#LornenzoProtocol $BANK @Lorenzo Protocol
The recent reversal of the Yen (Japanese Currency) was not limited to the forex market but also had a direct impact on global risk assets, especially Bitcoin. When the Yen strengthens, a risk-off sentiment develops in the overall market, which primarily affects leveraged assets.
The Bank of Japan's interest rate decision surprised the market. Due to the BOJ's hawkish signals, Yen-based carry trades unwound. Investors who borrowed cheap Yen to invest in Bitcoin and crypto had to close their positions, which created forced selling pressure.
When Bitcoin moved from $87,100 to $90,400, it seemed like a strong breakout, but there was neither strong spot demand nor volume confirmation behind this move. For this reason, the price fell back below $86,000, which was a clear false breakout.
The biggest loss from this entire move has been to high leverage traders. Over-leveraged long positions were rapidly liquidated, and the market first cleaned up leverage, which is a repeated and known pattern in the crypto market.
Technically, Bitcoin is still in the danger zone. Until higher timeframe confirmation and sustained spot buying occur, every upside move could prove to be a trap.
Past data shows that when macro-level shocks like interest rate changes and currency reversals occur, and the market is already leverage-heavy, fake rallies are often followed by consolidation or further downside.
Despite this, on-chain activity has not weakened. Long-term holders are not moving their holdings, and wallet behavior and accumulation patterns show that smart money is not panic selling.
Strong USDT activity is an important signal. The active presence of stablecoins indicates that capital is ready on the sidelines and investors are waiting for better entries.
The movement of funds between exchanges and DeFi indicates that capital is shifting not just for speculative trading but for strategic positioning. This behavior is usually seen before long-term bullish phases.
Liquidity is gradually improving. When stablecoins circulate and are deployed in DeFi protocols, it indicates that the market is not drying up but rather building a base.
Recent data shows an increase in the number of short-term holders, which typically happens during transition phases when new participants enter the market.
The supply of long-term holders is still tightly held. If demand becomes even slightly stronger, a supply shock could easily trigger.
Historically, in bull markets, leverage is flushed out first, then sideways consolidation occurs, followed by strong trend continuation. The current structure matches this pattern.
As the market approaches the next phase, volatility naturally increases. Weak hands exit the market, while strong players quietly build positions.
In such a volatile environment, the importance of platforms like Lorenzo Protocol increases. Lorenzo Protocol is an on-chain asset management platform that brings traditional financial strategies into the crypto ecosystem through tokenized products. Its On-Chain Traded Funds provide users exposure to quantitative trading, managed futures, volatility strategies, and structured yield products.
BANK token governance, incentive programs, and the vote-escrow system create long-term alignment through veBANK, promoting disciplined and risk-managed capital deployment compared to high-risk leverage.
The final conclusion is that the yen's reversal and the BOJ's decision have removed leverage from the market. Bitcoin's recent move was a false breakout, but on-chain data, USDT activity, and liquidity flows are still providing constructive signals. The market is risky in the short term, but the long-term structure is gradually becoming stronger.
