Watch These Bitcoin Price Levels Next as $52K Supertrend Risks Failure

Cryptocurrency

Summary:

Bitcoin is challenging multimonth lows and now risks violating support, which has sustained the entire BTC price bull run.

Bitcoin faces a battle to preserve its bull market as Mt. Gox reimbursements spark the biggest liquidation cascade in years.

BTC price supertrend support nears first test since 2022

The Bitcoin price downside hit 5% on July 5 alone, according to data from Cointelegraph Markets Pro and TradingView — and now traders are eyeing lines in the sand that bulls must protect. Watch These Bitcoin Price Levels Next as $52K Supertrend Risks Failure_1

Watch These Bitcoin Price Levels Next as $52K Supertrend Risks Failure_1

BTC/USD 1-hour chart. Source: TradingView

For popular trader Matthew Hyland, first on the radar is support at the $52,000 mark.

This forms the floor of Bitcoin’s supertrend indicator on weekly timeframes — a foundation for price in place since mid-March’s $73,800 all-time high.

Supertrend employs average true range to create a “Supertend line,” which delineates buy and sell phases for BTC/USD. The pair has been above the supertrend line since the end of 2022, when Bitcoin’s last bear market ended. Watch These Bitcoin Price Levels Next as $52K Supertrend Risks Failure_2

Watch These Bitcoin Price Levels Next as $52K Supertrend Risks Failure_2

Bitcoin Supertrend. Source: Matthew Hyland

Observing prior Bitcoin bull markets, the current drawdown from all-time highs is still modest.Since 2016, BTC/USD has dipped 38% on multiple occasions, making the capitulation target $45,750.

Commenting on the phenomenon, Adam Back, founder and CEO of Blockstream, criticized fickle market sentiment. Instead, he argued that hodlers should increase exposure to both Bitcoin and the stock of MicroStrategy, the firm with the largest BTC treasury of any public company.

“Reminder, zoom out. prior bull runs had half a dozen -30% draw downs too. we're at about -26% (-27% earlier),” he wrote on X.

“In fact if anything, recent draw-downs seem to be less deep, but people forget the normal bull market pattern. Don’t panic, buy the dip. or buy a bit of $CMSTR with BTC.”

BTC/USD chart with drawdowns (screenshot). Source: Adam Back

Analyst: Bitcoin history "repeating as we speak”

Just as unfazed about the extent of the downside is popular trader and analyst Rekt Capital.

“This pullback is -21% deep & 45 days long. In this cycle, average retrace depth is -22% & average retrace duration 42 days,” he calculated.“In terms of retrace depth, this is almost an average retrace. In terms of retrace duration, this is an above-average pullback.”

BTC/USD comparative chart. Source: Rekt Capital

Long-term, he added in a further X post alongside a comparative chart, BTC price history is “repeating as we speak.” Watch These Bitcoin Price Levels Next as $52K Supertrend Risks Failure_5

Watch These Bitcoin Price Levels Next as $52K Supertrend Risks Failure_5

BTC/USD comparative chart. Source: Rekt Capital

Source: Cointelegraph

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Alex

Economic

Stocks

Japanese stocks have been on a stellar run in 2024.

In February, the country’s benchmark Nikkei 225 smashed through its 1989 high.

This week, the Nikkei and the broad-based Topix surpassed previous records to hit fresh all-time closing highs on Thursday. The Topix notably breached a 34-year record set in December 1989.

How did the markets reach these level, especially for the Nikkei, which has scaled new peaks for the second time this year?

Earnings are the single driver to the current market rally, Jesper Koll, expert director at Tokyo-based financial services company Monex Group, told CNBC.

“Corporate Japan is now benefitting from decades of operational restructuring,” Koll said, adding that “breakeven points are at world record lows, so even minimal increases in top-line revenues feed explosive profit growth.”

He predicted earnings growth of 35% over the next two financial years — from April 2024 to March 2026 — as well as topline growth of 4% per year.

His forecasts stem from a prediction that Japanese companies will see domestic and global sales growth, and he explained that his prediction of a 4% sales growth is due to the wage hikes announced by Japan’s largest union on Thursday.

