Yen Breaks Key Level as XRP Outperforms in Crypto Market
The Japanese yen broke the critical 150 barrier against the U.S. dollar early Friday, a move that often signals the unwinding of carry trades and a shift in global risk sentiment. Meanwhile, XRP rose more than 5%, outperforming other major cryptocurrencies in the past 24 hours, as Bitcoin (BTC) managed to avoid the feared Thanksgiving holiday “massacre,” posting modest gains.
Crypto Market Update
Bitcoin traded above $96,000 in the early hours of Friday, recovering from a low of $93,500 on Thursday. Major altcoins like Ether (ETH), Solana’s SOL, and Binance’s BNB showed little movement, while Cardano’s ADA increased by 3.5%, and Dogecoin (DOGE) dropped by 1.2%.
The CoinDesk 20 Index (CD20), tracking the largest liquid cryptocurrencies, gained 1.3%. Mid-cap assets such as Algorand (ALGO) and Worldcoin (WLD) saw notable gains, with prices jumping as much as 21%, despite no clear catalysts.
Yen’s Impact on Risk Sentiment
The yen’s break above 150 against the dollar was driven by expectations that the Bank of Japan (BOJ) will raise interest rates in December, following stronger-than-expected inflation data from Tokyo. The move was further amplified by month-end financial adjustments and lower liquidity during the U.S. Thanksgiving holiday.
Market sentiment now points to a 63% chance of a BOJ rate hike, contrasted with a 67% likelihood of a Federal Reserve rate cut. The shift in expectations could reduce the attractiveness of carry trades, where investors borrow yen at low rates to fund higher-yield investments.
Influence of Yen and Global Risk on Bitcoin
The strength of the yen is closely tied to global risk sentiment. As an “anti-risk” currency, the yen often strengthens in times of market stress, which can dampen appetite for risk assets like Bitcoin.
A CoinDesk analysis earlier this week indicated that Bitcoin’s bullish momentum has weakened, partly due to a drop in the Australian dollar/yen (AUD/JPY) exchange rate, which serves as a proxy for global risk appetite. Historically, a strong yen has led to a decline in risk-on assets, with a previous surge in the yen causing Bitcoin to lose $20,000 in value.
XRP Outperforms Amidst Uncertainty
Amid broader market uncertainty, XRP’s 5% gain stands out, suggesting strong underlying demand and momentum. Bitcoin’s steady price movement above $96,000, coupled with XRP’s outperformance, indicates a market that is navigating macroeconomic challenges while showing resilience in certain assets.
Market Outlook
With the yen’s strength signaling a shift in market sentiment and potential changes in monetary policy, cryptocurrencies face a complex mix of macroeconomic influences. XRP’s rise and Bitcoin’s stability suggest a market in transition, where global financial forces may continue to drive volatility across digital assets.
