Bitcoin: Where are the Bulls?

Traders' Opinions

Summary:

After peaking late last year at 69k, the crypto has been one way directional and it makes one wonder, where are the bulls? Is it going to continue tanking without any opposition? Where is the bottom? So many questions to ask but not enough answers.

After this year's drastic fall of the cryptocurrencies, it would be very hard for the buy-and-hold traders to survive in this business.

As a result of greed and not wanting to admit losses, the Bitcoin buyers are having their fingers burnt back to back.

From the monthly timeframe perspective, price only retraced about 38.2 / 50 Fibonacci level, only to get smacked back down as the buyers were not showing signs of seriousness.

From the weekly time frame analysis, we would have loved to have seen a retest of 30K resistance also known as flip zone area but that does not seem to be the case, at least for now. Let's watch and see if we get to 18k before 30k and if this happens then we have a strong possibility of testing 10K demand zone next.

The daily's bearish wedge pattern was what gave us the heads-up that the sellers might as well come in strong but do not entirely rule out the bulls yet. The last line of defense for the bulls is 20750 and if this level should break then definitely 18k is next without a doubt.

H4 shows the consolidation area since June period and we can also see all the bullish flags & wedges that have been trying to propel price higher but to no avail. Too many mini consolidations on this timeframe suggesting the heavy battle between the buyers & sellers.

The overall trend is to the downside but if you are a counter-trend trader then I'll suggest 20750 area for longs else look for short opportunities to be safe with the trend.

Always ensure to do a thorough analysis from different angles of the bulls and the bears to have a better understanding of what both parties are considering.

Trade safely.

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Comments

Add to Favorites

Devin

Central Bank

UK short-term borrowing costs are on track to post the biggest rise this week in more than a decade as investors braced themselves for the Bank of England to take more aggressive action to cool inflation.

Two-year UK government bond yields climbed 0.11 percentage points on Friday to 2.56 per cent, bringing the rise since the end of last week to about half a percentage point — reflecting the strongest fall in price since 2009. Such big moves are unusual in the gilt market, which is typically coveted as a haven during times of broader market tumult.

The surge in two-year yields highlights the shift in market expectations towards a more aggressive tightening in monetary policy by the BoE. Investors have ramped up their outlook for rate rises after hotter than expected inflation data on Wednesday and a report on Friday that pointed to robust British consumer spending.

“This is where good news is bad news,” said Kiran Ganesh, a multi-asset strategist at UBS Global Wealth Management, pointing to how a strong reading on retail sales on Friday added fuel to a sell-off in short-term gilts.

Ganesh said data that open the door to big rate rises also darken the outlook for future economic growth on the premise that sharper increases in borrowing costs will knock the UK economy into a deeper recession.

“Of all the major economies, the UK is closest to falling into the stagflation bucket,” said Ganesh.

The retail sales data showed a month-on-month rise of 0.3 per cent in July, much better than expectations in a Reuters poll for a fall of 0.2 per cent. The data were skewed by a strong rise in online sales due to Amazon’s Prime Day sale, but showed how consumers are still spending even as the cost of living crisis bites.

“We doubt the recent resilience in consumer spending will last for much longer,” said Ruth Gregory, senior UK economist at Capital Economics. “Even so, July’s rise in retail sales provides another reason to think that the Bank of England will raise interest rates by 50 basis points [0.5 percentage points] rather than 25bp at its next policy meeting in September.”

Money markets are now pointing to expectations that the BoE will raise its main interest rate by about 2.2 percentage points by the end of May 2023, up from about 1.6 percentage points at the end of last week.

The selling this week in gilts may have been exacerbated by low trading volumes at the height of the summer holiday season. Still, the action has rippled into other regional government bond markets, adding to upward pressure on short-term yields in Germany.

Traders are also looking towards next week, when central bankers will meet at Jackson Hole, Wyoming, for the Kansas City Federal Reserve’s annual economic symposium at which they will discuss the steps they need to take to rein in rampant inflation. The Jackson Hole summit is often used as a platform for the Fed, the world’s most influential central bank, to make major announcements on its policy stance.

“The narrative over recent weeks has been the idea of the Fed pivoting and inflation coming under control,” said Ganesh. “But Fed members have pushed back against that and perhaps some investors are putting on bets that they’ll sound a more hawkish message at Jackson Hole.”

