Bitcoin may have reached a local bottom during the global market rout on Aug. 5, when its price dipped to a six-month low of approximately $49,500.

Technical analyst SuperBro highlighted that Bitcoin’s third-quarter bottoms in 2012, 2016, and 2020 followed strong upward momentum, often leading to price rallies to new record highs after the US presidential elections.

Given this historical precedent, there is growing anticipation that Bitcoin may resume its uptrend as it approaches the November 2024 election, which features a high-stakes contest between Donald Trump and Kamala Harris.

SuperBro bolstered his bullish outlook for Bitcoin by referencing the “left-translated cycle” theory. This theory posits that Bitcoin’s bullish cycles are beginning earlier and potentially reaching their peaks sooner than in previous cycles.

Key evidence supporting this theory is that Bitcoin’s most recent peak occurred a month before its fourth halving in April 2024. This is unusual compared to past cycles, where the peak typically followed the halving event.

If the left-translated cycle holds, Bitcoin could begin its ascent before traditional market participants expect, probably hitting a new record high ahead of the election. This could catch off guard the “mid curve” — or those who are slower to adapt to changing market dynamics.

As a result, these investors might be sidelined if they wait too long, missing out on the rally’s initial stages.

Fundamentally, Trump's positive stance on Bitcoin and potential regulatory changes under different administrations could fuel speculative buying, leading to accelerated price increases.

According to the crypto betting service Polymarket, Trump’s winning odds have improved.

Long-term holders (LTHs) of Bitcoin have consistently locked in about $138 million in profit per day during the recent flat trend, according to Glassnode’s latest weekly report.

This steady profit-taking suggests that a significant amount of capital is entering the market daily to absorb this selling pressure, keeping Bitcoin’s price relatively stable despite the choppy environment.

Meanwhile, the Realized Profit/Loss Ratio remains elevated but shows signs of a significant decline from its peak, indicating that LTHs are beginning to reduce their profit-taking activities.

Historically, this metric reaches high levels during market tops and declines before the market resumes an uptrend, as seen in the 2013 and 2021 cycles.

The combination of this declining Realized Profit/Loss Ratio and historical patterns of LTH behavior suggests that Bitcoin might be able to rally in the months leading up to the election.

From a technical perspective, Bitcoin may undergo a bull flag breakout in the run-up to the US presidential election.

BTC’s price has been trending inside a bull flag pattern since March, confirmed by its correction inside a descending parallel channel, which, in turn, has followed a strong uptrend.

As a rule, this formation increases Bitcoin’s likelihood of continuing its bullish momentum, given that its price breaks decisively above the flag’s upper trendline. Should it happen, its bull flag breakout target will be measured by adding the previous uptrend’s height to the breakout point.

That brings Bitcoin’s bull flag target to around $80,000 by the US election in November.

Statistics Canada said headline CPI inflation rose 0.4% month on month in July, which was above expectations for 0.3%, taking the annual rate down to 2.5% from 2.7%.

However, the market tends to react to the core measures of inflation, as they have a greater bearing on the Bank of Canada's decision-making process.

The Pound to Canadian Dollar exchange rate is now 0.20% higher day-on-day at 1.7745 after Statistics Canada reported a 0.1% m/m gain in CPI-trim and CPI-median. This confirms core inflation is tracking a path to undershoot the Bank of Canada's most recent set of forecasts.

The Euro to Canadian Dollar rate has reversed an earlier decline and is now slightly higher on the day at 1.5119, while the Dollar has also seen its earlier losses shrink to USD/CAD 1.3624.

Analyst Olivia Cross at Capital Economics says these core inflation readings show that the disinflationary pressures in July were encouragingly broad-based.

"For now, the three-month annualised rate is still 2.7%, down from 2.9%, but if the recent momentum continues, then core inflation would undershoot the Bank’s forecast for the average of CPI-trim and CPI-median to be 2.5% in the third quarter," says Cross.

The financial market's reaction suggests these data can allow the Bank of Canada to step up the easing process, potentially cutting interest rates more than previously expected in the coming months.

This shift in expectations is weighing on the Canadian Dollar.

Cross says these data leave the door open for the Bank of Canada to take a larger step later this year if there is additional weakness in the labour market or activity data.

The CAD's post-inflation decline could extend, according to analyst Daragh Maher at HSBC. He explains USD/CAD is potentially bottoming around technical support at 1.36, a level it has rarely dipped below since mid-April.

"The drop in USD/CAD during August is also out of line with the more modest shift in 2Y yield differentials, with a notable divergence over the past week. Perhaps that split reflects the bounce in global equity markets and hopes for a US soft landing, but it does suggest a rather overpriced CAD relative to rate expectations," says Maher.

A USD/CAD recovery, paired with GBP/USD resilience, would allow GBP/CAD to continue its recovery, with our Week Ahead Forecast targetting a potential move to 1.7750.

In fact, said Nick Vyas, Ph.D., associate professor of clinical data sciences and operations at the University of Southern California (USC), by 2030, COVID-19 likely will “be summarized as a small blip on our radar screen.”

