Crypto: Bitcoin Crashed 30% After The Last Yen Intervention, But There's A...

Past yen shocks were followed by BTC dropping 30% before rebounding more than 100%, a pattern traders are watching as talk of Japan's intervention returns.

Bitcoin (BTC) may face another sharp sell-off if growing talk of a Japanese yen (JPY) intervention turns into action, with past intervention episodes coinciding with 30% drawdowns in BTC price.

Past Japanese yen shocks saw BTC drop about 30%, and then recover by over 100%.

Onchain data says the Bitcoin bottom is not yet confirmed.

A yen intervention is when Japan’s authorities step into the forex market to influence the currency, most commonly by selling dollars and buying yen to slow a rapid yen slide.

Over the weekend, markets were on alert after reports that the New York Fed conducted “rate checks” in USD/JPY, often treated by FX traders as a prelude to coordinated action.

That followed official comments emphasizing close US-Japan coordination on currencies.

In the two prior intervention windows, BTC sold off by about 30% from local highs before forming a base, due to the unwinding of the “yen carry trades.”

In both cases, the post-shakeout recovery eventually extended into a rally of 100% or more.

“The same scenario is about to occur now,” said analyst Mikybull Crypto, adding that the BTC price “will first dump and rally afterward.”

Source: CoinTelegraph