On Wednesday (November 27), the US Dollar Index defended its strong position at 106.82, supported by strong US consumer confidence data and a weakening dovish stance from the FOMC. Gold prices maintained strength at $2627, as the Russian government expelled British diplomats and the Russian army launched a blitzkrieg against Ukraine with 188 drones. US President Biden announced a ceasefire agreement between Israel and Hezbollah in Lebanon, but the Israeli military still carried out fierce attacks on Beirut. Bitcoin plummeted below $92,000, with the 'Trump Trade' seeing a $200 billion evaporation in market value, yet failing to trigger panic or push key indicators into bearish territory.
The Putin government expels British diplomats, and the Russian army launches 188 drones.
AP News reported that amid escalating tensions in the Ukraine conflict, the Putin government ordered a British diplomat to leave the country on Tuesday, citing charges related to espionage, which the UK termed 'baseless.' The Federal Security Service, Russia's top domestic security and counterintelligence agency, stated in a release to Russian news agencies that the diplomat had provided false personal data when applying for entry permission.
The agency's Russian abbreviation is FSB, which claims he had worked for the British intelligence service as a diplomat, replacing one of the six British diplomats expelled from Russia in August. The FSB accused the diplomat of involvement in 'intelligence and subversive activities threatening the security of the Russian Federation.'
Maria Zakharova, spokesperson for the Russian Foreign Ministry, stated that it has been decided to revoke the diplomat's credentials and require him to leave Russia within two weeks. She stated that the Foreign Ministry has summoned the British ambassador and delivered a notice.
A spokesman for the British Foreign Office responded to Russia's comments: 'This is not the first time Russia has made malicious and baseless accusations against our staff. We will respond in due course.'
The Ukrainian Air Force stated on Tuesday that Russia launched 188 drones against most of Ukraine during a nighttime blitzkrieg, claiming this is a record number of drones deployed in a single attack.
According to the Air Force, most drones were intercepted, but key infrastructure such as apartment buildings and the national power grid were damaged. In the 17 target areas, there have been no reports of casualties.
Meanwhile, after US President Biden authorized Ukraine to use long-range weapons for deep strikes inside Russia, the Russian Ministry of Defense has rarely officially acknowledged that Russian military assets have recently been attacked by US-made ATACMS missiles on its own territory. Since mid-year, Russia has continuously attacked civilian areas in Ukraine using drones, missiles, and glide bombs.
Israel and Hezbollah reach a ceasefire agreement in Lebanon.
Bloomberg reports that, with US mediation, Israel and the Lebanese militant group Hezbollah have reached a 60-day ceasefire agreement after weeks of negotiations, marking the first step toward ending a conflict that has already resulted in thousands of deaths.
After talks with Israeli and Lebanese leaders, Biden delivered a speech at the White House on Tuesday, stating that all parties have agreed to a ceasefire, which will 'end the devastating conflict between Israel and Hezbollah.' Biden stated that the US 'remains prepared to reach a series of historic agreements with Saudi Arabia, including providing security agreements and economic guarantees for the region.'
Earlier on Tuesday, Israeli Prime Minister Benjamin Netanyahu stated that he would submit the proposed ceasefire agreement with Lebanon to the Security Cabinet for a vote and approval. He said Israel can now focus on addressing the 'Iranian threat' and increase pressure on Hamas in Gaza.
The ceasefire proposal was made after one of Biden's key Middle East envoys, Amos Hochstein, shuttled between Israel and Lebanon in an attempt to end the conflict before President-elect Donald Trump takes office in January. Both Hezbollah and Hamas are designated as terrorist organizations by the US and many other countries.
Biden and French President Emmanuel Macron issued a joint statement, committing both countries to 'work with Israel and Lebanon to ensure that this arrangement is fully implemented and enforced,' and to prevent 'another cycle of violence.'
After more than a year of fighting, the border area between Lebanon and Israel has been devastated, with Israel also bombing parts of Beirut and other Lebanese cities; this 60-day ceasefire agreement may pave the way for a more lasting ceasefire.
However, just hours before Biden's speech, the Israeli Air Force carried out its most intense attack on Beirut to date.
'Trump Trade' flashes $200 billion disaster.
