Crypto Market Rebounds as Trade War Fears Ease
1min read The crypto market stabilized today as trade war jitters eased, with BTC, ETH, and XRP prices rising by 6%, 7.26%, and 5.6% respectively in the last 24 hours. From a macro perspective, falling US bond yields point to a strong crypto rebound, while the VIX index urges caution.
The bond market is providing relief to crypto investors as yields fall across the board. The ten-year yield dropped to 4.25% from the year-to-date high of 4.80%, below the 200-day moving average, suggesting further declines ahead. The 2-year and 30-year yields have also dropped to 3.98% and 4.5%, much lower than their highest levels this year. Falling bond yields signal that the market anticipates the Fed to change its tune and deliver more cuts this year, with the swap market estimating three rate cuts instead of the two hinted by the Fed.
BTC, ETH, and XRP prices often perform well when the Fed is slashing interest rates, as it often leads to a rotation from value to growth. Odds of a rate cut have risen after Donald Trump unveiled his trade war against top countries like Mexico and Canada. However, the risk for cryptocurrencies is that the VIX index, a popular volatility gauge in Wall Street, has risen to $26.2, its highest level since December 19.
Looking ahead, popular BTC, ETH, and XRP coins will react to the upcoming crypto summit, nonfarm payrolls data, and Trump’s crypto reserves news, in addition to macro events.
ETH price remains under pressure almost a month after it formed a death cross pattern, hovering near the key support at $2,155, the lowest level in August and September last year. The death cross points to more downside, with a potential near-term move below the $2,000 support level. A drop below that level will be a sign that bears have prevailed, and could open the door for a crash to $1,500 and below, as Ethereum has already formed a triple-top pattern at $4,000.
XRP is at a significant risk of a bearish breakdown as long as it is below the key level at $2.918 