Bitcoin Reclaims $62K, Analysts Say Worst Is ‘Likely Behind Us’

Cryptocurrency

Summary:

With Germany’s “forced selling” over and Mt. Gox repayments all but priced in, analysts look to an easing macro environment as a driver for Bitcoin’s price in the coming months.

The price of Bitcoin has reclaimed ground above the $62,000 mark, and analysts say the worst of the selling could be over with German BTC sales over and Mt. Gox payments all but priced in.

Bitcoin has rallied 5.2% in the last 24 hours, bouncing off two-month lows of $53,500 on July 4, and is currently changing hands for $62,550, per TradingView data. Bitcoin Reclaims $62K, Analysts Say Worst Is ‘Likely Behind Us’_1

Bitcoin Reclaims $62K, Analysts Say Worst Is ‘Likely Behind Us’_1

The price of Bitcoin is holding above $62k for the first time since July 2.

Ben Simpson, the founder of crypto education platform Collective Shift told Cointelegraph that he believed Bitcoin’s “local bottom” had now been formed and believes BTC is now headed for an uptrend.

Simpson said the price of Bitcoin had been hammered by a deluge of “forced selling” — much of which stemmed from nearly $3 billion in sales from the German government and negative sentiment towards some $8.5 billion in Mt. Gox creditor repayments.

On July 12, when Bitcoin wavered around the $59,000 level, the Crypto Fear & Greed Index fell to its lowest level in 18 months, something Simpson said was at odds with a more fundamentals-based approach to the broader market environment.

“Generally, I just felt there was a very big mismatch between sentiment and fundamentals,” he said.

Moving forward, Simpson looked to several key catalysts as being bullish for Bitcoin’s price in the coming weeks and months.

“Jerome Powell is hinting towards potentially lowering rates at some point soon. We’ve also got the S&P 500 ripping to new highs amongst all of this as well as strong Bitcoin ETF inflows flowing back in.”

Just over $360 million in leveraged short positions on Bitcoin were liquidated as Bitcoin broke through the $62,000 mark, per Coinglass data cited by Apollo sats founder Thomas Fahrer in a July 15 post to X. Bitcoin Reclaims $62K, Analysts Say Worst Is ‘Likely Behind Us’_2

Bitcoin Reclaims $62K, Analysts Say Worst Is ‘Likely Behind Us’_2

Source: Thomas Fahrer

Similarly, eToro market analyst Josh Gilbert told Cointelegraph that the worst of Bitcoin’s price may be in the rearview mirror, citing Trump’s increased odds of clinching victory in the upcoming election as a key driver of positive price action in the coming months.

“We’ve seen weakness in the last few months, but I think the worst is likely behind us. Any short-term weakness is likely to be bought with this in mind, alongside the tailwind of an ETH ETF and, of course, a more pro-crypto US party potentially being elected.”

“The attack on former President Trump this week has positively impacted his reelection odds, with the former President’s pro-crypto stance lifting Bitcoin and crypto assets in the process,” Gilbert said.

Gilbert also noted that Trump and Republicans held a more friendly stance on crypto than Democrats.

“The closer we move to Trump potentially gaining his spot back in the White House, the higher we’re likely to see Bitcoin move,” he added.

A Bitcoin pump won’t happen overnight

Gustavo Schwenkler, director of Australian crypto exchange Cointree told Cointelegraph that the narrative around Mt. Gox creditors dumping their Bitcoin on the market had already been “processed and priced in” as of last week.

Schwenkler sees lower-than-expected inflation figures in the US and the suggestion of lowered rates as a strong catalysts for crypto markets moving forward.

“Inflation came out lower than expected and expectations that the Fed will start cutting rates got a boost. The market is now expecting first-rate cuts as soon as September,” he said.

Still, Schwenkler warned that any potential upward swing in the price of Bitcoin would likely not occur overnight.

“I also don’t think there’s going to be a lot of push for the price to go much higher in the short run. I think we will see BTC move around $55-65k at least until the Fed actually cuts rates.”

