This article is also available in Spanish.
Bitcoin (BTC) And Ethereum (ETH) have started September in the red, having already suffered price declines since the beginning of the month. This bearish sentiment towards major cryptocurrencies and, by extension, the broader crypto market is due to several factors macroeconomic factors.
Market still feeling the effects of the carry trade on the yen
Recent developments suggest that Bitcoin and Ethereum are still feeling the effects of the abandonment of Carry-trade on the yenThe yen has recently surged against the U.S. dollar, suggesting that investors are still selling riskier assets like these cryptocurrencies to liquidate their carry trade positions, which used the low-yielding yen.
Related Readings
In an X (formerly Twitter) jobhedge fund manager James Lavish He also suggested that the effects of the carry trade on the yen were still in play. He noted that the Nikkei 225 had fallen 3.7% while the USD/Yen pair was down.
Bank of Japan (BOJ) President Kazuo Ueda has also recently signaled his aggressive stance. statement Traders also said they would continue to hike rates if the economy and prices continue to evolve as expected. This also sparked fears among traders and prompted them to close their carry trade positions, putting more selling pressure on Bitcoin and Ethereum.
Bitcoin and Ethereum suffered significant losses during the Stock market crash of August 5which was triggered by the BoJ’s decision to raise interest rates for the second time since 2007. Bitcoin, meanwhile, fell below $50,000, while Ethereum fell as low as $2,200. So, with the effects of the yen carry trade still in play and the BoJ hinting at further rate hikes, both Bitcoin and Ethereum are at risk of further price declines.
US Stock Market Crash Contributes to Bitcoin and Ethereum Fall
Additionally, the correlation between Bitcoin and Ethereum with the American Stock Exchange has also contributed to their price decline since the beginning of September. Specifically, on September 3, more than $1.05 million was wiped out of the stock market, which also sparked fear in the cryptocurrency market and led to a wave of massive selling for Bitcoin and Ethereum.
Related Readings
This was demonstrated by the outflows seen that day from the Spot Bitcoin and Ethereum ETFs. Data Farside investors have shown that Spot Bitcoin ETFs And Ethereum ETFs under the microscope recorded 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 to find a spark that could give the cryptocurrency market a bullish momentum. Members of the crypto community are hoping that the US Federal Reserve will cut interest rates next FOMC Meeting It is expected to take place between September 17th and 18th, which will provide some relief to 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 data from CoinMarketCap.
Featured image created with Dall.E, chart by Tradingview.com
