News and analysis

Litecoin (LTC) has declined by 8.8% this week, trading at $104.18, underperforming the broader cryptocurrency market as Bitcoin (BTC) falls by 3.3% to $94,705. Litecoin’s weakness has been highlighted by its drop to a weekly low of $97.06, breaching the key support level at $100.00.

Further downside pressure on Litecoin could emerge if Bitcoin falls below its critical support at $89,000-$91,000, with a potential slide to $80,000. Such a move would likely exacerbate selling in Litecoin, dragging prices lower.

From a fundamental perspective, there is little to support Litecoin at present. While the network recently achieved a milestone of 300 million transactions, the number of active wallets has declined by 40,000 in recent days. This decline in user activity reflects waning network engagement, which poses a negative outlook for the altcoin.

The very first slice of statistical data on business activity from the United States this year reaffirmed an almost clear irrelevance and even potential hurtfulness of any immediate steps towards further lowering interest rates on U.S. Dollar-nominated loans from a purely economic point of view. The ISM Manufacturing PMI (Purchasing Managers Index), based on polls compiled from executives in over 400 industrial companies in late December, came out at 49.3 points vs 48.4 a month ago and 48.2 in average analyst estimates. This showed that a slowdown was occurring at a slower or even insignificant pace, keeping inflation risks on the table, especially when the price component increased from 50.3 to 52.5 with a similar rate of increase in new orders. Meanwhile, non-manufacturing PMI came out at 54.1 on Tuesday, compared to 53.5 in analyst polls and 52.1 a month ago, with a contribution of business activity components even jumped to a surprising 58.2 against declining from 57.2 in November to only 53.7 in December.

In other words, the economy is not cooling, and is rather in a positive acceleration, which in turn may lead to a recovery in wage rises and therefore to higher demand pressure, which may be reflected soon in higher producer purchase and output prices. Doubts of the major U.S. financial regulator are understandable at this point after its triple rate cut from 5.5% to 4.5% in 2024. The Federal Reserve (Fed) will now pay closer attention not only to consumer inflation measures, but also to producer prices (PPI), which is just going to be released on coming Tuesday, January 14. And so, this will become the next reference point in the further U.S. Dollar’s trajectory. The Greenback index (DX) is picking up steam since reaching a new record high for the last two years at 109.35, with its temporary pullbacks being limited by a 107.50 support area that previously served as a strong multi-month technical resistance.

In this context, the British Pound (GBPUSD) updated its lows since November 2023 to touch 1.2237 on January 9, EURUSD feels quite comfortable within a range between 1.02 and 1.0450, which corresponds to its 2-year bottom, and having a bias towards a possible further decline. The Aussie (AUDUSD) is one-step away from taking the path for a breakthrough to a quite unknown territory of its 5-year lows that were last time recorded when the initial outbreak of the Covid-19 happened.

A varying extent of the American Dollar strength is surely data dependent as the market community is eagerly waiting for the U.S. job data later today. The average expectations on new Nonfarm Payrolls is just a bit above 150,000 vs 227,000 in early December 2024 and nearly 160,000 for the previous four months on average. However, any value close to 150,000, plus or minus 20,000, or any higher number, may be considered as another positive sign for the Greenback, following the ADP national employment report which contained only 122,000 on Wednesday. The oppressive nature of average hourly wage in its dynamics, +0.4% each time from September to December, also matters.

The protective quality of investing more funds into the U.S. Dollar and U.S. bonds against tariff threats is switched on anyway, based on more than a 95% chance for the Fed to keep rates on pause at its January 29 meeting, according to CME's FedWatch tool. Federal Reserve officials never go against a well-established market consensus, when it is almost unanimous, for not to rock the boat of relative market trend stability. The central bankers' reluctance to shift the Fed fund rates lower before mid-March, if not early May, continues to play in favour of short-term speculative transactions on the foreign exchange market, bearing in mind all the listed currency instruments. Some intraday volatility may take place, especially in the case of appearing an abnormal two-digit non-farm value, but not a change in overall direction.

