Analysts flag Japanese yen strength and rising US yields as near-term Bitcoin risks ahead of Fed and BoJ rate decisions.
Macro & Markets ·
Bitcoin entered a critical period with major central bank decisions pending, as traders assessed potential shifts in global liquidity and risk appetite. The Federal Reserve and Bank of Japan were scheduled to announce rate decisions within days, with markets pricing an 85% chance of a 25-basis-point Fed increase. Analysts flagged a concerning scenario in which rising US yields and yen appreciation could occur simultaneously—tightening global liquidity while simultaneously accelerating the unwinding of yen-funded carry trades and forcing broad portfolio deleveraging across equities and digital assets.
Macro headwinds remained substantial as Brent crude traded above $100 and the 10-year US yield approached 5%, keeping inflation pressures visible ahead of the policy announcements. Recent labor data had exceeded forecasts significantly, with August payrolls at 162,000 versus economist expectations, and producer price inflation accelerating to 5.4% annually. Bitcoin's price hovered near $78,000—down 2.5% weekly but up 23% over the prior month—while spot Bitcoin ETFs shed $462.73 million across four trading days, marking their first negative week since mid-August.
What remained uncertain was whether central bank communication would sound more hawkish than rate moves alone suggested, and how quickly traders would rotate positions based on yield and currency flows. Political pressure also loomed, with a Senate vote on the CLARITY Act and broader questions about dollar credibility following trade-related threats. Market participants were left awaiting the true test once official decisions concluded.