Japan’s largest union, commonly referred to as Rengo, announced that Japanese companies have delivered the largest wage hikes in 33 this year.

Monthly pay for union-backed workers will climb 5.1% on average this fiscal year ending March 2025. Rengo also said big firms with 300 or more union-backed employees raised wages by 5.19%, while smaller firms increased pay by 4.45%.

"You do not have a shunto [wage hike] of 5% and nominal sales rising less than 4%, for example," he points out.

More importantly, Koll said, Japan is a "bastion of stability." He pointed out that its monetary, fiscal and regulatory policies are stable and pro-growth, and this acts as an important support for financial markets.

When the Nikkei crossed the 40,000 mark in March, Koll told CNBC at that time that it was "perfectly reasonable" for the index to cross 55,000 points by the end of 2025.

Koll told CNBC this week: "I stand by my forecast — the Nikkei 225 is poised to climb to 55,000 before the end of next year."

If his prediction comes true, it would be a 37% upside from the 40,000 mark.

Previously, Koll had predicted that the Nikkei would cross 40,000 in the twelve months from July 2023. He was later proven right when the index reached that level within eight months.

How sustainable is the rally?

However, the million dollar question will be: how long can this rally last?

A note by Nomura, published Thursday, said the gains on the Nikkei and Topix do not look appear sustainable. The analysts identified that these have caused by a short covering in futures.

There's a caveat though.

They said "these hasty gains could turn out to be sustained if it starts to look likely that April–June corporate earnings will surprise to the upside or that the Japanese equity market will see more inflows of longer-term money."

In the near term, Nomura said that futures will have "much to say" about the stock movement in Japanese equities, noting that as of 28 June, foreign securities companies' net short interest in futures amounted to 17,000 contracts.

If those short positions were to be unwound, Nomura estimates that the Topix would see a boost of about 2%–3%, from its June 28 levels. By their calculations, it will put the Topix at around 2,875 and the Nikkei 225 at around 40,600.

Both indexes have since surpassed Nomura's estimation, although not by much.

"We will be watching for whether Japan-listed domestic equity investment trusts/ETFs and U.S.-listed ETFs (which have been seeing outflows) start seeing growing inflows," the Nomura analysts said.

Source：CNBC

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Cohen

Economic

Stocks

Former pariahs in emerging markets have been among the world’s best-performing stock markets this year as investors bet reforms in troubled economies such as Argentina and Pakistan will help them leave the worst of their currency woes behind them.

Argentina’s Merval index has led Latin American bourses, rising 53 per cent in US dollar terms, while Pakistan’s stock gauge is one of the best performing in Asia, as markets that until recently were seen as very troubled have outperformed larger and more expensive peers.

These so-called frontier markets have been attractive because of their cheap valuations, say investors. In contrast, indices in more established markets such as Mexico and Brazil have declined in dollar terms as capital has been pulled towards surging artificial intelligence stocks in the US.

“You’ve got a big sucking sound out of the US, called [chipmaker] Nvidia,” which has pulled money away from larger emerging markets, said James Johnstone, co-head of the emerging and frontier markets team at Redwheel, an investment manager.

“But what is performing well are markets that have gone through almost existential crises and carried out the requisite reforms,” he added.

A group of developing economies including Sri Lanka and Turkey “have been through a really difficult period” but are now primed for recovery as expensive foreign currency debts and double-digit rates of inflation are brought under control, Johnstone said.

In Pakistan, the Karachi stock market has risen 30 per cent since the start of 2024, more than Taiwan and India’s benchmark share indices. It has nearly doubled in dollar terms since June last year when the country avoided a default by securing a $3bn loan from the IMF.

“The recent rally is due to investors’ confidence that Pakistan will get a long-term IMF deal after the successful completion of the standby agreement last year,” said Mohammed Sohail, chief executive of Pakistani brokerage Topline Securities.

Even after the recent bull run, Pakistani stocks still trade about 3.7 times their earnings, roughly half the historical average of seven, Sohail added.

The biggest contribution to the rally has come from the banking sector, which has enjoyed bumper profits as the central bank raised the policy rate to above 20 per cent to bring down runaway inflation, according to a research note from Arif Habib Limited, a Pakistani brokerage.

