US Goveernment Bonds & Crypto

How lucky are you in your everyday life and investment journey? I think we are all "lucky" to witness historical moments in the global economy and the new-born crypto ecosystem's growth. Especially when we consider the time of the pandemic, war in the North and semi-conductor crisis, we are seeing the history being written in front of us.

To our lucky list of occasions, I would like to add the spike in the US Government Bonds that affect crypto, so do other markets, deeply. If you check the chart of US 10-Year Government Bonds, you will see that it has reached the levels in 2007 before the economic crisis in the world.

To have a closer look, please check out the chart; see the broken trendline and try to foresee what comes next afterward.

Obviously, the bearish trendline that had been going lower was replaced by the first leg of an uptrend.

Why do People buy Government Bonds of U.S.?

Simply, because of the global risks and the expectation of higher interest rates by the FED.

The rise of Brent Oil will affect the inflation around the globe and the higher inflation will cause stricter monetary policy of the central banks. The domino impact that will trigger a more conservative investment of people due to the paradigm that we are in.

Have a look at the chart of 2-Year Government Bonds of the U.S.

The chart looks perfect for an investor if you want to "read" between the lines.

The trend that started in Q3 2021 has been going up and there is always a support in either 20-week Moving Average or 50-week Moving Average. It signs that there is a buy pressure to push it higher.

Remember, when the interest rates go up, markets cannot find buyers or any volume to grow. Meanwhile, lots of companies bankrupt; several projects die out. It is a time to get away from zombie projects that are not alive in reality but they were surviving thanks to debts.

Risks, US2Y and Crypto's State

Under normal conditions, we would expect longer periods to offer higher interest rates because investors take the risk of "time" with this trade. However, if we are not living under "normal" circumstances, then there is a red flag to be watchful.

US02Y -> 5.141
US10Y -> 4.61

This is a sign of high risk for markets and global tension which makes people invest in short term US Bonds as they cannot project what is coming next in the world.

For crypto, as a risky market, to get some volume and new investors, we need to see these numbers not more than half of their current levels.

Bitcoin is below 200-week Moving Average and around $24,500 we have 50-week Moving Average as a support level. However, this may not be enough and we may test lower levels up to 20K in the worst case scenario.

I do not expect a double bottom that might be as low as $15,500 re-test. Yet, depending on the global risk and situation in the markets, it is also a possibility though I do not expect it to happen.

As crypto investors, we always have an eye on the government bonds to more or less make prediction about the future performance of crypto ecosystem. We will have amazing times thanks to our investments but there is still some time needed.

What do you think about the current interest rates of Government Bonds?

Share your thoughts or experience below 👇

Hive On ✌🏼

Posted Using LeoFinance Alpha