Yen rate hikes continue; carry trades buckle first
On October 16, Kazuo Ueda made it clear that rate hikes would continue. Underlying inflation is approaching 2%, while financial conditions remain accommodative. The yen—the world’s cheapest funding tap—is starting to tighten. Leveraged positions borrowing yen to buy risk assets are facing an immediate rise in costs.
We saw this play out last August: rate hikes combined with carry-trade unwinds sent Bitcoin tumbling from $64,000 to $49,000 in just a few days, with liquidations of leveraged longs reaching billions of dollars. This time the pace is slower, but the direction is the same. Unwinding starts with high-beta assets; altcoins bleed first, weakness spreads, and even relatively resilient assets get drained. The short-term outlook is bearish: reduce positions on rallies into resistance. The previous daily low and the ETF cost-basis band are the key bull-bear dividing line for this move. A break below them would signal a weakening trend; holding them would mean it’s just a shakeout.
What’s the average entry price on your long positions? If the yen really rises above 1%, will you cut or hold?
$SOL $ETH $BTC
On October 16, Kazuo Ueda made it clear that rate hikes would continue. Underlying inflation is approaching 2%, while financial conditions remain accommodative. The yen—the world’s cheapest funding tap—is starting to tighten. Leveraged positions borrowing yen to buy risk assets are facing an immediate rise in costs.
We saw this play out last August: rate hikes combined with carry-trade unwinds sent Bitcoin tumbling from $64,000 to $49,000 in just a few days, with liquidations of leveraged longs reaching billions of dollars. This time the pace is slower, but the direction is the same. Unwinding starts with high-beta assets; altcoins bleed first, weakness spreads, and even relatively resilient assets get drained. The short-term outlook is bearish: reduce positions on rallies into resistance. The previous daily low and the ETF cost-basis band are the key bull-bear dividing line for this move. A break below them would signal a weakening trend; holding them would mean it’s just a shakeout.
What’s the average entry price on your long positions? If the yen really rises above 1%, will you cut or hold?
$SOL $ETH $BTC