- Ethereum price has made a bearish breakout in the past few days.
- The platform's total value locked (TVL) has slumped in the past few months.
Ethereum price has made a bearish breakout in the past few days as a somber mood engulfs the crypto industry. ETH coin plunged to a low of $1,544 on Friday, the lowest level since March 12th. It has fallen by more than 22% from the highest level this year, meaning it has moved into a bear market.
Bond yields rising
Ethereum price has been in a strong bearish trend in the past few days as investors focus on the falling interest in digital currencies. There is a sense in which many crypto investors have rotated to the stock market.
At the same time, there are concerns about the performance of the bond market. The yield of the 10-year and 30-year government bonds has jumped to the highest level in more than a decade.
In most periods, soaring bond yields mean that investors are anticipating more rate hikes by the Fed. If this happens, it will come at a time when the situation in the US and China is a bit mixed. For example, data from the United States shows that mortgage rates have jumped to the highest level in years.
At the same time, many Americans have started to default on their credit card debt and other loans. And the situation will worsen when millions of Americans restart paying their student loans.
China is another reason why Ethereum and other cryptocurrencies are sinking. Recent economic data from China showed that industrial production, manufacturing output, and retail sales slowed in July. Similarly, the country’s imports and exports have plunged hard in the past few months.
China is an important part for Ethereum and Bitcoin since many people are still trading these assets. Data by WSJ showed that Binance generates over 20% of its income from Chinese customers.
Additional data shows that DeFi TVL in Ethereum has slumped to $56 billion, a 11% drop in the past 30 days. It has fallen to 33.94 million ETH from the year-to-date high of 60 million ETH.
Ethereum price prediction
The daily chart shows that the ETH price has made a bearish breakout in the past few weeks. This sell-off gained steam last week as the coin fell to a low of $1,544. It is now moved below the 100-day moving average and is trading at the lowest level on June 15th.
Ethereum has formed what looks like a double-top pattern. Therefore, the coin will likely have a bearish breakout in the coming weeks. If this happens, the next level to watch will be at $1,500.
