As a seasoned researcher with a decade of market analysis under my belt, I’ve witnessed countless market swings that would make even the most hardened investor feel like they were riding a roller coaster. The past week has been no exception, as we saw US stocks plunge following the Japanese carry trade unwind, only to bounce back with surprising resilience.
As a researcher, I’ve noticed a swift recovery in the US stock market since the recent Japanese carry trade turmoil. We’re not completely out of the woods yet, but there’s an anticipation in the market for a favorable Consumer Price Index (CPI) report due later today. If this report is indeed positive, it could further fuel the ongoing stock market rally. It’s also plausible that Bitcoin (BTC) might mirror this trend.
Recovery follows the bloodbath
Approximately a week and a half ago, when U.S. stock markets started off turbulently on a Monday, due to the unraveling of the Japanese yen carry trade, it seemed like the long-anticipated recession might be moving into its most aggressive phase.
As a crypto investor, it’s been quite a challenging day in the broader stock market. The S&P 500 took a significant dip of approximately 8%, and the tech-focused Nasdaq saw an even steeper decline, falling over 10%. This downward trend was particularly evident among the prominent “Magnificent 7” stocks, where I noticed Nvidia (NVDA) suffered a substantial loss of around 24%. Other large cap stocks also experienced double-digit percentage drops.
Reflecting on the recent market events, I’ve noticed a remarkable turnaround since the close of trading on Monday. The recovery that ensued then has been steadily gaining momentum, and if Wednesday brings us favorable CPI data, it might just propel stocks back to their pre-Japan crash levels.
Nasdaq about to break the downtrend?
For instance, looking at the Nasdaq 100 Index, it appears that the downward trend might end on Wednesday, provided the CPI data goes as expected. If the index’s price manages to surpass the resistance level of $19,535 afterwards, it would mark an essential new high point. Under these circumstances, the Nasdaq could potentially rebound towards its record high and even exceed it – possibly dragging cryptocurrencies along with it.
Bitcoin late summer breakout?
Currently, the Bitcoin chart demonstrates a recovery pattern similar to Nvidia’s V-shape trend. At present, Bitcoin’s price has surged by approximately 24% from its lowest point. However, significant hurdles remain before we can talk about further gains. These include overcoming the major resistance level around $61,000 and the 0.618 Fibonacci level at $62,000. If these are successfully navigated, the next potential targets would be $63,000 and then $65,000, which aligns with the 0.786 Fibonacci.
As a researcher, I’m closely observing the economic landscape. If the annual core inflation rate drops to 3.2%, it significantly boosts the prospects of a 50 basis point Fed rate cut in September. The economic forecast remains murky, and an unforeseen event could potentially disrupt things, but with the global liquidity pool expanding, Bitcoin’s environment seems increasingly favorable. A late-summer surge in Bitcoin price is something I would certainly anticipate.
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2024-08-14 15:08