How Low Can the Bitcoin Price Go?

Cryptocurrency

Summary:

Bitcoin price could drop to $63,000 in the coming weeks, according to multiple technical signals.

Bitcoin faces new lower BTC price targets after dropping as much as 8% over the last seven days. How Low Can the Bitcoin Price Go?_1

BTC/USD daily chart. Source: Binance

Traders and analysts are debating whether the market may drop further — and how low it can go.

Could Bitcoin price drop to $63,000?

After a failed attempt to climb above $70,000 on June 12, the BTC has retraced toward the $66,000 demand zone.

At the time of publication, the price of the leadingcryptocurrency was exchanging hands at $66,842, down 4% over the last 24 hours, according to data from CoinMarketCap.

Popular analyst Mark Cullen utilized the Elliott Wave method to demonstrate that a final down move could come imminently, taking Bitcoin to around $63,000.

“Bitcoin is sweeping the weekend highs and then continuing with the downside move,” Cullen said in a June 11 post on X, adding that “there is still more to go.”

“Bitcoin hits the first target red box. The question now is how the CPI and FOMC impact price?” How Low Can the Bitcoin Price Go?_2

BTC/USD chart. Source: Mark Cullen

Fellow analyst Matthew Hyland noted that BTC/USD was trading above a key support level at $67,000, which appeared to be the first line of defense before the price prints lower lows.

Sharing a chart in an X post, Hyland explained that the price is consolidation on longer timeframes, which “favors a continuation” of the uptrend. However, if the price drops below the said level, the analyst sets a lower target for BTC around the $64,700 level.

The $63,000 to $65,000 demand zone would put BTC price action at its lowest since mid-May and could represent one of the largest drawdowns from the current all-time highs of around 15%.

Bitcoin price loses key moving average

Continuing, MN Capital founder Micheal van de Poppe examined BTC’s price action on the daily timeframe for insights into the nature of support the coin enjoyed on the downside.

Uploading a chart to X, van de Poppe noted that BTC/USD had lost the support of its 50-day exponential moving average (EMA), which is currently at $67,011.

He further explained that the price still held “a crucial level of support” above $66,000, where the 100-day EMA currently sits.

A closer look at the daily chart below shows that BTC also lost this support during today’s drawdown, increasing the odds of deeper drops.

BTC/USD daily chart. Source: Binance

The 200-day EMA at $64,000 now presents the last line of defense for BTC and could be where the downside could be capped in the short term.

The downward trend displayed by the relative strength (RSI) and the price strength at 44 suggested that the market conditions favored the downside.

Interestingly, data from Coinglass shows significant liquidity building up between $63,000 and $65,500 over the last 30 days

Bitcoin liquidation heatmap. Source: Coinglass

Source: Cointelegraph

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Samantha Luan

Economic

The Senate win was a major boost for Milei, who won a shock election last year pledging to overhaul the embattled South American country's economy. He wants to privatize public firms, strengthen executive powers and boost incentives for investment.

"Without a doubt it was the best day economically for the government," said Argentine analyst Christian Buteler, citing the approval of the bill, a twin fiscal package also being green-lit and the extension until 2026 of a currency swap line with China.

A currency swap line is a loan agreement between central banks that gives the receiving country access to an agreed amount of funds in foreign currency such as dollars, Chinese yuan or euros.

"The approval of the laws in the Senate, beyond the tightness of the votes or the changes made, underscores the government's ability to govern despite coming into power with a (legislative) minority. That is very positive," he said.

Sovereign bonds in the local over-the-counter market were up an average 2.4%, a sovereign risk index fell sharply, while the black market peso strengthened over 3% to 1,245 per dollar after hitting a record low in the past week.

The local S&P Merval stock index seesawed throughout the day, but ended up 2.4% after a bout of profit taking.

The narrow overnight Senate wins came as protesters set fires and clashed with police in the streets outside Congress, with some citizens fearing it would leave them further exposed to rising unemployment and consumer prices.

Thys Louw, portfolio manager at asset manager Ninety One, said the bill's passage was the first step in a "very tight, very noisy, very long process" ahead.

"It wasn't perfect, but I do think it was a step forward in views around governance and for the ability to govern," he said.

Even so, Argentina is far from out of the woods, analysts cautioned. The lower house still needs to approve individual measures before Milei can officially pass his first law.

"We could see a sustained rebound in the Merval (main stock index) if Mr. Milei's objectives are met and lead to a decline in country risk and a recovery in sovereign bonds," said Andres Abadia, chief Latam economist at Pantheon Macroeconomics. "For now, though, uncertainty remains elevated, so caution is warranted."

