The Japanese yen is flexing its muscles again, and if you’re into crypto, it’s time to pay attention. Recently, the yen has been making some serious moves against the U.S. dollar, and it is a full-on rally.
Since late Thursday, the yen has surged by 2.4%, hitting 145 per dollar. This sudden strength is bad news for riskier investments like Bitcoin and other cryptocurrencies, as it often signals a flight to safety among investors.
The yen is also making life hard for other major currencies like the Australian dollar, euro, and British pound. Against the Aussie, often seen as a gauge for market risk appetite, the yen has jumped more than 1%.
Yen’s strength and Bitcoin’s slump
Earlier this month when the yen last flexed its muscles, Bitcoin took a hit. It dropped from about $70,000 to $50,000 in just eight days, before clawing its way back to $60,000.
Right now, Bitcoin is stuck in a consolidation. It’s been staying around the $58,000 to $60,000 range, and there’s no clear sign of which way it’s going to go. At press time, it was trading at about $58,652, down 1.6% from the previous day.
The problem? There’s selling pressure and not enough buyers stepping in. That could mean more sideways trading in the days to come. So if you’re waiting for a breakout, you might be in for a long wait.
August has been a rough month, with Bitcoin down about 9%. Compare that to the global stock markets, which have actually gained almost 1%, and yeah, you get it.
Bitcoin tried to break through the $62,000 resistance level earlier this week, but it didn’t happen. Analysts are seeing signs of weakness, and that’s never a good thing when you’re hoping for a rally.
Even the ETFs aren’t doing much to boost the mood. Bitcoin ETFs recently saw about $13 million in net flows, which might sound like a lot, but it’s not enough to turn the tide.
Overall, the enthusiasm that once surrounded these investment vehicles seems to be fading. And if you’re worried about the U.S. government unloading seized Bitcoin onto the market, you’re not alone.
That could add even more downward pressure on prices, making it even harder for Bitcoin to make a comeback.
