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Bitcoin (BTC) And Ethereum (ETH) have started September in the red, after already experiencing price falls since the beginning of the month. This bearish sentiment towards the major cryptocurrencies and, by extension, the broader crypto market is due to several factors macroeconomic factors.
The market is still feeling the effects of the Yen Carry Trade
Recent developments suggest that Bitcoin and Ethereum are still feeling the effects of exiting the market Yen executes trade. The yen recently rose against the US dollar, indicating that investors are still selling riskier assets like these cryptocurrencies to unwind their carry trade positions that took advantage of the low-yen yen.
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In an X (formerly Twitter) afterhedge fund manager Jacobus Lavisch also suggested that the effects of the carry trade in the Yen were still at play. He noted that the Nikkei 225 was down 3.7%, while the USD/Yen trading pair was down.
The Bank of Japan (BOJ) Kazuo Ueda also recently made a hawkish statement statement that they will continue to raise interest rates if the economy and prices continue to perform as expected. This has also created fear among traders and prompted them to close their carry trading positions, increasing selling pressure on Bitcoin and Ethereum.
Bitcoin and ether suffered major losses during the August 5 market crashwhich was caused by the BOJ’s decision to raise interest rates for the second time since 2007. Bitcoin, in turn, fell below $50,000, while Ethereum fell to a low of $2,200. With the effects of the Yen carry trade still playing out and the BOJ hinting at more rate hikes, Bitcoin and Ethereum risk further price declines.
The US stock market crash is contributing to the fall of Bitcoin and Ethereum
Moreover, the correlation of Bitcoin and Ethereum with the American stock market has also contributed to the price crash since early September. Specifically, more than $1.05 million was wiped from the stock market on September 3, which also caused fear in the crypto market and led to a wave of sell-off for companies. Bitcoin and ether.
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This was evident from the outflows witnessed by both Spot Bitcoin and Ethereum ETFs that day. Facts of Farside investors showed that the Discover Bitcoin ETFs And Discover Ethereum ETFs witnessed total net outflows of $287.8 million and $47.4 million respectively.
With such a bearish outlook for Bitcoin and Ethereum, there is an urgent need for a spark that could provide bullish momentum for the crypto market. Members of the Crypto community are hoping that the US Federal Reserve will cut interest rates next time FOMC meeting The exchange will take place between September 17 and 18, as that will provide some relief for the market and help inject more liquidity into Bitcoin and Ethereum.
At the time of writing, Bitcoin and Ethereum are trading around $57,160 and $2,400, according to sources. facts from CoinMarketCap.
Featured image created with Dall.E, chart from Tradingview.com