Mark Hiriart, the head of sales at crypto asset manager Zerocap, argues that despite Bitcoin breaking $62,000, it would need to flip the $60,000 resistance into support, meaning that the price would need to hold steady above the $60,000 mark for some time.

Additionally, he said Bitcoin would need to reclaim its key 50-day and 100-day simple moving averages before BTC could progress higher to $65,000 and beyond.

Meanwhile, Hiriart warned there could still be some adverse effects from the potential Mt. Gox Bitcoin repayments.

“With Mt. Gox’s creditors sitting on a ten-year profit, it would be naive to think there won’t be any profit taking,” he said.

“The question is how staggered are the distributions and what percentage of recipients want to cash in. I would suspect short-term pressure on the market to continue over the Summer months,” Hirairt added.

Source: Cointelegraph

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Cohen

Economic

A potential return of Donald Trump as the next US president may bring bad news for emerging-market currencies, given the threat of his protectionist economic policies.

The South Korean won led the broader declines in Asia after the assassination attempt on Trump over the weekend boosted his odds of winning the presidency. Indonesia’s rupiah and Thailand’s baht snapped eight days of gains, while Malaysia’s ringgit slipped from its highest level in January.

Elsewhere, Mexico’s peso fell 0.8%, with the South African rand down 0.6%.

Investors are worried that Trump’s plans to slash taxes and raise tariffs, if elected, could stoke inflation and boost the case for the Federal Reserve to keep monetary policy restrictive for longer. The former president’s protectionist policies could also pose headwinds to the EM nation’s external finances, according to Sumitomo Mitsui Banking Corp.

“There’s a lot of caution in the market right now,” said Fiona Lim, senior currency strategist at Malayan Banking Bhd. “Trump’s policies are inflationary and a return of US economic outperformance and higher-for-longer US rates environment could potentially sink EM currencies once again.”

Emerging-Market Currencies Under Threat as Trump Odds Rise_1

Emerging markets have benefited from rising odds of monetary easing across the globe as inflation showed signs of abating. The developing-world currency index is up about 1.5% from a five-month low hit in April, while a gauge of dollar-hedged local-currency bonds looks set for a third monthly advance.

All those gains could be at risk with traders mindful of the dollar’s dominance during Trump’s years in office, when currencies like the Chinese yuan and the Mexican peso came under pressure after he unleashed higher tariffs.

“Trump’s policies are likely more protectionist against other countries and may cause headwinds to exporters,” said Jeff Ng, head of Asia macro strategy at Sumitomo. “This is particularly significant for Asian exporting nations. Risks to current-account balances may be detrimental to currencies.”

Source:Bloomberg

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Samantha Luan

Economic

Britain’s services sector and jobs market are likely to show lingering signs of strong inflation this week, a warning sign that may prompt the Bank of England to hold off on cutting interest rates in August.

Official data due Wednesday is expected to show services inflation ticked down to 5.6% in June from 5.7% the month before, a survey of economists showed. A day later regular pay growth is predicted to cool below 6% for the first time in 20 months in figures covering the three months to May.

While the headline rate of inflation is set to remain around the BOE’s 2% target for a second month, officials at the central bank are looking at underlying measures to get a better sense of how long price pressures will persist. And it’s those indicators that are underpinning concerns about cutting rates too soon.

“An upside surprise/re-acceleration in services inflation and wage growth could put the August cut in question,” said Sonali Punhani, UK economist at Bank of America.

Stubborn Services Inflation in UK Leaves BOE Cut on a Knife Edge_1

This week’s figures are the last major data releases before the BOE decides whether to ease off on its fight against inflation and cut rates for the first time since the start of the pandemic. While the European Central Bank has already moved to loosen policy, the UK election and lingering concerns about underlying price pressures have delayed a pivot by the BOE.

The minutes of the BOE’s last meeting in June showed that the decision not to lower rates from a 16-year high of 5.25% was “finely balanced” for some of the nine members of the Monetary Policy Committee.

