1. China has announced that it will rise the deficit in its balance sheet showing us that there will be more QE in China. Of course it's good for short term as it'll add liquidity. But remember, this thing doesn't look resilient in the long run as you know that the real estate market in China is now collapsing and at -80% decline in price.
2. Because of this, US10yr bond is now having an instant rising showing "believe" in the US government performance over the next 10 year. This thing could also lead into 2 scenarios which are as below.
- Scenario 1
If inflation rises faster than bond yields, it'll be good for the equity market as investors will be more into the risk on asset as the equity market will be good as the hedge against inflation.
- Scenario 2
It'll be a problem here if the yield is rising up too fast as it'll be higher opportunity cost for investors to hold equities or other risk on asset.
I personally believe that the inflation might increase faster than the yields in which I also believe that the risk on environment will be maintained for at least the next few months.
But for long run, once again I see that the overall macroeconomic is less resilient right now.
China stimulus plan is also good for the short term liquidity injection but long run, again is not that resilient.
The price is showing us my favorite structure which is the continuation pennant at the lower time frame. Also, this occurred right after the price claimed back above the $3.6k as the strong resistance and also confirm the higher high structure.
The latest Ethereum spot ETF approval is also giving us a high level conviction about the Ethereum itself and also the L2s on its network.
The trading day of the ETF hasn't started but we can see from the chart that market participants are very confidence with the current structure as well.
Based on the technical, we see a bullish pennant and also respecting the 21 EMA on the 12 hours time frame as dynamic support.
With this structure forming, my nearest target is to reach $4k as the nearest psychological level (due date possible at June 30) and also to reach the $4.8k before the end of 2024 which is also the prior ATH level.
If you want to invest big, you can bet on ETH but if you want the higher beta of ETH, you can start to accumulate the good L2s.