The Bank of Japan’s interest rate hike, ending 17 years of relatively low interest rates, was widely seen as the main catalyst for the current market downturn. Following the rate hike from 0.1% to 0.25%, investors who had taken out cheap yen loans to buy dollar-denominated assets rushed to liquidate their assets to close their yen loans in anticipation of future interest rate hikes. More than $1 billion was liquidated from cryptocurrency markets during the initial sell-off as a result of the unwinding of yen trading, including about $367 million in Bitcoin and $350 million in Ethereum, although markets have managed to regain some lost ground since Aug. 5.
Traders and analysts continue to debate whether the recent decline is sporadic or will be sustained, and we caution investors that the third quarter is traditionally a tough period for the Bitcoin market, especially in August and September.
The Bitcoin (BTC) rate on August 7 at 15:00 Hong Kong time was $56.9 thousand on the Binance cryptocurrency exchange paired with the USDT stablecoin. The capitalization of the first cryptocurrency was $1.1 trillion. Over the past 24 hours, Bitcoin has increased in price by about 1.5%. Our experts commented on the consolidation of the Bitcoin rate at $56 thousand. According to experts, historical data indicates the likelihood of an increase in the Bitcoin rate, since the price has reached levels where Bitcoin has historically reversed in previous bullish cycles (January 2018 and April 2021). However, this trend will only be confirmed in a few months.
According to the results of the trading day on August 6, investors withdrew about $148 million from American spot Bitcoin exchange-traded funds, including $64 million from the FBTC fund from Fidelity. The value of assets managed by a group of spot Bitcoin ETFs decreased, according to SoSoValue, to $51 billion .
The rate of the second largest cryptocurrency by capitalization, Ethereum (ETH), remained virtually unchanged in percentage terms over the past 24 hours. ETH is trading at $2,506. On August 6, the net inflow of funds into “ether” ETFs exceeded $98 million – almost twice as much as the day before. Inflows into exchange-traded funds on ETH have been recorded for the second day in a row. The value of assets under management of nine American Ethereum ETFs as of August 7 is $7 billion.
The remaining largest cryptocurrencies by capitalization, including XRP from Ripple, BNB from Binance, Cardano (ADA), Solana (SOL) and Toncoin (TON), are trading in different directions. Of the top ten in terms of capitalization, the Solana cryptocurrency showed the greatest growth per day – about 7%.
The value of the index of fear and greed in the crypto market on August 6 is at the level of January 2023 in the “fear” zone – 29 points out of 100. In March, when the Bitcoin rate reached its maximum, the index value was in the “extreme greed” zone – 90 points .
