The Ethereum price has been under pressure in the past few days. After soaring to an all-time high of $2,045, the price has dropped by more than 30% as investors worry about the rising US Treasury yields.
What happened: Ether price was in a strong upward trend on Sunday last week. However, the price started falling as investors started to worry about its valuation and the fact that it seemed overvalued. Also, a warning by Elon Musk led to rising pressure of ETH and BTC prices. In the past, a sharp decline of Bitcoin tends to lead to more weakness in other cryptocurrencies.
Further, Ethereum price and other risk assets declined as the US Treasury yields continued to rise. Last week, the ten-year yield of the US Treasuries rose to 1.50%, the highest level since February last year. At the same time, the spread between the 30-year yields and 5-year yields rose to the highest level in more than 5 years.
High yields usually have a direct impact on risk assets like cryptocurrencies, emerging market currencies, and technology stocks. Indeed, the Nasdaq 100 index has dropped by more than 5% in the past few days.
Ethereum price technical outlook
As I wrote last week, the sharp decline of the ETH price was expected. Furthermore, the currency was previously forming a rising wedge pattern that is usually a bearish factor. The price also moved below the 25-day and 50-day moving averages on the daily chart, It is also about 40% above the ascending trendline that is shown in red.
Therefore, at this stage, the outlook for the currency is neutral. On the one hand, the price could move down and retest the important support at $1,000. On the other hand, it could retest its all-time high at $2,045 on its path towards $2,500. In my view, I believe that the latter option will happen.
ETH price chart