We’ve talked about bond yields quite often in this update. While not the most exciting topic, it is a fundamental part of the US and the world economy. Yesterday, following the previous rise to 1.4%, the 10-year yield rose even higher, to 1.55%. Historically speaking, that’s not high, but given the current climate and equity valuations, many investors started to question their allocations.
The S&P dropped by more than 2%. The tech-heavy Nasdaq fell more than 3.5%. Gold also dropped about 2% due to the risk-off sentiment.
In crypto, we were not that affected, or rather, the downside action seems to have a reasoning of its own. BTC is down about 3% on the day, currently closing the day at $48,000.
While alts are holding up—the BTC Dominance index is still at 62.3—ETH dropped more than 6%. LINK is down almost 8%. Other alts are either flat and or ended up higher, like LTC, ADA, and STX.
Looking at the chart, it’s hard to make sense of where we are headed short-term. Naturally, the all-time high beckons us, but the rapid retracement earlier this week has left us… less confident.
Traditional markets definitely have had an influence and, should we see further retracement there, the bearishness could permeate crypto as well.
More specific to crypto, we’re at the mercy of whales, or large participants, playing games on retail and options traders—remember, we’ve got a massive options expiry today.
I would point to a very bullish piece of data, though. CryptoQuant’s tracking of Coinbase Pro outflows shows a massive withdrawal yesterday, suggesting institutions were happy buyers in the 48K region.
I would also like to point out two Glassnode charts: one showing the supply of stablecoins and the other showing the illiquid supply of BTC. You guessed it—one is trending up, while the other is inexorably trending down. If crypto prices venture further down, I would dare say that—at least in the long-term—there’s more demand and less supply. “Number go up.”
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