The recent decline in Bitcoin prices is not primarily due to cryptocurrency-specific news but is directly linked to the unwinding of the Japanese yen’s carry position, which is reducing liquidity across various asset markets. According to financial analyst NS3.AI, rapidly changing exchange rates between the US dollar and Japanese yen, along with indications of intervention by Japan’s central government, are compelling investors to reduce risk in their leveraged portfolios. This situation is negatively impacting Bitcoin liquidity and its derivatives. The term “carry unwind” refers to a financial process where investors borrow low-interest currencies to invest in higher-yielding assets, and when these positions are closed, it triggers large-scale sell-offs in the market. Such actions affect not only the crypto market but also other financial markets due to cross-asset deleveraging. Bitcoin, the leading digital currency, is typically influenced by internal crypto news, regulatory measures, or technological updates; however, this time its price decline is attributed to the restoration of the yen’s financial position within the global financial system. Additionally, monitoring foreign exchange market uncertainty, margin pressures, and internal crypto market factors can help anticipate such sell-offs. Although this situation may be temporary, investors are advised to keep an eye on international financial factors, as they can unexpectedly affect cryptocurrency prices. Future fluctuations in Bitcoin prices are likely in light of Japan’s financial strategies and changes in the global currency markets.
Source: binance
