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Gate.io Blog Daily News | Eurozone CPI and GDP, Fed Rate Hike, And More Earnings

Daily News | Eurozone CPI and GDP, Fed Rate Hike, And More Earnings

31 October 11:13

Fundamental & Technical Outlook

👓 Macro

🔹 Bitcoin (BTC) 24-Hour Change: 20,594 (-0.82%)
- The correlation of BTC-S&P 500 (SPX) continued to rise over the weekend, implying this week’s key events such as the FOMC statement on Wednesday will likely have some impact on cryptocurrencies as the SPX gets volatile: Current: 0.77; 24HR: 0.70; 1W: 0.30

🔹 Ether (ETH) 24-Hour Change: 1,588 (-1.77%)
- Likewise to BTC, the correlation of ETH-SPX continued to rise over the weekend, implying the S&P 500 index will have a larger effect on the movement of Ether going into Friday: Current 0.79; 24HR: 0.75; 1W: 0.29

🔹 Nasdaq Composite (IXIC): 11,102 (+2.87%)

🔹 Nasdaq E-mini Futures (NQ1!): 11,566 (Difference to Spot: +4.18%)
- Last week despite a series of disappointing reports coming from big tech companies, particularly Meta, the Nasdaq tech-heavy index closed higher Friday, implying investors may have priced in this week’s Fed rate hike which is expected to be 75bps (4.25%);

- The difference between Nasdaq futures and spot is +4.18%, implying investors’ optimism for this week’s new wave of earnings reports from notable companies coming from many key sectors, including but not limited to Moderna, Pfizer, Airbnb, AIG, Maersk, BP, Estee Lauder, Ferrari, ING, Intercontinental Exchange, KKR, Mitsui, Newmont, Petrobras, Qualcomm, Restaurant Brands, Saudi Arabian Oil, SoftBank, Sony, Starbucks, Toyota, Uber, and Yum! Brands.

🔹 S&P 500 (SPX): 3,901 (+2.46%)

🔹 S&P 500 E-mini Futures (ES1!): 3,905 (Difference to Spot: +0.1%)
- The difference between S&P 500 futures and spot is a mere +0.1%, while the Nasdaq futures and spot difference is +4.18%, implying traders looking for catalysts should keep an eye on both companies tech-heavy and listed on the S&P 500 index.

- The lesser difference marks a contradictory outlook that implies the FOMC rate hike may not have been priced in, therefore it’ll be essential to see how the US pre-markets react to the Eurozone CPI & GDP, both of which are due for release Monday.

🔹 The Dollar Index (DXY):
- The dollar rebounded from the 50-Day EMA Thursday after falling on Wednesday. The inverse correlation with Bitcoin and Ether stands at -0.76 and -0.75, essentially unchanged since Friday at -0.76 and -0.77, respectively, implying traders should anticipate any strong moves from the dollar will drag down BTC & ETH, particularly going forward into Thursday’s Fed rate hike decision.

- According to Goldman Sachs’ estimates, the central bank will lift its benchmark rate to a range of 4.75% to 5% in March, 25 basis points more than earlier expected. The route to the new peak includes increases of 75 basis points this week, 50 basis points in December, and 25 basis points in February and March.

🔹 Eurozone (EURUSD):
Last week the European Central Bank lifted its policy rate by 75 basis points -- in line with expectations -- and signaled more tightening ahead. This Monday, investors are expecting CPI & GDP data coming from the central bank.

- ECB Q3 Gross Domestic Product (GDP):
- Q3: QoQ Consensus: 0.2%
- Q2: 0.8%
- Q1: 0.6%
- Q3: YoY Consensus: 2.1%
- Q2: 4.1%
- Q1: 3.9%
- ECB September Consumer Price Index (CPI):
- Q3: MoM Consensus: 1.3%
- Q2: 1.2%
- Q1: 1.2%
- Q3: YoY Consensus: 10.2%
- Q2: 9.9%
- Q1: 10%

🔹 Catalysts this week:
- Monday: China manufacturing and non-manufacturing PMI, Eurozone CPI & GDP
- Tuesday: Reserve Bank of Australia policy decision
- Wednesday: Federal Reserve rate decision (FOMC Statement), EIA crude oil inventory
- Thursday: Bank of England rate decision, US Trade & Jobs Data
- Friday: US nonfarm payrolls (NFP) & unemployment, ECB President Statement

Monthly timeframe:

- Major Level: 61.8% (20,516) Fibonacci Retracement level
- Closest support zone: 19,858 - 19,423
- Key resistance zone: 21,864 - 22,865

As of Oct. 30, 2022, BTC’s monthly candle was trading above the monthly support level of 19,858 and the 61.8% (20,516) Fibonacci Retracement level measured from Oct. 2020 - Mar. 2021, implying a lack of strength from the bears in their attempt to bring down BTC since breaking below the aforementioned levels in September.

