The crypto market fell today as the US Treasury yield rose to its highest level in nearly two years.
Price trends in the cryptocurrency market remained bearish today, with rising US bond yields likely to blame.
Crypto market cap falls to two-month low
On August 17, the crypto market capitalization fell 1.3% to $1.097 trillion, a two-month low. Meanwhile, Bitcoin while accounting for 50% of the total crypto market, has now begun to fall below $28,000.
The crypto market has been in a decline since mid-July, coinciding with the US dollar index (DXY) gains over the same period.
What's more, its decline coincides with rising US bond yields. On August 17, the benchmark US 10-year Treasury note yield rose to 4.31%, the highest level since October 2022. This suggests that investors are moving towards safer assets rather than non-yielding cryptocurrencies like Bitcoin.
Most Fed officials believe inflation could remain high without further rate hikes, raising expectations for another rate hike in September.
Expectations for higher rates have been historically bearish for the crypto market, which explains the crypto market's decline on August 17th.
Is there a sharp recovery ahead?
Crypto market capitalization is currently nearly oversold with the daily relative strength index (RSI) at 33.75, just four points above the typical threshold. In other words, the market has a good chance of stabilizing or rebounding in the coming days.
Moreover, the market is testing its 200-day exponential moving average as support near $1.098 trillion. This is a good place for a bounce with over 3% upside from current levels if support holds.