Crypto Bulls may have to stiffen for a certain turbulence as Japan’s 20-year-old government bond yield rose to its highest level since 2008 in a step that has historically led to aversion from risk assets such as Bitcoin (BTC).
The Japanese government bond (JGB) yield rose to 2,265% last week, a level that was not seen since the global financial crisis, in the midst of speculation about potential rate increases by the Bank of Japan (BOJ) and rising inflation pressure.
These are the same conditions as August 2024, when strength in the Yen saw a global sale from stocks to Bitcoin, which Coindesk reported at that time.
An increase in Japanese bond yield combined with geopolitical and economic uncertainties is burning concerns among the traders that BTC could face a significant correction. Higher yields indicate that the Bank of Japan can raise interest rates to control inflation or control its large public debt.
Rising yields in Japan often signal broader global economic uncertainty or tighter economic conditions. This creates a stronger yen that can reduce the appeal of carrying manufacturers, where investors borrow in Yen to invest in higher exploited assets such as BTC.
As such, the merchants are targeting a low level of $ 70,000 for Bitcoin in the coming weeks in the midst of macroeconomic jitters, an ongoing customs trade war and the general shortage of market catalysts following a driveway to the US presidential election.
“We believe that geopolitical and economic uncertainty causes institutions to break down their crypto holdings, and Bitcoin could very well fall to the $ 70-80K series in the coming weeks,” said Jeff Mei, CEO of BTSE, in a telegram announcement to Coindesk.
“Only when this customs war ends and Fed resumes the rashes will the top cryptocurrencies resume trending towards previous high times,” added Mei, reflecting the growing concern over the impact of US trade policies and the Federal Reserve’s cautious attitude towards interest rate members in 2025.
Elsewhere, Augustine fan, head of insight at SignalPlus, painted a gloomy technical image: “Price action has technically been very negative, and the high realized volatility has worsened BTC-risk-adjusted profile with few (if any) immediate positive catalysts on the horizon.”
Fans comments are in line with a Coindesk analysis on Sunday, which noticed that BTC is testing the 200-day simple sliding average (SMA), and a close below it could mean a critical break in a strong support trendline.
