● When the US economy shows signs of robust growth, investors flock to buy dollars, aiming to capitalize on opportunities in the US stock market. This influx of investment typically causes the DXY Dollar Index to rise. However, the landscape shifts dramatically when the ominous clouds of an impending recession begin to gather. An economic slowdown serves as a signal to the Federal Reserve (Fed) that it might be time to ease monetary policy through Quantitative Easing (QE) and lower interest rates.

The next Federal Reserve meeting is fast approaching, scheduled for 18 September. In July, several members of the Federal Open Market Committee (FOMC) were inclined to vote for a rate cut. However, they opted to maintain the status quo, deferring their decision to early autumn to consider more recent macroeconomic indicators. Most market participants now anticipate a 25 basis point reduction in borrowing costs. But uncertainty lingers: what if the decision is postponed once more? Or, conversely, what if the rate is slashed by 50 basis points in one go? The outcome will hinge significantly on the latest data received by Fed officials.

● It appears that the US economy is not teetering on the brink of a severe recession. However, expectations for a dramatic economic upswing should be tempered. Data released on 3 and 5 September revealed that the Manufacturing Purchasing Managers’ Index (PMI) stood at 47.2 points, slightly up from the previous reading of 46.8 but still below the expected 47.5. This indicator remains under the crucial 50.0 threshold that separates growth from contraction. On a brighter note, the services sector outperformed expectations, with activity levels rising to 55.7 from 55.0, surpassing the forecast of 55.2.

In terms of the labor market, initial jobless claims for the week decreased from 223K to 227K, better than the forecasted 231K.

On Friday, 6 August, the US Department of Labor’s Bureau of Labor Statistics reported that Non-Farm Payrolls (NFP), which measures new job creation outside the agricultural sector, increased by 142K. Although this fell short of the forecasted 164K, it was a significant improvement over July’s revised figure of 89K (down from an initial estimate of 114K). Unemployment in the US dropped to 4.2% last month from 4.3% in July.

Average hourly earnings in the private sector saw a month-over-month increase of 0.4% in August, bringing the average hourly wage to $35.21. Wage inflation also rose to 3.8% from 3.6% in July.

● These figures have not provided a decisive edge to either bulls or bears in the market. Recently released aggregate GDP data for the Eurozone’s 20 countries also had minimal impact on market sentiment. According to Eurostat, the Eurozone economy grew by 0.6% year-on-year in Q2, aligning with both forecasts and previous figures. On a quarterly basis, growth was recorded at 0.2%, compared to a forecast and previous value of 0.3%.

● Consequently, after the release of the US Department of Labor report on 6 September, the EUR/USD pair experienced significant volatility: it first hit a weekly high of 1.1155, then dropped to 1.1065, rose again, dropped once more, and ultimately concluded the five-day period at 1.1085. Expert opinions on its short-term performance remain divided: 40% of analysts predict a strengthening dollar and a decline in the pair, while 60% anticipate a rise.

In technical analysis on D1 charts, most trend indicators favor bulls, with 85% showing green and only 15% red. Among oscillators, 40% are green, 35% are red, and the remaining 25% are neutral-grey. The nearest support zones for the pair are located between 1.1025-1.1040, followed by levels at 1.0880-1.0910, 1.0780-1.0805, 1.0725, and finally between 1.0600-1.0620. Resistance zones can be found around 1.1120-1.1150, then at levels of 1.1180-1.1200, 1.1240-1.1275, 1.1385, followed by ranges at 1.1485-1.1505, 1.1670-1.1690, and finally between 1.1875-1.1905.

● The upcoming week promises to be eventful according to the economic calendar. On Tuesday, 10 September, Germany’s Consumer Price Index (CPI) data will be released, continuing the theme of inflation into Wednesday with the publication of US CPI figures. That same day will also feature debates between US presidential candidates Kamala Harris and Donald Trump. On Thursday, 12 September, all eyes will be on the European Central Bank (ECB) meeting where interest rates and overall monetary policy direction will be decided. The subsequent press conference and comments from ECB leaders will be closely watched.

Additionally, Thursday will bring usual initial jobless claims figures and the US Producer Price Index (PPI). The week will conclude on Friday the 13th with the release of the University of Michigan’s US Consumer Sentiment Index.

CRYPTOCURRENCIES: “Fainting Spell” and “Heat Death” for Bitcoin, “Sewer” for Altcoins

● September has already started living up to its reputation as a challenging month for investors in cryptocurrencies. Historical data shows that bitcoin’s price tends to decline by an average of 6.18% during this period. So far, optimistic chart analysis has not been able to lift BTC/USD as expected; instead, it continues to trend downward disappointingly.

Despite hopes that formations like the “bullish flag” or “cup and handle” would propel bitcoin towards $110,000 by year-end, bearish forecasts are becoming more prevalent.

