Bitcoin is down about 6.5% this week, but this move hasn’t turned into an outright selloff yet. Instead, BTC moves slowly and lags behind other assets.
Currency stress is back in focus as the New York Fed worries about the Japanese yen for the first time in more than a decade. That has shocked larger markets, and crypto is not immune.
Why the yen is back on the global radar
One of the key macro markers this week came from the currency market.
The Japanese yen made its most shocking one-day jump in months after reports that the New York Fed was monitoring interest rates at major banks. This is generally seen as a warning sign.
Source:
For the first time in more than a decade, American policymakers have seemed openly concerned about the weakness of the yen.
Japanese government bond yields are rising while the Japanese currency continues to fall, so this matters. There is increasing tension in the Japanese economy, and this increases the risk of intervention.
Why timing is more important than price
Recent data showed that Bitcoin [BTC] responded not so much to levels as to timing.
Volatility increased continuously between January 20 and 21, when short-term movements typically occur. In contrast, the weekend sessions (especially on Saturdays) were quiet, with prices moving within tight margins.
Source: CryptoQuant
This turned out who was active on the market. Large players tend to enter in the middle of the week, while fresh capital is lacking during the weekends.
BTC is falling, but that’s not a big deal
Bitcoin moved lower this past week, retreating from the mid-$90,000s to the $88-$89,000 range. The move was initially quick, but the sales pressure quickly calmed down.
Source: TradingView
The RSI was at a neutral level. Meanwhile, CMF remained slightly positive and capital remained stable despite the dip – the underlying support remains. Bitcoin is consolidating as traders wait for a sign.
Final thoughts
- Bitcoin’s weekly dip occurred without panic or capital flight.
- The increasing currency stress around the yen could act as the next trigger.