bitcoin futures settlement empowers bears to pull Bitcoin lower to support levels near $58200.

Bitcoin chart analysis

The 4-Hour Bitcoin chart looks very bullish, MACD and RSI indicators signal an upcoming short-term trend reversal. However, this reversal will firstly be interfered by a strong resistance at $62700. If Bitcoin does close above $62700 to continue the bull run it must close above a critical distribution zone at $65600 and $66100.

The daily BTC chart shows that more steeper correction is to be expected. Bitcoin after a retest of its new ATH at $69000 closed below April’s dynamic resistance. Price action of October 27, 2021 until the $69K was squishy, every impulse was followed by a strong correction. Hence, the uptrend of October 28 most likely was an expanded B-wave of Elliot’s Wave theory. If that is the case, then according to the rules, Bitcoin must complete another leg down to complete the C-wave and the correction.

The C-wave is most likely to be completed at levels near $52800 and $51600, where Bitcoin will reach the previous impulse’s resistance to test it as support and will retest the dynamic support of July 21, 2021. This retest will also reset MACD and RSI indicators to buy signalling areas.

I still believe that Bitcoin should retest levels above the month’s open based on Bitcoin’s monthly return chart and assuming that futures traders must take the price above the month’s open prior to settlement to gain profit.

Historically November was Bitcoin’s common green month based on returns, let’s see if this November keeps the tradition.

DOT/USDT Analysis. 65$ Per DOT Very Possible

Cryptocurrency market is performing really well in the second half of the year. Bitcoin and some altcoins break all-time-highs, metaverses explode and Ethereum shows some great moves along its main rivals, mainly Polkadot.

Polkadot is Ethereum’s main rival as it was founded by Ethereum’s CTO Gavin Wood, who introduced the sharding mechanism, which is yet to be released on Ethereum, on Polkadot. Sharding helps a blockchain to run various transactions simultaneously without waiting for a block to be created on a main chain. This makes Polkadot a faster, cheaper and data-wise lighter blockchain alternative to Ethereum.

Polkadot is performing well, following its roadmap, the project announced in mid October that their parachain is ready to launch, with many projects already in a wait-list completing the integration. And according to the announcement on the official Polkadot website, auctions and parachains are launched. The initial announcement of the launch of Parachains on October 12, led to a massive 22% jump in a week. The successful launch and operation of these parachains on Polkadot could definitely support the surge of DOT, the coin might double in price.

To back my estimates and to ground my expectations, DOTUSD retested a major support on a 4-hour chart during another red-crypto-day on November 10.

The positioning of MACD and RSI indicators clearly show that DOTUSD should turn around and continue going upwards from this point. We are right now having a similar setup on RSI and MACD indicators as we had on September 21, 2021, see arrows on the chart. Hence after a small correction, Polkadot should continue upwards.

And if we apply the same price action of DOTUSD from September 21 to it’s recent ATH, Polkadot could reach $72 by the mid December. However there will be challenging resistances up ahead at $60 and $64. If DOTUSD announced successful operation of parachains, we might also witness a stronger upwards impulse, which will lead to a retest of this uptrend channel’s upper edge.

Indeed closing below the lower support will invalidate this analysis, however so far, since September, DOTUSD was following levels of this Pitchfork firmly.

 

GBP/USD Analysis: Trend reversing supports to watch

The FED seems to be having troubles with the rebounding labor market, however inflation hike is snapping on FED’s heels.

The FED seems to be achieving its goals of the US labor recovery. The US labor market surges lighting the green numbers on the economic calendar. Despite the promising economic outlook, the market seems to have a mixed reaction. On one side, there is the FED with forecasts and some forecasts are becoming valid, on the other is the valid assessment. Decreasing unemployment, rising payrolls, consumer confidence simply won’t stay behind the scenes of the “Inflation is under control” saga by the FED. Whereas, there are notes that rate hikes are coming sooner than predicted, it seems like no major Central bank, including the BoE, is willing to act before the FED.

This might be the position which puts the Pound Sterling in a weaker stance against the US Dollar.

