Bitcoin Drop Reminiscent of the Past: Price Could Rise Over 2x with Japan Move! - Coin Bulletin

The recent drop in Bitcoin (BTC) and the Nasdaq index, coinciding with a sudden rise in the Japanese yen (JPY) and Japanese government bond yields, reminded investors of August.

While Bitcoin price fell to $76,800 in the early days of March, the Nasdaq index also followed this decline. During this period, the yields of Japanese government bonds rose, and the Japanese yen, seen as a safe haven, began to strengthen. According to experts, the low-interest Japanese yen, which has been low for decades, was an important factor supporting risky assets in global markets. The yen's appreciation may have triggered a flight from risk in Wall Street and the cryptocurrency markets.

On the other hand, the overly optimistic stance of investors on the Japanese yen is strengthening the possibility of a backlash in the markets. According to the data of the A**BD Commodity Futures Trading Commission (CFTC) monitored by MacroMicro, speculators' long positions on the yen reached record levels last week. Such an extreme positioning implies that the yen's rise may come to a halt in the short term.

Japan can make a move

According to Morgan Stanley's G10 Currency Strategy team, the risk appetite of Japanese investors for risky assets may restrain the rise of the yen. In particular, Japanese investors are inadvertently slowing down the strengthening of the yen by investing in foreign markets through the Nippon Individual Savings Account (NISA). In addition, the public pension system generally moves away from yen assets, often contrary to market trends.

A similar scenario had occurred last August as well. At that time, yen had rapidly gained value, followed by a rapid rise in stocks and Bitcoin. The USD/JPY pair had risen from 140 levels at the beginning of August to 158.50 in January, while BTC had also surged from $50,000 to a record high of $108,000 during the same period.

Bitcoin is trading around $81,188 as I write this news, and it has lost around 5% of its value since the beginning of March.