Even so, foreign flows into Pakistan’s stocks remain minimal and the turnaround is instead a reaction to a drop in food and fuel inflation, which spiked after Russia’s invasion of Ukraine, said Dominic Bokor-Ingram, a senior portfolio manager in emerging and frontier markets at Fiera Capital. “We don’t see it as a reform story but as a bounce back from very low levels,” he said.

Some frontier stock markets remained in the doldrums in the first half of the year in dollar terms because currency devaluations have taken place recently. Egypt’s stock market, for instance, is down 27 per cent this year, hit by the Egyptian pound’s devaluation in March.

Even in the group of countries that have experienced stock market rallies, economic conditions largely remain miserable for ordinary people. Inflation is often still high compared with other emerging markets, despite sharp rises in interest rates — in Turkey, for instance, inflation cooled for the first time in eight months in June, but is still 71.6 per cent. A number of governments are facing resistance to plans to raise taxes to pay off their debts.

The Nairobi all-share index has jumped 44 per cent in dollar terms this year as Kenya averted default on looming bond payments and the shilling rallied more than one-fifth against the dollar.

But last month President William Ruto withdraw a finance bill, which was part of a plan to comply with an IMF bailout, after a deadly crackdown on protests against what were seen as onerous tax measures backfired.

Pakistan’s finance ministry unveiled a tax-heavy budget last month, which is aimed at increasing revenues and assuaging IMF concerns, as the nation’s wobbly governing coalition seeks a path out of anaemic growth, double-digit inflation and soaring public debts.

Argentina’s President Javier Milei has been steering economic measures into law, moving quickly compared with past reform attempts that got bogged down in political opposition, Bokor-Ingram said. “The difference between this time and all the previous times is the speed with which Milei has done it.”

Frontier markets and more idiosyncratic larger markets such as Argentina have also come on to investors’ radars as they try to control exposure to larger emerging markets such as China.

However, despite the promise of reform in some countries, many investors are conscious that returns on EM stocks have generally been poor over the past decade compared with US markets, one emerging market equity manager said. At the end of the day, the manager added, “you’re just operating in a highly cyclical asset class”.

Source:Financial Times

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Devin

Political

Britain's next prime minister Keir Starmer spent the election campaign accusing Rishi Sunak's Conservatives of "14 years of economic failure", but he has no obvious quick fix to lift the country out of its slow-growth rut.

Living standards have stagnated since Conservatives took power in 2010 and Britain's recovery from the Covid pandemic has been the weakest among big rich nations after Germany.

Starmer will be under pressure to use Labour's huge majority in parliament to end the sense of decline, from creaking public services and inflation-hit personal finances to a shortage of housing and weak business investment.

But with public debt at almost 100% of gross domestic product and taxes at their highest since just after World War Two, Starmer stresses the turnaround will take time.

"We're going to have to do really tough things to move the country forward," he told voters days before the election. "There is no magic wand."

Unlike in 1997, when Labour under Tony Blair ousted the Conservatives with the economy expanding by almost 5% that year, Starmer might struggle to get British annual growth above 2% in the foreseeable future, in line with much of a sluggish Europe.

Britain's economy is expected to grow by less than 1% this year.

The 2007-08 global financial crisis which hit Britain particularly hard, cuts to many areas of public spending and the shocks of Brexit, Covid and surging energy prices have combined to weigh on the world's sixth-biggest economy.

But Starmer and his likely choice of finance minister Rachel Reeves say they will not go on a borrowing binge to fund a growth push, with memories still fresh of the 2022 bond market rout under former Conservative prime minister Liz Truss.

They have also promised no major tax increases, leaving the new government with little room in the budget.

"The fiscal inheritance will be a difficult one and there are a lot of challenges to address," Lizzy Galbraith, a political economist with investment firm abrdn, said.

Unlike in 1997, when Labour stunned financial markets by handing operational independence to the Bank of England, its first economic policy move is likely to be low key.

It plans to move quickly to reform Britain's archaic planning system to speed up investment in house-building and infrastructure, part of a plan to improve the country's weak productivity, support growth and generate more tax revenues to invest in health and other strained public services.