Bitcoin's price has dropped from nearly $100,000 on Monday, with the pullback causing the total market cap of cryptocurrencies, valued at $3.2 trillion, to evaporate by approximately $200 billion.
Now, as a potential earthquake on Wall Street may hit Bitcoin next year, traders are nervously watching how low Bitcoin's price might drop, following the warning from crypto billionaire Michael Novogratz that Bitcoin's price could fall to $80,000 before rebounding.
Novogratz told CNBC: 'There is a lot of leverage in the system right now, and the crypto community has been leveraged to the extreme, so adjustments will occur.'
Novogratz predicts that Bitcoin's price may retreat to around $80,000 per Bitcoin, but he states that he expects it will not fall below this level—before Trump's victory in the presidential election, Bitcoin's trading price indicated a 'paradigm shift' in cryptocurrency regulation.
Novogratz, speaking about the incoming Trump administration, stated: 'Almost the entire cabinet owns Bitcoin and are advocates of digital assets.' He added that he believes it is inevitable for Bitcoin to eventually break through the $100,000 level.
'Typically, after the price reaches $100,000, there tends to be a pullback,' he said. 'If you know that our price will be higher, I wouldn't be surprised. We are in a price discovery phase. Supply is limited,' Novogratz stated.
The Federal Reserve is caught in a hawkish-dovish battle as the dollar defends its strong position.
Driven by strong economic data and a weakened stance from the Federal Reserve, the US Dollar Index shows a bullish tendency. Although a pullback has occurred recently due to profit-taking and geopolitical uncertainty, the upward trend remains intact. Technical indicators indicate that overbought conditions have eased, and consolidation may occur.
US consumer confidence improved in November, with the Conference Board Index rising from 109.6 to 111.7. The present situation index increased by 4.8 points to 140.9, and the expectations index slightly rose to 92.3.
Regarding the FOMC meeting minutes, Federal Reserve officials had differing views on further rate cuts but unanimously indicated that they would not explicitly hint at future policy directions. They emphasized monitoring economic trends amid data volatility and acknowledged the challenges in assessing the neutral rate's impact on economic activity.
Opinions vary, with some suggesting that if inflation remains high, rate cuts should be paused, while others argue for accelerating cuts if the economy weakens.
After the release of the FOMC meeting minutes, CME's Fed Watch tool estimates a 59% chance of the Federal Reserve further lowering interest rates by 25 basis points on December 18.
The benchmark interest rate on US 10-year Treasury bonds fell from a recent high of 4.50% to 4.29%.
US Dollar Technical Analysis
FXStreet analyst Patricio Martín stated that the US Dollar Index has strongly rebounded after falling from a two-year high, currently in a consolidation phase. The index is hovering around 107.00, close to the upper limit of its recent trading range.
Technical indicators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) suggest a possibility of a pullback, but the overall bullish momentum remains strong. The US Dollar Index may face resistance around 108.00 and support in the 106.00-106.50 range.
Breaking above 108.00 will indicate a continuation of the upward trend, while falling below 106.00 will suggest a potential deeper pullback.
Gold Technical Analysis
FXEmpire analyst Bruce Powers stated that gold fell below the lower ascending channel line on Monday and remained below that line on Tuesday. After breaking the overnight low, gold reached a low of $2605, subsequently finding support. This low completed a 61.8% Fibonacci retracement at $2607.
This places precious metals in a bearish position after a significant rise last week; on Friday, gold ended a five-day reverse trend while remaining in a strong position, breaking through a minor mid-term high of $2710. Nevertheless, Monday's upward momentum ended after reaching a minor new high of $2721. Sellers regained control from there, leading to a sharp drop in gold prices.
Despite last week's upward momentum, gold prices reclaimed the rising trend line and two moving averages, but on Monday, they fell sharply to a five-day low and closed weakly, offsetting any potential bullish signals. For example, as gold prices gradually reclaimed the ascending channel line, the 50-day line (orange, currently $2666) and the 20-day moving average (purple, currently $2662), potential resistance during the upward process was quickly overcome.
These lines represent the currently critical potential resistance areas, as corrections will lead to continued declines. In addition to new daily closing prices falling below moving averages and trend channels, please note that the 20-day moving average is beginning to fall below the 50-day moving average.
