During the Asia trading day, Bitcoin (BTC) held steady at the $29,000 level, while ether (ETH) experienced a slight dip to $1,858. The market was reacting to the recent moves made by the Bank of Japan (BOJ).
The BOJ announced a hawkish adjustment to its yield curve control program, raising the 10-year Japanese government bond yield cap to 1% from 0.5%. This decision came amidst calls from the International Monetary Fund to normalise its ultra-loose policy, potentially impacting global liquidity and risk assets, including Bitcoin.
Following the BOJ’s hawkish policy tweak, bond yields increased, providing negative cues for Bitcoin. Although bitcoin was trading above $29,000, it lost support from the widely-tracked 50-day simple moving average (SMA), which could lead to further losses, according to chart analysts.
Regarding market flow, few noteworthy developments, except for demand for put options offering downside protection, occurred late Thursday.
Ether followed a similar trajectory, trading at $1,859 with a 0.7% decrease over the past 24 hours.
Brent Xu, the CEO and co-founder of Web3 bond-market platform Umee, sees the current stability amidst rising rates as a sign of strength, but he also anticipates this pattern to continue. He disagrees that the market has entered a new bull cycle and believes it will remain range-bound for an extended period. According to Xu, trading volumes are relatively low, and retail investors are not actively entering the space.
Other major cryptocurrencies by market cap were experiencing negative movements. Memecoin DOGE and MATIC, the token of the smart contracts platform Polygon, saw declines of 3.45% and 2.63%, respectively, during the Asian business day.
On the other hand, Stellar Lumens’ XLM token, which had risen by double-digits the previous day, remained flat.
The CoinDesk Market Index, which measures crypto market performance, showed a decline of 0.92%.
Xu from Umee commented on the market’s current situation, stating that traders and investors should prepare for several months of dull market actions, with occasional short-lived rallies that revert to the mean. He does not expect a significant rally until next year’s halving, which could coincide with rate cuts triggered by potential events such as a credit crunch or a banking crisis.