Source：Reuters

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Economic

Forex

Central Bank

BoJ meeting held no surprises

The yen is under pressure again today as the Bank of Japan kept its interest rate unchanged and decided to trim its bond buying programme but postponed the announcement of the new size of bond purchases until the July meeting. Governor Ueda tried to moderate the market reaction at the press conference, but the market is mostly interested in actual announcements.

As a result, the US dollar/yen pair is trading higher and much closer to the late April intervention levels. Should this upward pressure continue, BoJ officials might not hesitate to act, although their usual plan is to verbally intervene before starting the calls to yen dealers.

Dollar in charge again

The dollar has almost completed a 150bps round trip against the euro, erasing most of the underperformance recorded on Wednesday due to the US CPI report and the moderately hawkish Fed meeting. The market is currently assigning a 72% probability of a rate cut in September, but as made evident by Chairman Powell, the data has to justify the decision.

The calendar is lighter today, but the market is expected to exploit any news that supports its cause. Therefore, today's import and export price indices could, on the margin, be worth a few pips in euro/dollar. But the market's attention will probably be on the preliminary University of Michigan consumer sentiment print and the various Fed speakers. The former is a key measure of consumer appetite, and it would be interesting to see if the recent correction has legs. Interestingly, Fed doves Goolsbee and Cook will be on the wires today.

Euro remains driven by political developments

The euro continues to suffer from political shenanigans following the European election results. The market's focus remains on France with the first round of the parliamentary election being just two weeks away. Political instability brings back memories of the European crises in the 2010s, but the economic situation is clearly much better now.

US equities continue their journey higher

In the meantime, US stock markets continue to record new highs and to diverge from the key European equity indices. The Nasdaq is up 3% this week, its best weekly performance since late April, and 16% higher thus far in 2024. On the contrary, both the DAX 40 and the CAC 40 indices remain on the back foot with around 3% losses this week. For the French index, this month could be the weakest one since May 2023.

Football in focus

Markets aside, the 2024 European Football Championship starts today in Germany. It will probably be an "action-packed" period for sports fans since the 2024 Summer Olympic Games, which will be held in Paris, France, also commences in late July. Apart from their aims on the pitch, both Germany and France aim to benefit economically from hosting major sporting events amidst the political crises.

There is usually a positive impact on consumer spending and tourism revenues not only during such events but also in subsequent years. This positive impact could prove more potent if the national team wins the European Football Championship trophy. The ECB will probably be on the lookout for any impact on retail sales and overall consumer appetite.

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Cohen

Economic

Political

Stocks

The European stock markets are poised to end the week on a negative note due to political uncertainties, despite a short-lived rebound induced by the Federal Reserve (Fed). In contrast, Wall Street maintained its bullish momentum, driven by a tech rally. Meanwhile, Asian stock markets were affected by declining metal prices and subdued Chinese economic data.

Europe

Major European benchmark indices declined for the week following a surprising surge in far-right power in the EU Parliamentary Elections. The selloff was particularly pronounced in French markets, with the CAC 40 falling by 3.67% from the previous week after President Emmanuel Macron called a snap election. Over the five-day trading period, the Euro Stoxx 600 lost 1.77%, the DAX fell 1.58%, and the FTSE 100 slipped 0.99%

At a sector level, French banking stocks led the broad losses amid investor concerns over potential disruptions to public financial stability following the far-right surge in the EU elections. BNP Paribas SA's shares plummeted nearly 10%, while Credit Agricole's stocks slumped 7.8% from last week. Renewable energy and defence stocks also underperformed due to uncertainties, with TotalEnergies down 4%, Airbus SE falling 5.2%, and Safran slumping 5.4%

Additionally, German auto maker shares were hit by concerns over potential retaliation from China on tariffs. Porsche AG saw a decline of 7.9%, while Volkswagen AG fell 7.3% over the last five trading days. Luxury consumer stocks were also negatively impacted by rising trade tensions, with LVMH sliding 3.5% and Hermes slipping 2.6%.

Technology stocks proved to be the most resilient sector, mirroring Wall Street’s performance. However, major tech shares showed only flat weekly performance, with ASML edging up by 0.15% and SAP climbing 1% from last week

The euro weakened against other peers in the G-10 group due to political turmoil. At 2 am CEST on Friday, the euro fell 0.56% against the US dollar to 1.0741 over the past five trading days. It also weakened against the British Pound by 0.5% to 0.8419 from last week, marking its lowest level since August 2022.

