Bitcoin held near $78,500 as the Japanese yen touched its strongest level since February, keeping the cryptocurrency inside its recent trading range while investors reduced bets against Japan's currency.
During Asian trading, the yen reached 152.89 per dollar before retreating to 154.14. The move eased some currency pressure ahead of the Bank of Japan's upcoming policy meeting on Sept. 17-18. Market analysts note that a stronger yen can squeeze investors who borrowed the currency to fund purchases of higher-yielding foreign assets, potentially driving portfolio-wide sales.
According to Jefferies analysis of Bank for International Settlements (BIS) data, cross-border yen borrowing reached ¥360 trillion ($2.35 trillion) in March. A stronger yen raises the cost of repaying these liabilities relative to foreign assets, while higher domestic bond yields in Japan can encourage investors to keep capital at home.
Bitcoin's price remained within a recent $77,200 to $82,100 trading range during the initial currency pressure. Support for the asset has come from spot Bitcoin exchange-traded funds, which recorded notable net inflows in early September, alongside an expanding stablecoin supply. Glassnode data placed the short-term-holder cost basis near $71,000, leaving recent buyers with a cushion before their average position falls into a loss.
At the same time, derivatives markets have shown increased activity. CryptoQuant data noted that aggregate open interest rose to between $25.2 billion and $27.5 billion during early September sessions, indicating that futures-led momentum played a significant role in recent price action. Analysts warn that derivatives-led moves can be vulnerable if prices reverse and participants are forced to reduce leverage.
Market observers indicate that Bitcoin's ability to withstand further yen appreciation will depend on whether sustained ETF inflows and stable spot demand can continue to absorb supply if global funding conditions tighten.