However, last week the BOE’s more hawkish rate-setters were quick off the blocks to warn of persistent inflation pressures after being silent during the election blackout period. Chief Economist Huw Pill, and rate-setters Jonathan Haskel and Catherine Mann all signaled caution over whether to reduce rates in appearances.

Investors place a 45% chance of a rate cut in August, down from odds of 60% at the start of this month. The pound last week hit its highest level against the dollar in a year on expectations that rates in the UK will remain elevated for some time and that economic growth is picking up. The UK currency is near the highest since August 2022 against the euro.

Wednesday’s CPI data “will make or break the August meeting,” said Kirstine Kundby-Nielsen, an analyst at Danske Bank. Stronger UK economic data, hawkish BOE comments and political stability following the election have helped boost the pound to its strongest level since 2022 versus the euro, she said.

A monthly survey showed economists revising up gross domestic product growth forecasts for this year to 0.8% from 0.7%. About 86% of those surveyed expect a rates cut in August.

Stubborn Services Inflation in UK Leaves BOE Cut on a Knife Edge_2

Some economists expect data on Wednesday to show headline inflation dipping below 2% for the first time since April 2021. A handful expect an increase to 2.1%, leaving the median forecast for another on-target reading.

However, services inflation — which the BOE is watching more closely for signs of cooling domestic pressures — has not slowed by as much as the central bank had hoped at its last forecasts in May.

The arrival of Taylor Swift’s Eras tour in the UK in June could put some upward pressure on the services number, according to some forecasters.

Services inflation is likely to remain well above the 5.1% rate the BOE had expected by June. However, the rate-setters played down the overshoot at the meeting last month, pointing to volatile or index-linked parts of the basket. Pay growth excluding bonuses is expected to fall from 6% to 5.7%.

Stubborn Services Inflation in UK Leaves BOE Cut on a Knife Edge_3

“We think the data will keep the prospect of an August interest rate cut alive, though recent comments from policymakers suggests it’s far from a done deal,” said Dan Hanson and Ana Andrade, economists at Bloomberg Economics.

“Wage gains have recently been sticky, partly impacted by the near-10% increase the National Living Wage, but should show clearer signs of easing in upcoming releases,” they said.

There were other signs of the jobs market cooling on Monday. A separate report showed active job postings fell 1.6% in June from a month earlier to 1.69 million — still above pre-pandemic levels. New advertisements for jobs fell 2.6%, according to the Recruitment & Employment Confederation.

“Recruiters reported some hesitancy among businesses about hiring,” said Neil Carberry, chief executive officer of REC. “The jobs market is proving remarkably resilient to economic pressures.”

The BOE’s rate-setters also have to judge whether a faster-than-expected economic recovery in the UK will hinder their ability to loosen policy.

Last week figures showed that the economy grew 0.4% in May, double the pace expected by economists. It means that, if GDP is flat in June, the economy would have grown by 1.4% in the first half of the year, above the 1.2% expansion expected by the BOE.

Source:Bloomberg

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Warren Takunda

Economic

Stocks

London stocks were set to fall at the open on Monday as investors digested disappointing Chinese GDP figures.

The FTSE 100 was called to open down around 22 points.

Data released earlier by China’s National Bureau of Statistics showed that second-quarter growth slowed to 4.7% year-on-from 5.3% in the first quarter, missing expectations of 5.1% growth.

ING said "weak consumption and property continued to be a drag on growth".

It added that more policy support will be needed in order to achieve this year's 5% growth target.

On home shores, investors will be mulling the latest data from Rightmove, which showed that house prices dipped in July as the general election, international sporting events and the start of the summer holidays unsettled the market.

According to Rightmove’s latest house price index, house prices eased 0.4% in July month-on-month, compared to June, when growth was flat. On an annual basis, prices ticked up 0.4%.

The national average asking price now stands at £373,493.

Rightmove said the drop was bigger than usual for this time of year, with new sellers hit with a series of distractions, including Euro 2024 and weeks of campaigning ahead of the 4 July general election.

