As a seasoned crypto investor with years of experience under my belt, I can’t help but feel a mix of apprehension and anticipation as I write this piece. The bearish sentiment towards Bitcoin (BTC) and Ethereum (ETH) is indeed weighing heavy on the market, and it’s like riding a rollercoaster without a safety harness!
To begin with September, Bitcoin (BTC) and Ethereum (ETH) have experienced a downturn, seeing price decreases since the start of the month. This negative outlook on the leading cryptocurrencies, which in turn influences the overall crypto market, is largely influenced by various economic factors on a broader scale
Market Still Feeling The Effects Of The Yen Carry Trade
It seems that Bitcoin and Ethereum are currently experiencing repercussions from the discontinuation of the Yen carry trade. The Yen has recently strengthened compared to the U.S. dollar, indicating that investors continue to offload riskier assets such as cryptocurrencies in order to liquidate their carry trade positions. This strategy typically involved holding onto the low-yielding Yen while investing in high-yielding currencies or assets like Bitcoin and Ethereum
In a recent post on X (previously Twitter), investment manager James Lavish hinted at the ongoing impact of the Yen carry trade. He pointed out that the Nikkei 225 index had decreased by 3.7%, while the USD/Yen trading pair was trending downwards
One way to rephrase the given text in clear and easy-to-understand language is as follows:
During the August 5 market crash, caused by the Bank of Japan’s decision to increase interest rates for the second time since 2007, both Bitcoin and Ethereum experienced significant losses. Bitcoin dropped below $50,000, while Ethereum reached as low as $2,200. Given that the impact of the Yen carry trade is still ongoing and the Bank of Japan suggesting further rate hikes, there’s a risk for both Bitcoin and Ethereum to experience additional price declines
US Stock Market Crash Contributes To Bitcoin And Ethereum’s Fall
Furthermore, Bitcoin and Ethereum’s correlation with the US stock market has also contributed to their price crash since the beginning of September. Specifically, on September 3, over $1.05 million was wiped out from the stock market, which also sparked fear in the crypto market and led to a wave of sell-offs for Bitcoin and Ethereum.
On that specific day, it was clear that both the Spot Bitcoin and Ethereum Exchange-Traded Funds (ETFs) experienced withdrawals. According to information from Farside investors, a combined total of $287.8 million was withdrawn from the Spot Bitcoin ETFs, while $47.4 million was taken out of the Spot Ethereum ETFs
In simpler terms, due to the current pessimistic view on Bitcoin and Ethereum, there is a pressing need for some positive news or momentum in the crypto market. Members of the cryptocurrency community are hoping that the US Federal Reserve will lower interest rates at their next FOMC meeting, which is scheduled between September 17 and 18. This action could potentially offer relief to the market and help increase liquidity in Bitcoin and Ethereum
Currently, as I speak, Bitcoin is valued approximately $57,160 on market data from CoinMarketCap, while Ethereum is trading at about $2,400
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2024-09-05 19:35