The October candle is most likely going to engulf the September candle, however, to sustain a bullish outlook going into November, the October candle will have to close above the 61.8% (20,516) Fibonacci level to attract more buyers.

Notably, this is not a definitive indication of a trend reversal since BTC is still trading within a Fibonacci Extended support zone (23,137 - 18,017) derived from Nov. 2021 - Jan. 2022, in other words, we’ll have to see BTC make a “higher-high” price action formation between November and December that exceeds the close (23,301) of Jul. 2022 candle to see a more solid confirmation.

BTC Monthly Resistance zones
1. 21,864 - 22,865
2. 23,137 - 25,328

BTC Monthly Support zones
1. 19,858 - 19,423
2. 19,423 - 18,017

BTC Weekly timeframe:
- Major Level: 20,516 (61.8% Monthly Fibonacci Retracement Level)
- Closest support zone: 20,516 - 20,885
- Key resistance level: 21,002 - 21,690

As of Oct. 31, Asian session, Bitcoin (BTC) was trading above the 61.8% (20,516) monthly Fibonacci Retracement level.

After seeing an engulfing candle previously, BTC bulls took advantage of the momentum last week and succeeded in driving the price above two key levels: 19,858 and 20,516.

With only a day remaining, there’s always a chance the bears will attempt to drive down BTC to invalidate a more bullish outlook going into this week, therefore it is essential for buyers to sustain the price of BTC above 20,516. A key level going into next week is 20,885 (61.8% Fibonacci Retracement level measured from Sep. 12 - 19), meaning the bulls will have to use it as an anchor point to drive BTC above any higher resistance zones.

On the other hand, since BTC was also trading slightly above the 12-Day EMA on the weekly timeframe, we may see some resistance which BTC bears can take advantage of and drive down BTC to an ideal 20,331 so that BTC bulls would have to retest the 61.8% (20,516) Fibonacci level.

BTC Weekly Resistance zones
1. 20,516 - 20,885
2. 21,002 - 21,690
3. 21,737 - 22,577
BTC Weekly Support zones
1. 20,516 - 20,331
2. 19,858 - 19,145
3. 19,960 - 18,472

BTC Daily Timeframe:
- Closest support zone: 20,583 - 20,516
- Closest resistance zone: 20,885 - 21,142
- Key Level: 23.6% (20,583) Fibonacci Retracement level measured from the two-day spike of Oct. 25 - 26

Oct. 30 21:00 UTC Update:

Bitcoin (BTC) was trading at $20,692, or down 0.92% in a 24hr period.

BTC Daily Resistance zones
1. 20,885 - 21,142
2. 21,369 - 21,502
3. 21,522 - 21,742

BTC Daily Support zones
1. 20,583 - 20,516
2. 20,319 - 20,108
3. 20,071 - 19,853

Monthly Timeframe
- Major Level: 1,428 (Monthly High of Jan. 2018)
- Closest support zone: 1,428 - 1,313
- Key resistance zone: 1,792 - 1,955

As October is coming to an end, it seems Ether will establish an engulfing candle going into November.

Notably, ETH rebounded quite strongly from the 38.2% (1,241) monthly Fibonacci Retracement level measured from Oct. 2020 - Apr. 2021, effectively thrusting ETH above the monthly level of 1,428 as well as the 38.2% (1,505) Fibonacci Retracement level measured from 2022 April through June, implying an anchor point (1,428) has been established in October.

Likewise to BTC, Ether bulls should be aware that the price of ETH on the monthly timeframe is entering into the next resistance zone (1,505 - 2,095) derived from the 38.2% - 61.8% Fibonacci Retracement levels of 2022 April - June plunge.

ETH Monthly Resistance zones
1. 1,792 - 1,955
2. 1,997 - 2,266

ETH Monthly Support zones
1. 1,428 - 1,313
2. 1,241 - 1,075

ETH Weekly Timeframe
- Major Level - Weekly resistance level of 1,760 (Weekly High of Feb. 01, 2021)
- Closest support zone: 1,595 - 1,552
- Key resistance zone: 1,651 - 1,694

As of Oct. 31,
Ether (ETH) was trading above the 61.8% (1,554) Weekly Fibonacci retracement level
- and within a support zone (1,552 - 1,639) derived from Aug. 29 - Sep. 05
- but below the 78.6% (1,651) level measured from Sep. 12 - 26

To confirm a trend reversal to the upside, Ether will have to close above the previous “lower-high” price action formation on Sep. 12, therefore the weekly resistance level of 1,760 is a key level going into the next two weeks when the bulls make an attempt to push the price of ETH even higher.

On the other hand, ETH bears will likely use the 23.6% (1,694) monthly Fibonacci Retracement level as an anchor point to drive down Ether. This is to invalidate a bullish signal by preventing the price of ETH from making a “higher-high” price action formation.

