Bitcoin: History Suggests BTC Will Be Up And Running Again after…

Cryptocurrency

Summary:

BTC’s price moved marginally in the last 24 hours. Market indicators hinted at a few more slow-moving days.

Investors might have been worried about the last few days, as Bitcoin’s [BTC] price witnessed multiple corrections.

However, they must not lose hope, as this might just be yet another re-testing phase, which could end with another bull rally.

What history suggests

The last week did not witness high volatility in terms of BTC’s price action, as the king of cryptos’ value moved marginally. A similar trend was also noted in the last 24 hours.

According to CoinMarketCap, at the time of writing, BTC was trading at $64,796.66 with a market capitalization of over $1.27 trillion.

However, there were chances for the coin’s price to turn volatile over the days to follow. Moustache, a popular crypto analyst, recently posted a tweet mentioning how BTC was in a “re-testing” phase.

If history is to be considered, BTC might soon begin a bull rally, as the coin turned bullish when its price entered a similar pattern back in 2017 and 2020.

Therefore, AMBCrypto checked Bitcoin’s metrics to see the chances of the coin actually kick-starting a bull rally.

Metrics look bearish though

Despite a historical bull pattern, Bitcoin’s on-chain metrics continued to look bearish. For example, it’s aSOPR was red, as per our analysis of CryptoQuant’s data.

This meant that more investors were selling at a profit. In the middle of a bull market, it could indicate a market top.

Its Binary CDD followed a similar trend, meaning that long-term holders’ movements in the last seven days were higher than average. If they were moved for the purpose of selling, it may have a negative impact.

Bitcoin: History Suggests BTC Will Be Up And Running Again after…_1

Nonetheless, other metrics told a different story. Bitcoin’s exchange reserve was dropping at press time, indicating that selling pressure on the coin was low.

Additionally, its Funding Rate and Taker Buy Sell Ratio was in the green, suggesting that buying sentiment was dominant in the derivatives market.

Bitcoin: History Suggests BTC Will Be Up And Running Again after…_2

AMBCrypto then checked BTC’s daily chart to find out which direction the coin was headed.

Our analysis of TradingView’s chart suggested that investors might as well witness a few more slow-moving days, as the Relative Strength Index (RSI) moved sideways near the neutral zone.

The Money Flow Index (MFI) also followed a similar trend, indicating that chances of less volatile price movement were high.

Source: AMBCrypto

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Ukadike Micheal

Cryptocurrency

Economic

Bitcoin prices surged on Monday, reclaiming some of the losses suffered the previous week, buoyed by sustained capital inflows into exchange-traded funds (ETFs) and anticipation surrounding the upcoming "halving" event. The world's largest cryptocurrency experienced a 4.9% rise to reach $67,462.8, though it remained approximately $6,000 below its record high reached earlier in March.

The recent downturn in Bitcoin's value, which saw it plummet from record highs, prompted traders to secure profits amid concerns of a potential market correction. However, the cryptocurrency swiftly rebounded from these lows as significant capital continued to flow into recently-approved spot ETFs. Notably, while ETF inflows bolstered Bitcoin's position, sustained outflows from Grayscale Bitcoin Trust (GBTC) exerted pressure on spot prices.

Anticipation surrounding the imminent "halving" event, where the Bitcoin network's production of new tokens will be halved, contributed to the positive sentiment surrounding the cryptocurrency. Expected to occur around April with the generation of the 740,000 block, the halving event is anticipated to further limit Bitcoin's supply, enhancing its scarcity and potentially driving up its value. Nonetheless, uncertainty persists regarding the exact timing of this event.

Despite Bitcoin's recovery, its upward momentum was tempered by the strengthening US dollar. The dollar surged to a one-month high, driven by signals of dovishness from major global central banks, which positioned the dollar as an attractive high-yielding, low-risk currency. Moreover, anticipation of forthcoming signals on US interest rates, particularly from key data releases such as the personal consumption expenditures data— the Federal Reserve's preferred inflation gauge—further bolstered the dollar's strength. This data is scheduled for release later in the week.

