Bitcoin (BTC) rebounds in the short term to reclaim $91,000…suspected impact from possible Japanese FX intervention

JH Kim

Summary

Bitcoin (BTC) rebounded in the short term to reclaim the $91,000 level, it reported.
The possibility of FX market intervention by the Bank of Japan (BOJ) and financial authorities was cited as a backdrop for Bitcoin’s rebound, it said.
It was raised that a shift to yen strength may have influenced Bitcoin’s rebound, as it led to a reduction in carry trades and eased selling pressure on risk assets, it reported.

An analysis suggests that suspicions of Japanese financial authorities intervening in the foreign exchange market helped drive Bitcoin (BTC) back above the $91,000 level in a short-term rebound.

According to cryptocurrency-focused media outlet CoinDesk on the 23rd (local time), Bitcoin fell in early Asian trading before rebounding later to regain the $91,000 mark. The outlet pointed to the possibility of foreign exchange market intervention by the Bank of Japan (BOJ) and financial authorities as a key factor behind the move.

As the yen’s gains against the dollar suddenly widened, some market experts said signals typical of FX intervention appeared. With the yen strengthening, leveraged carry-trade positions premised on dollar strength were partially unwound, easing selling pressure across risk assets in the process.

Markets have continued to view yen weakness and the expansion of carry trades exploiting it as a headwind for risk-asset prices such as Bitcoin. That is why the shift to yen strength is seen as potentially having contributed to Bitcoin’s short-term rebound.