data<\/a> from CoinGlass shows liquidations of $536 million in the past 24 hours, with long positions accounting for most of the losses. The total crypto market open interest has fallen by 0.66% to around $124 billion, and the average relative strength index sits near 36, which shows a market struggling to form support.<\/p>\nBOJ tightening is driving the sell-off<\/h2>\n
The latest drop has been shaped by fast-rising Japanese bond yields and a clear shift in tone from the Bank of Japan. <\/p>\n
Japan\u2019s 10-year government bond yield has reached 1.877%, the highest reading since 2008. The 2-year yield touched 1% for the first time since before the global financial crisis. Investors took the moves as proof that Japan is stepping away from decades of softer policy.<\/p>\n
<\/p>\n
This shift has put heavy pressure on the yen carry trade. The strategy has been widely used for years because borrowing in yen has been extremely cheap. Traders then moved that liquidity into higher-returning assets, including cryptocurrencies.\u00a0<\/p>\n
Estimates place the size of the trade in the trillions. When yields rise and the yen strengthens, those positions become harder to hold. Sudden yen appreciation often leads to margin calls and forced selling across risk assets. Analysts following the trade say a sharp move in yields could unwind billions in crypto exposure within a single day.<\/p>\n
A fragile backdrop for risk assets<\/h2>\n
Conditions in global markets have added more stress to crypto. Bitcoin\u2019s correlation with the Nasdaq and the S&P 500 pulled it lower as equities weakened. Concerns around debt exposure at fast-growing AI firms, along with China\u2019s tightening rules on digital assets, have also weighed on risk appetite.\u00a0<\/p>\n
The tone worsened further after S&P cut its stability rating for Tether\u2019s USDT to the lowest tier. Signs of strain appeared in offshore markets where USDT traded below its reference rate in China.<\/p>\n
Traders are now watching the Bank of Japan\u2019s mid-December meeting. A firm message about a near-term rate hike would likely push yields higher again and increase pressure on the crypto market.\u00a0<\/p>\n
Markets are also pricing in a Federal Reserve rate cut. A combination of a BOJ hike and Fed easing would narrow the gap between U.S. and Japanese rates and could extend the fourth quarter slide in digital assets.<\/p>\n
<\/p>\n
\n
<\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"
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