In recent days, the United States 10-year Treasury yields have seen a significant increase, reaching levels above 4.8%, which is the highest it has been since 2007. This surge in yields has caught the attention of financial experts and investors, who are now closely monitoring the situation.
One notable figure, Jeffrey Gundlach, the CEO of DoubleLine Capital, took to the social media platform X (formerly known as Twitter) to express his concerns about the narrowing spread between the 2-year and 10-year Treasury yields. Gundlach highlighted that this spread has decreased from 109 basis points a few months ago to just 35 basis points currently. He strongly advised that this development should serve as a recession warning for everyone.
Another prominent figure, Arthur Hayes, the former CEO of crypto exchange BitMEX, echoed similar concerns. Hayes warned that the government may have to resort to printing money in order to save the bond market. He stated that if a condition known as a “faster bear steepener” occurs, where long-term interest rates rise more quickly than short-term rates, it could potentially lead to the collapse of firms. In turn, some investors believe that this scenario could trigger a bull market for cryptocurrencies.
Interestingly, amidst the uncertainty in the macro environment, institutional investors have begun showing interest in cryptocurrencies. According to the latest Digital Asset Fund Flows Weekly Report by CoinShares, there has been a significant inflow of $21 million into digital asset investment products, marking the first positive inflow in six weeks. This indicates that institutional investors are starting to see cryptocurrencies as a viable investment option.
With these developments in mind, many are turning to charts and technical analysis to discern the potential movements of various cryptocurrencies. Let’s take a closer look at the analysis for some of the major cryptocurrencies.
Starting with Bitcoin (BTC), the price recently reached above $28,143, but encountered aggressive selling pressure from bears. However, the bulls managed to hold ground at $27,160. The presence of an upsloping 20-day exponential moving average and a positive relative strength index suggests that the bulls currently have the upper hand. If the price breaks above the resistance level at $28,143, it could trigger a short-term double bottom pattern, potentially leading to a target objective of $31,486. However, if the price fails to break above the resistance and falls below the 20-day EMA, it may consolidate between $24,800 and $28,143 for a while.
Moving on to Ethereum (ETH), the price faced strong resistance at $1,746, indicating fierce selling pressure from bears. The 20-day EMA is beginning to flatten out, indicating a balance between supply and demand. If the price manages to turn up from the current level, the bulls will attempt to break the resistance at $1,746, potentially completing a double bottom pattern with a target objective of $1,961. Conversely, if the price falls below the moving averages, it may continue to consolidate within the range of $1,531 to $1,746.
Next up is Binance Coin (BNB), which saw a jump above the $220 resistance level, but failed to sustain the breakout. This failure and the inability of the bulls to maintain the price above the 20-day EMA is seen as a negative sign, indicating that traders may be selling off. The price may fall to the uptrend line, but if it rebounds from this level, the bulls will attempt to push the pair above $220. A close above this resistance could signal the start of an upward movement to $235 and potentially $250. However, if the price breaks below the uptrend line, it may decline to the support level at $203.
In the case of XRP, the price managed to break above a symmetrical triangle pattern, indicating a potential uptrend. The bulls will aim to surpass the resistance at $0.56, which could mark the beginning of a new upward movement. The price may then target the pattern at $0.66. However, if the price turns down from $0.56 and falls below the uptrend line, it may indicate profit-taking by the bulls, resulting in a range-bound movement between $0.56 and $0.41 for a few more days.
Moving on to Solana (SOL), the price has been oscillating within a range between $14 and $27.12. Despite setups formed within a range being less reliable, they should not be disregarded. If the price turns up and breaks above the neckline, it could potentially rally to $27.12, with a pattern target of $32.81. However, if the price falls below the 20-day EMA, it may suggest a bearish sentiment, leading to a potential drop to $17.33.
In the case of Cardano (ADA), the price recently turned down from $0.27 and reached the 20-day EMA at $0.25. This level is crucial in the near term, as a rebound from the 20-day EMA could indicate a change in sentiment from selling on rallies to buying on dips. The bulls will then aim to push the price above $0.27, leading to a potential up-move to $0.29 and later to $0.32. However, if the bears manage to push the price below the 20-day EMA, the price may descend to the support level at $0.24.
Finally, Dogecoin (DOGE) experienced a minor rally above the 50-day SMA, but was unable to sustain the higher levels. This indicates that bears are still selling on minor relief rallies. Despite the bullish divergence seen in the RSI, suggesting a weakening grip by bears, the indicators are not providing a clear direction for the next move. As a result, it is advisable to wait for the price to either close above the 50-day SMA or fall below $0.06 before taking any directional bets.
In conclusion, the recent surge in United States 10-year Treasury yields has raised concerns among experts and investors. Meanwhile, institutional investors are showing increased interest in cryptocurrencies, with a recent inflow of $21 million into digital asset investment products. As for the major cryptocurrencies, technical analysis suggests potential movements and patterns to watch for. However, it’s worth noting that cryptocurrency markets can be highly volatile and unpredictable, so it’s important to approach them with caution and conduct thorough research.