Forex analysis review
Forex analysis review |
| The Fed continues to print money Posted: 17 Jul 2021 08:31 AM PDT
US stock markets closed lower on Friday. The Dow Jones Industrial Average added 346 points (0.86%) at the close and amounted to 34,658 points. The Standard & Poor's 500 indexes lost 35 points (0.75%), showing a decline to 4,324 points. The Nasdaq Composite index fell by 110 points (0.80%) to 14,675 points. A fairly large number of macroeconomic reports were published in the United States on Friday, which is not too important for the US currency exchange rate. However, they were able to influence the mood of investors. For example, a fairly important report on retail sales for June was published, which showed an increase of 0.6% m/m with lower forecasts. The consumer sentiment index from the University of Michigan was also released, which fell from 85.5 to 80.8. However, the impact of ordinary statistics on the US stock market now looks quite strained. There is no denying that the stock market continues to grow, and it is growing quite quickly. The Standard & Poor's 500 and Nasdaq Composite indices have shown almost record growth in the last couple of months. Thus, this may partly be a consequence that the Fed continues to pour huge amounts of money into the American economy, which continues to migrate and settle on the US stock market. A very important observation: both of the above indices showed the strongest upward dynamics exactly when bitcoin and the entire cryptocurrency market collapsed. Recall that over the past few months, the main cryptocurrency in the world has fallen in price by about half. Thus, it is quite possible that the money withdrawn from the cryptocurrency market also settled on the stock market. And of course, there is no denying the obvious relationship between the increase in the money supply in the United States and the growth of all the leading stock indices. It is purely inflationary growth. The companies themselves are not becoming more expensive. Their assets, profits, financial results, production volumes, production capacities are growing (at least for many), but not at the same pace that the stock market and the value of their shares have been growing in the last year and a half. A classic example is the shares of Tesla, which grew eight times in 2020 alone. Tesla did not produce eight times more electric cars, and its revenue did not grow eight times. Tesla continues to remain far behind other automakers, barely entering the top ten largest automakers. Nevertheless, its capitalization exceeds the capitalization of any carmaker. Such is the paradox. Thus, we believe that US stock indices will continue to grow as long as the Fed and the US authorities continue to pour trillions of dollars into the American economy. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 17 Jul 2021 08:31 AM PDT
The main cryptocurrency continues its downward trend. There is no doubt that the "bullish" trend is complete. However, we would like to mention a few important points that can also help traders and investors. The first thing to note is that the volatility of bitcoin has sunk very much in recent weeks. If earlier the cryptocurrency could pass from the minimum to the maximum of the day $ 5000 - $ 8000, now the volatility is $ 1500 - $ 2000 per day. It suggests that overall market activity is falling. The second thing that should be noted is the lack of supporting factors. Previously, bitcoin has always found a reason for optimism. Now, even the forecasts of pseudo-experts of the cryptocurrency market from the category of "$ 100,000 by the end of 2021" do not impress anyone. Perhaps someday, bitcoin will cost $ 100,000 per coin. However, it is not in the coming months. Third, institutional investors cannot maintain the exchange rate of the main cryptocurrency. Again, it is no secret that institutions make up approximately 50% of the bitcoin market. However, as practice shows, even the sale of 10-20 thousand coins (out of a total of more than 18 million) can lower the rate. Even small sales lead to a drop in the cryptocurrency exchange rate. It suggests that the market is very "thin" now, and sales from retail investors are quite enough for the quotes of the "bitcoin" to continue to fall. Nassim Nicholas Taleb recently wrote an article about bitcoin, in which he once again criticized the "black gold." In his opinion, bitcoin has completely failed as a means of hedging risks and as a currency. He called bitcoin "an extremely fragile asset that needs constant interest in itself." Taleb believes that the real price of bitcoin is zero. Unlike gold and other precious metals (and even just assets), the price of bitcoin depends very much on the market mood. "Bitcoin cannot be used as a protection against systemic risk," Taleb said. Also, the author of "Black Swan" believes that the world needs one or two decentralized currencies. However, bitcoin cannot be such a currency because of its extreme volatility. Thus, we expect a further decline in the quotes of the "bitcoin." We also remind you that in all previous cases, when the upward trend ended, bitcoin subsequently lost up to 90% of its value.
In technical terms, on the 4-hour timeframe, bitcoin quotes were fixed below the ascending trend line and below the Ichimoku cloud. Also, the price has fallen to $ 31,100 per coin and is trying to overcome it for the third day. If this overcoming happens, bitcoin will only hold $ 29,700 from a new collapse of quotes. Overcoming it will open the way for sellers to the level of $ 24,350. The material has been provided by InstaForex Company - www.instaforex.com |
| Bitcoin continues to roll down Posted: 17 Jul 2021 08:31 AM PDT
The quotes of the main cryptocurrency continued to decline steadily and reached the first "dangerous" level of $ 31,100 on Friday. For the third day in a row, bitcoin is trading near this mark, which has worked for the sixth time in the last two months. However, let us pay attention to how the nature of bitcoin's movement has changed over the past few weeks. We continue to stand by our opinion: bitcoin will continue to become cheaper in the coming year. Of course, many "crypto experts" continue to voice crazy forecasts for the cost of bitcoin in 2021, assuring that the current recession is a temporary phenomenon. The "bullish" trend is over, the fundamental background remains sharply negative, and most real experts are confident that the first cryptocurrency will fall into the range of $ 10,000 - $ 24,000. The spread of the range is relatively high because many experts call different goals for the fall of bitcoin. However, the fact that there is a goal of $ 24,000 per coin does not completely negate the forecast of $ 10,000 per coin. The same opinion is shared by the CEO of the investment company DoubleLine, Jeffrey Gundlach. In his interview with CNBC, he said that he sees a classic figure of technical analysis on the bitcoin chart. It suggests that bitcoin will continue to fall, at least to the level of $ 23,000. Earlier, a similar forecast was given by JPMorgan analysts, who believe that BTC may fall to $ 25,000. At the same time, JPMorgan considers that the reason for the further fall will not be technical but fundamental. This month, the units of the Grayscale Bitcoin Trust bitcoin fund will be unblocked after a six-month lock. The peculiarity of these shares is that their owners must keep them on their hands for a certain period without having the right to sell. According to the BYBT service, about 40 thousand bitcoin coins will be unlocked, estimated at $ 1.4 billion. Potentially, these coins (or most of them) can immediately go to cryptocurrency exchanges for sale. Over the past few months, the bitcoin exchange rate has fallen in price by more than two times, and investors of Grayscale Bitcoin Trust did not have the opportunity to sell shares when the price was beginning to fall. However, they are highly likely to want to do it now. And, of course, do not forget that China has almost completely got rid of mining companies, which also does not improve the fundamental background. And in addition, the entire crypto community is waiting for news from the United States, where the legislation controlling the turnover of cryptocurrencies may be tightened.
In technical terms, bitcoin fell to the level of $ 31,100 for the sixth time. Thus, the cryptocurrency has already begun to test the strength of $ 31,100, and it may start to try $ 29,700 in the near future. From our point of view, a new drop in bitcoin is only a matter of time. However, as long as these obstacles are not passed, "digital gold" retains purely theoretical chances of growth to the level of $ 40,700. However, this also requires the desire of investors to buy bitcoin, which is not yet observed. The material has been provided by InstaForex Company - www.instaforex.com |
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