The Conservatives balked at upsetting core supporters in suburban areas where much of any surge in residential construction is likely to happen.

Starmer promises to be hard-headed about breaking down the barriers to growth, but the challenge will be big.

"We've been here before with an incoming government promising planning reform and it gets watered down in office," Galbraith at abrdn said.

Jack Paris, chief executive of InfraRed, an international infrastructure asset manager, expects Labour will turn more to private investment for green energy and speed up transportation projects.

"The new UK government should provide increased clarity and visibility to investors with a long-term infrastructure strategy representing a catalyst to making the UK again one of the most attractive destinations for long-term investors," he said.

Drop-out Britain

Also on Starmer's to-do list is reversing the post-pandemic rise in people dropping out of the jobs market due to sickness, something other rich economies have already done.

The Boston Consulting Group and the NHS Confederation, representing much of the health service, estimate that getting three-quarters of workforce dropouts since 2020 back into the jobs market could boost tax revenues by as much as 57 billion pounds in total over the next five years.

For context, Britain spends around 11 billion pounds a year running its justice system.

Starmer's growth plan also includes lowering some of the barriers to trade with the European Union. But he has ruled out a major reworking of Britain's Brexit deal.

Economists say Labour's policies to date are unlikely to make a big difference, much less meet Starmer's goal of turning Britain into the Group of Seven leader for sustainable economic growth, something it has barely managed since World War Two.

Higher public investment would be growth-positive but Labour pledges to cut immigration could have the opposite effect.

Analysts at Goldman Sachs say Labour's reforms will boost Britain's economic growth in 2025 and 2026 by just 0.1 percentage point each year.

Economists polled by Reuters last month expected the economy would grow by 1.2% in 2025 and 1.4% in 2026, less than half its pace in the 10 years before 2007.

But in some ways Labour is inheriting an economy that is turning a corner, a point Sunak tried in vain to sell to voters.

After a recession in 2023, a recovery is under way and high inflation has now abated, allowing the Bank of England to start cutting interest rates possibly as soon as next month. Business and consumer confidence are on the rise.

Starmer says — and many business leaders agree — that political stability will help attract investment to Britain after a turbulent eight years in which the country was run by five different Conservative prime ministers.

Investors are already warming to the UK's lower risk profile in the light of rising populism in France and the United States.

Laura Foll, a portfolio manager at Janus Henderson Investors, linked a recent out-performance of UK shares to that shift in perception. "Relatively, the UK, from a political standpoint, is looking in far better shape," she said.

Source: Reuters

Risk Warnings and Disclaimers

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ING

Forex

USD: Room for payroll disappointment

Before headlines on a possible replacement for the US Democratic candidate take centre stage again, the focus will be on the first piece of hard US data for June: US payrolls. The consensus figure is 190k after the very strong 272k May print.

We think the risks are skewed to a softer reading today after the big drop in the employment component of the ISM services index. To see a major repricing in Federal Reserve rate expectations to the dovish side however, we may need to see payrolls slow below 150k, considering the June Fed Dot Plot and rising perceived probability of a Trump win in November work as hawkish counterweights.

Over the summer months, we expect to see evidence that the US labour market is at the kind of inflection point that some Fed members like Mary Daly have referred to. We also think that other upside surprises in payrolls may have an asymmetrical, more contained market impact (compared to downside surprises) after recent comments by Chair Jay Powell suggested the Fed acknowledges that headline figures may overestimate the actual number. This narrative may gain more traction should we see large revisions in the April-May figures today.

We see downside risks for the dollar today, and expect DXY to move below 105.0. A substantial repricing in Fed dovish bets may give some respite to the yen, although we continue to see the likes of Norway's krone, and the Australian and New Zealand dollars as the best-positioned G10 currencies for a US-macro led rally in high-beta FX.

EUR: Rate cut dissent

The minutes of the June European Central Bank meeting, published yesterday, showed some members did not agree with cutting rates. It is increasingly clear that the June move was a consequence of a series of pre-commitments, rather than a strong intent to start an easing cycle. Indeed, the minutes confirm the centrality of data dependency at this stage, with particular focus set to be on wages, whose stickiness is keeping many EBC members on the cautious side when discussing further easing.