The 20-year average for July is a 0.2% decline.

However, Rightmove added that growing expectations for an imminent cut in interest rates, along with a more stable political outlook following Labour’s historic win, boded well for the autumn market.

The number of sales being agreed was also an "encouraging" 15% above the same period a year ago, it noted.

Tim Bannister, director of property science at Rightmove, said: "Three major uncertainties hanging over the property market at the start of the year were when the first interest rate cut would be, and the timing and result of the general election.

"We’ve now got the political certainty of a new government with a large majority, which we expect will help home-mover confidence. It’s very early days, but the new chancellor’s immediately announcements on housebuilding targets and planning reform are positive signs."

The cost of borrowing currently remains at a 16-year high of 5.25%. But the market widely expects the first cut in either August or September.

In corporate news, luxury goods maker Burberry said it has suspended dividend payments and that it expects to post an interim operating loss after a slump in first-quarter revenues.

The company said retail sales in the 13 weeks to June 29 fell by 22% to £458m.

"The slowdown in trading we experienced in Q1 FY25 continued into July. If this trend were to continue through the current quarter, we would expect to report a H1 FY25 operating loss and FY25 operating profit to be below current consensus," Burberry said.

Elsewhere, Me Group International reported a strong first-half financial and strategic performance, with a 4.6% revenue increase to £150.4m and a 10.3% rise in profit before tax to £30.0m.

The FTSE 250 company said growth was driven by the expanding Wash.ME laundry operations and increased installations of Revolution laundry machines, alongside a 2.4% revenue increase in Photo.ME machines.

It said it maintained a robust balance sheet with significant cash generation, supporting investments and a 16.2% increase in the interim dividend, while projecting continued growth and record profitability for the full year.

Source: Sharecast

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Samantha Luan

Economic

Indonesia's trade surplus narrowed in June to its smallest in four months as exports rose less than expected amid strong import growth, data from the statistics office showed on Monday, after two big copper miners halted shipments.

The June surplus was $2.39 billion, falling short of economists' median forecast of $2.98 billion in a Reuters survey, and May's revised surplus of $2.92 billion.

The value of shipments from Indonesia, the biggest economy in southeast Asia, has gradually declined from its peak during a global commodity boom in 2022, amid softening prices.

Several economists said the June data remained in line with market expectations of a trend of a narrower goods trade surplus this year, which will widen the current account deficit and may pressure the rupiah exchange rate.

"We anticipate a widening current account deficit, in line with the declining trade surplus, primarily due to weakening global demand for export products," economist Hosianna Situmorang of Bank Danamon said on the WhatsApp messaging app.

June exports rose 1.17% on a yearly basis to $20.84 billion, less than the 5.46% expected in the Reuters poll.

However, a drop of 16% in June shipments of mining products dampened overall export growth, which included falling shipments of coal, steel and copper.

Copper miners Freeport Indonesia, a unit of U.S. mining giant Freeport-McMoran, and Amman Mineral Internasional , could not ship any copper concentrate to overseas buyers last month as the Indonesian government was still working on extending their export permits.

Jakarta was supposed to stop all copper concentrate exports by the end of May, but authorities have promised a dispensation until the end of the year for Freeport and Amman, whose refining smelters have yet to reach full capacity.

Freeport's new permit was issued this month, but Amman's permit is still being processed.

June imports were worth $18.45 billion, up 7.58% on a yearly basis, compared with the poll forecast of 6.55%.

The rise in imports of fuel, as well as raw materials and consumer goods, drove overall growth.

State energy firm Pertamina ramped up tenders for fuel purchase in June after a fire at one of its production units at the Balikpapan refinery. It had sought June deliveries of products such as jet fuel and gasoil.

Source:Reuters

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Warren Takunda

Central Bank

Economic

Federal Reserve Chair Jerome Powell on Monday kicks off what is shaping up as a key week of commentary from U.S. central bank officials taking stock of slowed inflation and mulling whether to signal the start of interest rate cuts because of it.

