An unexpected movement in the Japanese bond market is causing unrest among investors worldwide. According to market strategist Levi Rietveld, XRP is on the eve of a period of violent price fluctuations. What’s behind this?
Japanese interest rates rise above crisis levels
The yield on Japanese ten-year government bonds has risen this week to above the level of the financial crisis in 2008. That seems like a detail, but according to Rietveld it is a crucial warning. Japan has been the center of the so-called ‘yen carry trade’ for decades, where investors borrow cheap yen to invest in risky assets worldwide.
Now that interest rates are rising rapidly, borrowing in yen is becoming more expensive. As a result, global investments may suddenly come under pressure. Especially markets that depend on liquidity. such as the crypto market, feel that effect immediately.
Why this could be bad news for XRP
XRP is one of the most liquid cryptocurrencies, with an active derivatives market. That makes it a favorite coin for professional traders to quickly respond to macroeconomic signals. According to Rietveld, this makes XRP extra sensitive to external shocks.
According to Rietveld, there does not need to be XRP news to see significant movements. “As soon as traders look to de-risk or hedge their positions, XRP is often the first to move,” he explains.
What investors can expect
The movement in Japanese interest rates does not necessarily have to lead to a crash, but it can cause sharp price movements. That makes XRP extra susceptible to volatility in the coming days. b
Such signals from the bond market are taken seriously by professional parties. And when the big boys start moving, the rest of the market will immediately feel it.
Source: https://newsbit.nl/analist-waarschuwt-bereid-je-voor-op-xrp-volatiliteit-volgende-week/
