Don't be happy too soon! Analyst: 'This data' warns of an impending wave of hedging, BTC may experience a 30% big dump

BTC Rebound above 96,000, what is the reason for the market pullback this week?

BTC welcomed a pullback trend earlier this week, and once fell below $91,000. However, as of this morning (28th), it hit the bottom and rebounded, temporarily rising back above $96,000, with an intraday increase of 3.68%.

Although BTC is still oscillating at a high level, aiming for $100,000, Omkar Godbole, market director of 'CoinDesk', recently put forward bearish ideas successively. In addition to predicting the risk of BTC possibly falling below $90,000, he also suggested that there may be a more widespread wave of hedging in the future.

He pointed out that the recent upward trend of BTC has shown signs of slowing down. Although it is still fluctuating at a high level, investors should not take it lightly. Because BTC is facing multiple challenges, including weakening demand in the US market and potential risks in the global financial market.

The trend of the Australian dollar/Japanese yen suggests a new wave of risk aversion? Is the Central Bank of Japan going to raise interest rates again?

Godbole is following the changes in the Exchange Rate of Australian Dollar/Japanese Yen (AUD/JPY), which is an important indicator of global economic risk appetite.

The market is currently closely following the possible Interest Rate adjustment by the Central Bank of Japan (BOJ) in December. According to ING's analysis report, BOJ Governor Haruhiko Kuroda stated that the decision to further tighten monetary policy will be based on existing information and will be made through "sequential meetings", which has sparked speculation about a rate hike in December.

What will happen if Japan raises interest rates? Do you still remember the big dump of the stock market and cryptocurrency in late July to early August this year?

At that time, the strong rise of the Japanese Yen led to a significant drop of over 8% in the Australian Dollar/Japanese Yen Exchange Rate, followed by a dramatic Fluctuation in global risk assets. BTC quickly dropped from about $70,000 to $50,000 within a week, a decrease of nearly 30%.

Fast forward to now, the AUD/JPY Exchange Rate has rebounded from the low point in August, but there has been a pullback in recent days.

Source: TradingView AUD/JPY Exchange Rate Trend

If the yen drives the second wave of risk aversion, BTC may fall below 90,000

Godbole further warned that if the Central Bank of Japan really raises interest rates in December, it may trigger a new wave of market hedging.

Investors not only need to follow the trend of AUD/JPY, but Godbole also mentioned the risks of the probability of the Federal Reserve cutting interest rates and the possibility of a trade war re-emerging due to Trump's election and the imposition of 'inflation tariffs' on Mexico, Canada and the United States.

CME FedWatch data shows that the market currently expects a 70% probability of a 1-point rate cut in the United States in December, with a 30% probability of maintaining the current Intrerest Rate.

Image source: FedWatch CME FedWatch data shows that the current market expects a 70% probability of a 1-point rate cut in the US in December.

Godbole suggests that BTC investors should closely follow the changes in the AUD/JPY Exchange Rate and the policy direction of the Central Bank of Japan. If a situation similar to the end of July this year occurs, BTC may experience a significant pullback again, with the risk of falling below $90,000.

Although BTC has performed strongly recently, Godbole's analysis reminds investors to remain cautious and not be overly optimistic about the market. Market risks have always been present and it is necessary to carefully deal with possible fluctuations.

[Disclaimer] The market is risky and investment should be cautious. This article does not constitute investment advice. Users should consider whether any opinions, perspectives, or conclusions in this article are suitable for their specific situations. Investment based on this is at your own risk.

"Don't be too happy too soon! Analyst: 'This data' warns of the impending hedging tide, BTC may see a 30% big dump again." This article was first published in 'encryption city'.