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Aug 3 . 8 min read

Investors await the July US employment report, which is expected to shed more light on the strength of the economic rebound. Forecasts for the report are quite disparate, but most analysts expect the rebound in hiring to have slowed considerably last month.

Markets will also be on the lookout for Congress, which remains bogged down in the next round of economic relief measures after the expiration of a key lifeline for millions of unemployed Americans.

The second half of the second-quarter earnings reporting season begins after last week’s impressive big tech results, but macroeconomic data and concerns about the course of the pandemic weigh on Treasury yield.

Meanwhile, the Bank of England is not expected to implement changes at its meeting on Thursday, and investors await any clues to the possible future course of monetary policy.

This is what you need to know to start your week, according to the main financial social media.

In a new bullish rally, bitcoin went beyond $ 11,000, buoyed by monetary and fiscal policy of the United States Federal Reserve, which has warned this week of a negative impact on the economy in the short and medium-term.

Among the reasons for this bleak outlook for the economy (although it has been favorable for bitcoin) highlights the supposed revival of Covid-19 in that country as explains criptonoticias.

The good thing is that we closed the month of July touching one of the strongest Fibonacci resistances of all and very close to 50% of the short term Fibonacci retraction line and with strong breaking of the resistance of the Ichimoku cloud crossed with 61% of the Fibonacci retraction line.

We have a small confirmation of the start of wave 1 that could extend the next few months until the break of the historical maximum of 20k.

Many of the indicators favoring trend reversal. We can only say that the monthly close at 11344 is simply the start for the new business cycle to come.

Other external opinions say that BTC monthly candle closed a full bar at 11.3k. The second-highest close in history, only behind December’17 when we set the all-time high.

Typically bullish follow-up would be a retest of mid-low 10ks in the first half of August and close it out strong.

Another thing that explains by criptonoticias and Cointelegraph that the dollar fell to its lowest value in two years after the announcements by the Fed and the Economic Activity Office (BEA) also published the economic figures for the second quarter, confirming the fear of a record contraction of the Gross Domestic Product (GDP) of 32.9%.

With this decline in GDP, the largest quarterly decline since the BEA began its records in 1947 is recorded. Prior to this pandemic, the worst decline in GDP occurred in the first quarter of 1958, when it fell 10%.

On the other hand, on Thursday, July 30, a day after the Federal Reserve announced that it would keep interest rates close to zero, the weighted index of the United States dollar (USDX) fell to 92.63, a value that was not seen since May 2018.

This index shows the strength or weakness of the US dollar compared to a basket of currencies including the euro, the Japanese yen, the British pound, the Canadian dollar, and the Swiss franc.

At the time of writing this article, USDX is at 93.46, which can be interpreted as a depreciation of the dollar close to 7% with respect to its base value of 100.

The devaluation of fiat currencies every day is making the cryptocurrency market even stronger. We saw that very well with the last weekly closing of the negotiations. The thesis is then that many, many more people are opting for the digital world as the next strategy for a new ecological order.

In that order of idea, we have closed the week with Bitcoin making a slight break from the main downtrend line for the entire market with a breakout failure of the 50% Fibonacci area above 11429. We really need to break the previous zone to follow a trend discharge along with wave 1.

For this graphic period, Bitcoin begins to show signs of entering an overbought zone. The positive case we see is the slight confirmation of a close with a bullish hammer.

Corresponding to bitcoin’s bullish momentum this week, explains too by criptonoticias, futures markets and open interest related to this cryptocurrency have also boomed. The Bakkt and Chicago Mercantile Exchange (CME) markets are reporting new caps on traded contracts and amounts traded.

Bakkt, a subsidiary of the Intercontinental Exchange (ICE) the company behind the New York Stock Exchange, which had been liquidating a daily average of USD 23 million in futures contracts in the month of July, settled on July 27 contracts for USD 134 million.

For its part, the average daily trading volume for bitcoin futures at CME increased on Monday 27 to $ 1.3 billion, 10 times higher than what was traded on Bakkt.

The dollar had a terrible July explains investing, suffering its biggest monthly decline in three years.

Investors have been concerned about the explosion of Coronavirus cases in the United States, amid fears that an ineffective response could result in permanent damage to the US economy, which could keep interest rates and growth low for years.

“This is not the benign decline in the dollar we had thought of, but rather, a seemingly downturn driven by a new risk premium being inserted into the US asset markets due to a resurgence in Covid-19 cases,” said ING analysts in a research note.

This resulted in a high price for gold, which rose more than 9% in July to all-time highs. Yellow metal is denominated in dollars and therefore cheaper for investors outside the United States, in addition to being seen as a store of value during geopolitical uncertainty.

U.S. Treasury bonds are also in demand, with five-year Treasury yields falling to a record high after the Federal Reserve last week delivered a conciliatory message of support for the Coronavirus-stricken US economy.

Thursday’s data indicated that the US economy contracted at a record annualized rate of 32.9% in the second quarter, explains investing, sending the yield on the three-, five-, and 20-year bonds to record lows. The entire yield curve is about to drop below 1%.

A new trigger for future falls could be the July unemployment figures.

Last week the Federal Reserve linked the economic recovery to the resolution of the health crisis, assured that “the direction of the economy will depend considerably on the course of the Coronavirus.”

Policymakers at the Federal Reserve have reiterated a commitment to use their “full range of tools” to support the economy and keep interest rates close to zero for as long as it takes to recover from the epidemic.

All this news leads us to a single conclusion. From the next few days many investors will have to migrate their investments to other more lucrative markets and whoever leads the way in the cryptocurrency market will be a winner.

Added to this conclusion is the fact that Ethereum prices soared past $400 per coin over the weekend before experiencing a quick correction. Demand for ether in order to utilize as gas for transactions on the Ethereum network has driven accelerated demand for the token, as explained by TradeBlock.

Over the past 6 months, Ethereum transactions fees have soared as users clamor for transactions within the DeFi space — majority of DeFi apps are built on the Ethereum blockchain and require ether for use in transacting within its smart contracts.

Over the weekend, ether reached its highest price since July 2018 when the price was slowly declining from an all-time high of over $1,000 per coin in January 2018. Ether prices have risen more than 75% over the past month and are up more than 300% since reaching a recent low in March during initial COVID-19 waves.

Fueling the recent demand for Ethereum transactions is the rise of DeFi and stablecoins, as it was written by TradeBlock. While many decentralized financial applications and stablecoins launched in 2018 and 2019, they received limited interest until recently as technological improvements allowed for increased usability.

At the time of writing, more than 4 million ether and more than $4 billion in digital currencies are deposited in DeFi applications. Additionally, more than $6 billion in value is deposited across Ethereum based stablecoins.

This has made Ethereum one of the largest chains by total value locked in its smart contracts, and a gaining rival to traditional financial systems.

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