Elsewhere, European stocks dipped in morning trading on Friday, with the regional Stoxx 600 down 0.7 per cent and the FTSE 100 off by 0.4 per cent. Futures contracts tracking Wall Street’s S&P 500 slid 0.8 per cent, with those following the tech-heavy Nasdaq 100 down 1 per cent.

Source: FT

Risk Warnings and Disclaimers

Comments

Add to Favorites

Owen Li

Indonesia may impose a tax on nickel exports this year, President Joko Widodo said, as the biggest producer of the electric-vehicle (EV) battery metal looks to refine more at home.

Jokowi, as the president is known, confirmed that Southeast Asia's largest economy is considering introducing a levy in an interview with Bloomberg News editor-in-chief John Micklethwait in Jakarta on Thursday (Aug 18). That came after an Indonesian government official said early in 2022 that the country was studying a progressive tax on nickel pig iron and ferronickel.

The world's epic shift into EVs has spurred a surge in demand for battery metals including nickel, lithium and cobalt. While Indonesia has benefited from rising prices of nickel, also used to produce stainless steel, Jokowi wants the nation to move up the EV supply chain. Ultimately, he wants to stop all exports of raw materials.

Indonesia wants to add more value locally to increase state revenues and provide more job opportunities, Jokowi said on Thursday.

"That's what we want also with bauxite, copper, tin, crude palm oil and others," he said. "We are not being closed. We are being open indeed."

Indonesia is home to almost a quarter of global nickel reserves, and the metal is one of its major exports, along with coal and palm oil.

Refining nickel can create up to US$35 billion (RM156.68 billion) of added value, the president said late last year. A tax may curb revenue from overseas sales in the short term, however, and it's also likely to push up global prices that have risen around a third since the end of 2020.

Shares in Asian nickel producers were up on Friday. IGO Ltd closed up 2.2% in Sydney and Pacific Metals Inc climbed 3.6% in Tokyo. Indonesian miners PT Aneka Tambang and PT Vale Indonesia also advanced. Nickel jumped almost 4% at the open on the London Metal Exchange, and was 0.6% higher at 8.23am in the city.

"The market has partly priced in the news before," said Gao Yin, an analyst at Horizon Insights in Shanghai. "The impact on prices will be limited before the tax actually lands," she said, adding that there's unlikely to be a major impact on flows of nickel to China from the levy.

Palm oil, carbon tax

The country shocked global markets earlier this year when it temporarily banned palm oil shipments to keep inflation in check. The move, which came as many nations were grappling with soaring prices of kitchen staples, sparked fears of worsening food inflation.

The government subsequently changed course as stockpiles recovered, introducing a so-called domestic market obligation (DMO) that requires producers to sell some palm oil locally. The DMO would be withdrawn if the market is stable, although the national interest would be prioritised, Jokowi said on Thursday.

The president also confirmed in the interview that Indonesia would impose a carbon tax before year end, an early step in its journey to carbon neutrality. First announced in 2021, the levy was delayed earlier this year, as the government sought to protect citizens from the impact of rising food and fuel prices.

Indonesia will become the first developing nation in Asia to put a tax on emissions, which officials have previously said would be initially set at 30,000 rupiah (US$2.02 or RM9.04) per ton of CO2-equivalent for coal-fired power plants. The country is the world's biggest exporter of thermal coal used in power stations.

The nation has an "ambitious target" to get to net zero by 2060, but it will require technology and funding, Jokowi said on Thursday. "We have renewable energy potential, but shifting from coal to renewable energy is not an easy thing, because coal prices are still cheaper."

Source: Bloomberg

Risk Warnings and Disclaimers

Comments

Add to Favorites

Owen Li

Ships crept down the middle of the Yangtze River on Friday after China's driest summer in six decades left one of its most powerful rivers barely half its normal width and sparked a scramble to contain damage to the sluggish economy in a politically sensitive year.

Factories in Sichuan province and the neighboring metropolis of Chongqing in the southwest were ordered to close after reservoirs supplying hydropower dropped to half their normal levels and demand for air conditioners surged in hot temperatures.

In Chongqing, river ferries, usually packed with sightseers, were empty and tied to docks next to mud flats that stretched 50 meters (50 yards) from the normal shoreline to the edge of the depleted river.

