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Bitcoin fell sharply to start the week, following the surprise selection of a new prime minister in Japan over the weekend. Following a roughly 14% rally after the U.S. Federal Reserve’s 50 basis point rate cut nearly two weeks ago, conditions were primed for a significant Bitcoin (BTC) selloff. The selection of a new prime minister in Japan over the weekend seems to have triggered this move. Source: BNC Bitcoin Liquid Index In a surprising decision, Japan’s ruling party selected Shigeru Ishiba as the next prime minister. It’s widely believed that Ishiba supports the Bank of Japan’s (BOJ) goal to normalize monetary policy, which means raising interest rates. Following his selection, Ishiba called for snap elections to be held in late October. This comes after the BOJ’s modest rate hike in late July, which caused a sharp unwinding of the yen carry trade and triggered a global financial panic, sending Bitcoin plunging from about $70,000 to below $50,000 within days. The selloff was so severe that the BOJ had to step in, using a former official to reassure markets that there wouldn’t be another rate hike in 2024. Ishiba’s selection over the weekend triggered another surge in the yen and a 5% drop in Japan’s Nikkei stock average, with the selloff extending to Bitcoin, which fell from about $66,000 to as low as $63,300. At press time, Bitcoin has recovered slightly to $63,800, down about 3% from late Friday. European stocks are down around 1%, while U.S. stock index futures show only modest losses.   Bitcoin Takes a Breather After Strong Run Prior to this weekend, Bitcoin had been enjoying a strong rally since the Fed cut its benchmark rate by 50 basis points in mid-September. China’s launch of monetary and fiscal stimulus to boost its economy also contributed to…

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Filed under: News - @ September 30, 2024 9:24 pm