Speaking during the 12th annual Global Supply Chain Excellence Summit, hosted last week by the Randall R. Kendrick Global Supply Chain Institute at USC’s Marshall School of Business, Vyas said there are three major forces that will drive supply management in the future: geopolitics, digital transformation and human capital.

Devising scenarios that account for the three forces can give organizations an idea of what impacts they might feel in 2030.

Geopolitical tensions. The Red Sea shipping crisis seemingly pales in comparison to what a South China Sea crisis could mean to the flow of goods, said Vyas, founding director of the Randall R. Kendrick Global Supply Chain Institute. Imagine what the implication of not being able to use that trade route, he said.

“History teaches us one thing: The greatest civilization fell not because it was completely demolished, but because its supply chain routes were disrupted,” he said. “One thing that keeps me awake at night is how (geopolitics) can actually evolve into a crisis and the magnitude that can supersede it.”

Vyas recommends that that supply management professionals and leaders analyze whether their organizations are prepared: “Are you thinking through this? Are you creating what if scenarios? What does this mean for your business?” Also, options like onshoring and nearshoring are potential alternatives for mitigating geopolitical impacts, he said.

Digital transformation. How will the digitalization be shaped in the future by such technologies as artificial intelligence and machine learning?

In global companies, traceability is key to any transformation, Vyas said. “There is no sustainability if we don’t have the traceability, if we don't hold the stakeholders accountable for it, both positively and punitively.”

He continued: How will narratives be shaped when organizations talk about visibility and ensuring “the value system in global trade is honest? That if something says, ‘Made in Mexico,’ that it is manufactured in Mexico and not assembled there.” Trade agreements will begin to address such visibility and accountability, he said.

Human capital. As the profession evolves, so must its people. “Part of our ecosystem that we're going to have to adapt, learn and live,” Vyas said. That means staying current, even ahead, of trends and processes.

It means embracing AI, other technologies and innovation — and ensuring humans are part of the equation, he said. It means focusing on such issues as reducing carbon footprints and building, agile, resilient and sustainable supply chains.

One area that’s changing is banking. The future will see the marriage of physical and financial supply chains, said keynote speaker, Geoff Brady, head of global trade and supply chain finance in Global Transaction Services (GTS) at Bank of America. Banks are transforming their business financial offerings to provide capital where needed.

In the past, a bank’s mission was to ensure the profitability of its supply chain loans. “We had to … figure out what the receivable flows were, where were they going, how likely they were to be repaid,” Brady said. New banking solutions will change supply chain finance, making it more efficient and streamlined.

One is embedded finance, he said. “Embedded finance very simply means financing options in places where they don’t normally exist,” he said. Essentially, it entails integrating financing services as part of a non-financial platform.

“It's a way for us to come to you … where you already are,” Brady said.

Silver (XAG/USD) continued its upward momentum during the European trading session on Wednesday, trading in the mid-$29.00s. This recovery follows the metal’s recent dip to its lowest level since May, driven by a dovish Federal Reserve stance, pressure on the US dollar, and geopolitical uncertainties, which have bolstered silver’s status as a safe-haven asset.

According to retired investment professional Kevin Bambrough, Samsung’s new solid-state (SS) battery, incorporating silver as a key component, is set to drive significant demand for the metal.

This battery features a silver-carbon (Ag-C) composite layer that enhances performance, offering a 600-mile range, 20-year lifespan, and 9-minute charge time. Bambrough estimates that each battery pack could require around 1 kg of silver.

With 16 million EVs potentially adopting this technology, annual silver demand could rise by 16,000 metric tons—nearly two-thirds of current global production. This surge, coupled with ongoing demand from the solar industry, points to a bullish outlook for silver.

•Anticipation of a September Federal Reserve rate cut has boosted silver prices.

•Investors expect a 25 basis point rate reduction, leading to lower US Treasury yields and a weaker dollar.

•The CME Group’s FedWatch Tool shows a 70% probability of the rate cut, reflecting strong market sentiment.

•A Reuters poll suggests most economists anticipate 25 basis point cuts at each of the Fed’s three remaining 2024 meetings.

•Fed Governor Michelle Bowman warns inflation concerns may delay rate cuts, potentially limiting silver gains.

•Geopolitical tensions further drive demand for silver as a safe-haven asset, supporting the metal’s recent rally.

Silver (XAG/USD) continues its upward trend, trading near $29.53. The price is supported by bullish momentum, with key support at $29.34, indicating potential for further gains.

Economic activity moderated in the first half of this year after increasing at a strong pace last year. Private domestic final purchases (PDFP) growth was solid and slowed much less than gross domestic product (GDP). Consumers appear to be pulling back on discretionary items and expenses, with a decline in restaurant spending.

The labor market continues to loosen, and there are signs that illustrate the labor market is coming into better balance. After slowing in the second quarter, payroll employment gains eased to a more modest pace in July. Although the unemployment rate is notably higher than a year ago, it remains at a historically low. In addition, the ratio of job vacancies to unemployed workers has declined to its pre-pandemic level. The inconsistencies in the latest jobs report warrant caution. Job gains have been consistently overstated in the establishment survey since March of last year, and it appears that the recent rise in unemployment may be exaggerating the degree of cooling in labor markets.

