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Bitcoin and the broader cryptocurrency market came under strong selling pressure earlier on Thursday, amid the global equity sell-off followed by a Wall Street correction on Wednesday. Interestingly, the sudden surge in the strength of the Japanese Yen has led to growing liquidations across risk-ON assets such as Gold, equity, and Bitcoin.
Japanese Yen Hits Two-Month High Against USD
The JPY/USD pair surged to its two-month high on Thursday suggesting that the interest rate gap between the US and Japan will narrow going ahead. However, as the stronger Yen hurt the Japanese exporters, it pushed the Nikkei 225 index into a technical correction.
However, this development has led to widespread liquidations across other asset classes such as Gold and Bitcoin. Thus, the Yen’s strength has been a source of added volatility across global assets. After hitting a multi-decade low against the USD earlier this month, the Japanese Yen has gained 6% from the bottom. This momentum will come to test in the coming week when US macro indicators come out. 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.”
Also Read: Peter Brandt Predicts US Dollar Collapse, Backs Bitcoin as Solution
Other store-of-value assets such as Gold and Silver have also entered a sharp correction. At press time, Gold is down 1.05% trading at $2,373.89 per ounce. Similarly, Silver is down over 3% trading at $27.87.
Bitcoin Market Liquidations
On the other hand, the 24-hour liquidations in the crypto market have reached closer to $290 million with $274 million in long liquidations and and $27.9 million in short liquidations. As per data from Coinglass, more than $72 million Bitcoin longs have been liquidated in the last 24 hours. Investors will be paying close watch to the growing strength of Japanese Yen to see what happens ahead.
The Bitcoin price has tanked more than 3.3% in the last 24 hours slipping under $64,500 as of press time. Reportedly, this selling pressure has been due to Mt. Gox’s distributions to creditors over the past two days.
However, the Bitcoin technical chart and on-chain indicators suggest that this could be a buy-the-dips opportunity and the downside could be limited from here. On the other hand, the stablecoin liquidity is picking up fast which could be an overall positive for Bitcoin going ahead.
Cryptoquant’s Head of Research Julio Moreno stated that the USDT and USDC supply is expanding once again which could be overall positive for Bitcoin.
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. pic.twitter.com/F3dCB8uDoi
— Julio Moreno (@jjcmoreno) July 24, 2024
Also Read: Mt. Gox Compensates Over 17000 Creditors, What’s Next?
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