Bitcoin (BTC) recently experienced a relief rally, pushing its value to $58,000 earlier this week. However, this upward momentum was short-lived, as market fluctuations following the Trump-Harris US presidential debate and an ongoing carry trade unwind affected the crypto's gains.
<h2>What is the Carry Trade Unwind?</h2>
[embed]https://twitter.com/CryptoHayes/status/1833664074829398063[/embed]

The carry trade unwind, particularly related to the strengthening Japanese Yen, is a key factor impacting Bitcoin. This trend became prominent in August when the Bank of Japan (BoJ) raised interest rates, causing carry trade investors to close their positions. Investors typically borrow from low-interest-rate currencies like the Yen to invest in higher-return assets, but the BoJ’s interest rate hike triggered a market sell-off, including in crypto.
<h2>Risk Warnings for Bitcoin</h2>
[embed]https://twitter.com/jjcmoreno/status/1833652548605276440[/embed]

Prominent figures like BitMEX founder Arthur Hayes have highlighted the potential risks for Bitcoin if the US dollar weakens against the Yen. Hayes hinted at further market volatility, stating, “$USDJPY breaking down, it’s about to be goblin town all over again.”
<h2>Impact on Bitcoin's Future</h2>
As the carry trade continues, Bitcoin's strong correlation with the Nasdaq could make it more vulnerable to market shifts than gold. On the brighter side, US <a href="https://www.cryptoknowmics.com/news/spot-bitcoin-etfs-face-consecutive-outflows-amid-market-uncertainty/" target="_blank" rel="noopener">Bitcoin ETF</a> investors have shown confidence, with net daily inflows reversing a streak of $1.2 billion in outflows.

Whether Bitcoin can withstand these pressures remains to be seen as traders monitor both the carry trade and broader market trends.

<em><strong>Disclaimer: </strong></em>The views and opinions expressed in this article are for informational purposes only and do not constitute financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.

Bitcoin Faces Risks as Japanese Yen Carry Trade Unwind Continues

Bitcoin’s rally to $58K faces setbacks amid Japanese Yen carry trade unwind. Will BTC weather the ongoing market pressures?

Sujit received his Bachelors in Science from the LNMU Darbhanga. He is currently working as a Content Strategist. He has more than three years of professional experience in information systems, security policies, technologies, and Cryptocurrency. He has published 6 books in the area of information security and assurance. He has published more
than 50 research articles in leading journals Regarding the Latest and Breaking Crypto News and updates. His research interests include access control, computer forensics, Digital Marketing, Web development, business hacks, player experience, and virtual storytelling.

Bitcoin Faces Risks as Japanese Yen Carry Trade Unwind Continues

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