Bitcoin near $58K as dollar hits 40-year high vs yen

Bitcoin fell toward $58,000 around Tuesday’s Wall Street open as the US dollar rose to a 40-year high against the yen, increasing the chance of Japanese policy action and adding selling pressure ahead of the quarter-end close. The cryptocurrency has lagged US equities this quarter.

Around the open, BTC traded near $58,000 after losing momentum below $60,000. Intraday charts showed downside pressure and rising volatility. Traders pointed to a compressed price range on short time frames and rising open interest as signs that a sharp move could follow whichever side breaks first.

On X, one trader wrote: “Open Interest pumping, noticed some large longs entering on this dip, it’s about to get spicy.” Another trader described the market as consolidating with marginally higher lows and equal highs, and warned a decisive break could trigger a quick move.

The dollar’s surge pushed USD/JPY to about 162.50, its strongest level since the mid-1980s, increasing the prospect of intervention by Japanese authorities. Analysts noted that firms and investors with dollar liabilities may sell assets to obtain dollars, which can put downward pressure on those assets, including bitcoin.

Onchain analytics firm CryptoQuant reported higher inflows to exchanges after bitcoin fell below $70,000. A large share of the coins moved were last active six to 12 months ago, indicating they were likely bought near recent cycle highs. A CryptoQuant contributor described this pattern as consistent with capitulation among cycle-top buyers.

CryptoQuant also recorded larger transfers to exchanges and more movement of coins tied to the prior peak. The firm noted similar capitulation events involving cycle-top investors occurred near long-term lows in 2018 and 2022.

For the quarter, bitcoin’s losses approached 20% while the S&P 500 rose about 14% and the Nasdaq 100 gained roughly 25%, widening the performance gap between crypto and US equities. Traders said that divergence can shift flows away from assets that are easier to liquidate.

Market participants expect volatility to remain elevated as the quarter closes and currency developments unfold. Traders are monitoring order books, open interest and exchange flows for signals of whether the next large move will be a renewed sell-off or a recovery attempt.