Throughout the week, a series of speeches by Fed officials are expected to provide additional insights into the central bank's plans for interest rate adjustments in 2024. Despite indications from the previous week's Fed meeting suggesting potential interest rate cuts totaling 75 basis points this year, the market remains attentive to further guidance from policymakers.

Bitcoin's resurgence amid capital inflows and anticipation of the halving event underscores the cryptocurrency's resilience in the face of market volatility. However, the impact of external factors such as the strength of the US dollar and expectations regarding US interest rates highlights the interconnectedness of cryptocurrency markets with broader economic trends. As investors navigate through these dynamics, prudent risk management and a nuanced understanding of market fundamentals will be essential for capitalizing on potential opportunities in the evolving cryptocurrency landscape.

Source: Investing

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Devin

Commodity

The collective fund positioning is the most bearish for mid-March, which sometimes features relatively tamer market action as traders await pivotal U.S. stocks and acreage data at the end of the month.

Funds Chip away at Cbot Grain, Oilseed Shorts Ahead of Key US Data_1

Managed money combined net position in CBOT/MGEX futures and options

In the week ended March 19, most-active CBOT corn and soybeans declined fractionally while wheat and soybean oil notched fractional gains. Soybean meal fell 1.6%.

Money managers’ most notable move in the week ended March 19 was the slashing of their net short in CBOT soybean oil futures and options, to 14,748 contracts from 33,410 a week earlier and 62,473 two weeks earlier.

Soyoil futures rose 7% in those two weeks, which featured the biggest round of fund short covering since June, and the most-active contract on March 18 hit a three-month top. Global vegoil prices as well as U.S. crude and gasoline futures have strengthened this month, which began with speculators holding their most bearish ever early March soyoil views.

Funds Chip away at Cbot Grain, Oilseed Shorts Ahead of Key US Data_2

Managed money net position in CBOT soybean oil futures and options

Funds are holding their most bearish mid-March meal views, but they trimmed their net short in the week ended March 19 despite the price slide. That resulted in a managed money net short of 46,874 CBOT soybean meal futures and options contracts versus 50,935 in the prior week.

Money managers covered shorts in CBOT soybean futures and options through March 19, trimming their net short by less than 7,000 to 148,339 contracts, two weeks removed from the record of 171,999.

The week ended March 19 featured some notable short covering in CBOT corn futures and options, though less so than in the previous week. Money managers cut their corn net short to 242,988 contracts from 255,928 a week before, which is similar positioning as in March 2019.

Funds Chip away at Cbot Grain, Oilseed Shorts Ahead of Key US Data_3

Managed money net position in CBOT corn futures and options

Commodity index traders’ total number of positions in CBOT corn futures and options topped 700,000 contracts last week for the first time since June 2022. Those have expanded by 55% since late December, the type of growth last seen in late 2020.

CBOT wheat futures were up through March 19, but money managers expanded their net short to a 15-week high of 80,570 futures and options contracts from 78,870 a week earlier. That resembles funds’ year-ago position when wheat futures were trading 24% higher.

CBOT corn, soybeans, soybean meal and wheat all made multi-week highs on either Thursday or Friday. Corn was unchanged over the last three sessions, soyoil slid 1%, meal added 1.6% and wheat and beans notched fractional gains.

The U.S. Department of Agriculture will publish 2024 planting intentions and quarterly stock data on Thursday, which will be the market’s focus this week in addition to weather for Brazil’s corn crop. Analysts expect a rebound in U.S. soybean acres versus last year.

Source: Reuters

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Samantha Luan

Economic

The figure is up from January's 3.1 per cent and higher than the 3.4 per cent forecast by a Reuters poll of economists.

"This was driven by higher services and food inflation, partly reflecting seasonal effects associated with the Chinese New Year," the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) said on Monday (Mar 25).

Core inflation excludes private road transport and accommodation costs. February's reading was the highest since July 2023 when the figure stood at 3.8 per cent.

Overall or headline inflation in February also rose to 3.4 per cent year-on-year from 2.9 per cent in January due to higher accommodation costs.

