Weekly Forecast: Cryptocurrency Market Gains Momentum Ahead of Pivotal Month for Financial Markets
Cryptocurrencies are heading into the first week of June on a positive note, as bitcoin and the major altcoins show signs of recovery following a month-long downtrend. As we predicted last week, the sellers are slowly relinquishing control of the market, which may signal a return to growth in the coming weeks.
Cryptocurrencies Eye June Recovery
Cryptocurrencies have taken turns adding and shedding market cap over the past two months, with April’s resurgence nearly offset by a dismal May. However, if the last two days are any indication, the market looks poised for a breakout in the first week of June.
Digital asset values climbed more than $22 billion over the weekend, reaching a high near $356 billion, according to CoinMarketCap. Cryptocurrencies have now recovered some $50 billion from last Tuesday’s swing low.
Bitcoin prices rallied above $7,750 on Sunday, extinguishing fears of a larger correction back down to $7,000. Bitcoin’s share of the total market was 37.3% at the time of writing.
Altcoins led by EOS have added $15 billion since Friday. EOS jumped more than 22% following the successful launch of the mainnet.
Bitcoin cash rose more than 13% on Sunday to reach $1,170 a coin.
According to John McAfee, June will be a pivotal month for cryptocurrencies. The technologist expects bitcoin’s price to virtually double this month and surpass $15,000 before backtracking again in July.
Geopolitics, Trade Remain in Focus
For conventional assets, geopolitics and trade negotiations will remain the biggest focus this week.
U.S. President Donald Trump confirmed Friday that historic talks with North Korea’s Kim Jong-un is back on for June 12 in Singapore. Trump had previously cancelled the summit after Pyongyang threatened nuclear war over joint military drills between the U.S. and South Korea.
On the trade front, fallout from Washington’s protectionist policies are likely to continue this week after the Trump administration targeted Canada, Mexico and the European Union for import tariffs. In a surprise announcement, the White House said the three jurisdictions will also face hefty duties on steel and aluminium shipments to the United States.
An unexpected surge in nonfarm payrolls Friday was a major catalyst for Wall Street’s relief rally. Combined with recent data on PMI and personal spending, the jobs report boosted optimism about the health of the world’s largest economy.
The economic calendar is less active this week, though several major reports could influence stocks, commodities and currencies.
Eurozone and U.S. data are in the spotlight at the start of the week. Sentix will release its monthly Eurozone investor confidence index for June. Separately, the European Commission’s statistical agency will report on producer prices for the month of April.
In the United States, the Commerce Department will release data on April factory orders.
The Reserve Bank of Australia (RBA) will deliver a policy verdict on Tuesday. The benchmark interest rate is projected to hold at 1.5%.
In terms of economic data, final PMI reports for the month of May will circulate throughout the European session. Eurostat is also expected to report a decline in retail sales for the month of April.
In the U.S., the Institute for Supply Management (ISM) will report on May services PMI.
The U.S. Commerce Department and Statistics Canada will each report on international trade on Wednesday. Commodity traders will also keep track of U.S. crude inventory data courtesy of the Energy Information Administration (EIA).
Eurozone releases will dominate the headlines on Thursday with reports on Germany factory orders, French trade and Eurozone gross domestic product (GDP).
Asia and Europe will be the main focus for calendar watchers on Friday. Japan will issue revised first-quarter GDP figures, which are expected to show stagnation as opposed to contraction. Meanwhile, the Chinese government will report on the national trade balance for May.
In Europe, Germany will issue the latest trade and industrial production figures in the final session of the week.
Canada will also make headlines with the release of last month’s jobs data.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.