Bitcoin (BTC) Price Trading In Post-Halving Danger Zone,How Much Can It Retrace?

Economic

Cryptocurrency

Summary:

As per the historical trend, the Bitcoin price can correct for another 15 days with a possibility of downside volatility at the $60600 Range Low.

The world’s largest cryptocurrency Bitcoin came under selling pressure earlier this week falling under $65,000 as the US GDP growth and business activity slowed down. As of press time, the Bitcoin (BTC) price is trading at $64,256 with a market cap of $1,265 trillion.

Bitcoin price In Post-Halving ‘Danger Zone’

Crypto analyst Rekt Capital has raised concerns about a potential “Danger Zone” following Bitcoin’s recent halving event. Drawing parallels to historical trends from 2016, Rekt Capital highlights a significant downside wick of approximately -11% that occurred around 21 days after the Halving, before a subsequent upward reversal.

With Bitcoin currently 6 days post-halving, attention is drawn to the possibility of downside volatility around the Re-Accumulation Range Low. Rekt Capital warns that if history repeats itself, this downside volatility could manifest over the next 15 days, termed the “Danger Zone.” While this period ends in 15 days, there remains a possibility of downside volatility at the $60600 Range Low in the meantime, according to historical analysis. Bitcoin (BTC) Price Trading In Post-Halving Danger Zone,How Much Can It Retrace?_1

Bitcoin (BTC) Price Trading In Post-Halving Danger Zone,How Much Can It Retrace?_1

Bitcoin’s struggles persist as it faces rejection from the $65,600 resistance level, failing to establish it as support. Over several weeks, Bitcoin price has consistently shown downward movement towards the $60,600 liquidity pool, marked in green.

On the other hand, Bitcoin critic Peter Schiff believes that $60,000 support won’t hold and that the Bitcoin price is heading for even lower levels.

Tech Stock Rout Puts Pressure on BTC

Bitcoin’s decline coincided with a downturn in major U.S. technology stocks, spurred by Meta Platforms Inc (NASDAQ: META) reporting a weaker-than-anticipated revenue forecast. Following Meta’s 15% decline in after-hours trading, industry giants Microsoft Corporation and Alphabet Inc also experienced drops of 2% and 3%, respectively.

Traditionally, Bitcoin’s movement tends to mirror that of U.S. technology stocks, as both sectors are often seen as avenues for high-risk, high-return investments. However, this correlation had somewhat diminished earlier in the year, particularly with the introduction of spot exchange-traded funds in the U.S., which led to Bitcoin price outperformance.

However, amid the uncertain macro scenario, Bitcoin ETFs have registered net outflows showing a clear decelerating trend in the overall flows. Thursday’s GDP report, which fell short of expectations, has left the Fed in a tight spot, limiting its options going forward. The data’s implications have investors questioning the possibility of rate cuts by the Fed in 2024, pushing back expectations.

Source：coingape

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Warren Takunda

Economic

Cryptocurrency

Bitcoin could see a “re-acceleration” of its bull market thanks to new United States economic shifts.

That is the latest macro forecast by Arthur Hayes, former CEO of crypto exchange BitMEX.

Hayes on crypto bull market: "Forget about the Fed"

Bitcoin and altcoins have little hope in the Federal Reserve dropping interest rates soon to attract more liquidity into the economy.

As Cointelegraph reported, the odds of this happening sooner rather than later are becoming slimmer with each macro data print.

For Hayes, however, the Fed is no longer the U.S. yardstick worth watching — instead, it is Treasury Secretary Janet Yellen.

On April 29, the U.S. Treasury will release the quarterly refunding documentation, which sets out how the government will effectively manage liquidity.

On the radar are two key liquidity sources: the Treasury General Account (TGA) and so-called Reverse Purchase Agreements (RRPs).

“As expected tax receipts added roughly $200bn to TGA,” Hayes wrote in a post on X (formerly Twitter) on April 26.