At the same time, there appears to be growing confidence in the ECB's staff economic projections by the Governing Council. Those projections remain rather optimistic on disinflation by end-2025, and will in our view justify two more rate cuts by the ECB this year. Market pricing is less dovish, at 38bp.

There is no market-moving economic data in the eurozone today, and EUR/USD will be driven by events in the US. We see some upside room for the pair on the back of US payrolls disappointment potential. While EUR/USD may move to the upper half of the 1.08/1.09 range today, we think the lingering risk of a re-widening in French bond spreads after Sunday's second round election mean the upside remains capped.

GBP: Labour expected triumph materialises

Labour is set to secure a very vast majority in parliament, according to preliminary results. Keir Starmer's party should secure around 410 of the 650 seats, while the Conservatives are projected to lose 247 seats from the previous election and be left with only 118. The Liberal Democrats are projected at 70. Labour's lead is not as large as pre-election polls had suggested, but it makes no difference from a policy perspective given the still huge majority.

The pound did not move much during the night and this morning, a clear signal of how a Labour majority had been fully priced in. We believe the new chancellor can avert spending cuts thanks to small edits of the fiscal rules and minor tax tweaks. However, it will be complicated to avert a rise in taxation further down the line.

What matters for sterling, however, is mostly the implications for Bank of England policy. And for the moment, there are none. BoE officials should start speaking again next week after a quiet period before the vote. Our view remains that the first cut will come in August, and will be followed by two more in 2024. In line with that, we expect sterling to be a laggard in the summer months.

CEE: Hawkish NBP to be replaced by NBR close call on the start of the cutting cycle

Although we expected a hawkish National Bank of Poland press conference, the governor has raised the bar once again. An inflation forecast well above market expectations for next year and forward guidance of stable rates for all of next year is a lot for the market to digest. The market is pricing in roughly 100bp of rate cuts overall by the end of next year. This suggests a lot of room for repricing despite yesterday's significant move and we believe that less than half of the current pricing could be in play. This gives the front-end decent room for more paying and flattening, with the 2y/5y segment as the best place to be, in our view. EUR/PLN touched 4.280, our level from yesterday's FX Daily and the repricing at the front-end of the curve gives us more room to go lower, with 4.260 as the next stop for us.

Today in the rest of the region we will see more monthly hard data from retail sales and industrial production in Romania and Hungary. The Czech market is closed today due to a public holiday. Later, we should see a decision from the National Bank of Romania. Most of the market surveys expect the cutting cycle to start with a 25bp cut to 6.75%. However, we expect rates to remain unchanged today as in May and the NBR will wait for a new forecast in August. However, it is obvious that it will be a close call. EUR/RON remains untouched, and we do not expect any changes here before the end of this year. The situation may be more interesting in Romanian government bonds (ROMGBs), which have underperformed their CEE peers for most of the year, and a rate cut could give them some impetus to rally. Regardless of the timing of the start of the cutting cycle, however, we see room for rate cuts capped at just two 25bp cuts for this year.

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Alex

Economic

Stocks

Asian share markets scaled new highs on Friday as investors sized up U.S. rate cuts for September and the mood was upbeat, while the euro hit a three-week peak ahead of French elections. Sterling was firm at $1.2762 as Britain's Labour Party was set for a landslide poll victory that will sweep it to power after 14 years of Conservative rule. Elsewhere, the dollar was slightly weaker and Treasury yields marginally higher in Tokyo, as trade resumed after the U.S. Independence Day holiday.

Japan's Nikkei and broader Topix both nudged up to record levels, as did Taiwan's benchmark, before retreating slightly. MSCI's broadest index of Asia-Pacific shares outside Japan touched a two-year high with Samsung's estimate of a more than 15-fold rise in second-quarter profit helping South Korea's KOSPI to a two-year peak as well.

Singapore's bank and property heavy Straits Times index retreated after sharp gains lifted it to a two-year peak. "Global liquidity remains flush and with the S&P (500) printing a ridiculous number of records these days...at some point valuations elsewhere will make a compelling enough case," said Vishnu Varathan, chief economist at Mizuho in Singapore.

