#BTC86kJPShock
$BTC and Japan 🇯🇵: "JPShock" in action:
Recent volatility in the cryptocurrency market is directly related to the monetary policy of the Bank of Japan (BOJ) and the dynamics of the yen.
Reason for the decline:
The rise in the yield on Japanese 2-year bonds to a 17-year high (1.01%).
This is caused by comments from BOJ Governor Kazuo Ueda, hinting at a possible first interest rate hike in over a decade.
Transmission mechanism (Carry Trade Unwind): Rising bond yields and expectations of a BOJ rate increase strengthen the yen.
This forces traders who took cheap loans in yen (carry trade) to buy risky assets (such as Bitcoin and Ether) to urgently liquidate these risky positions. They sell BTC/ETH to return yen before it strengthens even more.
💥 "Shock" Effect:
These mass sell-offs occur during Asian hours of low liquidity, significantly amplifying the negative price movement and leading to a liquidation cascade.
⚡Scale:
This caused over $290 million in total liquidations of long positions in BTC and ETH, confirming significant volatility and pressure.