There are three main events coming today which will affect the US Dollar index and have their own impact on GBPUSD, these are the US CPI, Crude Oil inventories and the Initial jobless claims. Jobless claims are expected to be lower than the previous month’s 269K by 4K, Core CPI and CPI are expected to continue the positive momentum. Crude Oil Inventories on the other hand are expected to be lower, amid a high demand and a recovery of the hospitality field. Decreasing oil inventories usually have a negative impact on the US Dollar index.

From the technical point of view, GBPUSD looks bullish.

The pair is in a bullish flag pattern, following the support and resistance zones of this downtrend channel.

RSI and MACD indicators on a 4-Hour GBPUSD are signalling an upcoming bullish reversal. The pair has also formed a double bottom pattern when GBPUSD retraced strongly after a retest of $1.34200 level.

Based on the price action, and taking into account a conceivable volatility this week during the release of the Economic data from the US, GBPUSD may also retest the $1.34200 and $1.33200 below that.

The retest of $1.33200 will complete a 5-wave move of the bullish flag and we can expect an escape from the bearish downtrend channel. However the indication of a high purchasing power on November 5 after a retest of $1.34200, RSI and MACD indicators signal that the uptrend reversal of the pair is already in progress.

Bitcoin Analysis – When is the Next Bull Run

Valkyrie Bitcoin ETF launch seems to have no effect on Bitcoin’s surge as many Bitcoin enthusiasts were expecting. The same day Bitcoin hit the new ATH, the first cryptocurrency also hit a new milestone, it reached a $1.26 trln market cap.

CME Bitcoin futures is currently showing a growth up to December, Bitcoin’s November futures are up 0.02%, whilst the December futures are up 0.19%. This might indicate that Bitcoin is expected to continue the climb up to December and possibly reach the $72K mark.

One of the indicators many Bitcoin traders watch is the Fear and Greed index. The indicator is currently at Extreme Greed, which might push sellers to push the BTC price down.

Bitcoin is back to tracking the US Dollar index, week started with a retest of October 22 high which resisted the uptrend continuation. BTCUSD since then has been waiting for the release of the US economic data, CB Consumer price confidence and the New home sales which are coming out later today. The released data will be moving the price.

On-chain Bitcoin data, chiefly the Bitcoin fee, is a very healthy median for Bitcoin. On the ground that Bitcoin is being used as a legal tender in El Salvador and many countries willing to adopt Bitcoin as a legal tender, low transaction fees are crucial.

On the other hand, the daily Bitcoin chart signals a correction ahead. Mainly the correction began when Bitcoin reached its dynamic resistance of August 9. MACD and RSI indicators on a daily chart are bearish, Bitcoin closed below the support of the uptrend channel and might correct down to $53100 if it doesn’t close above $63800.

Chart by TradingView

Since its massive 2021 uptrend Bitcoin’s price was testing EMA50 as support.

Chart by TradingView

Hence, if BTCUSD doesn’t close above $63800-$64100 and there is no significant bull power, bears might take control of the price and push the price lower, to retest EMA50. Supports to watch are $55300, $53100 and $53000.

Whenever you see any analyst claim that Bitcoin price could hit $110K, don’t be pessimistic, refer to this uptrend parallel channel. For the longer term, Bitcoin is very likely to hit this mark by December 2021, if BTC is backed by a high uptrend impulse.

Chart by TradingView

4-Hour BTCUSD has a Head and Shoulders pattern being formed. This pattern also suggests that Bitcoin might show correction if it stays below $63800 and $64100 which is a Fibo 0.618 of the October 21 drop.

Chart by TradingView

To sum up, Bitcoin is still one of the most promising assets to invest in, its growing scarcity and the migration of miners to the US show a solid confidence in its continuous growth. Decreasing fees on Bitcoin’s network and its popularity assists in the adoption of Bitcoin globally. Robinhood, for instance is adding its own crypto-wallet and already has 1 mln subscribers, hence I highly recommend to keep an eye on BTC.