The usually bustling streets of Chongqing were empty after temperatures reached 45 degrees Celsius (113 degrees Fahrenheit) on Thursday. State media said it was the hottest temperature outside Xinjiang, China's northwestern desert region, since official records began in 1961.

"We couldn't have gotten through the summer without air conditioning," said Chen Haofeng, 22. He was taking pictures of the exposed riverbed." Nothing can cool us down."

The world's second-largest economy grew just 2.5 percent in the first half of 2022 from a year earlier, less than half the official target of 5.5 percent.

The impact of the drought has been unusually severe in Sichuan, where 80 percent of the province's electricity comes from hydroelectric dams.

Thousands of factories in Sichuan and Chongqing that make processor chips, solar panels and auto parts were shut down for at least six days this week.

Some announced no disruptions in supplies to customers, but the Shanghai government said in a letter released Thursday that Tesla Inc. and a major Chinese automaker were forced to suspend production.

The municipal government in Chengdu, capital of Sichuan province, told households to conserve electricity and set air conditioning temperatures at no less than 27 degrees Celsius (80 Fahrenheit). Another city, Dazhou, earlier announced rolling three-hour daily power outages in neighborhoods.

The Yangtze River basin, which covers parts of 19 provinces, produces 45 percent of China's economic output, according to the World Bank.

The impact of the blackout on the country is limited because Sichuan accounts for only 4 percent of industrial production, while other provinces use more coal power, which is not disrupted.

The government says China's two main state-owned power companies, State Grid Co. and Southern Power Grid Co. are shifting power from 15 other provinces to Sichuan.

Han Zheng, one of seven members of the Communist Party's ruling Standing Committee, pledged official support to secure power supplies during a visit to State Grid on Wednesday, the official Xinhua news agency reported.

China suffered a similar disruption last year when a dry summer led to a shortage of hydropower and the shutdown of factories in Guangdong province, the global manufacturing hub. Other regions have suffered blackouts due to coal shortages and forced power cuts to meet official energy efficiency targets.

Larry Hu of Macquarie Group said it is unlikely to be as severe this year.

"If power rationing in Sichuan lasts only a few weeks, the impact on industrial production nationwide should be very limited," Hu said in a report.

Chengdu's Sunbeam Electronics said the six-day shutdown would reduce its production by 48,000 electronic circuits. The company said it expects its annual profit to take a 5 million yuan ($600,000) hit.

BOE Technology Group Co., which makes electronic displays, said a Sichuan subsidiary will suspend production. In a statement released through the Shenzhen Stock Exchange, BOE promised to "fully guarantee the delivery of products to customers."

Sichuan-based producers of solar panels and lithium for electric vehicles also halted production, but no companies announced supply disruptions, news reports said.

Source: NPR

Risk Warnings and Disclaimers

Comments

Add to Favorites

Damon

Demand for affordable energy sources such as thermal coal escalated amid the energy security crisis exacerbated by the escalation of the Russia-Ukraine conflict, South Africa-based Thungela Resources Limited said in its H1 2022 interim results statement.

Supply constraints in major coal-producing regions resulted in the price of thermal coal increasing to unprecedented levels, the Johannesburg Stock Exchange-listed thermal coal exporter added.

"Energy security, reliability and affordability concerns in Europe have highlighted the importance of coal in the energy transition, July Ndlovu, CEO of Thungela Resources, said in the statement.

"Coal is set to remain a critical input for affordable and reliable power generation, not only in the developing world but also in highly industrialised and developed nations, which have recently increased their reliance on coal to meet their energy needs.

"We are monitoring these trends and their implications for Thungela's strategy in the short to medium-term, with particular attention to exploring opportunities for geographic diversification," he added.

Coal sales from South Africa to Europe have increased eight-fold in the first six months of 2022 year-on-year, digital newspaper Africa News reported, quoting the coal exporter.

The European Union banned Russian coal imports in response to the invasion of Ukraine in April, but the ban took effect on August 10 as part of the wide-ranging sanctions.

European countries, which previously imported 45% of their coal from Russia, have been swapping expensive natural gas for coal from Colombia, Australia, the US and South Africa, the news report said.

The Netherlands, Germany, Poland, Denmark, France, Italy and Ukraine are among European countries importing growing quantities of coal from South Africa.

In the first five months of this year, European countries imported more than three million tonnes of coal from South Africa, up 40% more than the total volume in 2021.

