Ether (ETH) prices are in a downtrend while Bitcoin (BTC) is challenging the $64,000 mark

Ether (ETH) changed hands just above $3,000 during the opening hours of the Asian trading day as CoinDesk Indices' Ethereum trend indicator turned negative, signaling a bearish trend reversal.

At the same time, Bitcoin (BTC) is trading slightly above $64,000 after struggling with it for most of the Asian trading morning.

“Unexpectedly higher U.S. Treasury yields, a stronger dollar and geopolitical risks in the Middle East weighed on crypto markets,” Jun-young Heo, a Singapore-based derivatives trader at Presto, told CoinDesk in an interview on Telegram.

Yeo said the risk-off sentiment was also reflected in the derivatives market, with funding rates on some exchanges turning negative and three-month base returns “dropping” to 10%.

“Short-term put options are more expensive than call options for both BTC and ETH,” Heo continued.

Liquidations in the last 12 hours were almost evenly split between bullish and bearish futures bets, with $31.1 million worth of long positions liquidated and $36.49 million worth of short positions reclaimed .

“It appears that investors have failed to break through all-time highs, but they remain unwilling to become completely pessimistic,” Justin d'Anethan, head of business development at Keyrock, a crypto market maker in Hong Kong, said in a message to CoinDesk.

The CoinDesk 20, an index that measures the performance of the world's largest digital assets, is effectively trading at 2,174.

“It is a difficult environment to navigate with a number of positive crypto-centric catalysts,” he continued. On the other hand, the macro side seems to dominate all risk assets, with more hawkish interest rate expectations given surprisingly higher inflation and of course increasing tensions in the Middle East.”

d'Anethan also noted that sideways price action and settling into a range in cryptocurrencies could set the stage for more explosive moves, with leveraged traders making a point and then suffering violent liquidation events when the situation clears up and makes a decisive move initiates in markets.

“It may take some time or some other trigger rather than known events to turn this sentiment back into an uptrend,” Heo added.

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