Silver Analysis, Next Stop 26$

Silver gains as the risk of the FED rate hike broadens. Rate hikes are most likely to be on the table before the FED as the inflation is overpassing the expectations of the Federal Reserve.

Silver continues its uptrend since September 30, 2021 when it hit the newly lows of the year. The uptrend is backed by the FED’s tapering plan which should start in November. Despite the positive US Jobless Claims, the US Dollar index remains under pressure below the 93.7 level.

The US Dollar index is still vulnerable below the 93.7 which is a crucial resistance. The DXY chart I was posting in my previous articles still seems to be valid and the USD might drop to 92.5 – 92.4 levels to complete the expanding diagonal pattern.

Chart by TradingView

CFTC net positions as of October 12, 2021 demonstrates a dominance of long positions on both non-commercial and nonreportable positions, whereas commercial positions are still on short. The total number of long traders in each category is larger than short traders. This shows a sentiment of traders and looks like the number of traders, who believe that Silver could go higher is larger.

Source CFTC

As for the technical analysis, Silver on a daily chart is currently testing a resistance level formed by MA100. If XAGUSD doesn’t overtake this resistance, it might drop to $23.5 to find the next support backed by the EMA50.

Chart by TradingView

The pullback to $23.5 could be a sign for Silver to regain power before the next uptrend move. This pullback will also be a strong support of the next bullish move as it will be a retest of October 15’s resistance as support.

RSI indicator shows signs of a correction ahead, MACD remains bullish. Hence, after a slight correction, XAGUSD may continue the uptrend up to $26 and $26.8. FED Chairman Jerome Powell will have a speech later today, during the speech Mr. Powell will give the sights of the FED about the economic projections and future actions by the Federal Reserve, so keep that on track.

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

USD/JPY Analysis – Correction Ahead of a Possible Jump to 116

Like I’ve been saying during my previous analyses, Job openings and employment surge is the FED’s one of the main goals. Even being so, the market seems to still hold on to the USD. The JOLTS Job openings report claimed only 10.439M new job openings, which is below the estimated 10.925M, which is a huge almost 500K gap. Nevertheless, USDJPY continued its massive bullish impulse reaching 113.787.

Technical analysis

Multi-time frame analysis of the pair suggests a possible upcoming correction down to 112.150 – 112.300 levels, where the US Dollar/Japanese Yen could create a great opportunity to a swing high of 114 and 116 as seen on a weekly chart below.

Chart by TradingView

Despite the bullish looking USDJPY, the pair has to retest the February 20, 2020 resistance of 112.2 – 112.154 as support.

Chart by TradingView

The importance of this support and current resistance is also rendered on a 4H USDJPY chart. The pair has hit the upper edge of the parallel channel and could head downwards to retest the lower band of the uptrend channel.

Chart by TradingView

MACD and RSI on all of the three time-frames signal the local bearish move, however this bearish movement should be considered as a correction as the impulse is very strong and an important breakout is made on a daily chart.

The support zone at 112.154 – 112.3 outlined on the chart is also strongly backed by EMA50, which is widely used for swing price action. A retest of this zone will accumulate buyers power as this level also holds a resistance of September 20, 2021. And as a general rule, retesting a resistance as support is a bullish continuation signal.

The US Dollar index is still below its strong resistance and despite rising yields, DXY still remains below it. There still is a high probability of DXY to drop towards 92.4 levels to complete the expanding diagonal / broadening wedge pattern.

Chart by TradingView

Upcoming events to track, to follow the price action of the pair are:

October 13, 2021 – US Core CPI data both monthly and annual. Whilst YoY data is forecasted to remain at 0.2, there is an expectation that MoM data will be 0.2, higher than August’s 0.1.

October 13, 2021 – OPEC Monthly report, key driver of the oil price, rising oil prices have an impact on the USD.

October 13, 2021 – FOMC meeting minutes. Important to trace as the FED might input changes to the report and might drop some interesting market-shaking comments.

October 14, 2021 – Japan’s industrial production for August will outline Japan’s key economic sector.

October 14, 2021 – US Initial Jobless Claims. Again, keeping an eye on the FED’s key metric.