“Forget about the May Fed meeting the 2Q24 refunding annc comes out next week.” Bitcoin Bull Market May Return After $1.4 Trillion US Liquidity Spike — Prediction_1

Bitcoin Bull Market May Return After $1.4 Trillion US Liquidity Spike — Prediction_1

TGA vs. RRP liquidity chart. Source: Arthur Hayes/X

Draining either the TGA or money from the pool of RRPs allows for money to reenter the economy — a key stimulus for risk-asset performance, and specifically crypto upside.

Hayes argues that the focus is thus on Yellen as part of a theory, which calls for U.S. dollar printing to only accelerate toward the upcoming Presidential Election and afterward.

A $1 trillion TGA drain, $400 million in RRPs or a combination of both is on the table, potentially totaling a $1.4 trillion liquidity injection.

“The Fed is irrelevant, Yellen is a bad bitch, you best respect her,” Hayes concluded.

“If any of these three options happen, expect a rally in stonks and most importantly a re-acceleration of the crypto bull market.”

Bitcoin ETFs see "overdue" slowdown

Other players see the knock-on effect of Bitcoin’s mainstream entry becoming a positive feedback loop for price.

The U.S. spot Bitcoin exchange-traded funds (ETFs) remain far from their full captive audience — despite marking the most successful ETF debut in history.

Commenting on BlackRock’s iShares Bitcoin Trust (IBIT), the largest product by assets under management excluding the Grayscale Bitcoin Trust (GBTC), Bloomberg ETF analyst Eric Balchunas dismissed a recent cooling of inflows as cause for concern.

“While $IBIT's daily inflow streak is over at 71 days, it is not done setting records. Here's a look at ETFs all time by assets after first 72 days on market,” he wrote alongside Bloomberg data.

“The league of own-ness of IBIT, FBTC et al shows how overheated it all was, a breather was overdue tbh.”

U.S. spot Bitcoin ETF AUM chart. Source: Eric Balchunas/X

He added that “out of all the 10,698 registered funds in the U.S. (incl ETFs, mutual funds, CEFs) $IBIT currently ranks 2nd in YTD flows.”

While overall allocations remain small thus far, Cathie Wood, CEO of one spot Bitcoin ETF provider, ARK Invest, sees the trend gathering speed.

Source: Cointelegraph

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FastBull Featured

Remarks of Officials

Joachim Nagel, President of the Deutsche Bundesbank, delivered a speech on 25 April by saying as follows.

Investments in the transformation of the euro area towards a climate-neutral economy will generate additional demand and can therefore lead to inflationary pressure. This requires a more restrictive monetary policy stance, which would tend to increase the general level of interest rates in the next few years.

Climate-neutral policies may also influence the development of inflation in various ways. In addition, other factors may also affect the future course of monetary policy, such as an aging population and continued high demand for public finances that may also lead to higher interest rates. The spread of digitalization and artificial intelligence, on the other hand, may dampen rising inflation by increasing productivity, leading to lower interest rates.

What's clear is that investments in the transformation of the euro area towards a climate-neutral economy will not change the European Central Bank's (ECB) 2% inflation target.

Despite the difficulty of predicting the future equilibrium rates, the ECB remains committed to ensuring stable inflation through monetary policy.

Nagel's Speech

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Ukadike Micheal

Economic

Cryptocurrency

Investors have withdrawn a substantial $218 million from US Bitcoin exchange-traded funds, marking one of the most significant daily outflows observed recently. This move reflects a broader trend in the market, where demand for risky assets appears to be diminishing, partly due to fading expectations of Federal Reserve interest-rate cuts.

One notable aspect of this outflow is its impact on the Fidelity Wise Origin Bitcoin Fund, which experienced its first net outflow since its inception on January 11, along with several other ETFs, including BlackRock Inc.’s iShares Bitcoin Trust. While these ETFs collectively amassed around $54 billion in assets, recent market conditions have led to a decline in demand.

The catalyst behind this shift in market sentiment can be attributed to rising Treasury yields, influenced by US inflation data indicating the likelihood of prolonged higher borrowing costs. In such an environment, investors tend to shy away from speculative investments like cryptocurrencies, seeking safer alternatives.

Analysts like Noelle Acheson, author of the Crypto Is Macro Now newsletter, suggest that Bitcoin's momentum may pause as long as macroeconomic factors continue to support elevated yields. This sentiment reflects the interconnectedness of traditional financial markets and cryptocurrencies, where developments in one sector can influence sentiment and investment decisions in the other.

