Ether (ETH), Ethereum’s original cryptocurrency, failed to breach again against Bitcoin (BTC) due to BTC / USD surging more than 8% on March 18th.

There are two possible reasons why the ETH / BTC pair has not been able to breach an important resistance level.

First, BTC has gathered a lot in a short squeeze after most of the market has been short in recent days, bypassing most alternative cryptocurrencies.

Second, the overall macroeconomic outlook for the risk market is deteriorating due to higher yields on 10-year US government bonds, which peaked in 14 months at 1.75%. This may put further pressure on selling altcoins, which tend to have less volume and liquidity than BTC.

ETH is down at a key level despite the network’s optimistic estimates.
According to a trader under a pseudonym “Trader XO”, ETH is down centrally on the ETH / BTC chart.

The trader stressed that ETH must remain above the 0.029 BTC lower support range for the short-term bullish market structure to remain unchanged.

If ETH breaks the range around $ 1,720 for ETH / USD, the rally is likely to continue. He said:

“$ ETH – rejected in the middle as expected. I’d rather see dips here. You wouldn’t mind deviating from the recession anyway – it will give me more confidence to move to # Ethereum. Wait patiently for the structure to form earlier. You jump. More to the side.” Initially. ”
Despite the ETH / BTC slump, analysts say the fundamentals and data points in the Ethereum chain remain very optimistic.

Ethereum analyst and investor known as DCinvestor indicated that the upcoming EIP-1559 Proof Staking (PoS) proposal on Ethereum will reduce ETH.

These two factors, along with declining ETH exchange reserves as previously reported by Cointelegraph, are broadly optimistic about ETH over the medium term. The analyst notes:

“ With the advent of EIP-1559 and Proof of Stake, the dollar ETH bid could never exceed 120 million tokens, which is extremely rare considering how ridiculous it is to be useful, that’s ~ 5.7 times more than 21 million BTC, but that’s sustainable, 20 Times more beneficial than programmable money and security. ”
The macro scene, government bond yields are still worrying
The 10-year drive in US government funding has likely been the main catalyst for weakening Bitcoin and ETH over the past 12 hours, as the reverse correlation can be seen in the chart below.

Portfolio managers and strategists have expressed concern about the overheating bond market and its potential negative impact on the risk market.

Hinesh Patel, Portfolio Manager at Quilter Investors, said:

While not responding at this point may be the only suggestion, regardless of what Powell is doing at the moment, the Fed is putting bond markets at risk. If they do nothing, the bond market will continue to raise interest rates in search of the perfect solution. The Fed will be accused of over stimulation and excessive excitement to increase or adjust bond purchases while trading. ”
Bitcoin, Ethereum, and the rest of the crypto market can be separated from the risk and equity markets. Ideally, however, you should stabilize US Treasury profits for the cryptocurrency market to see a steady trend in the short term.

Source: CoinTelegraph