Bitcoin, plummeting to $50,000?..."Possible if crypto bill fails and Yen carry trade liquidation overlaps"

▲ Bitcoin (BTC), cryptocurrency decline/AI generated image

A warning has emerged that Bitcoin (BTC) could be shaken again by the impact of Japan's yen defense. The outlook suggests it could fall to $50,000 if the US cryptocurrency market structure bill fails and yen carry trade liquidation overlaps.

According to crypto media outlet BeInCrypto on August 3 (local time), crypto analyst Crypto Rover analyzed that this year's major Bitcoin price drops coincided with Japan's moves to defend the yen. He warned, “All major Bitcoin crashes this year have coincided with Japan defending its yen.”

Bitcoin plummeted 35.43% from late January to mid-February. It underwent a 26.28% correction from late April to June 10, during which a 9.34% decline also occurred. In late July, selling pressure intensified again as the yen's value dropped to a 40-year low, near 164 yen per dollar.

The US and Japan jointly intervened in the foreign exchange market last week by jointly buying yen, for the first time since 1998. According to Bank of Japan (BOJ) data, Japan has injected approximately $59 billion into recent market interventions. The BOJ reportedly used about $32 billion in the preceding week alone.

Analyst Ted Pillows predicted that Bitcoin could fall to $50,000 if the US cryptocurrency market structure bill is not passed and yen carry trade liquidation begins. Yen carry trade is a strategy that involves borrowing yen at low interest rates and investing in high-yield assets, including cryptocurrencies. If the yen sharply strengthens, investors may close their positions, leading to increased Bitcoin selling.

Analyst Michaël van de Poppe presented a contrasting view. He analyzed that if the dollar continues to weaken and the yen strengthens, funds flowing out of government bonds could move into risk assets like Bitcoin. The speed of yen appreciation and the scale of yen carry trade liquidation were identified as key variables determining Bitcoin's direction.

[Key Article Summary]

-This year's major Bitcoin price drops have repeatedly coincided with Japan's moves to defend the yen.

-An outlook suggests Bitcoin could fall to $50,000 if the US cryptocurrency market structure bill fails and yen carry trade liquidation overlaps.

-A contrasting analysis also suggests that if the dollar continues to weaken, bond funds could move into Bitcoin.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. This content should be interpreted for informational purposes only.*