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The global market has rattled as Japan takes measures to boost its YeYennd prevent further fall. Crypto market liquidations have soared to $672 million as fears of a YeYenarry trade unwind have picked up again. Hard assets like Gold and Silver have notched new record highs, while risk-on assets have slid.
Crypto Market Liquidations Soar $672 Million
Bitcoin and the broader cryptocurrency market have once again come under strong selling pressure. BTC price slips another 1.75% today, moving to the crucial support at $87,000. According to Coinglass data, total liquidations have soared to $674 million, with long liquidations surpassing $600 million.
Gold surged past $5,000 per ounce for the first time on record, reaching an intraday high near $5,093. On the other hand, silver also climbed to a fresh all-time high around $109.4, showing a sharp shit towards hard assets.
The move came as cryptocurrencies weakened, with Bitcoin slipping below $87,000 during a broader market sell-off. More than 200,000 crypto traders were wiped out in the last 24 hours. The largest single liquidation was reported to be a $15.2 million Ethereum long position.
According to market participants, this divergence indicates a rotation in capital flows. As of now, gold and silver are clearly dominating as safe haven assets.
Crypto Market Investors Watch Japan
Crypto markets are increasingly focused on Japan after the yeYenosted its biggest one-day gain in months. Traders are growing increasingly confident that Japanese authorities, along with US coordination, could make a move to support the currency.
In recent sessions, the Japanese YeYenas come under significant pressure, which could prompt policy intervention from Japanese officials. Adding to the attention, the New York Federal Reserve was reported to have conducted “rate checks” in USD/JPY. While a rate check does not confirm active dollar selling, it can signal that authorities are assessing market conditions more closely.
Historically, a coordinated action between the US and Japan has been associated with a weaker dollar. A softer US Dollar can ease the global liquidity conditions. This can support risk assets such as equities, gold, and cryptocurrencies.
Analysts noted that sharp yen appreciation can force the unwinding of yeYenarry trades. This typically resembles trades in which investors borrow yeYeno buy higher-yielding or riskier assets. In the near term, it can lead to major selloffs in the crypto market, as seen during the unwinding of the yeYenarry trade in August 2024.
However, in the long term, greater market liquidity could benefit Bitcoin and other cryptocurrencies. Although the BTC price dropped to $62000 during the yeYenarry trade unwind of Aug. 2024, it recovered over the next year to hit fresh all-time highs of $125,000.
Silver Outperforms Bitcoin By a Wide Margin
Silver has surged well ahead of Bitcoin, with the precious metal now outperforming in one of the widest margins. Over the past roughly 13 months, silver has gained about 270%, while Bitcoin is down around 11% over the same period. The rally has also pushed silver’s market capitalization to an estimated 3.5 times larger than Bitcoin’s. This highlights a sharp contrast between the crypto market and the performance of hard assets.
At the same time, the gap between the Bitcoin and Gold market cap has been widening. Although BTC market cap stands at $1.75 trillion, the Gold market cap has surged past $35 trillion.
