Analysis: Bitcoin's Major Rally May Depend on Bank of Japan's Bond Market Intervention

Source: CryptoNewsNet Original Title: Analysis Company: ‘Bitcoin’s Major Rally May Depend on This News Coming from Japan’ Original Link: https://cryptonews.net/news/analytics/32329814/ According to cryptocurrency asset analysis company Delphi Digital’s latest assessment, there is a striking negative correlation between Bitcoin and Japan’s 10-year government bonds.

The analysis reveals that tensions in the Japanese bond market are putting pressure on Bitcoin prices, but a potential central bank intervention could reverse this trend.

Current Market Dynamics

Delphi Digital notes that while Bitcoin prices are trading sideways, gold continues to rise. The primary reason for this divergence could be linked to Japanese government bonds. Normally, rising bond yields increase the opportunity cost of holding non-yielding assets, putting pressure on gold. However, the current situation—where both gold and yields are rising simultaneously—suggests the market is pricing in policy pressures and balance sheet risks rather than economic growth.

Japanese Bond Market Vulnerability

According to the report’s data, Japan’s 10-year government bond yield has risen approximately 3.65 standard deviations above its long-term average. Japanese banks structurally hold a high percentage of long-term bonds and are heavily exposed to them, both as assets and collateral. This situation creates significant vulnerability for the financial system.

Bitcoin’s Recovery Potential

In the current environment, much of the pressure is being absorbed by gold, while Bitcoin exhibits a negative correlation with Japanese 10-year bonds and has performed relatively weakly with rising yields. According to Delphi Digital, if the Bank of Japan takes steps to stabilize the bond market, the risk premium on gold may decrease and Bitcoin may find room to recover.