The 10-year US treasury bond has reached the highest level since 2007, exceeding 4.9%, which has shaken the risk assets such as stocks and cryptocurrencies
The 10-year US treasury bond has reached the highest level since 2007, exceeding 4.9%, which has shaken the risk assets such as stocks and cryptocurrencies. However, a careful observation shows that the increase of treasury bond has a greater impact on the second largest cryptocurrency, ETH, than BTC.
Ethereum shines brightly under US treasury bond bonds
Ethereum as encryptionCurrency investors provide the opportunity to earn pledge rewards by pledging ETH assets online. However, the yield of this pledge process has dropped to an annual low of 3.5%, far below the previous peak of over 8% and also the lowest level in the past 10 months.
At present, the yield of ETH pledge is about 5% lower than that of US treasury bond bonds, which constitute the basis of the traditional financial system. This inconsistency indicates that due to a departure from the ultra-low interest rate environment prevalent during the pandemic, the cryptocurrency market sometimes exhibits high volatility and its attractiveness has weakened.
Since the beginning of the year, the price of ETH has increased by 32%, while the price of BTC has increased by 77% during the same period. On the other hand, when the yield of the US 10-year treasury bond bond rose by 50 basis points last month, the ETH price fell by more than 5%, while the BTC price rose by 8%.
ETH pledge has become less attractive
With the update of the Ethereum network, starting from September last year,ETH pledge has become popular.However, the number of ETH pledges in September decreased by 67% compared to May, reaching 1.2 million.
As of the time of writing, ETH's price is approximately $1580 and is attempting to break through the resistance level of around $1600. The fact that the number of active wallet addresses on the Ethereum network has exceeded 100 million indicates that this resistance may soon be overcome.
Can the ETH market reverse
Ethereum did not continue to decline after breaking the previous low yesterday, forming a bottom deviation structure and experiencing a wave of rebound. It hit the 1575 line and then fell back. In the morning, the market once again rose to the 1595 line, but was hindered. Currently, the currency price is operating around 1580, and the four hour level market has risen sharply, but Quanneng has not kept up. It was suppressed by the 1600 level above and retreated.
In the short term, we focus on the support of the 1570 region. If we cannot break back, we can move in more. From a daily perspective, the overall structure still belongs to a bearish trend. Although the closing rebound is not sustainable, the support below is also relatively strong, making it difficult to fall below the 1500 level, forming a range fluctuation trend. Before breaking the limit, we can treat it as high and low to hold the limit. The upper limit suppresses 1600-1620, and the lower limit supports 1570-1550
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