● According to Ecoinometrics, bitcoin has lost its leading position among high-capitalization assets regarding Risk-Adjusted Return on Capital (RAROC). Nvidia’s shares have surged by 142% since early 2024, whereas bitcoin has only gained about 35%. Ethereum lags even further behind with just a 5% increase.

Peter Schiff, President of Euro Pacific Capital and a notorious bitcoin skeptic, noted that while bitcoin has appreciated since the beginning of the year, most of that growth occurred in the first two months due to hype around spot BTC-ETFs in the US. “If you didn’t buy bitcoin at the beginning of January, you’re likely seeing no profit,” Schiff remarked.

He emphasized that physical gold has shown steady value appreciation throughout 2024 and that hopes for BTC surpassing gold or equalling its market capitalization are dwindling. Schiff maintains that bitcoin’s price will eventually plummet to zero.

● Investor Nick Crypto Crusade painted a similarly grim picture for digital assets in his publication titled “The Bull Rally is Cancelled.” He suggested that traders are pessimistic about any imminent bull season and tend to sell off bitcoins when prices approach $70,000.

Former BitMEX CEO Arthur Hayes shared a similar outlook, predicting that BTC could drop to $50,000 while altcoins might crash entirely due to changes in Federal Reserve policies under the Reverse Repo Program (RRP). Higher RRP balances effectively remove liquidity from financial systems.

● Experts from Outlier Ventures claim that halving events no longer impact bitcoin’s price as they once did; they believe that miner reward reductions last had a fundamental effect in 2016.

CryptoQuant observed a decrease in active wallets and overall network activity on bitcoin’s blockchain—a sign that interest may be waning and contributing negatively to its price.

● Charles Hoskinson, founder of Cardano and co-founder of Ethereum, argues that bitcoin has become a “religious symbol” doomed by its ecosystem’s stagnation. According to him, most industry changes occur outside bitcoin’s influence.

Despite these concerns, there are still glimmers of hope for growth in cryptocurrency markets. Arthur Hayes remains optimistic about long-term developments as he expects US Federal Reserve policy easing to provide new opportunities.

While recent declines have scared off smaller holders and speculators who sold their reserves, large investors continue accumulating digital gold. Analytics firm Santiment notes that wallets holding between 10 and 10,000 BTC now control nearly two-thirds (67%) of circulating coins—a sign of positive future expectations among major players.

Willy Woo also sees signs of market stabilization as long-term holders control over 14 million BTC or around 71% of circulating supply—an encouraging indication for future growth prospects.

The Fed’s interest rate decision on 18 September will be crucial; however, significant changes in bitcoin’s price might not occur until October unless extraordinary events unfold beforehand.

Experts from Bitfinex highlighted potential impacts from rate decisions: A cut by just 25 basis points could spark long-term price increases driven by liquidity growth while more drastic cuts (50 basis points) could trigger short-term spikes followed by corrections due to intensified recession fears—possibly causing BTC/USD pair losses up-to-15-20%.

● By week’s end another bearish attack hit bitcoin following S&P500 declines driven largely by Nvidia-related news involving US Department Justice Antitrust Division investigations which alarmed AI-investors significantly impacting crypto markets too.

As-of-writing evening Friday (6-Sep), BTC/USD trades around $52k+. Overall cryptocurrency market capitalization fell below psychologically important $2T mark—now standing @ $1-87T compared-to-$2-07T-a-week-ago—with Bitcoin’s Crypto Fear & Greed Index plunging from34-to22points moving from Fear zone into Extreme Fear territory.

CRYPTOCURRENCIES: “Playful” Solana & Ripple Forecasts

● Raoul Pal—former Goldman Sachs executive-now CEO & Co-Founder Real Vision—believes gaming applications utilizing cryptocurrencies are nearing breakthrough; transitioning-from-Web2-to-Web3 could catalyze changes within both-gaming-industry-&-blockchain-space potentially sparking-explosive-user-interest-&-large-scale-trading-of-related-crypto-assets-particularly-Solana-network-tokens

● Despite-Ripple’s-victory-over-SEC XRP-struggled-maintain-above-critical-resistance-level-$060-currently-priced@$05069; however-some-analysts-predict-moderate-year-end-price-growth-reaching-potentially-$066-per-coin; CoinCodex-experts-suggest-target-of-$110 while-XRP-maximalists-envision-token-reaching-$150-year-end-based-on-XRP’s-“unique-position-within-financial-sector-focusing-on-cross-border-payments-&partnerships-with-major-financial-institutions”

Disclaimer: These materials are not an investment recommendation or guide for working on financial markets &are-for-informational-purposes-only Trading-on-financial-markets-is-risky-&can-lead-to-complete-loss-of-deposited-funds