According to CoinDesk, XRP experienced a notable increase of over 5% in the past 24 hours, leading gains among major cryptocurrencies. This rise occurred during the Thanksgiving holiday, a period when bitcoin (BTC) managed to avoid a historically feared market downturn, instead showing a slight increase. BTC was trading above $96,000 early Friday, recovering from Thursday's low of $93,500. Meanwhile, other major cryptocurrencies such as Ether (ETH), Solana’s SOL, and BNB remained relatively stable. Cardano’s ADA saw a 3.5% increase, whereas dogecoin (DOGE) experienced a 1.2% decline. The CoinDesk 20 (CD20), a liquid fund tracking major tokens, recorded a 1.3% increase.
In the midcap sector, Algorand’s ALGO and Worldcoin’s WLD surged by as much as 21%, despite the absence of immediate catalysts. These movements in the crypto market coincided with significant developments in the foreign exchange market, particularly involving the Japanese yen. The yen briefly surpassed the 150 mark against the U.S. dollar, driven by expectations of a potential Bank of Japan (BOJ) rate hike in December. This anticipation was fueled by higher-than-expected inflation data from Tokyo. The yen's movement was likely intensified by month-end financial adjustments and reduced liquidity due to the Thanksgiving holiday. Market sentiment currently suggests a 63% probability of a BOJ rate increase, contrasting with a 67% likelihood of a Federal Reserve rate cut, which could diminish the appeal of yen carry trades.
The yen is often regarded as an "anti-risk" currency, serving as a safe haven for investors during periods of market stress. Its strong performance at the end of July and September previously triggered the unwinding of carry trades, which are bullish risk-on bets financed by relatively inexpensive yen-denominated loans. As borrowing the Japanese currency became more costly, these trades were unwound. A recent CoinDesk analysis indicated that bitcoin's bullish momentum has weakened, with the Australian dollar/yen exchange rate declining, signaling a risk-off sentiment. The Australian dollar, closely tied to global economic health, and the yen typically have an inverse relationship with risk assets like BTC. This situation mirrors a previous instance when rumors of a BOJ rate hike led to a yen surge, resulting in an 8% drop in the AUD/JPY exchange rate and a $20,000 decrease in BTC, highlighting the potential impact of foreign exchange movements on cryptocurrencies.
