Bitcoin's 'Death Cross' Could Trap Short Sellers as Bank of Japan Eases Rate Concerns
🔹 The “death cross” technical indicator could trap short sellers again as the Bank of Japan (BOJ) softens the odds of a near-term rate hike. The pattern, which is typically bearish, is now predicting a bullish trend as it did in September 2023.
✅ Highlights:
🔺 BOJ Stance: BOJ Governor Shinichi Uchida said the central bank will not raise borrowing costs amid market uncertainty, reducing the possibility of unwinding "Yen borrowing deals" and related risk aversion.
🔺 Market Reaction: Uchida’s comments sent Bitcoin soaring, briefly surpassing $57,300, while the Japanese Yen weakened. Japan’s Nikkei rose 4%, and futures linked to the S&P 500 rose 0.8%.
🔺 Yen Borrow Trade: The strategy of borrowing cheap yen to invest in high-yielding assets became popular thanks to the BOJ's zero interest rate policy. Last week's rate hike led to the unwinding of these trades, causing widespread risk aversion and a significant drop in Bitcoin prices.
💬 Expert Opinion:
🔺 Global Macro on X:
"The BOJ has made the 'Yen option,' and the Nikkei will drag the Nasdaq and S&P back to pre-selloff levels."
🔺 Andy Constan, CEO of Damped Spring Advisors: The unwinding of the Yen borrowing trade led to selling of risky assets and buying of Yen, affecting leveraged investors and causing widespread disruption in the market.
🔗 source: https://t.me/cryptoanalysisvn/1/1941
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