Wall Street

The US stock markets surged to new highs following the Fed’s rate decision, with the Apple-led tech rally contributing to bullish momentum. The S&P 500 gained 1.62% over the five-day trading period, marking its 29th record high of the year on Thursday and surpassing 5,400 for the first time in history. The Nasdaq, which is heavily weighted towards technology stocks, performed particularly well, rising 3.11% from the previous week. In contrast, the Dow Jones Industrial Average lagged behind, declining 0.39% compared to a week ago, weighed down by losses in industrial and banking stocks.

At a sector level, three out of eleven sectors posted gains from a week ago, with technology leading the way, up 5.6%. However, telecommunication, energy, financials, and consumer staples all underperformed, each declining by more than 1%.

Apple’s shares surged 10% over the past five trading days, reclaiming its position as the world’s most valuable company, fueled by its AI adoption announcement on Monday. Nvidia’s shares rose 7% as trading began following its 10-for-1 share split this week. Broadcom’s stocks soared nearly 20% driven by strong quarterly results and the announcement of a 10-for-1 stock split.

The US reported slightly cooler-than-expected inflation data for May. The headline US consumer price index (CPI) rose 3.3% from a year ago, which was slightly below the expected 3.4%. Although the data remained above the Fed’s target of 2%, it indicated that inflation is on a downward trajectory.

The Fed kept the interest rate unchanged at between 5.25% and 5.5%, in line with expectations. However, the dot plot indicated a forecast of only one rate cut for this year and four cuts by 2025. This projection marks a significant decrease from the three cuts projected for 2024 in March. Despite this, the bond markets reacted to the Fed meeting in a dovish manner, with US 10-year government bond yields falling by 20 basis points to 4.24% this week.

Asian Markets

Major Asian stock indices showed mixed performance for the week, with the Australian ASX 200 declining by 1.71%, the Japanese Nikkei 225 increasing by 0.48%, and the Chinese Hang Seng Index slumping by 2.19%.

The Bank of Japan kept the policy rate unchanged as widely expected and signaled a potential reduction in bond purchases at the next meeting. This dovish stance led to a decline in the Japanese Yen and boosted Japanese stock markets, which rallied on Friday.

The Chinese stock markets experienced declines due to disappointing economic data and escalating trade tensions with both the EU and the US. China reported weaker-than-expected CPI data for May, suggesting sluggish domestic consumer demand. However, these figures could prompt the Chinese government to implement additional stimulus measures.

Source：euronews

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Warren Takunda

Economic

Pound Sterling extended gains against a broadly weaker Euro through Thursday and into Friday after polls showed the National Rally (RN) was gaining momentum, raising fears for France's debt outlook.

"A possible victory for Le Pen's party in the snap elections for the National Assembly is putting pressure on French government bonds," says Dr. Jörg Krämer, Chief Economist at Commerzbank. Falling French bonds are meanwhile pressuring the Euro.

RN is on course to increase its parliamentary seats from 88 at present to 220 to 270 seats in the National Assembly, a survey by Elabe for the news channel BFMTV showed. Such an outcome would mean Jordan Bardella, the 28-year-old leader of RN, will be Prime Minister, ensuring France's President and Prime Minister will come from two separate parties.

Fears about France's fiscal outlook are growing, and markets are expressing unease by selling French debt (bonds). The Pound to Euro conversion has crossed the 1.1850 mark as a result, and competitive payment providers are now offering rates in excess of 1.18.

Bruno Le Maire, Minister of the Economy, warned France risks a financial crisis. He was asked by Franceinfo radio on Friday whether the current political situation in the country could lead to a financial crisis, and his answer: "Yes."

Investors will be watching the difference between the yield offered by falling French bonds and the yield offered by safe-haven Germany. France's yield is rising quickly relative to Germany, meaning investors are uneasy about France's prospects.

As the chart below shows, GBP/EUR rises alongside the spread between German and French bond yields. As long as fears regarding France linger, Pound Sterling can remain supported:

Pound to Euro Rate Strengthens Following Shock French Poll_1

Above: French-German spread (top) and GBP/EUR.

Krämer explains that the RN and other populist European political movements want to limit the EU to a confederation of states with a Commission that carries out the orders of the heads of state and government "like a mere employee".

"Now, one can argue about the desired depth of integration of the EU. But a monetary union is simply not compatible with member states acting autonomously," says Krämer.

For the Euro project to work, the constituent countries must be broadly aligned in terms of how much they spend, meaning there must be a degree of budget discipline.

Recall the Greek debt crisis in the early 2010s, which morphed into a broader crisis for the Eurozone as other 'periphery' countries also started to see their debt come under pressure. Greece has since carried out difficult reforms and now displays the kind of fiscal discipline compatible with using a single currency.

