“Overnight, the Bank of Japan announced that they would reduce asset purchases in a move that signaled marginal tightening of policy. By the time European markets opened, they digested this news and immediately went into defensive move…[which also] put a damper on the strong price action in BTC,” wrote Chad Steinglass, head of trading at CrossTower, a digital asset trading firm.
- The BoJ is considering ditching its 6 trillion yen purchase target of buying exchange traded funds (ETFs), as reported by Bloomberg. The ETF purchase program is expected to only be used in times of market turmoil, which could be interpreted as marginal tightening.
- And the quick risk-off reaction to the BoJ news during Asian and European hours is not unusual.
- It’s not uncommon for Europeans to be more skittish than others. Since Lunar New Year, Asian markets have been relatively weak, Steinglass told CoinDesk in a phone interview.
- Crypto will trade with risk [assets] intraday. Over the last few weeks, bitcoin has been affected by rocky markets, but has been resilient, which is encouraging.
The recent bounce above $58K is consistent with rising price floors in BTC as the long-term trend remains intact. “Every time we break into a new range, old resistance becomes support – consistently over the last several months,” said Steinglass.