USD/RUB Analysis. Dollar Could Drop to 70.4 Per Ruble

Rising demand for oil and natural gas soarded the price of these assets. Russia’s economy is mainly dependent on export of oil and gas. Europe’s energy crisis came in handy for the ruble and strengthened it as nearly half of the bloc’s gas is imported from Russia. The energy crisis could have a more dramatical outcome as Russia is willing to sell its gas to a highly demanding Europe, but the geopolitical tension between Ukraine, EU’s ally, limits capabilities.

Russian gas is already being supplied to Hungary and Croatia via the new TurkStream pipeline bypassing Ukraine. And we all know that the US and the EU imposed sanctions to Russia due to the Ukraine-Russia conflict. Now why this is important, you may ask. Increasing the natural gas supply to Europe will not only increase the Russian income in foreign currency, but will also give Russia an edge, which in fact will strengthen the Russian ruble.

Globally, oil prices soar, as lockdown restrictions ease and airlines resume operations. Crude is traded near $80 and Brent already surpassed the $83 per barrel mark. Russia is World’s third largest oil supplier. The Russian economy was severely impacted during the Global Covid19 lockdown, as the oil demand decreased drastically. Last year’s total oil and gas income based on the data of the Ministry of Finance of Russia was over $72 bln.

There is a significant increase in Russia’s budget from the oil and gas sector, the year is yet to end and the total income from January to September is almost $86 bln. Through the year, the Russian Ministry of finance continued its streak of foreign currency and gold purchases. These factors support the strengthening of ruble at least until the end of the year, while the growing foreign currency portfolio will act as a great instrument for Russia to keep the USD/RUB rate within the range of their interest.

From the technical point of view, USD/RUB also looks bearish for now. There is a descending channel on a daily USD/RUB chart.

Chart by TradingView

It might seem that the price has formed a double bottom formation, however there is a high chance that the price will drop lower to 70.5 to test the dynamic support, where it might retrace to test the upper threshold of the falling wedge pattern. The 70.4 support area is an important level to watch, as it will be decisive for the next move of USD/RUB. Based on the rules of the falling wedge pattern, the price must complete the 5 wave move and reverse, as it’s a trend reversal pattern.

However, if the price drops below 70.4 which might happen due to several reasons, interest hike risk, weakening the US Dollar, soaring oil and gas prices. Russia sealing gas export deals with other EU countries, then USD/RUB might proceed down to 68 and 67 as seen on a weekly chart below.

Chart by TradingView

In general, the weekly USD/RUB chart looks very bullish, so keep an eye on this pair.

The pressure on the US Dollar index is high as well, the most anticipated NFP data release today. These data will draw a further course of the US Dollar index, which has already tested a severe resistance zone at 94.3.

Chart by TradingView

The US Dollar index has formed an expanding diagonal, which completed it’s 5-wave move, hence a correction from this zone towards 93.4 and 92.4 is anticipated.

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

Gold Analysis – It’s Time for Gold to Steal the Show

The data may suggest that the FED will restrain from their idea of increasing interest rates early next year, however taper uncertainty puts the USD in a weaker position. The market is tired of the sea-saw imposed by the FED. And when this kind of sentiment fills the market, the edge goes to safe-haven assets, mainly Gold.

There are several factors which might weaken the US Dollar this week, one of them is the ongoing negative US trade balance. New US-China trade deal talks are anticipated to remain unchanged with either party willing to back down. US President Joe Biden also labeled the importance of talks with the US allies to present a more united front to Beijing.

Doesn’t sound like the US is willing to cut tariffs and ready to negotiate. Strong US Dollar might play a negative role for normalizing the balance sheet and increasing exports. ISM Non-manufacturing PMI in August is expected to be lower than in July. The California oil spill would result in a deduction of oil from the US oil inventories which historically affects the US Dollar index negatively.

Non-farm employment change, initial jobless claims which will be published later this week are key metrics to watch, these data will identify the commitment of markets to the FED. NFPs of course is the main course of the week, Nonfarm employment change will be the second identifier of the next path of the USD and Gold. The first was during the previous week, when after a firm acclaim of the economy following the projections by the FED, we witnessed a worse than projected jobless claims.

