Japanese Yen’s Sudden Surge Intensifies Liquidation in Bitcoin and Gold

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As a seasoned crypto investor with a few years of experience under my belt, I’ve seen my fair share of market volatility and liquidations. And today’s events have once again proven that the crypto market is not for the faint-hearted.

As a researcher studying the cryptocurrency market, I’ve observed that Bitcoin and other digital currencies experienced significant selling pressure earlier today. This selling pressure came on the heels of a global equity sell-off and a correction in the U.S. stock market on Wednesday. Notably, the unexpected strengthening of the Japanese Yen has resulted in increased liquidations across assets considered high risk, including gold, equities, and Bitcoin.

Japanese Yen Hits Two-Month High Against USD

On Thursdays session, the JPY/USD exchange rate reached its highest point in two months, indicating a potential decrease in the interest rate disparity between Japan and the United States moving forward. Nevertheless, the strengthened Yen had an adverse effect on Japanese exporters, causing the Nikkei 225 stock index to experience a technical correction.

As a seasoned market analyst with extensive experience in the financial sector, I have witnessed numerous market developments that have led to significant shifts in asset prices. The recent surge in US Treasury yields has caused ripples in various corners of the market, leading to widespread liquidations in assets like gold and Bitcoin. This volatility has been particularly pronounced in the Japanese Yen, which has gained strength against the USD, adding an extra layer of complexity to an already tumultuous market landscape.

“This situation amounts to a major unwinding process, triggered by the squeezing short position in the yen. It’s leading to extensive selling off throughout various markets.”

Japanese Yen’s Sudden Surge Intensifies Liquidation in Bitcoin and Gold

In the present market scenario, valuable assets like Gold and Silver have experienced a significant decline. The price of Gold currently stands at $2,373.89 per ounce, representing a decrease of 1.05%. Meanwhile, Silver is trading at $27.87, marking a loss greater than 3%.

Bitcoin Market Liquidations

In contrast, the crypto market has seen a significant increase in 24-hour liquidations, amounting to approximately $290 million. Long liquidations accounted for around $274 million of this total, while short liquidations came in at roughly $27.9 million, as indicated by Coinglass. Over the past day, over $72 million worth of Bitcoin long positions have been terminated. The rising influence of the Japanese Yen is a factor that investors will be closely monitoring for future developments.

The cost of a Bitcoin unit has dropped by over 3.3% within the last 24 hours, falling below $64,500 at the time of reporting. It is believed that this downward trend can be attributed to Mt. Gox’s recent distributions to its creditors, causing increased selling pressure in the market.

The Bitcoin tech chart and on-chain signals hint that this dip might be a good buying chance, with potential limitations to the downside thereafter. Meanwhile, the swift increase in stablecoin reserves presents a promising outlook for Bitcoin’s future growth.

Expert: Julio Moreno, the Head of Research at Cryptoquant, expressed that the inventories of USDT and USDC are growing again. This expansion might have a favorable impact on Bitcoin as a whole.

Stablecoin liquidity picking up again.
This correlates with Bitcoin price gains.

USDT market cap growing above trend again.

USDC and USDT market cap both expanding again.

— Julio Moreno (@jjcmoreno) July 24, 2024

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2024-07-25 12:56