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Bitcoin Weekly Forecast: BTC hits $13,863 for the first time since June 2019

83918   October 31, 2020 01:56   FXStreet   Market News  

• Bitcoin has formed a potential double top at $13,863 on the weekly chart.
• Upcoming US elections could play an essential role in the price action of BTC.
• Iran becomes the first country to use cryptocurrencies at a state level.

Bitcoin has retested the high at $13,863 set in June 2019, potentially forming a double top. The cryptocurrency market is experiencing increased volatility due to the upcoming US elections, as it’s not clear who the winner will be.

Let’s take a look at some of Bitcoin’s most important news this week and how the price has reacted so far. We will deep dive into technical and on-chain indicators to find out the most likely direction of the flagship cryptocurrency.

Bitcoin adoption seems to be growing everyday 

On October 29, a report from the Central Bank of Iran (CBI) and the Ministry of Energy stated that Iran would allow national imports to be funded through cryptocurrencies. Citizens of Iran will be able to mine Bitcoin and exchange them as long as they are used to finance imports from other countries. 

In order to avoid sanctions on Iran’s access to the dollar, the official newspaper of the government suggested using a rate of +1.55% on Bitcoin’s price. Iran has recently cut up to 47% off the electricity tariff for authorized cryptocurrency mining centers. 

While the price of Bitcoin remains above $13,000, it seems that institutional interest is growing significantly. On October 30, we saw the largest Bitcoin options trade ever get filled. A recent report shows that calls at $36,000 by January 29, 2021, got up to 8,000, beating the ones at $32,000 by a 4:1 ratio.

However, despite all the positive developments for Bitcoin, the upcoming US presidential election will have a tremendous impact on BTC’s volatility. Historically, US presidential elections had fairly identical reactions.

BTC/USD US elections chart

Before the election, in 2012 and 2016, Bitcoin’s price plummeted by at least 10% on both occasions. Nonetheless, the flagship cryptocurrency rebound sharply afterward, experiencing two of its most massive rallies so far. 

Bitcoin Price Prediction: Can the double top be broken?

The most notable development on the weekly chart is the potential double top established at $13,863. Back on June 24, 2019, Bitcoin’s price rose up to $13,868 before a massive 72% correction close to nine months.

BTC/USD weekly chart

However, there are some differences between the high now and the one in June 2019. For instance, the MACD just turned bullish again, and it’s gaining momentum while in 2019, it was already really high.   

BTC MVRV chart

Additionally, the Market-Value-to-Realized Value (MVRV) is far lower at around 7%, below the danger zone at 19%, compared to 35% in June. Bitcoin is currently bounded inside a weekly uptrend that has a robust support level established at $10,000. 

A breakout above the high at $13,863 can drive Bitcoin’s price towards $15,000 and potentially higher as there is no resistance above. On the other hand, the confirmation of a double top would be devastating for the flagship cryptocurrency pushing it to at least $10,000 in the short-term.

S&P 500 top movers: Twitter Inc (TWTR stock) down more than 20% on weak user growth

83917   October 31, 2020 01:29   FXStreet   Market News  

• S&P 500 Index dropped to its lowest level in more than a month.
• Twitter Inc shares fall sharply on disappointing user growth figures.
• Mohawk Industries Inc (MHK: NYSE) stock soars on strong earnings summary.

After opening the day modestly lower, the S&P 500 Index (SPX) continued to push lower pressured by the poor performance of technology stocks. At the moment, the S&P 500 Technology Index is down more than 3% on the day and the SPX is losing 1.8% and 6.2% on a daily and weekly basis, respectively.

S&P 500 top movers

Twitter Inc (TWTR: NYSE) reported it had 187 million monetizable daily active users during the third quarter and fell short of analysts’ estimate of 195.2 million. Additionally, the company noted that it is forecasting its expenses to increase by nearly 20% in the last quarter due to an increase in investments, as reported by Reuters.

