Yen at 40-year low and Fed is hiking — short Bitcoin and risk assets
Thesis
The Japanese yen has collapsed to a 40-year low against the dollar, which historically signals major global stress as Japanese investors pull money out of overseas assets. At the same time, Citadel Securities is warning that investors are underestimating Fed Chair Warsh's determination to fight inflation with more rate hikes. When you combine a crashing yen with rising U.S. rate hike expectations, the cost of borrowing globally shoots up and forces investors to dump risk assets like Bitcoin. Bitcoin is already clinging to key support with $1.8 billion in ETF outflows — this macro setup suggests another leg lower is likely.
Strategy approach
Build a rule-based strategy that enters short BTC-USD on D1 when USD/JPY makes a 20-day high AND BTC-USD closes below its 50-day moving average. Exit if BTC-USD closes back above its 20-day moving average, or after a 14-day max hold, with a 5% stop loss.