Yen Intervention Disrupts Global Liquidity, Bitcoin Faces Continued Short-Term Downside Pressure

Summary:

The first joint U.S.-Japan foreign exchange intervention since 1998 to support the yen has raised market concerns over the risk of a reversal in yen carry trades. Against the backdrop of tightening global liquidity conditions and declining institutional risk appetite, Bitcoin ETF flows shifted from three consecutive weeks of net inflows to net outflows, signaling a clear deterioration in short-term market sentiment.

SELL BTC-USDT

EXP

TRADING

63700.6

Entry Price

43593.0

68000.0

63767.8 +240.2 +0.38%

0.0

Pips

Flat

43593.0

Exit Price

63700.6

Entry Price

68000.0

Fundamental

Bitcoin continued its weak performance this week. As of the European session on Monday, the price had fallen below $63,000, following a decline of more than 2.8% over the previous week. Meanwhile, spot Bitcoin ETFs recorded modest net outflows last week, ending a three-week streak of net inflows and indicating that institutional investors have become more cautious toward risk assets.

On the macro front, the U.S. Treasury, through the Federal Reserve Bank of New York, coordinated with Japan’s Ministry of Finance last Friday to purchase yen. This marked the first joint U.S.-Japan foreign exchange intervention since 1998, aimed at stabilizing the persistently weakening yen. At the same time, the yield on the U.S. 30-year Treasury bond briefly climbed to 5.27%, the highest level since 2007, before easing slightly to 5.24%, reflecting continued market expectations for a prolonged high-interest-rate environment.

The impact of this foreign exchange intervention on the cryptocurrency market is primarily transmitted through the yen carry trade channel. As the yen appreciates rapidly, funds that rely on low-cost yen financing to invest in higher-risk assets may be forced to unwind positions and buy back yen, triggering broad deleveraging across global risk assets. Cryptocurrencies such as BTC and ETH could be affected in a similar way to the sharp market volatility caused by the unwinding of carry trades in August 2024. Therefore, with global liquidity facing potential contraction risks, institutional investors are likely to remain cautious in the near term.

Looking ahead, investors should closely monitor three key indicators: the USD/JPY exchange rate, Japan’s financing costs, and long-term U.S. Treasury yields. As fiscal policies and currency interventions increasingly influence global capital flows, fiscal policy is becoming an increasingly important variable affecting global liquidity conditions and the performance of risk assets.

Yen Intervention Disrupts Global Liquidity, Bitcoin Faces Continued Short-Term Downside Pressure_1

Technical Analysis

Bitcoin attempted to break above the $65,000 psychological level again last week but failed to establish a sustained move higher. Multiple long upper wicks appeared on the four-hour chart, indicating significant selling pressure at higher levels and weakening bullish momentum.

From the four-hour perspective, Bitcoin formed a short-term peak near $65,675 before entering another decline. The price subsequently broke below $65,000, $64,200, and the key neckline support at $62,500, creating the early structure of a head-and-shoulders pattern and signaling increasing downside risks in the short to medium term.

However, the current formation has not yet developed into a fully confirmed standard head-and-shoulders pattern, meaning a short-term rebound triggered by profit-taking among bears remains possible. On the upside, the first resistance level is around $64,200, followed by the $64,500 area and the descending trendline resistance. The more important resistance zone is near $65,650. If Bitcoin manages to close back above $65,825, the current bearish structure would be invalidated, increasing the possibility of a trend reversal.

Until Bitcoin regains key resistance levels, the overall structure remains bearish, with a preference for selling into rallies.

Trading Strategy

Trading Direction: Sell

Entry Price: 64,000

Target Price: 43,593

Stop Loss: 68,000

Strategy Valid Until: September 2, 2026, 23:55

Support Levels: 61,761 / 61,227 / 59,523

Resistance Levels: 63,745 / 64,686 / 65,348

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