Bitcoin crashed 30% after the last Yen intervention, but there’s a catch

Following the aggressive, though officially unconfirmed, Japanese Yen intervention (JPI) aimed at stabilizing the currency against the U.S. Dollar, global markets experienced a sharp downturn. Bitcoin (BTC) was arguably the most dramatic immediate casualty, plummeting nearly 30% in the 48 hours post-intervention, dropping from highs near $62,000 to lows below $44,000. Initial market analysis immediately linked the crypto collapse to the JPI, speculating that the massive liquidation of U.S. Treasury and dollar assets necessary for the intervention created a severe global liquidity crunch, forcing investors to dump high-beta, high-risk assets like BTC.

However, there is a catch. While the JPI undoubtedly contributed to the macro risk-off sentiment, on-chain data suggests the intervention merely served as a potent catalyst for a structural market event already primed to occur. The depth and speed of the 30% crash were primarily driven by a massive, cascading liquidation event across major derivatives exchanges. High leverage positions that had accumulated in the weeks prior were wiped out the moment the macro news caused the $50,000 psychological support level to break. The BOJ’s action provided the initial nudge, but the true mechanism of the crash was the inherent instability of the over-leveraged crypto futures market. Thus, the Yen intervention was the match, but the highly volatile crypto ecosystem itself was the tinderbox.

Source: Bitcoin crashed 30% after the last Yen intervention, but there’s a catch