The Eurozone and EU have fiscal rules to ensure countries live within their means to ensure the smooth functioning of the Euro. The growing fear is that France, with its rising debts, will be a source of similar problems, particularly with a government that does not subscribe to Eurozone fiscal rules.

"A weaker euro, French equities underperforming, and France’s bond spread spiking have little to do with the European elections. And everything with the complete lack of budget discipline!" explains Jeroen Blokland, Founder of the Blokland Smart Multi-Asset Fund.

If French budget discipline is lacking now, an anti-EU integrationist movement in France could be problematic if it outright rejects the EU's fiscal rules.

The European Commission has warned France's budget for 2024 means it is at risk of flouting fiscal guidance. The EU will this year reinstate debt and deficit rules that it suspended during the pandemic.

The Commission subsequently told the French government to take the necessary steps to meet the EU’s fiscal rules.

Macron’s government was already struggling to balance the country’s fiscal profile with voter demands for more spending. Debt as a percentage of economic output is expected by the Commission to rise to 110% of gross domestic product by 2025, according to forecasts released in late 2023.

Credit rating agency Standard & Poor's last Friday cut France's credit rating, pouring cold water on the French government's recent efforts to put its public finances back in order.

The agency lowered France's credit rating from AA to AA−, citing larger-than-expected deficits and political fragmentation as reasons for the downgrade.

Source: Poundsterlinglive

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Glendon

Economic

The USD/JPY currency pair is currently navigating a sea of uncertainty, with technical signals flashing caution amidst a backdrop of diverging central bank policies, global economic anxieties, and whispers of geopolitical tensions. This article delves into the current state of the US Dollar (USD) and the Japanese Yen (JPY), exploring the internal strengths and weaknesses of each currency, and ultimately analyzing how they influence the ever-shifting exchange rate.

USD in the Driver's Seat (for Now)

Technical Analysis: The USD/JPY's recent surge above 158.00 has some analysts wary. Short-term technical indicators like Relative Strength Index (RSI) nearing overbought territory suggest a potential pullback. Moving averages on certain timeframes could also be hinting at a retracement before potentially continuing the upward trend. However, a decisive break above this key resistance level could signal a continuation of the USD's dominance.

Fundamental Factors: The primary driver behind the USD's recent strength is the Federal Reserve's hawkish stance on interest rates. Signals from the Fed regarding future rate hikes are seen as a vote of confidence in the US economy, attracting foreign investment and strengthening the USD. Additionally, rising US Treasury yields offer investors a potentially higher return compared to other markets, further bolstering the USD's attractiveness.

US Economic Data: The sustainability of the USD's strength hinges on robust US economic data. Upcoming releases like GDP growth figures, employment reports, and consumer spending data will be closely scrutinized. Strong economic data will reinforce investor confidence in the USD, while weak data could trigger a pullback.

JPY Under Pressure, But Not Out:

Technical Analysis: If the USD/JPY experiences a pullback, the JPY may find technical support at previous lows around the 154.50 level. However, a sustained break above 158.00 could further weaken the JPY, potentially leading to a test of multi-year lows.

Fundamental Factors: The Bank of Japan's (BOJ) unwavering commitment to ultra-loose monetary policy, characterized by low interest rates and quantitative easing, remains a significant headwind for the JPY. This policy creates a significant interest rate differential between the USD and JPY, making the USD a more attractive option for yield-seeking investors.

Japan's Economic Woes: Beyond monetary policy, Japan's own economic challenges cloud the JPY's outlook. An aging population and the potential for stagnant or deflationary growth could further weaken the currency. Additionally, the recent surge in global commodity prices, particularly energy prices, could widen Japan's current account deficit, putting further pressure on the JPY.

Beyond the Dollar and Yen: External Forces Stir the Waters:

Geopolitical Tensions: Rising geopolitical tensions, such as ongoing conflicts or trade disputes, can create market uncertainty and push investors towards safe-haven currencies like the JPY. This external factor can introduce significant volatility into the USD/JPY exchange rate. An escalation in tensions could trigger a sudden flight to safety, temporarily strengthening the JPY even against a backdrop of dovish monetary policy.

Global Risk Sentiment: The overall health of the global financial markets plays a crucial role. Increased risk aversion due to concerns about a global economic slowdown or financial crisis could benefit the JPY's safe-haven status. Conversely, improved risk appetite could strengthen the USD as investors seek higher returns associated with riskier assets.

