Key Insights
- •Crypto analyst Miles Deutscher reveals reasons why he believes Bitcoin (BTC USD) bottomed out in November.
- •Japan’s bond market is breaking, and the BOJ may be forced to make a drastic choice. A look at how this could affect the crypto market.
- •Sensitive market position triggers caution among whales.
Whether Bitcoin price hit its local bottom near $80,000 has been up for debate lately, especially with weak demand failing to sustain bullish momentum.
Nevertheless, some analysts still swear by the $80,000 as the official low. Among them was Miles Deutscher. He recently made a solid argument in favor of $80,000 as the local Bitcoin price low.
He noted that the price still avoided further downside despite recent FUD. According to Deutscher, FUD around trade wars, the Bank of Japan, and Chinese crypto bans may end up being favorable for Bitcoin news.
The analyst believes that this news could mark the bottom for the cryptocurrency. Bitcoin (BTC USD) price dipped below $90,000 at the time of observation.
However, Deutscher’s arguments were not the only reason why some analysts have been anticipating a local bottom near the $80,000.
The Bitcoin (BTC USD) Chart Demonstrated a Major Support Retest in November
The $80,000 Bitcoin price level was also significant based on a long-term trend pattern that has been going on for over 2 years. The cryptocurrency bottomed out near the same price level last month.
The fact that the BTC USD chart registered a bounce near the $80,000 price level also reinforced the bullish sentiment. However, the cryptocurrency achieved limited upside since then.
In other words, Bitcoin (BTC USD) price may still break the long-term support in case of another capitulation event. This could potentially be triggered by unfavorable macro data.
The Japanese bonds market in particular could be the ticking time bomb that may trigger the next liquidity cascade from the crypto market.
Recent data revealed that the 10-year Japanese government bond yield surged as high as 1.97% on Thursday. This was its highest level observed in the last 2 years.
The last time the bond yield was that high was just before the 2008 financial crisis. Consequently, its recent surge has investors concerned. More so, because the BOJ may be forced to raise interest rates.
Some analysts believe that higher rates in Japan may trigger another unwind of the JPY carry trade. A repeat of the conditions observed in August 2024.
Investor Sentiment Leans Towards Caution Amid Rising Macro Uncertainty
The Bank of Japan (BOJ) will reportedly hold a meeting to discuss interest rates between 18 and 19 December.
The extent of the Yen carry trade remains contentious but some analysts believe that it is deeply rooted into the investment markets.
As a result, Bitcoin (BTC USD) investors and analysts have been closely watching how things have been unfolding at the macro scale. These factors have no doubt influenced investor attitudes.
The Bitcoin exchange whale ratio across all exchanges has been rising. This suggests that whales have been moving their BTC holdings onto exchanges in case of another downside wave.
Whale deposits on exchanges could signify intent to sell. However, it could indicate that they are waiting for a clear decision on whether or not to sell.
In which case, the overall conclusion is that whales have been adopting a cautious stance. The FED and BOJ announcements in the next 2 weeks could therefore influence Bitcoin liquidity flows and the investment mood in 2022.