He noted artificial intelligence demand had driven chipmaker rallies in Taiwan and South Korea, that interest-rate settings were fuelling record profits for Singapore's big banks and that a weak yen had been a tailwind for Japanese equities. Japanese household spending unexpectedly fell in May, government data showed on Friday, complicating the interest rate outlook especially as one of the factors behind the drop has been how the weak yen has curbed consumers' purchasing power.

The yen rose slightly to 160.75 per dollar. FTSE futures ticked 0.2% higher on Friday and S&P 500 futures were up ever so slightly to suggest a fresh record for the cash index may be in store later in the day. JOBS IN FOCUS

Employment data in the U.S. headlines the economic calendar on Friday. A slowdown in hiring and small uptick in unemployment is forecast, which would leave open the door for U.S. rate cuts. A run of subdued data, with the U.S. ISM measure of services activity sliding to its lowest since mid-2020 earlier in the week, had markets lifting the probability of a rate cut in September to 73% and pricing 47 basis points of cuts this year.

Two-year U.S. Treasury yields were steady at 4.70% in Asia and benchmark 10-year yields were up 1.4 bps to 4.36%. A television interview with Joe Biden also airs in the New York evening and will be closely watched as he seeks to get his campaign back on track following an underwhelming showing at last week's presidential debate. In currency markets, the euro rose to $1.0817 as polls point to France's far right National Party falling short of an absolute majority at Sunday's parliamentary election runoff.

"If the polls eventually prove accurate, this would mean the more extreme policies of fiscal expansion and immigration curbs are unlikely to pass," said MUFG analyst Michael Wan. The Australian dollar notched a six-month high of $0.6739 as yield spreads swung in its favour, underpinned by wagers that the next move in Aussie rates might be up given inflation is proving stubborn.

In commodity trade, a weaker dollar has gold on course for its largest weekly rise in a month, up 1.6% to $2,363 an ounce. Oil is its most expensive since April with Brent crude futures holding above $87 a barrel following a bigger-than-expected drop in U.S. crude stocks, which suggest firm demand as the U.S. summer driving season gets under way. Bitcoin was down 7% and at a four-month low below $55,000.

Source:Devdiscourse

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Warren Takunda

Economic

Political

The 10 PM exit poll calculates Keir Starmer's Labour has won a majority of 170, with the Conservatives set to win the fewest seats since the party was founded in 1834.

Labour's strong win fulfils a base-case scenario for markets and is therefore fully costed by the UK currency. The Pound to Euro was flat at 1.18 in the minutes following the exit poll announcement and the Pound to Dollar unchanged at 1.2760.

"The political and policy chaos of recent years will be put to bed by the election. A new government is no guarantee of stability, but Keir Starmer gives something of an aura of being boring – which might not be a bad thing," says Chris Iggo, Chair of the AXA IM Investment Institute.

The Scottish National Party was the other big loser of the day, all but putting to bed any tail risk of another independence referendum.

"The exit poll has provoked little volatility in FX markets, as the expected Labour landslide is duly predicted. The stability that would be provided by such a win would mean investors can cross ‘UK political risk’ off their list of worries for the time being," says Chris Beauchamp, Chief Market Analyst at IG.

Analysts see the prospect of political stability in the UK and Labour's desire to create closer ties with the EU as supportive of the Pound over the long term.

This contrasts with the Euro, which faces France's election outcome on Sunday. Here, political and fiscal instability is likely to be a feature in the coming months. "Domestic politics in Europe are back in the limelight. We argue that they squarely favour the USD but also CHF and GBP relative to the EUR," says Themistoklis Fiotakis, an analyst at Barclays.

"The focus now shifts across the channel to France, where Sunday night’s election could have bigger ramifications," says Beauchamp.

The U.S. meanwhile has its own election in November, which pollsters say will likely be won by Donald Trump. For now, expectations of another Trump presidency are proving supportive of the Dollar.

However, there remains uncertainty as to how Trump's policies will impact markets, particularly if the Federal Reserve has begun an interest rate cutting cycle in September.

"The UK elections appear to be a non-event for UK markets given the dynamics of the opinion polls and this is one factor which will support GBP as an indicator of political stability relative to elsewhere," says Kamal Sharma, FX Strategist at Bank of America.