ETH Weekly Resistance zones
1. 1,595 - 1,639
2. 1,651 - 1,694
3. 1,735 - 1,760

ETH Weekly Support zones
1. 1,595 - 1,552
2. 1,552 - 1,494
3. 1,456 - 1,402

ETH Daily Timeframe
- Closest support zone: 1,595 - 1,575
- Closest resistance zone: 1,664 - 1,694
- Key Level: 1,565 (Daily Close of Oct. 26)

Oct. 30 21:55 UTC Update:
ETH was trading at $1,593, or down 1.98% in a 24hr period.

ETH Daily Resistance zones
1. 1,664 - 1,694
2. 1,713 - 1,740
3. 1,760 - 1,775

ETH Daily Support zones
1. 1,595 - 1,575
2. 1,517 - 1,494
3. 1,488 - 1,464

📌 The topic of the day-El Salvador Opens Bitcoin Embassy in Switzerland

In a bid to increase the adoption of Bitcoin, El Salvador entered into an agreement with the city of Lugano, Switzerland. As a result, El Salvador has opened a special office in the city, aiming at influencing people to invest in and use Bitcoin. As a point, El Salvador adopted BTC as a legal tender in 2021. Despite the current crypto winter, El Salvador still believes in the power of BTC.

The city of Lugano has also adopted BTC alongside USDT and LVGA stablecoins as de facto legal tender. To this effect, Tether said that it supports the partnership between El Salvador and the city of Lugano.

Paulo Arduino, Tether CTO, said “We commend the pioneers leading Lugano and El Salvador for launching this initiative, which promises to foster the exchange of best practices and ideas regarding the power of cryptocurrency.”

👀 Happenings of the week

🔹 Hong Kong aims to become a crypto hub. Hong Kong is working flat out to create a friendly legislative framework to govern the blockchain sector.

🔹 Former Barack Obama’s advisor says Bitcoin will rally over $60,000. Jim Messina, Obama’s former adviser, said that cryptocurrency has been the best invention of his lifetime and foresees BTC rallying above $60,000.

🔹 The crypto winter has not negatively impacted the fundamentals of cryptocurrencies. A report by Fidelity Digital Assets shows that the crypto sector is still viable and has not been badly affected by the current situation.

🔹 MakerDAO may undergo a hard fork following the approval of recent proposals. The restructuring which MakerDAO aims to implement has split its community, which could lead to a hard fork.

🔹 Ethereum co-founder Vitalik Buterin explains why crypto is better than gold. Although the Bank of America Securities (BofAS) reports that BTC correlates with gold, Buterin thinks that crypto is better than Gold as it is easy for people to invest in it.

🔹 Adoption of cryptocurrencies could lead to more jobs for Filipinos. A Filipino business leader says that cryptocurrencies are changing many people's lives through job creation and foreign investment.

🔹 Singapore sues Do Kwon, Terra’s co-founder. The Singaporean government sues Kwon for intentional falsification of information.

🔹 A Binance team shall support Twitter’s blockchain solution effort. Binance says that it backs Elon Musk’s takeover of Twitter and its team will support Twitter’s efforts to introduce blockchain solutions.

🔹 Zuckerberg’s investment in the metaverse may fail. Following Meta's Reality Labs division’s $3.675 billion loss in the third quarter, its shareholders are not happy with how the company is pouring funds into the metaverse project.

🔹 NYSE delisted Twitter’s shares soon after Elon Musk’s takeover. Since Twitter is going private, after Musk’s takeover, NYSE has already delisted its shares.

🔹 European regulators will discuss suitable regulations for the decentralized sector at the Reg3 Conference. The European Crypto Initiative (EUCI) and the New Economy Institute will discuss a possible crypto regulatory framework for the region.

🔹 The Vietnam Blockchain Summit 2022 focuses on the country’s blockchain development future. The Vietnam Blockchain Summit 2022, held on 19 and 20 October, discussed the future of blockchain development in Vietnam including the importance of the country’s CBDC.

🔹 The Japanese city of Toda intends to use Metaverse in its education sector. The city of Toda intends to use the metaverse in order to increase the student's attendance rate as they participate in it.

🔹 The THORChain is working again. The team announced that THORChain is now functioning well after a short disruption following a bug in the blockchain.

🔹 Dogecoin rallied over 150% within 4 days. The Dogecoin has reached an overbought level which could result in a price fall before the year-end. The main reason for the recent surge in its price is the deal between Elon Musk and Twitter.

🔹 Kava has successfully launched its mainnet upgrade. The Kava mainnet upgrade, launched on 26 October, includes a liquid staking feature.

Author: Gate.io Researcher Peter L.&Mashell C.
This article represents only the researcher's views and does not constitute any investment advice.
Gate.io reserves all rights to this article. Reposting the article will be permitted provided Gate.io is referenced.
In all other cases, legal action will be taken due to copyright infringement.
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