The Fed meets July 30-31, but under the central bank's rules policymakers can't comment about monetary policy from this Saturday, July 20, until the Friday after the meeting.

With inflation edging closer to their 2% target and rising concerns about how long the job market can stay strong with the Fed's foot on the economic brake, they may well use those final days to either flag that rate cuts are imminent or explain why recent data still doesn't warrant a turn to easier monetary policy.

The betting in recent days has tilted strongly towards the Fed, after a false pivot late last year that seemed to put rate cuts on the horizon, finally deciding that the pandemic-era outbreak of inflation has been controlled.

"We expect a strong signal in July that cuts will begin at an upcoming meeting," likely September if the economy evolves as expected, Citi analysts wrote on Friday, a day after weak June inflation prompted investors to boost the estimated likelihood of a September cut to over 90%, according to data from CME Group's FedWatch, opens new tab tool, while some major banks and investment houses pulled forward their own rate cut calls.

Policymakers are not expected in the coming meeting to lower the benchmark interest rate from the 5.25% to 5.5% range where it has been held since July of 2023. But recent weak inflation reports may lead them to change their policy statement in a way that flags a possible rate cut at the next meeting in September, and this week's comments will be parsed to see how the latest data has shaped policymakers' views.

The Consumer Price Index fell in June after remaining unchanged in May, while a Friday report on wholesale prices showed price pressures slowing in areas like healthcare that should further build the case for easier monetary policy.

Powell Opens Key Week of Fedspeak as Rate Cut Case Develops_1

ENOUGH GOOD DATA?

Powell speaks at 12:30 p.m. EDT (1630 GMT) Monday at the Economic Club of Washington.

He told U.S. lawmakers last week that "more good data" on inflation would pave the way to lower borrowing costs, but said he would not hint at the timetable for making a decision.

His congressional testimony, however, came before CPI and Producer Price Index reports led economists to estimate that the Personal Consumption Expenditures price index, used by the Fed to set its inflation target, fell below 2.5% in June from 2.6% in May. PCE data for June will be released on July 26.

Powell and other Fed officials say they want to begin cutting rates before inflation actually hits 2% since the impact of monetary policy takes time to reach the economy. Waiting too long, they fear, could keep interest rates too high and slow things more than necessary.

Among this week's speakers, Fed Governor Adriana Kugler delivers remarks on Tuesday afternoon, while Fed Governor Chris Waller has an event scheduled on Wednesday morning and New York Fed President John Williams has an overseas appearance on Friday. Richmond Fed President Thomas Barkin, a current voter on interest rate policy, speaks Wednesday morning as well.

Waller's remarks at a Kansas City Fed event could be of particular note. He has been an important voice in the inflation debate, considered hawkish by temperament but someone who has recently noted from his own research that the job market is at a point where further weakening could lead to a faster rise in the unemployment rate.

Powell Opens Key Week of Fedspeak as Rate Cut Case Develops_2

Cooling in the job market so far, Fed officials feel, has been absorbed largely through a decline in the massive number of job openings posted by businesses in response to the strong demand for goods and services coming out of the pandemic.

Nevertheless, the unemployment rate has been steadily ticking up. It breached 4% for the first time in over two years in June, when 4.1% of people wanting a job did not have one.

In late May Waller said he still wanted to see "several more months of good inflation data" before he would support a rate cut, and on Wednesday he will have the opportunity to say how much progress he feels has been made.

Since his last monetary policy remarks, the PCE price index has fallen from 2.7% to 2.6% in May, with a further decline now expected.

If coming data, including an initial report on second-quarter economic growth, continues to show easing price pressures, it may cause the Fed in its next statement to change longstanding language that says inflation "remains elevated," a phrase many economists see needing to be altered to open the door to rate cuts.

"You're seeing the inflation rate...come down to something like what the target is," Chicago Fed President Austan Goolsbee said Friday on National Public Radio's Morning Edition. "The more data you get like what we got this week...the more confident you will be that you're on the path back to 2%."