Meanwhile, South Africa's Richards Bay Coal Terminal data showed it delivered 3.24 million tonnes of coal to European countries by May-end, 15% higher year-on-year.

Source: ZAWYA

Risk Warnings and Disclaimers

Comments

Add to Favorites

Devin

The economic outlook for Germany is gloomy due to energy price rises and supply chain disruptions, the finance ministry said on Friday, a message underscored by a record jump in producer prices.

The German economy, Europe's largest, stagnated in the second quarter, with the war in Ukraine, soaring energy prices, the pandemic and supply disruptions bringing it to the edge of a downturn.

"The outlook for the further development (of the economy) is currently noticeably gloomy," the ministry said in its August monthly report, adding that it was marked by "a high degree of uncertainty".

"The significantly lower gas supplies from Russia, the persistently high price increases for energy and, increasingly, other goods, as well as the longer-than-expected supply chain disruptions, also in connection with China's zero-COVID policy, are weighing heavily on the economy's development," it said.

Producer prices, regarded as a leading indicator for inflation, saw their highest jumps on record both on the month and on the year in July, driven primarily by high energy prices, said the federal statistics office on Friday.

Energy prices as a whole were up 105% compared with July 2021, due mainly to higher prices for natural gas and electricity, the office said.

Feeding into already high energy costs, the German government will impose levies on gas consumers from Oct. 1 that will add several hundred euros to the average family's annual energy bill. To cushion the blow, sales taxes on gas are set to be reduced to 7% from 19% while the levies are in place.

Higher energy prices mean inflation is unlikely to cool off anytime soon: Germany's annual inflation rate in July was 8.5%, in line with the wider euro zone's record rate of 8.9%.

The German government in April forecast 2022 inflation at 6.1%. It will present updated economic projections on Oct. 12, the finance ministry said.

Source: Reuters

Risk Warnings and Disclaimers

Comments

Add to Favorites

FastBull Featured

Remarks of Officials

Isabel Schnabel, Member of the Executive Board of the European Central Bank (ECB) gave an interview with Reuters on August 16, the main content of which is as follows.

Q1: Please give us your assessment of growth and inflation developments since your last policy meeting.

A: The euro area economy is clearly slowing. But we had a relatively good second quarter, which shows that some pockets of resilience are supporting economic growth. Where is this resilience? One source is pent-up demand, which shows up particularly in services. This is likely going to carry over into the third quarter but it may fade towards the end of the year.

There is a strong indication that growth is going to slow and I would not rule out that we enter a technical recession, especially if energy supplies from Russia are disrupted further. Downside risks to economic growth have also increased due to additional supply-side shocks, caused by droughts or the low water levels in major rivers.

I do not see any indication of a prolonged, deep recession at the moment. It's not even clear that there's going to be a technical recession in the euro area at all. I would just not rule it out.

Q2: When could inflation peak?

A: I would not exclude that, in the short run, inflation is going to increase further. But any projection is currently subject to high uncertainty. So it's very difficult to predict when inflation is going to peak.

Q3: Would higher inflation readings mean you need to raise your projections?

A: Economic growth, of course, has an impact on the inflation projection. Still, even if we entered a recession, it's quite unlikely that inflationary pressures will abate by themselves. A supply-side shock is slowing growth and at the same time raising price pressures. The growth slowdown is then probably not sufficient to dampen inflation.

Q4: Do you see a risk of inflation expectations getting de-anchored?

A: Most measures of longer-term inflation expectations remain around 2%. However, a number of indicators are pointing towards an elevated risk of de-anchoring. An increasing share of survey respondents expect inflation to be well above our target. I think it's very important that we take such signs seriously.

Q5: What are the implications of this assessment for the September policy meeting?

A: In July we decided to raise rates by 50 basis points because we were concerned about the inflation outlook. But if I look at the most recent data, I would say that the concerns we had in July have not been alleviated. We have moved to a meeting-by-meeting approach, so we've moved away from giving any precise forward guidance on the future path of interest rates. The September rate hike will be determined by the data at that time.

Q6: Where is the neutral rate?

A: Real short-term rates remain in deep negative territory, meaning we are quite far away from the point where our policy becomes restrictive. Estimates of the neutral rate are surrounded by large uncertainty. I think it's a useful theoretical concept but in practical terms, it doesn't help us much.