ALT5 Sigma Digital Assets Morning Call
Major crypto assets start the week on a down note
NEW YORK, NEW YORK, US, April 18, 2022 /EINPresswire.com/ --• Higher US yields and dollar put renewed pressure on crypto prices
• Bitcoin and Ethereum move below Important psychological levels
• China GDP beat expectations, but downside risks persist
• Ethereum Foundation details ETH treasury holdings
Major crypto assets are lower Monday morning, with bitcoin, Ethereum and Solana currently trading below key psychological levels. After stabilizing late last week and into the weekend, prices have come under renewed downward pressure, partly in line with gains in US yields and the US dollar, conditions that have recently concurred with lower crypto prices.
Crypto moving inversely to the US dollar
The yield on the US 10-year Treasury note rose to 2.87% earlier today, the highest since late-2018 and approaching the 3% threshold. The move higher in yields is taking the US dollar along with it, with the Dollar Index (DXY) moving above 100 and trading near two-year highs. Given that crypto assets such as bitcoin are sometimes seen as a hedge against US dollar declines—and often moves inversely to the greenback—the rise in yields/dollar is putting some pressure on major crypto assets.
On the charts
Bitcoin’s move below $40,000 opens scope to test support at the cluster of March lows between $37,100 and $37,600. Ethereum has marginally broken support at the $2,950 area defined by both the 50-day and 100-day moving averages, and a sustained break of those levels would be bearish for near-term sentiment.
China GDP beats expectations, but future risks remain
As markets continue to focus on the macro backdrop, China developments remain an important component of the broader picture. Crypto investors need to monitor these developments, as China’s economic performance has material ripple effects on global growth, and its policy initiatives can have a more immediate impact on risk appetite in financial markets.
China’s economic growth rate in the first quarter beat expectations, with GDP rising 4.8% y/y, notably above the median forecast of 4.2%. The outcome avoided concerns that the covid related lockdowns would impose a larger drag on growth. That said, the lockdowns have continued into Q2 and the risk to this quarter’s growth remains.
A modest policy easing measure should be followed by more aggressive moves
Responding to the growth risks, China’s central bank announced a reduction in banks required reserve ratios (RRR), essentially freeing up more bank capital for lending. The policy easing was generally expected but the relatively modest size (a 25bp reduction for the largest financial institutions) has not generated much reaction—let alone enthusiasm—in China’s financial markets. So while the RRR cut is welcome, many China watchers expect further easing measures going froward, including additional cuts to the RRR as well as policy interest rate cuts.
Ethereum foundation details ETH holdings
The Ethereum Foundation reported that ETH accounts for 80.5% of the non-profit’s $1.6 bln treasury holdings, according to Crypto Briefing. The Ethereum Foundation is the largest non-profit supporting the Ethereum ecosystem. Its actions are closely monitored in the crypto community in part because in the past it has sold ETH (as part of its periodic portfolio rebalancing) at what turned out to be very advantageous levels, near cyclical market peaks.
Robert Lynch
Head of Research and Strategy
ALT 5 Sigma Inc.
bob@alt5sigma.com
ABOUT ALT 5 Sigma
ALT 5 Sigma is a global fintech that provides next generation blockchain powered technologies for the trading, clearing, settlement, payment, and insured custodianship of digital instruments. ALT 5 was founded by financial industry specialists out of the necessity to provide the digital asset economy with security, accessibility, transparency, and compliance. ALT 5 provides its clients the ability to buy, sell and hold digital assets in a safe and secure environment deployed with the best practices of the financial industry. ALT 5 Sigma's products and services are available to Banks, Broker Dealers, Funds, Family Offices, Professional Traders, Retail Traders, Digital Asset Exchanges, Digital Asset Brokers, Blockchain Developers, and Financial Information Providers. ALT 5's digital asset custodian services are secured by Fireblocks.
DISCLAIMER:
Digital Asset Morning Call is for informational purposes only and does not constitute, either explicitly or implicitly, any provision of services or products by ALT 5 Sigma ("ALT 5"). Investors should determine for themselves whether a particular service or product is suitable for their investment needs or should seek such professional advice for their particular situation. ALT 5 Sigma. makes no representation or warranty to any investor regarding the legality of any investment, the income or tax consequences, or the suitability of an investment for such investor. ALT 5 Sigma does not solicit or provide any financial advice. This is at the sole discretion of the individual.
ALT 5 Sigma Canada Inc
ALT 5
+1 888-778-7091
ALT 5 Sigma Canada Inc
ALT 5 Sigma
+1 2899804470
email us here
Legal Disclaimer:
EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.