Singapore’s Core Inflation In February Rises to 3.6% Amid Chinese New Year Spending_1

Accommodation inflation increased to 3.9 per cent from 2.1 per cent in January as additional Service & Conservancy Charges (S&CC) rebates, which were disbursed in January, were not disbursed in February.

Services inflation increased to 4.2 per cent in February from 3.3 per cent in January mainly due to higher airfares and a steeper increase in holiday expenses.

Food inflation rose to 3.8 per cent compared with 3.3 per cent in January as the prices of cooked and non-cooked food rose at a faster pace.

Electricity and gas inflation edged down to 5.3 per cent because of the slower pace of increase in electricity costs.

Private transport inflation fell from 2.9 per cent in January to 1.4 per cent in February due to a slower rate of increase in car prices, which in turn reflected lower COE premiums.

"Amid the larger projected COE supply this year, private transport inflation is expected to be lower as compared to last year," said MAS and MTI.

"Accommodation inflation should also continue to ease as the supply of housing units available for rental increases over the course of the year."

OUTLOOK

Core inflation is expected to resume a gradual moderating trend over the rest of the year, said MAS and MTI, as import cost pressures continue to decline and tightness in the domestic labour market eases.

They projected both headline and core inflation to average 2.5 per cent to 3.5 per cent for 2024.

Excluding the transitory effects of the GST increase, headline and core inflation are expected to come in at 1.5 per cent to 2.5 per cent.

"Upside risks to inflation remain, including from fresh shocks to global energy and shipping costs due to geopolitical conflicts, higher food commodity prices from adverse weather events, as well as more persistent-than-expected tightness in the domestic labour market," said MAS and MTI.

"Conversely, an unexpected weakening in the global economy could induce a greater easing of cost and price pressures."

Source: CNA

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Ukadike Micheal

Economic

Commodity

Oil prices surged in Asian trading on Monday due to heightened concerns over tighter global supply stemming from escalating conflicts in the Middle East and between Russia and Ukraine. Brent crude futures rose by 39 cents to $85.82 a barrel, while U.S. crude futures gained 40 cents to $81.03 per barrel.

Last week, both benchmarks experienced marginal declines of less than 1% compared to the previous week, largely attributed to the strength of the U.S. dollar, which rose approximately 1%. However, escalating geopolitical tensions have renewed worries about global oil supply.

The ongoing conflicts in the Middle East and the Russia-Ukraine conflict have contributed to market uncertainty, with recent attacks on energy facilities in both regions raising concerns about supply disruptions. Moreover, a shrinking U.S. oil rig count, which fell by one to 509 last week according to data from Baker Hughes, indicates potential future declines in oil production.

In Russia, recent attacks on oil refineries have heightened market anxieties, leading to increased demand for available crude oil cargoes. Approximately 12% of Russia's total oil processing capacity has been impacted by these disruptions, according to analysts at ANZ Research.

Furthermore, Indian refineries refusing to accept Russian crude transported on PJSC Sovcomflot tankers due to U.S. sanctions have added to global market tightness, exacerbating supply concerns.

In the Middle East, ongoing conflicts have intensified, with Israeli forces besieging Gaza hospitals and engaging in clashes with militants. Meanwhile, U.S. forces intercepted Houthi unmanned aerial vehicles over the southern Red Sea after the group launched missiles toward an oil tanker owned by a Chinese company.

From a technical standpoint, these geopolitical tensions have significant implications for the oil market. Supply disruptions resulting from conflicts in key producing regions can lead to volatility in oil prices, impacting both producers and consumers. Moreover, heightened geopolitical risks often prompt investors to seek safe-haven assets, further influencing market dynamics.

The surge in oil prices driven by escalating geopolitical tensions underscores the fragility of global oil supply chains. As conflicts intensify and uncertainties persist, market participants must remain vigilant and adapt their strategies to navigate the evolving geopolitical landscape. While geopolitical events can create short-term price spikes, the long-term implications for the oil market hinge on geopolitical stability and the ability of key producers to maintain uninterrupted supply.

Source: Reuters

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Cohen

Economic

Central Bank

Forex

A week ago, Japan raised interest rates for the first time since 2007 in a move that marked a historic shift in monetary policy.

