To receive the Morning Note in your inbox, subscribe here: https://stormrake.substack.com/
Market sentiment is at its lowest in almost three years, with liquidations surpassing those seen during both the Luna and FTX collapses. However, unlike 2022, this isn’t solely a crypto crash—global markets are correcting.
Bitcoin is down 1.5%, falling back below $80K. The S&P 500 has dropped 2.7%, gold is down 0.8%, and even the US dollar is weakening. So, where is the money flowing?
A Repeat of the Yen Carry Trade Unwinding?
Cast your mind back to mid-2024 when the yen carry trade imploded, triggering a market-wide sell-off. Investors rushed to repay their Yen-denominated debts, liquidating US equities and other risk-on assets purchased through leveraged yen positions.
Could we be witnessing a similar move today? Possibly. Over the past two months, the S&P 500 and crypto markets have lost a combined $5.5 trillion in market cap. The S&P 500 is down nearly 10% from its all-time high set last month, while Bitcoin has dropped 30% from its January peak.
In January, the USD/JPY pair surged to 159, nearly reclaiming its 2024 high before the previous carry trade unwind. This rally was impressive, considering it had dropped to 139 after that unwinding. Since January’s high, the Yen has almost mirrored its July 2024 price action, increasing 8%, Yen bond yields have surged— the cost of borrowing Yen has increased significantly.
Now, assets acquired with borrowed Yen are declining, forcing investors to unwind positions. While it’s too early to confirm another full-scale carry trade unwinding, the signs are undeniable:
- The Yen is strengthening
- Japanese Government Bond yields are increasing
- The USD/JPY pair peaked just before Japan raised interest rates (similar to July 2023)
- Risk-on assets are falling, suggesting a scramble to repay Yen-denominated debts
All the hallmarks of a carry trade unwind and mass deleveraging event are in play.
Liquidity Will Return—Bitcoin Will Benefit
Despite these developments, as mentioned yesterday, global money supply continues to expand in an attempt to engineer a soft landing. Once conditions shift, excess liquidity will flow back into risk-on assets—especially Bitcoin. The play is simple: weather the storm by staying patient. The tide will turn—use these dips to accumulate more Bitcoin.
This Trump-driven volatility isn’t going anywhere, and sharp corrections should be expected throughout the year. As I’ve said countless times, these dips are golden buying opportunities. Time and time again, I’ve been proven right—and those who followed my advice have reaped massive gains.
Stormrake Spotlight: Sonic (S) ($0.43)
Stormrake Spotlight: Sonic (S) ($0.43)
Despite the broader market weakness, Sonic has outperformed most cryptocurrencies, including Bitcoin. While it’s down 1.53% on the day, this resilience is a strong indicator of its potential. Typically, altcoins suffer disproportionately in bearish conditions, yet Sonic is holding steady—a glimpse of the strength it may exhibit once the market turns.
BTC/USD Key Levels and Price Action:
BTC/USD Key Levels and Price Action:
Bitcoin has continued its decline, now breaking below the lows from two weeks ago, forming a fresh low of $77.4K. This move further cements the bearish structure, with consecutive lower highs and lower lows.
Our attention now turns to the previous all-time high from March 2024 at $73.8K—a critical level where we expect buying demand to emerge.
BTC Total ETF Flows for 10 Mar: $ - 41.0 million
(ETF flow data is sourced from https://farside.co.uk/btc/ and reflects figures at the time of writing.)
ETH/USD Key Levels and Price Action:
ETH/USD Key Levels and Price Action:
Ethereum has dropped to its lowest level since November 2023, continuing its pattern of lower highs and lower lows.
ETH has just tapped a key support zone, which may trigger a short-term bounce, but as long as broader market conditions remain bearish, Ethereum will continue to struggle.
ETH Total ETF Flows for 10 Mar: $ - 34.0 million
(ETF flow data is sourced from https://farside.co.uk/eth/ and reflects figures at the time of writing.)
*All prices are denominated in USD unless stated otherwise*
Written by Alexandar Artis
Create a brokerage account today
No Advice Warning
The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.
Stormrake is not a financial adviser and does not provide financial product advice. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances. Stormrake is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by this newsletter.
Disclaimer
All statements made in this newsletter are made in good faith and we believe they are accurate and reliable. Stormrake does not give any warranty as to the accuracy, reliability or completeness of information that is contained here, except insofar as any liability under statute cannot be excluded. Stormrake, its directors, employees and their representatives do not accept any liability for any error or omission in this newsletter or for any resulting loss or damage suffered by the recipient or any other person. Unless otherwise specified, copyright of information provided in this newsletter is owned by Stormrake. You may not alter or modify this information in any way, including the removal of this copyright notice.Copyright © 2024 Stormrake Pty Ltd, All rights reserved