The $218 million outflow from Bitcoin ETFs ranks among the largest observed, underscoring the magnitude of the shift in investor behavior. Even BlackRock's Bitcoin ETF, which had previously enjoyed a 71-day streak of consecutive inflows, saw this trend abruptly end on Wednesday.

Despite these challenges, Bitcoin itself has maintained relative stability, hovering around the $64,320 mark, although it has retreated from its mid-March peak of $73,798. The anticipation surrounding the debut of spot-crypto ETFs in Hong Kong adds another layer of complexity to the market dynamics, with many speculating on the potential impact of increased volatility.

While the introduction of spot-crypto ETFs in Hong Kong is viewed positively within the industry, analysts caution against expecting an immediate flood of capital. Instead, they anticipate a gradual impact on market dynamics, with the widespread availability of entry points and increased education about cryptocurrencies playing key roles in shaping investor sentiment and market behavior.

The significant outflows from US Bitcoin ETFs highlight the evolving dynamics within the cryptocurrency market and its interconnectedness with broader macroeconomic factors. As investors navigate these uncertainties, adaptability and a nuanced understanding of market dynamics will be crucial for making informed investment decisions in the digital asset space.

Source: Bloomberg

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Warren Takunda

Economic

Forex

Central Bank

The Pound to Euro exchange rate is now at 1.1650, which forms the lower end of the 2024 range. Two things can happen:

1) it can defend the line, which will allow it to reestablish in the levels between 1.1650 and 1.1720.2) It fades below 1.1650, turning this level into a resistance layer, ultimately trapping it in a new, lower range.

Pound to Euro Rate's Friday Close Will be Important_1

Above: GBP/EUR at daily intervals with the 200-day moving average and horizontal support line annotated.

We note the exchange rate has recovered above the 200-day moving average following a brief dip below it last Friday which was a warning signal of building selling pressure and the commencement of a downtrend. This was a false break, which will underscore Sterling resilience against the Euro going forward.

The recovery suggests the Pound is strong enough to resist a downtrend against the Euro, but we could still be in for a period of sub-1.1650 levels in the coming days and weeks, depending on how today's price action plays out.

A weekly close above 1.1650 would see us increasingly confident early May will bring with it a potential test of the 1.17 level or even the upper resistance area at 1.1620.

These data are based on the spread surveyed in a recent survey conducted for Pound Sterling Live by The Money Cloud.

For now, we expect gains to be limited as markets await the central bank's direction. The European Central Bank has indicated it will cut interest rates in June, but the Euro would come under pressure if this was followed by another cut in July, which appears to be an active debate at present.

"We remain comfortable with our forecast that the pound is likely to strengthen somewhat against the euro in the coming months, especially as the ECB is likely to start cutting rates sooner," says a note from Commerzbank.

The Bank of England has become more unpredictable in its thinking owing to a series of speeches from members of the Bank's Monetary Policy Committee that made it clear there is a great deal of divergence in views as to when it would be appropriate to cut rates.

This could make for a more volatile trading environment in the coming weeks.

"From our FX strategy perspective, we suspect there is enough balance and uncertainty on the MPC to suggest the market’s pricing of 55bp of BoE rate cuts by year-end, with the first 25bp fully priced for the 1 Aug MPC, is just about as dovish as it should really be," says Shahab Jalinoos, FX strategist at UBS.

UK inflation will print below 2.0% in April, in an apparent win for the Bank of England, which would imply ample scope for lower interest rates. But, this could yet prove a blip as services sector inflation is running hot and will likely mean headline inflation creeps back above the 2.0% target in the coming months.

"Also, the UK government only just enacted a 9.8% minimum wage hike. In this context, we stick to our EURGBP 0.8500 – 0.8700 range view and would look to fade a new attempt to push towards the top of the range, in line with our 0.8500 end-Q2 target," says Jalinoos.

EUR/GBP at 0.85 gives a GBP/EUR conversion of 1.1765.

Source: Poundsterlinglive

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Alex

Economic

Commodity

The World Bank’s food price index eased in early April 2024 after falling by about 4.0% in the first quarter of 2024, 9.0% lower than a year earlier.

