As Bitcoin and Ethereum crash, yields on government bonds continue to rise


Bitcoin (BTC) and Ether (ETH) started the week with negative conditions as investors prepared for the rate decision of central banks such as the US and the Bank of England.

Bitcoin price failed to hold $20,000

BTC price failed to pass the psychologically important $20,000 support on September 19. The BTC/USD pair fell 6.5 percent to around $18,250, while ETH corrected 4% to around $1,280.

Alongside the two biggest cryptos, the crypto market in general has been in a downtrend since mid-August. BTC and ETH have lost 28 percent and 37 percent of their market value respectively since this period.

As Bitcoin and Ethereum crash, yields on government bonds continue to rise
Daily price chart of BTC/USD and ETH/USD pairs. Source: NewsOfFinance

A global 500 basis point increase awaits us?

The Fed and other central banks could attack rising inflation this week with rate hike decisions.

collected by Bloomberg data According to the report, the Fed and Sweden’s central bank Riksbank, the Swiss National Bank, Norway’s central bank Norges Bank, the Bank of England and other central banks may decide to increase interest rates by 500 basis points in total, or 5 percent.

As Bitcoin and Ethereum crash, yields on government bonds continue to rise
The days when central banks will hold the interest rate meeting in the week ending September 24. Source: Bloomberg

The reaction of risky assets in the market to these meetings was negative.

The global stock market index ACWI, which MSCI brings together the stock markets of developed and emerging markets, fell to $ 84 after falling by 4.25 percent. The index peaked at $107.39 in November 2021. Interestingly, Bitcoin and Ethereum also peaked at $69k and $4,950 in the same month, respectively.

As Bitcoin and Ethereum crash, yields on government bonds continue to rise
ACWI weekly price chart. Source: NewsOfFinance

Therefore, this deepening correlation, which is shown and resolved by the possibility of rising interest rates around the world, may continue to put pressure on BTC and ETH.

Investors may instead turn to low-volatility assets such as dollars and government bonds.

For example, the US Dollar Index started the new week with a 0.5 percent rise at 110 points, after the highest weekly close since 2002.

Similarly, the yield on six-month U.S. government bonds came in at 3.79 percent if held to maturity. Offering a guaranteed return in the short term, this tool offers investors a safe investment alternative. The yield on 10-year government bonds has also surpassed the peak in June, when Bitcoin hit the bottom.

As Bitcoin and Ethereum crash, yields on government bonds continue to rise
US government bond yields as of September 19. Source: Bloomberg

Other shorter-dated and longer-dated T-bills yield similar returns.

Will Bitcoin fall to 14-15 thousand dollars, Ethereum to 750 dollars?

Some on-chain and technical indicators point to a sudden collapse for the Bitcoin and Ethereum markets.

The Bitcoin Spent Output Age Band (7-10 years) indicator, which tracks BTCs spent first and categorizes them by coin age, showing that more than 5,000 BTC were moved on Sept. MACD_D, one of the users of the CryptoQuant platform, said that this is generally bad news for the Bitcoin price. thinks.

“A serious downtrend could be seen in the future if a saver who has held his BTC for seven years is holding more than 5,000 BTC,” the verified user noted.

“This indicator has signaled 7 times in the past and has resulted in a decline in all but 1 (February 07 ’21).

As Bitcoin and Ethereum crash, yields on government bonds continue to rise
Bitcoin spent output age bands (7-10 years) indicator. Source: CryptoQuant

The user, in particular, thinks that Ether dominance exceeding 20 percent indicates that “the bubble will burst soon”.

“If ETH dominance rises to more than 20 percent, it is a good time to take a short position.”

It may interest you: Goldman Sachs $12,000 warning for Bitcoin

Technically speaking, Bitcoin has entered the breakout phase of a “bearish pennant” pattern and may decline towards the pennant’s profit target of around $14,500 in 2022.

As Bitcoin and Ethereum crash, yields on government bonds continue to rise
The daily price chart of the BTC/USD pair showing the bearish pennant breakout pattern. Source: NewsOfFinance

On the other hand, Ether is experiencing a break in the symmetrical triangle formation. ETH price may decline to $750 with the expected breakout.

As Bitcoin and Ethereum crash, yields on government bonds continue to rise
The daily price chart of the ETH/USD pair showing the symmetrical triangle breakout pattern. Source: NewsOfFinance



Soruce : https://tr.cointelegraph.com/news/bitcoin-ethereum-crash-continues-as-us-10-year-treasury-yield-surpasses-june-high

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