Source: Ronsco

Market Picture

The crypto market cap fell to $2.88 trillion, down 5% over the day. It appears that the market has started to take profits after a week of rallying. The first target for such a pullback appears to be the March-June resistance area around $2.70 trillion. However, we are optimistic that the market may well pick up cryptocurrencies at higher levels and trigger FOMO.

Bitcoin kept things interesting on Tuesday, starting the day by testing the $90K level, then dropping to $85K before testing $90K again. On Wednesday morning, the price pulled back to $87K, the first significant daily decline in eight days. Technically, a pullback to $84K or even $81K would fit within the correction pattern of the last impulse. In that case, a broader correction could begin. For now, however, we believe the market has stumbled and could quickly return to growth.

News Background

Amid the rapid rise of cryptocurrencies, tech analyst Ali Martinez noted an ‘explosion of institutional FOMO’, citing Bernstein’s recent positive report. ‘We are literally starting the dot-com cycle for cryptocurrencies,’ said Michael van de Poppe, founder of MN Trading.

On 11 November, MicroStrategy shares hit a new all-time high of $351.7, taking its YTD growth rate to 438%. Coinbase shares have been at their highest since November 2021. The exchange’s shares have jumped 75% in the last five days.

Arkham Intelligence notes that 2,500 BTC ($222m) were sent to two unknown addresses from the wallets of the former Mt.Gox. This is the fifth Bitcoin transaction in the last two weeks, totalling more than $2 billion.

Polymarket users are betting that bitcoin will reach $100K by the end of November. The proportion of such bets has reached 57%.

Tesla’s Bitcoin value has exceeded $1 billion. The company holds 11,509 BTC. According to Arkham data, El Salvador’s Bitcoin assets exceeded $500 million. The country holds 5,932 BTC.

Australia’s wage inflation within expectations

Wage inflation in Australia eased to 3.5% y/y in the third quarter, down from 4.1% in Q2 and just shy of the market estimate of 3.6%. This was the weakest wage price growth since Q4 2022. Quarterly, wage growth remained at 0.8% in the third quarter, below the market estimate of 0.9%.

The data is in line with the Reserve Bank of Australia’s projection that wage growth has peaked. The central bank expects wages to continue to easing in the fourth quarter and next year, which supports the case for a rate cut. The RBA has insisted that a rate hike remains on the table as underlying inflation is too high. The decline in wage growth is an encouraging sign as high wages have driven services inflation, which remains much higher than the 2% inflation target.

The RBA’s hawkish stance has put it out of sync with other major central banks are lowering rates in response to falling inflation. The markets have priced in another hold in rates at the December meeting, with an initial rate cut likely in the first half of 2025.

Australia releases the October employment report on Thursday. The economy is expected to have added 25 thousand jobs, after a sparkling 64.1 thousand gain in September, most of which was full-time employment. The unemployment rate is expected to remain unchanged at 4.1%.

In the US, Minneapolis Fed President Neel Kashkari said on Wednesday that the US economy is in a “good place” and that monetary policy is currently “modestly restrictive”. Kashkari added that economic data would be the guide as to the Fed’s rate path.

AUD/USD Technical

There is support at 0.6505 and 0.6475;

0.6543 and 0.6573 and the next resistance lines

Source: MarketPulse

Trump wins but gold loses

After hitting a record high of around $2,790 on October 30, gold entered a corrective phase due to US data suggesting that the Fed may need to slow down the pace of its future interest rate reductions.

The correction of the precious metal accelerated on the first signs that Donald Trump will be the 47th president of the US, with the bears staying in charge as the financial world continued to pile into the so-called ‘Trump Trade.’

But is the pullback in gold actually part of the ‘Trump trade’? Because ahead of the election, the precious metal was benefiting whenever the chances of Trump returning to the White House were increasing, perhaps due to the uncertainty surrounding a Trump presidency.

Yet, currently, gold seems to be surrendering to the stronger dollar, which is likely benefiting from speculation that Trump’s tax cut and tariff policies will fuel inflation and thereby prompt the Fed to proceed with even slower rate reductions.

Just after the election, the probability for policymakers stepping to the sidelines in December rose to slightly above 30%. Now, it rests at around 15%, with the probability of taking a pause in January rising to around 63%.

Besides Fed, China and geopolitics are also eyed

Before the US election even started being a theme for financial markets, gold’s main drivers were elevated purchases by major central banks, especially the People’s Bank of China, safe-haven inflows due to geopolitical tensions in the Middle East, as well as speculation of aggressive rate cuts by the Fed.

It is worth mentioning that just after September’s 50bps reduction, investors were assigning a strong chance for a back-to-back double cut in November, although this changed later due to the better-than-expected US data and the increasing chances of Trump winning the election.

China refrains from buying for the sixth straight month

According to the World Gold Council, central bank purchases of the precious metal may be set to slow further due to a six-month abstain by the Chinese central bank. Its holdings held steady at 72.8mn troy ounces, although the Bank’s value of gold reserves rose to $199bn from $191bn.

But Trump’s return to the White House is likely adding to the chances of China resuming its purchases. After all, the central bank of the world’s second-largest economy has been piling up gold so that it loosens its dependence on the US dollar in case tensions between the US and China escalate. And with Trump pledging to impose massive tariffs on Chinese goods, a Trade War 2.0 seems increasingly likely.

So, China is unlikely to have changed its strategy. They may prefer to wait and buy more gold at more favorable prices.

Can Trump restore peace in Europe and the Middle East?

In terms of geopolitics, some investors may have started unwinding their safe-haven holdings in hopes that as the new US president, Donald Trump will try to resolve the conflicts in the Middle East and Ukraine. However, anything suggesting that a truce may not be so easily achievable, could very well refuel the yellow metal’s prevailing uptrend.

Broader uptrend remains intact

From a technical standpoint, gold corrected sharply lower this month, but it is still holding above the uptrend line drawn from the low of October 6, 2023. This corroborates the view that the current retreat may be destined to stay limited and short lived.

The bulls may decide to jump back into the action from near the crossroads of the uptrend line and the $2,545 zone and perhaps aim for the high of September 26 at $2,685. Should they not stop there, they could aim once again, and even exceed, the record high of $2,790.

For the outlook to shift to bearish, the metal may need to slide below the crossroads of the $2,545 barrier and the aforementioned uptrend line. Such a technical dip may pave the way for the key pivot zone of $2,390, the break of which could carry extensions towards the $2,285 territory, which acted as a floor between April and June.

Bitcoin continued its upward solid momentum to a high of $90,100 on Nov. 12, but has since cooled to trade at $87,534, according to TradingView data.

Bitcoin was trading at $87,534 at the time of publication. Source: TradingView

Source: Cointelegraph

Pre-Market U.S. Stock Movers

Source: Barchart