Bridging the gap between the uncertainty and gold, let’s also take a look at some data which might be helpful in identifying your future decision on investing in Gold.

This uncertainty and a deviation between the FED-forecasts and the actual data may be one of the reasons for the market willing to hedge and await for the better times, when there is certainty. By hedge, I mean convert the currency to gold. Central banks of India and Uzbekistan continue their Gold-purchasing streak adding 12.9 and 8.7 tonnes respectively in August. The annual leading Gold-purchasing Central banks are Thailand with 90.2 tonnes, Japan with 80.8 tonnes, Hong Kong with 63 tonnes and Brazil with 62.3 tonnes. Largest sellers so far are Philippines with 32 tonnes, Philippines are producers and their CB mainly purchases Gold from the local Gold miners.

The data above outlines that some central banks are still taking a conservative and cautious approach to what is held in front. The Evergrande case puts a curtain before the market to shade the certainty.

The growing production cost of Gold also is an important indicator. Miners for sure won’t work in loss

AISC – All-in Sustaining Cost is a metric used to reflect the costs associated with the full operation of a gold mine.

As for the technical analysis, there is one important pattern on a daily gold chart which is important to watch – a descending triangle.

Chart by TradingView

A Descending triangle as a general is a signal of the bearish continuation, this is confirmed only when the price breaks below the lower edge of the triangle, the support line. In our case we are above the support line and it seems like the price is willing to touch the upper edge first.

The bullishness of Gold is supported by both RSI and MACD indicators. MACD has already crossed the signal line, indicating a further upside continuation, whereas RSI remains in mid-level since June.

On a 4-hour XAUUSD chart, there is a breakout confirmation from the descending wedge.

Chart by TradingView

As we can see on the chart above, Gold broke above the local dynamic resistance, retraced to retest the resistance as support and is looking to continue the uptrend to $1833 and $1849 levels.

There is another pattern to watch which suggests that Gold can climb further to 1907, it’s the inverse head and shoulders which Gold formed with the help of August 09 net buy positions.

Chart by TradingView

I personally look forward to seeing a completion of the ABCDE correction pattern and a continuation of a bullish run, possibly up to $2200.

Chart by TradingView

Key takeaways are to watch for the economic data, especially the data related to the employment changes. The developments around the US-China trade deal seem to be in the spotlight again and markets will be watching the developments around Evergrande. NFP data would be crucial for the USD, don’t miss the release of these data.

Bitcoin is Under Pressure, and the Anticipated $100K by the End of the year Looks Beyond the Reach.

China’s ban of cryptocurrencies is related to the migration of mining capacities to the US, just remember the April energy outage in Xinjiang which led to a major hashrate drop. And when the hashrate is in hands of the US, China doesn’t want to risk it, so cryptocurrencies are banned. This strategy also should increase the mass adoption of the Chinese digital currency, the digital yuan.

Digital yuan is already tested for cross-border inter-bank transactions between China, Hong Kong, UAE. In the cryptocurrency world, Bitcoin was meant to be the digital gold, the main counterpart and a hedge asset, and it is obvious that one world power is already restrained from this idea.

While China is restricting access to cryptocurrencies, the US is proposing various ways to regulate cryptocurrencies. Tom Jessop, president of the Fidelity Digital Assets, had a meeting with SEC officials and asked for the approval of Bitcoin-ETF and Bitcoin-futures-based products. While the US firms are competing to launch the Bitcoin-ETF in the US waiting for the approval from the SEC, Bitcoin ETFs and ETPs are already traded in Canada and European markets.

SEC Chairman Gary Gensler also stated that the launch of Bitcoin-ETF could be completed anytime this year, however the product should comply with strict rules of mutual funds to be listed in stock exchanges under the 1930 law.

It is very clear that Bitcoin and cryptocurrency trading will be normalized in the sense that there will be less to none sentiment driven price actions. Bitcoin will be less sensitive to news and other FUD-spreading gossips. Bitcoin will be bound to the global economic data and the economic data from the US, and the US Dollar index.