In recent months we have seen some further progress on lowering inflation, with the 12-month measures of total and personal consumption expenditures (PCE) inflation having moved down since April, although they have remained above the 2% target. It is expected that inflation will decline further with the current stance of monetary policy. Should the incoming data continue to show that inflation is moving sustainably toward our 2 percent goal, it will become appropriate to gradually lower the federal funds rate to prevent monetary policy from becoming overly restrictive.

However, I still see some upside risks to inflation due to increasing geopolitical tensions, additional fiscal stimulus, and increased demand for housing due to immigration. We need to be patient and avoid undermining continued progress on lowering inflation by overreacting to any single data point. I will remain cautious in my approach to considering adjustments to the current stance of policy.

There was no major news on the wire to trigger the minor selloff in global equities, so it was nothing else than a correction after a long rally following an ugly meltdown. As such, the S&P500 and Nasdaq were slightly down, by around 0.20% each, the European Stoxx 600 retreated 0.47%, while the Nikkei gave back some of yesterday’s gains in Tokyo, as the USDJPY fell and consolidated near the 145 level.

The US dollar index took another dive, however, and hit the lowest levels since the beginning of January. Citi analysts said that the carry trade is back but not with the Japanese yen but with the US dollar. They say that the positioning comes as a macro risk gauge dipped below neutral, but warned that there is only a small window of opportunity for the strategy to perform well as the election risks are looming. Additionally, the Fed risks are looming as well, and the greenback – now in the oversold territory according to the RSI index – doesn’t look appetizing for further shorting the dollars.

Data-wise, the final inflation numbers from the Eurozone brought no surprise. The headline inflation remained steady at 2.9% and core inflation ticked slightly higher from 2.5% to 2.6%. The numbers were soothing but the slowing disinflation and the strong wages growth in many European countries including France, Spain and Germany, were pointed as ‘worrying signals’ for the European Central Bank’s (ECB) struggle to bring inflation down to its 2% target. The latter cast a shadow over what the ECB could do after the anticipated September cut. The waning dovish expectations gave a boost to the single currency yesterday. As such, the EURUSD spiked past the 1.11 level. The US dollar’s broad-based weakness helped as well.

Now, the EURUSD is in the overbought territory and a downside correction would be healthy. Across the Channel, the weak dollar pushed Cable above an important psychological mark: the 1.30 level. The pair never traded meaningfully above this level since 2022 and a meaningful appreciation above this level means more to sterling bulls than just a policy divergence between the Federal Reserve (Fed) and the Bank of England (BoE).

Elsewhere, though, the tone was mixed. In Sweden, the Riksbank cut its rate by 25bp yesterday and said that it could lower its rate three more times this year. But despite that dovishness, the Swedish krona advanced against the greenback yesterday, and the USDSEK fell to the lowest levels since March.

Across the Atlantic, inflation in Canada fell from 2.7% to 2.5% in July as expected and marked the softest increase in consumer prices since March 2021. Core inflation fell to 1.7%. The numbers were aligned with the Bank of Canada’s (BoC) forecasts that inflation would drop toward the 2.5% mark in H2. Although inflation is expected to rebound due to incoming base effects for gasoline prices, the numbers backed the dovish BoC expectations, yet here as well, the Loonie was bid against a widely offered US dollar. Even the selloff in crude oil didn’t give cold feet to the CAD bulls. The USDCAD fell to 1.36 and is about to test the 200-DMA to the downside. Needless to say that the pair is also approaching an overbought territory and should see traders take a break and think what to do next.

In summary, no matter the news flow or the idiosyncratic expectations, the major story is the US dollar’s weakness – that I think has stretched to unfunded levels. Today, the dollar traders will have a close look to the FOMC minutes and the BLS preliminary revision to annual payrolls. I don’t think that we will have anything major from the Fed minutes – plus, so much has changed since the last FOMC meeting with market expectations going to wild places – but the BLS’ revision could be interesting in that, economists at Golman Sachs and Wells Fargo expect that the revisions will show that the payrolls growth in the year through March was at least 600’000 lower than currently forecasted. Goldman says that the revision could be as high as a million lower, while JP thinks that the numbers will be revised by around 360’000 jobs to the downside. The bigger the downside revision, the higher the worries that the Fed has waited too much before normalizing and the crazier the Fed doves will go and the higher the pressure will be on the US dollar.

And of course, the dollar’s misery is making gold shine like a new penny. TD Securities say that the current positioning in gold is more consistent with levels that would suggest recession. If you believe a recession isn’t imminent, gold prices may be – perhaps – inflated. It’s true that the EM central bank have been buying gold to diversify against inflation and diversify away from the dollar and the uncertain geopolitical, financial landscape drives capital to the safety of the yellow metal.

Yet, Chinese consumers are reportedly cutting back their purchases due to high prices, the dovish Fed expectations look overpriced and the RSI index suggests that gold is about to step into the overbought territory and correction could be healthy at the current levels.