Why are Bitcoin and gold moving in sync amid a weakening Japanese Yen and a shift in Federal Reserve expectations? An analysis of the three main driving forces

Under the combined influence of multiple macroeconomic positives and easing selling pressure, both Bitcoin and gold prices are strengthening simultaneously, with market sentiment showing clear signs of recovery. After Bitcoin briefly retreated to around $60,000, some institutions and whales chose to accumulate at lower levels. However, this week’s release of key US economic data could still trigger a new wave of volatility.

First, changes in Japan’s political landscape have led to a weakening of the yen, indirectly boosting safe-haven assets. Following the Liberal Democratic Party’s overwhelming victory in early elections led by Prime Minister Sanae Takaichi, the yen depreciated against the US dollar, and the US dollar index also declined. The easing of exchange rate fluctuations reduced the risk of closing yen arbitrage positions and increased investors’ willingness to allocate funds to gold and Bitcoin. As a result, gold prices broke through the $5,000 mark, and Bitcoin rebounded above $72,000.

Second, US market sentiment has improved, driving increased spot demand. After a correction in tech stocks, Bitcoin rebounded, and former President Trump reiterated long-term stock market goals, boosting risk appetite. The US’s top compliant CEX Premium Index ended a two-month slump with a significant rebound, indicating that US investors and large funds are re-entering the spot market. 10x Research believes that $73,000 remains a key resistance level, and current position changes suggest traders are more inclined to reduce leverage rather than chase higher prices.

Third, Bitcoin mining difficulty has been sharply reduced, easing pressure on miners. Recent data shows mining difficulty has dropped by over 11%, marking one of the largest declines since 2021. Previously, a sharp price decline prompted some miners to sell holdings to maintain cash flow, with Marathon Digital selling 1,318 Bitcoins. The difficulty adjustment has temporarily improved miners’ cost structures and provided support for price stabilization.

Currently, Bitcoin is fluctuating around $71,800, with a 24-hour volatility still quite noticeable. As US non-farm payrolls and CPI data are about to be released, interest rate and liquidity expectations remain key variables influencing Bitcoin and gold trends. In the short term, the market may continue to stay highly sensitive.