Don't rush to sell! Algorithms and calendars are dominating market fluctuations

Written by: Alertforalpha

Translated by: White Paper Blockchain

Are yen carry trades being unwound again? Is this the reason for the cryptocurrency crash?

If you’ve been on social media today, you’ve probably seen the panic. Everyone is saying this is a repeat of August 2024.

But the reality is: things might not be what you think.

Why it might not be yen carry trades

The narrative is simple: investors buy cheap yen to purchase high-yield assets (such as US tech stocks or cryptocurrencies).

Now, with Japanese bonds rising sharply, they’re forced to sell these assets back for yen.

Sounds scary, right?

But there are two big holes in this theory.

1. The yen hasn’t spiked

If everyone was scrambling to buy back yen to repay loans, the value of the yen against the dollar should have soared.

But it hasn’t.

Compared to last week, it’s basically flat.

2. Leverage is already gone

A macro analyst—someone who has traded yen their entire career—pointed out months ago that most of the reckless leverage was already cleared out in the crash in August.

Traders took big losses, and they haven’t piled back into the same trades with the same intensity.

So, if it’s not a massive global unwinding, what is it?

The Real Culprits: Algorithms and the Calendar

The most boring explanation is usually the correct one.

We’ve just turned the calendar to December. This is prime time for:

Institutional rebalancing

Tax-loss harvesting

Automated risk resets

The “Algo Flush”

As midnight UTC approaches for the new month, adjustments are very likely to trigger sell orders to reset hedges and rebalance risk inventories.

This isn’t emotional; it’s mechanical.

Institutions are selling underperforming assets (like bitcoin they bought at a high price) to lock in returns in other directions before year-end.

That explains why the sell-off was so coordinated and mechanical—because it really was.

What to watch next

Bitcoin faced resistance at the daily Bollinger Band moving average, causing this turbulence.

But as long as we hold the $80,000–$82,000 level, the structure remains intact.

This week is packed with macro data:

Monday: Jerome Powell speech

Wednesday: ADP jobs data and ISM Services PMI

Friday: PCE inflation and employment data

Expect chop, expect volatility.

But don’t let the “yen panic” narrative scare you into selling your positions.

The worst of the leverage washout may already be behind us.