Pressured by these developments, TWTR opened sharply lower and extended its slide. As of writing, the stock was down 20.35% on the day at $41.76.

Among the other S&P 500-listed major tech stocks, Facebook (FB: NASDAQ), Netflix Inc (NFLX: NASDAQ), Apple Inc (AAPL: NASDAQ) and Amazon.com Inc (AMZN: NASDAQ) are down between 6.25% and 5.6% on the day.

On the other hand, Mohawk Industries Inc (MHK: NYSE) reported adjusting earnings per share of $3.26 for the third quarter and beat the market expectation of $2.14. At the moment, MHK is the top daily percentage gainer, rising 8.6% at $101.05.

USD/JPY’s upside attempts remain capped below 104.75

83916   October 31, 2020 01:26   FXStreet   Market News  

• USD/JPY rebound from 104.00, limited below 104.75
• The dollar is consolidating losses with the investors in a cautious mood.
• Breach of 104.00 might accelerate USD’s downtrend.

The US dollar is trading on a slightly negative tone against the Japanese yen on Friday, with the pair’s recovery from 104.00 low on Thursday stalling below 104.75.

Dollar consolidates losses in a cautious market

The greenback has been moving back and forth within previous ranges on Friday, unable to stage a significant recovery from a key support level at 104.00. Growing concerns about the economic impact of the second round of lockdowns in Europe and the cautious market mood anticipating a contested election in the US are keeping USD/JPY bulls in check.

On the macroeconomic front, the upbeat US personal income and outlays data, which has shown larger than expected increases in September, have been practically ignored by the markets.

USD/JPY’s downtrend might accelerate below 104.00

A technical perspective shows the pair is neutral, on the short-term with risks skewed to the downside, according to FXStreet’s Chief Analyst Valeria Bednarik, who points out to key support at 104.00:  “The 4-hour chart shows that the pair was unable to retain ground above a bearish 20 SMA, currently below it. The 100 and 200 SMAs maintain their bearish slopes well above the shorter-one, all of them indicating prevalent selling pressure. Technical indicators, in the meantime, hover within neutral levels, without clear directional strength (…) The USD/JPY pair has bottomed around 104.00 in September, and once again this October, with a break below the region opening doors for a steeper decline.”

Technical levels to watch

USD: Election and FOMC meeting pose key tests for dollar’s rebound – MUFG

83915   October 31, 2020 01:26   FXStreet   Market News  

Analysts at MUFG Bank, point out that the stronger US growth figures and fiscal stimulus optimism are helping to lift US yields and encouraging a stronger US dollar. They warn that the US election outcome and the Federal Reserve meeting should help to dampen greenback’s rebound.

Key Quotes:

“The USD has been rebounding ahead of next week’s US Presidential election. It has helped lift the dollar index back towards the top of its recent trading range between the 92.000 and 94.000. The USD’s upward momentum has been mainly driven by negative developments overseas rather than any material reassessment of the likely outcome from the US Presidential election. The re-imposition of a national lockdown in France has triggered a sharp correction lower for risk assets and helped to boost the safe haven appeal of the USD. There is a heightened risk other countries in Europe will follow France’s lead. At the same time, the US economy has been and is expected to be less negatively impacted by the second and third waves of COVID.”

“Assuming there is no significant surprise in the Presidential race, the initial market reaction is likely to be driven more by whether the Democrats are able to take control of the Senate as well. A Blue Wave would be the most supportive outcome for risk assets encouraging speculation over even bigger fiscal stimulus plans and improving global trade relations. It would provide a shot in the arm for high beta currencies especially Asian, emerging and commodity-related currencies with the exception of the rouble.”

“Our forecast for USD weakness against the majors in the year ahead is built on the assumption the Fed will step up QE.”

“A shock Trump victory and/or the Republicans maintaining control of the Senate will likely be required to reinforce the USD’s upward momentum in the week ahead.”