Subcomponent indexes for grains, oils, meals, and other foods fell between 2.0% and 5.0%. Maize prices tumbled by about 11% and wheat prices declined by 4% in 2024 quarter one, together driving the 4.0% reduction in the overall grains index.

Both wheat and maize prices hit three-year lows during the quarter, with the downtrend continuing in early April 2024.

The decline in maize prices was attributed to competitively priced offers from the Black Sea region, larger production in major exporters, and favorable prospects for the next harvest, with global maize production in the 2023-24 season expected to increase by 6.0% to an all-time high.

“Downward pressure on wheat prices derived from robust exports from Russia and Ukraine and the second-highest global production on record in 2023-24. The collapse of the Black Sea Grain Initiative had minimal fallout, as Ukraine has so far been able to continue exporting via seaborne corridors and new overland routes”, the World Bank pointed out.

Rice prices increased by about 4.0% in the first quarter of 2021, standing 28.0% higher than a year earlier, reflecting supply concerns in major exporting countries related to El Niño and continued export restrictions from India.

However, the prices retreated in February, March, and early April, reflecting the depreciation of Thailand’s baht and Viet Nam’s dong against the U.S. dollar, sluggish global rice demand amid increased prices, a seasonal supply increase from the harvest in Viet Nam, and ongoing offseason harvests of irrigated fields in India and Thailand.

The oils and meals price index also declined by 5.0% in 2024 quarter one, reaching a level 17.0% lower than a year earlier.

This decline was driven by a 14.0 fall in soybean oil prices, a 13.0% drop in soybean meal prices, and a 5.0% decrease in soybean prices, partly offset by an 8.0% increase in palm oil prices.

Downward pressures on soybean prices stemmed from near-record production in Brazil, a near doubling of production in Argentina, and subdued Chinese demand. Global soybean production in 2023-24 is projected to increase by 5.0%, to a new record.

Source：myjoyonline

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Ukadike Micheal

Economic

Forex

The Federal Reserve faces another challenge in its battle against rising prices as its preferred inflation measure, to be released Friday morning, is expected to confirm an uptick in early 2024. Economists anticipate 0.3% increases in both the headline and core PCE price indexes for March, with year-over-year rises projected at 2.6% and 2.7%, respectively.

The core PCE price index, excluding food and energy components, saw a 0.3% rise in February, in line with economists' consensus estimate but lower than January's 0.5% increase. Year-over-year, the index was up 2.8%. Meanwhile, the headline PCE price index increased by 0.4% in January and 0.3% in February, with the latter showing a year-over-year change of 2.5%, surpassing the Fed's 2% annual inflation target.

However, recent economic data indicates a potential upward trend in inflation. The first-quarter GDP data from the Bureau of Economic Analysis revealed that the core PCE price index increased at a significant annualized rate of 3.7%, exceeding expectations. While the March core PCE price index is anticipated to show a strong monthly increase, upward revisions to January and February figures could moderate the overall inflation rate for March.

The persistence of inflationary pressures has dashed hopes for imminent interest rate cuts, with both headline and core consumer price indexes rising by 0.4% in March and showing year-over-year increases of 3.5% and 3.8%, respectively. Despite this, Fed officials, including Chairman Jerome Powell, have reiterated the need for more evidence of sustained inflation decline before considering changes to interest rates. The central bank has maintained the federal funds rate at a target range of 5.25% to 5.50% since July 2023.

While inflation remains a concern, the labor market and economic growth have shown resilience. Strong growth and continued strength in the labor market have been observed, although progress in reducing inflation has stalled since the beginning of 2024.

Looking ahead, futures-market pricing indicates a low probability of interest rate movements at the Federal Open Market Committee's upcoming meetings, with roughly even odds of a quarter-point rate cut in September.

The looming release of the March PCE price index underscores the ongoing challenge of containing inflationary pressures. Despite the Fed's cautious approach to interest rate adjustments, market participants remain vigilant for signs of sustained inflation moderation. The delicate balance between addressing inflationary risks and supporting economic growth remains a central theme for policymakers and market participants alike.