The cryptocurrency market abruptly awakens this morning as Bitcoin sees a sharp 4% correction following the closure of the Asian session, dragging down most altcoins. The panic originates not from the blockchain, but from Japan, where a historic macroeconomic shake-up has destabilized risk assets.
The catalyst for this crash is purely macroeconomic. For the first time since 2008, the yield on 2-year Japanese Government Bonds (JGBs) has broken through the symbolic threshold of 1%. This sudden surge reflects renewed expectations of a rate hike by the Bank of Japan.
The immediate consequence: the Nikkei index plummeted, creating a contagion effect across global markets. Bitcoin, which maintains a strong correlation with stock indices and global liquidity, didn’t escape the selloff. Investors, caught off guard by this potential monetary tightening, massively reduced their exposure to volatile assets (risk-off).
The price collapse triggered a cascade of liquidations across trading platforms. Within 24 hours, the market recorded over $573 million in liquidated positions, the vast majority being long positions (buyers betting on upside).
This long squeeze phenomenon accelerated the decline, forcing algorithms and traders to sell at market to cover their losses. Volatility is at its peak, and Bitcoin is now testing critical support levels. If selling pressure persists, and if the S&P 500 (particularly tech stocks like Nvidia) confirms this bearish trend at the U.S. open, BTC could revisit the $60,000 to $70,000 zone.
Paradoxically, while Bitcoin and tech stocks correct, precious metals are exploding. Silver hit $58, an all-time high.
This decoupling suggests that capital isn’t disappearing, but rather fleeing toward safe haven assets amid uncertainty over Asian monetary policies.
The U.S. market close will be decisive. Traders should monitor three key indicators:
The market remains on high alert, and caution is warranted in the face of this institutional volatility.
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Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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