Biden leads Trump by 6% of registered NC voters

83914   October 31, 2020 01:21   Forexlive Latest News   Market News  

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United States Baker Hughes US Oil Rig Count rose from previous 211 to 221

83913   October 31, 2020 01:09   FXStreet   Market News  

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USD/CHF climbs back toward weekly highs near 0.9170 after short-lived correction

83912   October 31, 2020 01:09   FXStreet   Market News  

• US dollar holds onto weekly gains across the board.
• USD/CHF posts best weekly results in a month, still sideways.

The USD/CHF resumed the upside during the American session and climbed toward the 0.9170 area. It continues to hold a bullish tone following a short-lived retreat that found support around 0.9130. The US dollar is posting a weekly gain of more than a hundred pips.

The greenback is about to end the week higher across the board and with a positive tone, supported by risk aversion and also by higher US yields.

The Swiss franc failed to benefit versus the greenback despite the decline in equity prices and ahead of US elections, but it rose versus the euro. The common currency weakened following the European Central Bank meeting that also contributes to the bullish pressure in USD/CHF.

From a technical perspective, the recent rally in USD/CHF points to more gains, but on a wider view, it continues to move sideways supported by the 0.9000 area and with resistance initially below 0.9200 and then 0.9300. Also, the 20-week moving average at 0.9210 could be seen as a relevant technical level.

Technical indicators are starting to favor the US dollar. Next week, it will be critical to see if the pair manages to break and hold above 0.9170 that would point to more gains or if it fails again, suggesting another visit to 0.9040 and 0.9000.

Levels to watch

Baker Hughes oil rig count up to 221 vs. 211 last week

83911   October 31, 2020 01:05   Forexlive Latest News   Market News  

HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

ADVISORY WARNING: FOREXLIVE™ provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE™ specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.

Baker Hughes rig count at the top of the hour

83910   October 31, 2020 00:56   Forexlive Latest News   Market News  

HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

ADVISORY WARNING: FOREXLIVE™ provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE™ specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.

House speaker Pelosi: Has major difference of opinion with administration on relief

83909   October 31, 2020 00:56   Forexlive Latest News   Market News  

House Speaker Pelosi

Speaking on MSNBC, House Speaker Pelosi says:

Fixing flows begin to reverse dollar surge

83908   October 31, 2020 00:51   Forexlive Latest News   Market News  

US dollar gains slow

As we warned ahead of the fix, there was some US dollar demand going through into month end. Now that we’re past the top of the hour, some of that is unwinding and the commodity currencies in particular are reversing.

It’s all about equities now and there’s some dip buying underway. The market is being led around by tech at the moment.

For bank trade ideas, check out eFX Plus

Silver Price Analysis: XAG/USD stages sharp rebound after testing $23

83906   October 31, 2020 00:51   FXStreet   Market News  

• XAG/USD reversed its direction after dropping to a monthly low on Thursday.
• A daily close above 100-day SMA could open the door for additional gains.
• $23 aligns as critical technical support for silver.

After suffering heavy losses on Wednesday, the XAG/USD pair extended its slide on Thursday and touched its lowest level in a month at $22.56. However, the pair managed to close the day above the critical $23 level and staged a decisive rebound on Friday. As of writing, XAG/USD was up 1.67% on the day at $23.65.

Silver technical outlook

On the daily chart, the Relative Strength Index (RSI) indicator seems to have turned north after dropping to 40. However, the fact that the RSI remains below 50 suggests that Friday’s climb is a technical correction of the latest decline. 

However, XAG/USD is currently sitting above the 100-day SMA, which is currently located at $23.50, and a daily close above that key moving average could attract more buyers. On the upside, the initial resistance aligns at $24.25 (20-day SMA) ahead of $25 (psychological level) and $25.25 (50-day SMA).

Supports, on the other hand, are located at $23.50 (100-day SMA) and $23 (psychological level/Fibonacci 38.2% retracement of March-August uptrend). With a daily close below $23, the outlook could turn bearish.

XAG/USD chart (daily)