Bitcoin fell one other 4% on Tuesday, with greater than $1.8 billion liquidated previously 48 hours amid US President Donald Trump's tariff threats and turmoil in Japanese bonds.
Bitcoin (BTC) fell to $87,790 in late trading on Coinbase on Tuesday, its lowest level since December 31. More than $1.8 billion was liquidated within the last 48 hours, about 93% of which were long positions, Coinglass reported.
BTC crashes 10% in per week, erasing all January gains. Source: TradingView
The asset has now erased all gains made to date this 12 months and is 10% below its year-to-date high of just below $98,000. It has also fallen below the 50-day exponential moving average (EMA), which served as support within the recent rally.
Crypto markets have lost a complete of $225 billion in market capitalization, the biggest decline since mid-November, and the overall capitalization now stands at $3.08 trillion.
Japanese bond market collapse or “Sell America” trade
According to Reuters, Trump's renewed tariff threats led to a repeat of the so-called “Sell America” trade that emerged after the tariff announcement last April.
While many attribute the market volatility to Trump's escalation of the trade war, other aspects is also at play.
50T Funds founder and CEO Dan Tapiero said the “wipeout” was brought on by “the overall annihilation of the Japanese bond markets that’s currently infecting all markets.”
Tapiero predicted further gains for gold, which hit an all-time high of $4,835 an oz on Tuesday, followed by Bitcoin.
US Treasury Secretary Scott Bessent said the identical on Tuesday: “I feel the markets are happening due to Japanese [10-year] The bond market has experienced a six standard deviation deviation over the past two days.”
This has “nothing to do with Greenland,” he said.
Japanese 10-year government bond yields rose nearly 19 basis points in two days, while 30-year Treasury yields posted their biggest each day rise since 2003 as investors braced for higher government spending and lower liquidity, Reuters reported.
Critical source of world liquidity is becoming scarcer
Jeff Ko, chief analyst at CoinEx Research, told Cointelegraph that the rise in Japanese bonds was as a consequence of fiscal uncertainty and market volatility ahead of the snap election.
“This threatens to speed up carry trade unwinding and further deplete a vital source of world liquidity,” he said. “Beyond the trade war, a capital war appears to be emerging,” he continued.
“As geopolitical tensions increase, money flows are shifting away from U.S. assets. Bitcoin finds itself in a tug of war – despite sharing characteristics with hard assets like gold, it’s currently being sold as a consequence of its increased sensitivity to liquidity conditions.” Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph's editorial guidelines and goals to supply accurate and up-to-date information. Readers are advised to independently confirm the knowledge. Read our editorial policies https://cointelegraph.com/editorial-policy
