Bitcoin

The Ethereum will be weakened against Bitcoin if the Treasury Department’s returns rise. Will the ETH aid rally come?

Ethereum’s native cryptocurrency, Ether (ETH), flopped again against Bitcoin (BTC), with the BTC / USD pair rebounding more than 8% on March 18.

There are two likely reasons why the ETH / BTC pair is failing to break through a large level of resistance.

First, BTC rebounded sharply in a brief moment after most of the market was tight for the past few daysand outperforms most altcoins.

The Ethereum will be weakened against Bitcoin if the Treasury Department’s returns rise.  Will the ETH aid rally come?
The Ethereum will be weakened against Bitcoin if the Treasury Department’s returns rise. Will the ETH aid rally come?

Secondly, The macroeconomic outlook for the risk market is deteriorating due to rising yields on 10-year US TreasuriesThis could put further selling pressure on altcoins, which are generally lower in volume and liquidity than BTC.

Despite optimistic key figures in the chain, ETH is rejected at key level

According to the trader known as “Trader XO” ETH declined at a key level in the ETH / BTC chart.

The dealer emphasized that ETH needs to stay above the low support zone at 0.029 BTC in order for the short-term bull market structure to remain intact.

ETH / BTC pair with key levels. Source: TraderXO, TradingView.com

If ETH rebounds from the low range of around USD 1,720 on the ETH / USD pair, you have a better chance of seeing the rally continue. He said::

“$ ETH – Rejected from average as expected. Ideally, I would see the lows hold here. I wouldn’t mind deviating from the lows either, to be honest, it would give me more conviction to get into the #Ethereum come and wait patiently for the structure to form before entering. Other side panels first. “

Despite the stagnation of the ETH / BTC pair Analysts say Ethereum’s on-chain data points and fundamentals remain very bullish.

An Ethereum analyst and investor named “DCinvestor” He noted that the upcoming EIP-1559 proposal and Proof of Stake (PoS) in Ethereum would make ETH tighter.

These two factors, combined with the decline in ETH reserves on the exchanges, as Cointelegraph previously reported, generally draw an optimistic outlook for ETH in the medium termThe analyst pointed out::

“With the advent of EIP-1559 and proof-of-stake, the supply of ETH can never exceed $ 120 million, which is extremely tight considering how absurdly useful it certainly is, 5.7 times that $ 21 million BTC, but it’s sustainable and roughly 20 times more useful than programmable money and collateral. “

Macro outlook, government bond yields remain worrying

The Treasury Department’s 10-year return momentum is likely the main catalyst behind Bitcoin and ETH’s weakened momentum over the past 12 hoursas shown by the inverse correlation in the graph below.

BTC / USD (blue) vs. ETH / USD (orange) vs. TY10 (light blue). Source: trade view.

Portfolio managers and strategists have raised concerns about the overheating of the bond market and its potentially negative impact on the risk market.

Hinesh Patel, Portfolio Manager at Quilter Investors, said:

“While the only offer now is arguably not to act, whatever Powell is doing in this situation, the Fed is pushing bond markets into danger. If they do nothing, equity market bonds will push yields higher in search of it . ” The Fed increases or adjusts bond purchases. If she acts now, she will be accused of stimulating too far and walking too far. “

Bitcoin, Ethereum and the rest of the cryptocurrency market could decouple from the risk market and stocksIdeally, however, the US Treasury’s return should stabilize so that the crypto market can see a sustained upward trend in the short term.

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