Bitcoin (BTC) News Today: BTC Dips Below $50K on Yen Carry Trade Unwind

BTC Drops Below $50,000

On Monday, August 5, BTC slid by 6.91%. Following a 4.41% loss on Sunday, August 4, BTC ended the session at $54,274. Market conditions worsened on Monday, August 5, with BTC briefly tumbling below $50,000 for the first time since February.

The Bank of Japan Policy Decision Resonates

Riskier assets braced for another bruising session on Monday as Yen strength forced investors to unwind Yen carry trades.

On July 31, the Bank of Japan raised interest rates and cut Japanese Government Bond (JGB) purchases. The more hawkish stance strengthened the Yen. Consequently, investors borrowing Yen to purchase BTC and other crypto likely faced margin calls, driving the BTC and broader crypto market sell-off.

The BoJ policy move coincided with the weak US Jobs Report, fueling fears of a US economic recession, further pressuring BTC demand.

US BTC-Spot ETF Market Responds to the Market Turmoil

On Monday, the US BTC-spot ETF market reported total net outflows for the second consecutive session.

According to Farside Investors:

• On Monday, Grayscale Bitcoin Trust (GBTC) saw net outflows of $69.1 million.
• ARK 21Shares Bitcoin ETF (ARKB) had net outflows of $69.0 million.
• Fidelity Wise Origin Bitcoin Fund (FBTC) reported net outflows of $58.0 million.

However,

• Grayscale Bitcoin Mini Trust (BTC) saw net inflows of $21.8 million.
• Bitwise Bitcoin ETF (BITB) and VanEck Bitcoin Trust (HODL) had net inflows of $2.9 million and $3 million respectively.

Excluding flow data for iShares Bitcoin Trust (IBIT) and Valkyrie Bitcoin Fund (BRRR), the US BTC-spot ETF market saw total net outflows of $168.4 million, down from $237.4 million of outflows in the previous session.

US recession risks may have eased after the service sector data, The ISM Services PMI increased from 48.8 in June to 51.4 in July, with new orders and employment data also upbeat.

Nevertheless, oversupply risk remains a BTC headwind.

Oversupply Risk

Mt. Gox has $2.44 billion in BTC (46,164 BTC) left to return to its creditors as of Tuesday, August 6. A transfer of BTC to creditors could fuel BTC sell orders following the latest sell-off, further affecting BTC price levels.

Moreover, the US government still holds $11.10 billion in crypto, with BTC and ETH facing the risk of supply surges. Crypto holdings included:

• BTC: 203,239 ($10.74B);
• ETH: 50,524 ($117.10M); and
• USDT: 121,734,000 ($121.73M).

On July 29, the US government transferred $2 billion in BTC to two addresses, kickstarting a pre-Bank of Japan BTC retreat from a July 29 high of $69,912.

Investors should remain alert amidst BTC-spot ETF outflows and oversupply risks. Stay updated with our latest news and analysis to manage exposures to BTC and the broader crypto market.

Technical Analysis

Bitcoin Analysis

BTC remained below the 50-day and the 200-day EMAs, affirming the bearish price signals.

A BTC return to $57,500 could support a move toward the 200-day EMA and the $60,365 resistance level. A break above the $60,365 resistance level could give the bulls a run at the 50-day EMA and the $64,000 resistance level.

US economic data, BTC-spot ETF flows, and BTC supply-demand trend-related news require consideration.

On the other hand, a drop below the $52,884 support level could signal a fall toward the $47,860 support level.

With a 31.88 14-Daily RSI reading, BTC could drop below the $52,884 support level before entering oversold territory.

Ethereum Analysis

ETH saw well below the 50-day and 200-day EMAs, confirming the bearish price trends.

A break above the $2,664 resistance level would support a move toward the $3,033 resistance level.

US ETH-spot ETF market flow trends and supply-demand signals require consideration.

Conversely, an ETH drop below the $2,403 support level could signal a fall toward the $2,124 support level.

The 14-period Daily RSI reading, 26.35, shows ETH sitting in oversold territory. Buyer demand could intensify at the Monday low of $2,128.