Yet the currency fell. Now Japanese officials are talking of official intervention to prop it up. It traded at 151.86 per dollar on Friday, its weakest this year and within a whisker of levels that drew intervention in 2022. It also made long-term lows versus the euro and Aussie last week.

A weaker yen is a boon for Japanese exporters' profits but can squeeze households by increasing import costs.

Here's what's behind the selling:

Sell The Fact

News reports, including from Reuters, foreshadowed the Bank of Japan's landmark exit from negative interest rates in the lead-up to the decision. So did economic conditions, with sharply rising wages suggesting sustainable inflation and less need for subzero rates or policies to cap government bond yields.

"The event was too well anticipated, so the market was just too well priced going into the event," said Patrick Hu, a G10 currency trader at Citi in Singapore who focuses on the yen.

The yen fell more than 1% the day of the announcement.

Carry On

The yen is the lowest-yielding G10 currency, making it ideal for carry trades, in which an investor borrows in a currency with low interest rates and invests the proceeds in a higher-yielding currency.

With the BOJ decision and other central bank "event risks" out of the way last week, investors who had trimmed such trades have been rebuilding their positions. Investors are betting that Japanese rates are not going to be rising quickly from here, effectively extending the life of yen carry trades.

Short-term Japanese rates are held below 0.1% and only about 20 further basis points in hikes are priced this year.

The U.S. Fed funds rate is 5.25-5.5% and a 25 bp cut isn't fully priced until July. The U.S.-Japan government bond yield gap at the 10-year tenor is almost 350 bps.

Flow

The rates picture is also keeping big Japanese investors' cash abroad, where it can earn better returns, depriving the yen of support from repatriation flows. Japanese investors keep about $3 trillion in foreign bonds and yen trades.

Japan Post Bank and Japan Post Insurance, among the largest financial firms, told Reuters their portfolios won't be radically changing in response to the BOJ's policy shift.

Intervention Risk

At 151.27 per dollar the currency remains very close to the 151.94 mark that drew intervention in 2022. Markets seem leery of testing the 152 level, though authorities have stressed they aren't targeting particular levels but rather speculative moves.

"Many seem to think a 'line in the sand' against further JPY weakness sits near the 152 area when intervention occurred in late 2022," said HSBC analysts in a note to clients.

"The current situation is trickier, especially when the U.S. dollar is not in a bubble-like state as in the period of October/November 2022. So, the risk is that Japan's (finance ministry) tries to intervene to support the yen but with very limited success. This could create heightened uncertainty for the yen and other currencies."

Source: Yahoo

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FastBull Featured

Remarks of Officials

Atlanta Fed President Raphael Bostic said in an interview on March 23, local time, as follows,

I am now less confident that inflation will continue to decline towards the 2% target than I was in December. Only one rate cut is expected later this year, by 25 bps, down from the two previously expected.

Current economic data suggests that commodity price inflation is rising at a higher pace – core PCE data, due next week, is expected to show that inflationary pressures are higher. The Fed will have to watch how the data plays in the coming weeks.

Overall, the US economy is more resilient than I expected, so I doubled my GDP growth forecast to 2%. Given the strong performance of the US economy, there is no need to rush a rate cut, and the Fed should be patient. In addition, cutting the rate once is not a bad thing, but a good one.

In his March 22 speech on Fed Listen, Fed Chairman Jerome Powell stated that "monetary policy decisions will be carefully discussed based on data alone, and the topic of rate cuts will be put on the next Fed decision speech (May)."

However, Powell's speech seemed to be a slight deviation from Wednesday's speech, with the addition of "not just relying on data as a reference for making monetary policy decisions." "There are both possibilities here. First, if inflation is less than expected, it may also start a week of interest rate cuts. The second is that in the event of weaker-than-expected inflation, restrictive monetary policy will continue to be maintained.

The hawkish comments of Bostic on interest rate cuts are actually in line with the second scenario, which is also expected to be a high-probability event. At a time when the road to disinflation is bumpy, we may see the Fed cut interest rates only once this year.

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