The digital gold’s price action will be similar to the traditional gold. And for the fund to be able to compete, it has to purchase as many Bitcoins as possible, to do that, the price of an asset should drop. The cheaper the price, the more assets you can buy and thus increase the total valuation of your ETF, just keep it in mind.

Speaking of the sentiment, the Fear and Greed index still shows slight greed in the market, which still signals the upcoming correction.

As for the technical analysis, Bitcoin is currently below an important support level, which currently acts as resistance. The price has formed a falling wedge pattern and in order to be able to jump to levels near $50K, it has to close above $43900.

Chart by TradingView

MACD looks bullish, however, the resistance is strong. According to the rules of the Wedge pattern, BTC should drop one more time down to $37200 and $36300 levels to touch the lower edge of the falling wedge pattern (ending diagonal).

Let’s take a closer look at the pattern on a 4H BTCUSD chart.

Chart by TradingView

As seen on the chart above, the red line (area of resistance) is a historical and local resistance line. For Bitcoin to show any signs of bullish move, it has to close above this area, otherwise the drop might continue.

Like I noted in this article above, BTC is bound to the DXY and we are expecting important economic data from the US later today. GDP and Initial jobless claims data will guide the market and the US dollar index. Positive US Labor data will boost the US Dollar as it is one of the core metrics and goals of the FED.

EUR/USD Analysis. Euro Struggles, 1,14 Could Be The Next Stop

The battle of the best economic projections between the ECB and the FOMC seems to have an edge for the second as the European CB remains cautious about the excess risk of inflation hike.

On Friday, the FED Chairman, Mr. Powell assured the on-track progress of the economic recovery in the US. Goals on employment and inflation were reached as was noted by the Chairman and other members of the Committee. These positive vibes from the FOMC curtained the fear of risk of rate hikes fueling the US Dollar to continue its climb. To quell worries of rate hikes, policymakers assured that the reduction of asset purchases won’t lead to rate hikes, at least until 2022.

Last week, the EU and German economic data were mainly red colored as the actual data released was not the same or above the anticipated. This fact weakens the Euro before the US Dollar, as these data clearly state that the ECB economic projections are inaccurate. Last week’s EU and German PMI data were below the anticipated. ECB President Christine Lagarde will have a speech. I do not expect to hear anything new rather than to hear from the President that there are some numbers which define the course of ECB on inflation, increasing energy prices are temporary. Speaking of energy, it is important to track where the deal with Russia will lead to (Nord Stream 2 gas pipeline).

Shortly after the speech of the ECB President Christine Lagarde, we are expecting a release of the US CB Consumer confidence data for September, which is expected to be higher than what was released in August. The FED Chairman will also testify to the economic projections before the Joint Economic Committee today. Although markets will be tracking speeches of both CB leaders, it seems like the course for the EUR/USD is set, US Dollar prevails.

From the technical point of view, EUR/USD is traded inside a downtrend channel. The price action of June 25 has formed an expanding ending diagonal pattern, which is yet to complete its formation.

Chart by TradingView

Correlating to the US Dollar index, there is a same expanding diagonal pattern, although faced the other way – upwards.

Even though the US Dollar seems to have a motive impulse towards 94.4 and 94.5, RSI is on the edge of the overbought level and signals a short-term correction. The vice versa is witnessed on the daily EUR/USD chart, whereas the RSI is near the oversold level, hence to balance the strength, EUR/USD might retest 1.17700 before it continues to proceed downwards to complete the correction.

Key support levels to watch herein are $1.16150, $1.15000 and an area between $1.14500 and $1.14200. It is important to note that MA100, MA200 and EMA50 are all above the priceline and act as a strong resistance, most importantly the EMA50 is right at $1.17700 which backs the strength of this resistance.

It is pretty much clear that the end of the correction is not yet confirmed and for the Euro to continue the uptrend the economic data from the EU has to follow the projections of the ECB and EUR/USD must close above the upper edge of the downtrend channel. Until then, EUR/USD is bearish.

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

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.