- Bitcoin is experiencing selling pressure as the Japanese yen strengthens, leading to widespread liquidations and heightened market volatility.
- The surge in the yen has caused Bitcoin’s price to drop by 3.3%, with more than $72 million in Bitcoin long positions liquidated over the past 24 hours.
- Rising stablecoin liquidity could benefit Bitcoin despite selling pressure from Mt. Gox distributions and the strong Yen.
On July 25th, Bitcoin and the crypto market experienced selling pressure. This was triggered by a global stock sell-off that followed Wall Street’s decline on Wednesday. Interestingly, the sudden rise in the Japanese yen’s value led to increased liquidations of riskier assets such as Bitcoin, stocks, and gold.
Yen’s Surge and Market Volatility
On Thursday, the JPY/USD pair shot up to its two-month high. This implies that the US-Japan interest rate differential will soon close. However, the strengthening Yen harmed exporters from Japan, causing a technical dip in the Nikkei 225 index.
Widespread liquidations of other asset classes, including gold and bitcoin, followed this scenario. As a result, the strength of the Yen has increased volatility in all global assets. The Japanese Yen rose 6% from its multi-decade low vs the US dollar earlier this month.
Kyle Rodda, a senior market analyst at Capital.Com, told Bloomberg, “It’s effectively a big deleveraging event caused by the short squeeze in the yen. It’s forcing widespread liquidation across markets.”
Other store-of-value assets, such as Gold and Silver, also entered a sharp correction. Gold is down 1.05%, trading at $2,373.89 per ounce. Similarly, Silver is down over 3%, trading at $27.87.
Crypto Market Liquidations and Bitcoin’s Price Drop
24-hour liquidations have nearly topped $290 million. This comprises long liquidations totalling $274 million and short liquidations totalling $27.9 million. Coinglass data shows that long Bitcoin positions worth over $72 million had been liquidated in the last day. In order to forecast the future moves of the market, investors are closely monitoring the growing strength of the Japanese yen.
The Bitcoin price tanked more than 3.3% in the last 24 hours, slipping under $64,500 as of press time. Reportedly, this selling pressure is due to Mt. Gox’s distributions to creditors over the past two days.
However, the Bitcoin technical chart and on-chain indicators suggest this could be a buy-the-dips opportunity. The downside could be limited from here. Moreover, stablecoin liquidity is picking up fast, which could be overall positive for Bitcoin going forward.
Cryptoquant’s Head of Research, Julio Moreno, stated that the USDT and USDC supply is expanding once again, which could be positive for Bitcoin. Hence, investors will closely monitor the market dynamics and the strength of the Japanese Yen in the coming days.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
