Cryptocurrency markets are experiencing downward pressure, with Bitcoin sliding to approximately $US86,000 and Ethereum dipping below $US2800 ($4278). These declines coincided with Japan’s two-year government bond yield reaching a 17-year high of 1.01 per cent. This surge followed signals from Bank of Japan governor Kazuo Ueda indicating a potential rate hike.
According to Zerocap analyst Emir Ibrahim, weak Bitcoin exchange-traded funds (ETFs) inflows and limited dip-buying suggest that structural demand remains muted. This observation points to underlying concerns about the strength of the cryptocurrency market’s foundation. Zerocap is a digital asset investment firm providing wealth and investment management services, along with digital asset trading and custody to private clients, family offices and institutions.
The recent market downturn also saw intensified forced selling, with over $US500 million in leveraged BTC longs liquidated. While the specific cause of this selling pressure is unclear, analysts are monitoring whether it is related to concerns about the unwinding of the yen carry trade. The carry trade involves borrowing in a currency with a low interest rate and investing in one with a higher rate.
Looking forward, market participants are closely watching US economic data and interest rate expectations. These factors could significantly influence risk assets and overall sentiment in the cryptocurrency market leading into 2026. The interplay between macroeconomic factors and crypto-specific dynamics will likely shape the trajectory of digital assets in the coming years.
