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Bitcoin is showing signs of a potential bull market resurgence as it approaches the end of Q1 with near two-week highs. However, market sentiment is mixed, with many traders anticipating a price dip that could even reach new multimonth lows. The Relative Strength Index (RSI) has broken a 4-month downtrend, signaling a bullish continuation, which could lead to significant price movements if confirmed. Despite this, short-term holders are facing unrealized losses, adding pressure to the market. On a positive note, stablecoin reserves on Binance have reached all-time highs, suggesting growing investor confidence. The market is also watching the upcoming Personal Consumption Expenditures (PCE) index release, which could influence risk assets. Amidst these developments, traders remain cautious, with some predicting a potential drop to $80,000 before any further recovery or new highs.
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Taiwan Semiconductor Manufacturing Co. (TSMC) has highlighted significant challenges in maintaining compliance with export controls, particularly after its AI silicon was found in products of US-sanctioned Huawei Technologies Co. via intermediaries. In its latest annual report, TSMC noted that its position in the semiconductor supply chain restricts its ability to monitor the final use or users of its products, complicating efforts to prevent misuse or unauthorized diversions. Despite its efforts to comply with export regulations, TSMC admits there is "no assurance" against compliance issues. The company has been working with authorities following an incident where its chips were potentially diverted to Huawei, which led to a halt in shipments to a client. This situation underscores the broader geopolitical tensions, with the US implementing new regulations to restrict China's access to advanced AI chips, and blacklisting companies involved in such diversions.
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The escalating trade war between the US and China has led to significant economic repercussions globally. China has criticized the US for using tariffs as a tool to coerce other nations into reducing trade with Beijing, describing it as an act of 'unilateral bullying'. Despite this, President Trump has expressed optimism about negotiating trade deals, hinting at possible tariff adjustments to protect US consumers. The US has imposed tariffs on Chinese imports reaching up to 245%, prompting China to retaliate with a 125% duty on US goods. This tit-for-tat has not only strained bilateral relations but also impacted various sectors. For instance, baby gear manufacturers are facing potential price hikes and supply shortages due to the high dependency on Chinese production. Similarly, the cosmetics industry, particularly companies like e.l.f. Beauty, are at risk as they heavily source from China. The gaming industry also anticipates disruptions with the launch of new consoles and games potentially affected by these tariffs. Amidst these tensions, China's ambassador to the US has called for peaceful coexistence, yet remains prepared for further conflict if necessary.
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Gold prices have soared to unprecedented levels, reaching above $3,385 an ounce, driven by a combination of factors including a weakened US dollar, President Trump's criticism of the Federal Reserve, and persistent trade war tensions. Trump's contemplation of firing Fed Chair Jerome Powell has raised concerns about the independence of the US monetary policy, potentially eroding confidence in the dollar and increasing the appeal of gold as a safe-haven asset. This year, gold has seen a robust demand, with central banks adding to their reserves and investors continuously investing in bullion-backed ETFs for the longest streak since 2022. The trade conflict has unsettled markets, reducing the appetite for risk assets and accelerating the rush towards havens like gold. Additionally, the weakening dollar and positive forecasts from banks like Goldman Sachs, predicting gold could hit $4,000 by mid-next year, further support the bullish trend in gold prices.
