carrytrade
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Japan's inflation fell, even deflation MoM.
$BTC $SOL $SUI is very bullish, because Japan will be dovish again.
#carrytrade #JapanEconomy
$BTC $SOL $SUI is very bullish, because Japan will be dovish again.
#carrytrade #JapanEconomy
$BTC $ETH $SOL
The Bank of Japan (BoJ) is expected to raise interest rates by 25 basis points at next week's meeting, with the probability rising to 90% based on positive inflation and wage growth data. Governor Ueda and Deputy Himino have reinforced these expectations by stating that discussions on a rate hike will be held. Political stability after the election and government support for the BoJ's independent decisions are also key factors.
The Japanese yen surged sharply, making it the best-performing G10 currency this week, driven by speculative position adjustments, despite increased USD/JPY volatility ahead of the decision.
Looking at previous events, Bitcoin pumped more than 10% before Trump’s speech at the Bitcoin conference on July 29, 2024 (US time: Night, July 28, 2024). Subsequently, the market peaked due to a "sell the news" reaction and a correction, worsened by the BoJ's rate hike of 0.25%, which forced foreign investors to sell their paper asset holdings in the market. Bitcoin’s market dropped 30% from its peak after that. The culmination occurred on August 5 with a carry trade event that triggered a 14% Bitcoin drop in a single day.
If history is likely to repeat itself, as retail crypto traders are already euphoric about Trump, signaling a temporary market peak. The BoJ has already hinted at a rate hike, with the right momentum expected after Trump’s inauguration. Bitcoin is projected to drop by 15% from its peak after the Trump event, with the carry trade peak anticipated on Wednesday, January 29, 2025 (assuming a similar scenario of a 5-day lag after the BoJ hike).
Predicted Dip Range: $88K – $92K
Red: Trump event
Blue: BoJ rate hike
Green: Deepest dump
Source: Tradingview, Reuters, Tradingeconomics
#carrytrade #BEARISH📉
The Bank of Japan (BoJ) is expected to raise interest rates by 25 basis points at next week's meeting, with the probability rising to 90% based on positive inflation and wage growth data. Governor Ueda and Deputy Himino have reinforced these expectations by stating that discussions on a rate hike will be held. Political stability after the election and government support for the BoJ's independent decisions are also key factors.
The Japanese yen surged sharply, making it the best-performing G10 currency this week, driven by speculative position adjustments, despite increased USD/JPY volatility ahead of the decision.
Looking at previous events, Bitcoin pumped more than 10% before Trump’s speech at the Bitcoin conference on July 29, 2024 (US time: Night, July 28, 2024). Subsequently, the market peaked due to a "sell the news" reaction and a correction, worsened by the BoJ's rate hike of 0.25%, which forced foreign investors to sell their paper asset holdings in the market. Bitcoin’s market dropped 30% from its peak after that. The culmination occurred on August 5 with a carry trade event that triggered a 14% Bitcoin drop in a single day.
If history is likely to repeat itself, as retail crypto traders are already euphoric about Trump, signaling a temporary market peak. The BoJ has already hinted at a rate hike, with the right momentum expected after Trump’s inauguration. Bitcoin is projected to drop by 15% from its peak after the Trump event, with the carry trade peak anticipated on Wednesday, January 29, 2025 (assuming a similar scenario of a 5-day lag after the BoJ hike).
Predicted Dip Range: $88K – $92K
Red: Trump event
Blue: BoJ rate hike
Green: Deepest dump
Source: Tradingview, Reuters, Tradingeconomics
#carrytrade #BEARISH📉
Thursday Japan/BOJ will announce interest rates.
70% interest rates remained at 0.25%, 29% interest rates rose 0.10% and 1% interest rates fell 0.05%.
If interest rates rise, then risk assets such as $BTC , $ETH , $SOL will fall significantly. Why? because Japan's carry trade is very large, reaching trillions of dollars.
If interest rates remained at 0.25% nothing would happen.
If interest rates fall, BTC will go towards 100k, ETH 6k, and SOL 400.
#JapanEconomy #carrytrade #BOJIntervention #Marketsentimentstoday
70% interest rates remained at 0.25%, 29% interest rates rose 0.10% and 1% interest rates fell 0.05%.
If interest rates rise, then risk assets such as $BTC , $ETH , $SOL will fall significantly. Why? because Japan's carry trade is very large, reaching trillions of dollars.
If interest rates remained at 0.25% nothing would happen.
If interest rates fall, BTC will go towards 100k, ETH 6k, and SOL 400.
#JapanEconomy #carrytrade #BOJIntervention #Marketsentimentstoday
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WHAT IS CARRY TRADE
A financial bicycle (or Carry Trade) is a strategy that takes advantage of the difference in interest rates between two currencies or financial assets.
The basic idea is to borrow in a currency with a low interest rate and invest that money in a product or asset that offers a higher interest rate, with the goal of earning the difference, known as carry.
How a financial bicycle works
The typical strategy involves taking out a loan in a currency that has low interest rates, such as the Japanese yen (JPY), and then converting that money into a currency with a higher interest rate, such as the US dollar (USD).
The basic idea is to borrow in a currency with a low interest rate and invest that money in a product or asset that offers a higher interest rate, with the goal of earning the difference, known as carry.
How a financial bicycle works
The typical strategy involves taking out a loan in a currency that has low interest rates, such as the Japanese yen (JPY), and then converting that money into a currency with a higher interest rate, such as the US dollar (USD).
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