This week, Bitcoin's bullish momentum has weakened due to reduced demand in the U.S. market and a decline in the Australian dollar-Japanese yen (AUD/JPY) exchange rate, a positive sign indicating caution among investors with risk assets. The AUD, a commodity currency, reflects global economic health, while the yen is considered a safe-haven currency. The decline in the AUD/JPY exchange rate suggests a wary sentiment among investors. Analyst Matt Simpson warns that if the AUD/JPY continues to decline, it could raise broader concerns about risk.
The historical context shows that when the yen strengthens, it can trigger sell-offs of risk assets like Bitcoin, similar to what happened in late July and early August. Currently, the new strength of the yen comes with speculation about the Bank of Japan (BOJ) possibly raising interest rates next month, as well as concerns about U.S. trade tariffs. ING forecasts that the BOJ may raise interest rates in December, which could further impact Bitcoin prices, potentially pushing them below $90,000.
In another development, Solana's native token, SOL, has recovered 8% from a recent low of $222 on November 26, although some investors remain skeptical about the significant correction from the all-time high of $263.80 on November 23. Many investors feel disappointed, as SOL only increased by 1% while the broader altcoin market surged up to 12% during the same period, with many other tokens achieving gains over 40%. However, onchain and derivatives data indicate that SOL has significant growth potential, supported by a 48% increase in total value locked (TVL) over the past month, reflecting rising demand in its decentralized application ecosystem.
Although Solana is often compared to Ethereum, both networks are thriving in different niches. Solana leads in memecoin activity, while Ethereum still dominates in decentralized finance (DeFi). Notably, three of Solana's top DApps have surpassed Ethereum in revenue. Current futures data shows optimism for SOL, with traders paying a 23% premium for long positions—the highest in the past seven months. With SOL's market capitalization at $113.7 billion, significantly lower than Ethereum's $429.4 billion, there is still plenty of room for potential growth.
