The liquidation of Bitcoin and Gold were intensified following the sudden surge in Japanese Yen on Thursday.
Bitcoin and the broader cryptocurrency market were subjected to significant selling pressure earlier on Thursday, following a Wall Street correction on Wednesday and the global equity sell-off. The abrupt increase in the value of the Japanese Yen has resulted in a rise in the number of liquidations in risk-on assets, including gold, equity, and Bitcoin.
Japanese Yen reaches two-month high of the US dollar
On Thursday, the JPY/USD pair reached its highest level in two months, indicating that the interest rate disparity between the United States and Japan is expected to decrease. Nevertheless, the Nikkei 225 index was compelled to undergo a technical correction due to the Yen’s appreciation, adversely affecting Japanese exporters.
Nevertheless, this development has resulted in a widespread liquidation of other asset classes, including Bitcoin and gold. Consequently, the Yen’s strength has contributed to increased volatility among global assets. The Japanese Yen has recovered 6% from its multi-decade nadir against the US dollar earlier this month. This momentum will be tested when US macro indicators are released in the upcoming week. 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.”
Gold and Silver, also store-of-value assets, have experienced a significant decline. At the time of publication, gold is trading at $2,373.89 per ounce, a 1.05% decline. Similarly, Silver is trading at $27.87, a decrease of over 3%.
Bitcoin Market Sell Offs
In contrast, the 24-hour liquidations in the crypto market have come close to $290 million, with $274 million in long and $27.9 million in short liquidations. In the past 24 hours, over $72 million in Bitcoin longs have been liquidated, according to data from Coinglass. Investors will closely monitor the Japanese Yen’s increasing strength in anticipation of future developments.
As of press time, the Bitcoin price has plummeted by over 3.3% in the past 24 hours, falling below $64,500. According to reports, the selling pressure has been precipitated by Mt. Gox’s distributions to creditors over the past two days.
Nevertheless, the technical chart of Bitcoin and on-chain indicators indicate that this could be a buy-the-dips opportunity, and the downside possibility may be restricted from this point. Conversely, the rapid increase in stablecoin liquidity could serve as a general advantage for Bitcoin.
Julio Moreno, the Head of Research at Cryptoquant, has indicated that the USDT and USDC supply is expanding again, which could positively impact Bitcoin.