Meta Platforms (META) revisited the area near its all-time highs after its leading founder Mark Zuckerberg’s most encouraging announcement that his media giant is embarking on its journey to restore the right to free expression of opinion. When wearing an extremely rare Swiss watch with an exclusive Greubel Forsey "Hand Made 1" writing on his left wrist (worth about $900,000, according to Bloomberg), he shed some light on the social platform owner's decision to end its previous thorough and boring automatized fact checking procedures in a Facebook video this Tuesday. "We will allow more speech by lifting restrictions on some topics that are part of mainstream discourse and focusing our enforcement on illegal and high-severity violation," he, in particular, said, while claiming "a more personalized approach" to political content, so that "people who want to see more of it in their feeds can". In an official article headed "More Speech and Fewer Mistakes", Meta noted later that "on platforms where billions of people can have a voice, all the good, bad and ugly is on display... but that’s free expression".

Since 2019, Meta developed growingly complex systems to manage content in response to "societal and political pressure" but now they have become ready to admit "this approach has gone too far". "What started as a movement to be more inclusive has increasingly been used to shut down opinions and shut out people with different ideas", is one of Mark Zuckerberg's actual quotes, as one more of his sentences said "we have reached the point that there are just too many mistakes and too much censorship", so that "it's time to get back to our roots". Starting in the U.S., the largest social community in the world (more than 3 billion users) would change its algorithm, moving to a so-called "Community Notes" mode to personally complain about unacceptable and intolerable posts or remarks on the platform.

This happened in the very first regular trading week of January, and so the initial and enthusiastic bullish wave up to $631.55 per share was quickly offset by an immediate technical recovery to $605 and below. Yet, the Wall Street crowd bought up the dips without shelving. There's not a doubt in my mind that postponed and more lasting effects are all still ahead, since this is a real revolution in adjusting Facebook and Instagram closer to the standards, which were recently refounded by the former Twitter, now X. The shift was clearly launched ahead of the president-elect Trump's inauguration, as the key MMA figure Dana White, who was an important part of Trump's election campaign, was newly appointed to Meta's board. Another Republican policy executive Joel Kaplan has become a head of the global policy department at Meta. Zuckerberg flew down to Trump's Mar-a-Lago place in November and later donated $1 million to his inaugural fund, blaming the present Democratic administration for increased censorship pressure that prompted a global trend towards increased regulation. I believe this is a time for reckoning, which can create an additionally positive momentum for the stock's further rising.

My personal target price for Meta stock is well above $750, as I already assessed the company as very promising before the announced changes in policy. More suitable textual and visual stuff without artificial limitations on free discussion will certainly attract more advertisers, also encouraging a large number of former users to return for posting and reading. It is well known that many temporary bans of users were even too far from being based on divisive political considerations or other most controversial topics like the race card, national conflicts or vaccinations. I personally know of some most ridiculous cases like Christmas cards featuring a Madonna nursing a baby being removed, and users were banned, or art posts with ancient Greek sculptures that included bare chests of statues as another good and strange example. Sometimes quite harmless messages were flagged as hate speech by stupid algorithms. Of course, many people were offended because of this kind of attitude, and they have gone away, but now some of them may try to restore their relationship with Facebook and Instagram. As a result, Meta will be able to raise even more money, adding additional revenue and profits to its records of 2024. Artificial intelligence recommendations and targeted advertising will only help in doing business.

We'll see if there are many taboo topics. But I'm an optimist, looking forward to a flurry of memes about the "great state of Canada", Greenland, all that hyping trolling of Trump and Musk and other current agenda. I don't know if our world is starting to return to a more or less normal normality, but Meta seems to have decided to repaint its way of mirroring the real world into colours that can better match the full spectrum of customers' views. I saw it was good. And here is my final piece of The Rolling Stones styled ode. Please sing it mentally in Mick Jagger's voice:

Smiling Facebook I can see,

And it’s for me, I sit and watch as tears go Bu-u-u-uy...

VeChain (VET) has fallen 12.7% this week, trading at $0.0445, underperforming the broader cryptocurrency market. Bitcoin (BTC), the leading cryptocurrency, has declined by 5.6% to $93,220, with bearish momentum building as it approaches key support at $89,000-$91,000. This decline is largely attributed to tightening monetary conditions in the United States, which continue to weigh on risk assets. Investor confidence is further shaken by significant net outflows from spot BTC-ETFs, which lost $583 million on Wednesday, marking the second-largest single-day outflow on record.

If BTC falls below the critical support level of $89,000-$91,000, VeChain is likely to extend its losses, with prices potentially declining another 10% to $0.0400. A sustained drop in BTC could push VET even lower, towards $0.0300. Conversely, a strong rebound in BTC prices to the $100,000 level could drive VET back up to $0.0500, representing a recovery of approximately 12% from current levels.