The Final Word:

The USD/JPY exchange rate offers a dynamic trading environment for those who understand the interplay of technicals, fundamentals, and broader market forces. By staying informed about upcoming economic data releases, central bank pronouncements, and potential geopolitical risks, investors and traders can make more informed decisions in this ever-evolving market landscape.

To stay updated on all economic events of today, please check out our Economic calendar

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Cohen

Economic

Central Bank

The message from the Fed was two-fold: Not only are officials now only anticipating one rate cut this year, compared to the three they projected as recently as March, but they also see its easing cycle bottoming out at a higher level than previously expected, underscoring the era of higher rates is set to stay.

Fed Diverges From Global Peers in New Era of Higher for Longer_1

That’s in contrast with the Bank of Canada, which lowered its benchmark overnight rate by 25 basis points to 4.75% last week, making it the first Group of Seven central bank to kick off an easing cycle. The European Central Bank soon followed, lowering its key rate by 25 basis points to 3.75%, while the Swiss National Bank made its move to cut in March.

For the world economy, divergence from the Fed matters. Higher US interest rates stoke dollar strength and will continue to lure foreign capital away from rival economies, especially emerging ones.

The Fed staying on hold raises questions around harmful foreign-exchange volatility and risks undermining progress on getting inflation down, according to analysis by Bloomberg Economics.

“The overall theme for western, developed economies is that we’re on the road to cuts but it won’t all happen at once,” said Kristina Hooper, chief global market strategist at Invesco. “The Fed is not in the lead this time. Last week was historic in that we saw two G-7 central banks cut rates, neither of which was the Fed.”

Fed Chairman Jerome Powell did little on Wednesday to encourage bets on a near-term rate cut.

“We’ve stated that we do not expect it will be appropriate to reduce the target range for the federal funds rate until we have gained greater confidence that inflation is moving sustainably toward 2%,” Powell told reporters after keeping policy on hold. “So far this year, the data have not given us that greater confidence.”

Policymakers see scope for different paths ahead, suggesting there’s space for divergence before it crosses a threshold that would fuel market volatility.

“There are limits to that divergence in interest rates, but we’re not close to that limit,” Bank of Canada Governor Tiff Macklem said on a panel discussion in Montreal on Wednesday.

Such a split is only set to bolster the prevailing trend that has grabbed hold of currency markets in 2024: The high relative yields on offer in the US make investing in American assets — and by proxy the dollar — too good to pass up.

Save for Japan, gains have been pronounced against those economies where benchmark rates have since been cut this year. The euro is down more than 2% versus the greenback, the Canadian dollar and Swedish krona more than 3% weaker, and the Swiss franc is lower by almost 6%.

The yen weakened in Asian trading on Friday after the Bank of Japan decided to stay put on monetary policy and said it would specify the plan for bond purchases at its next meeting. The decision spurred selling of the yen as investors were primed to expect details on cuts to debt buying.

A recent study by Bank of America currency strategists Howard Du and Vadim Iaralov found that this year’s dollar buying — prompted by the relative yield and growth advantage in the US — has largely taken place outside of US hours and been led by investors in Europe and Asia.

“You have a central bank dynamic where the Fed relative to most other global central banks is perceived to be more hawkish,” said Nathan Thooft, of Manulife Investment Management. “Eventually the Fed will begin a cutting cycle like everyone else, but our relative rates are starting at a higher level and we’re starting later.”

Even if the Fed does cut, the moves will likely be limited given that pockets of inflation remain sticky and well above the 2% target, said Jerome Haegeli, chief economist at Swiss Re, who previously worked at Switzerland’s central bank.

“What the market’s short-term thinking misses is the fact that the Fed is likely to cut by much less than what was previously the norm,” he said. “Higher-for-longer remains intact in the US and over time.”

Traders see a high chance the Fed will lower rates in September after a key gauge of underlying inflation posted its smallest annual advance in more than three years. And in what may limit the divergence trend, there’s no guarantee that the ECB or others will have scope to move further as policymakers warn that inflation remains a threat.

“Central banks on both sides of the Atlantic have to be even more stubborn than the inflation,” ECB Governing Council member Joachim Nagel said at the same event as Macklem in Montreal. “This is a similarity that I see.”

And the Fed isn’t the only central bank leaning hawkish. The BOJ is facing pressure to tighten as its currency remains weak, while the Reserve Bank of Australia continues to warn of ongoing price pressures.

“Of course, the other risk is cutting too soon, with inflation picking up again, and rate cuts having to be reversed,” said Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management. “Which is precisely why the Fed has been very patient in starting its easing cycle.”