Due to the lower swing high on Monday, a descending ABCD pattern has been added to the chart to guard against adjustments evolving into new swing lows. Of course, considering the bearish closing price at the beginning of the week and the fact that it fell below the ascending trend line again on Tuesday, any rebound may face resistance, leading to a price drop.
The initial target of this pattern is $2470, where the price change between the two bearish volatility ranges AB and CD exhibits 100% symmetry. Since this price level aligns with the 61.8% Fibonacci level at $2473 and previous support and resistance areas, it becomes a lower target. Additionally, the ascending trend line also crosses this price area; if gold continues to weaken, attention should be paid to whether this trend line shows signs of support.
The chart shows that the descending parallel trend channel forms a parallel horizontal line along the top trend line, reaching the recent volatility low of $2537. It can provide guidance for gold's movement. For instance, resistance can be expected at the upper channel line or below it. Additionally, if gold breaks above this line and maintains above it, demand will improve rather than decline. If gold remains below the upper descending trend line, bearish conditions will be preserved.
Bitcoin Technical Analysis
CoinTelegraph notes that Bitcoin retraced 8.2% within four days after reaching a historic high of $99,609 on November 22. This decline resulted in $250 million in liquidations of bullish leveraged positions but failed to trigger panic or push key indicators into bearish territory.
From the purple area, it can be seen that Bitcoin's price rose by 22.6% from November 9 to November 13, leading buyers to clear $342 million through Bitcoin futures contracts. Thus, the latest price adjustment does not necessarily indicate a trend reversal but merely reflects that derivatives traders were temporarily over-leveraged.
To assess whether the inability to break the psychological barrier of $100,000 has affected investor sentiment, evaluating Bitcoin miners' activities is crucial. These entities collectively hold approximately 1.8 million Bitcoins, worth over $166.3 billion, and are responsible for releasing 3.125 Bitcoins for each mined block.
Recent data shows that miners are reducing their Bitcoin positions at a rate of about 2,500 Bitcoins per day, equivalent to $231 million. In contrast, the average daily inflow of the US Bitcoin spot ETF from November 18 to November 22 was $670 million.
While some may attribute Bitcoin's failure to break the $100,000 mark to miner sell-offs, this explanation seems insufficient. Notably, MicroStrategy announced on November 25 that it acquired Bitcoin for $5.4 billion, indicating strong institutional demand.
Long-term holders have also intensified selling pressure. Historical patterns show that Bitcoin's price exhibited similar behavior in late March, prior to which Bitcoin made several unsuccessful attempts to break the $73,500 mark. Profit-taking by some whales triggered a two-month adjustment, ultimately leading Bitcoin to fall to a low of $60,830 on May 1.
If historical trends hold, Bitcoin's price could drop to around $82,500—a 17% standard retracement from its historical high—not signaling a bear market. In contrast, during the pullback from March 14 to May 16, the holdings of the US Bitcoin spot ETF saw little change, with MicroStrategy purchasing 24,400 Bitcoins in a single transaction.
This time, the situation is very different. Spot ETF buying remains strong, and other institutional participants have followed MicroStrategy's lead. These include Japan's MetaPlanet, the US's Semler Scientific, and the leading global Bitcoin miner Marathon Digital. This coordinated activity indicates an increasing corporate adoption rate, which may provide solid support for Bitcoin's price.
Although it is uncertain whether these entities will maintain their pace of Bitcoin acquisitions, reports indicate that Microsoft shareholders are discussing similar strategies, further boosting market confidence.
If whales and arbitrage desks expect prices to plummet, hedging costs will rise, pushing the bearish/bullish ratio above 6%. A key indicator here is a 25% delta deviation, which in neutral markets typically ranges from -6% to 6%. Deviations beyond this range indicate heightened fear or excessive optimism.
Data from the options market highlights this resilience, as the bullish sentiment observed from November 16 to 26 has faded, with put (sell) and call (buy) options now trading at similar premiums, indicating a shift toward neutral sentiment. However, on-chain indicators and derivatives show no signs of pressure or impending bear markets, suggesting a bullish outlook for Bitcoin's price.
