Bitcoin Surpasses $61,000 as Traders Exercise Caution Before U.S. CPI Release and Yen Carry Trade Unwinding
Bitcoin (BTC) saw a surge above $61,000 during the early Asian trading hours on Wednesday, leading the gains among major tokens and reversing losses incurred from a significant price drop earlier in the month. According to CoinGecko data, Bitcoin recorded a growth of over 3%, with other major tokens like ether (ETH), Solana’s SOL, Cardano’s ADA, xrp (XRP), and BNB Chain’s BNB also experiencing increases of up to 2.8%. However, memecoins like dogecoin (DOGE) and shiba inu (SHIB) only rose by 1%, indicating a lack of favor towards riskier bets.
The rise in Bitcoin surpassed the 2.45% increase in the broader CoinDesk 20 (CD20), a liquid index that tracks the largest tokens by market capitalization excluding stablecoins. Despite these gains, some trading funds remain cautious due to an eventful data week, with concerns about potential short-term disruptions that could hinder the ongoing rally.
Traders are keeping a close eye on the upcoming US Consumer Price Index (CPI) release, with expectations that the inflation numbers will provide guidance on whether the Federal Reserve will cut rates by either 50 or 25 basis points in September, with the odds currently evenly split, as per insights shared by crypto trading firm QCP Capital.
The recent recovery on Wednesday helped traders recover from losses following a market-wide drop of 20% earlier in August due to the unwinding of the popular yen carry trade. Some strategists warn of further losses related to this carry trade, suggesting that its impact is not entirely resolved.
In a recent CNBC interview, Richard Kelly, the head of global strategy at TD Securities, expressed caution about declaring the end of the carry trade unwind, emphasizing the potential for further unwinding, particularly in light of the undervalued yen.
The Bank of Japan (BoJ) recently raised rates for the first time in over a decade, causing disruptions in global markets and risk assets, including Bitcoin. The impact of the rate hike on trading strategies led to a ripple effect that affected various markets, with Bitcoin experiencing a 15% decline in a 24-hour period, one of its most significant drops in recent times.
Traders remain optimistic about TON, with Toncoin’s TON recording a 7% increase during the Wednesday Asia trading session. Stakeholders attribute this growth to the platform’s thriving GameFi ecosystem and its close integration with Telegram, which has facilitated viral social growth and high blockchain transaction speeds, enabling scalability.
Ben El-Baz, Managing Director of HashKey Global, highlighted the potential for TON to attract more developers by leveraging Telegram’s advantages, representing a significant opportunity for the TON ecosystem’s growth.
