21 hour ago
1 0
Bitcoin Faces Potential Crash Amid Fed and BoJ Policy Shifts
Bitcoin is under potential pressure due to upcoming meetings by the Federal Open Market Committee (FOMC) on December 9-10 and the Bank of Japan (BoJ) on December 18-19. Analysts anticipate a hawkish shift from the BoJ, reminiscent of last summer's events that led to rapid deleveraging in risk assets like crypto.
- Analyst Benjamin Cowen points out similarities to July 2024 when Fed rate cuts and BoJ hikes led to Bitcoin capitulation.
- The yen carry trade, where institutions borrow low-interest yen to invest in US assets, could destabilize if the yen rises or stock markets fall.
- Institutional investors may exit positions to avoid losses, causing asset sales and Yen purchases, impacting Bitcoin as a leveraged asset.
- Upcoming economic data and meetings could influence market dynamics, with high Japanese yields adding pressure on the BoJ to act.
- BitMEX founder Arthur Hayes links recent Bitcoin declines to BoJ rate hike prospects, framing it as a macroeconomic event.
- Futures indicate an 80-87% probability of a Fed cut in December, while BoJ signals possible tightening, risking the yen carry trade.
This convergence of Fed easing expectations and BoJ tightening threats may repeat July 2024’s pattern: a sharp decline in Bitcoin followed by stabilization after forced deleveraging.
At press time, BTC traded at $92,235.
