Bitcoin is once again facing a 'stress test' from the Bank of Japan.
Recently, Bitcoin's price has started to feel the impact of next week's Bank of Japan (BoJ) policy decision. The market generally expects the BoJ to raise interest rates by 25 basis points, prompting traders to adjust their positions in advance. In other words, risk appetite is declining, and a sell-off may quietly unfold before the policy is officially announced.
This leaves the market with room for 'sell the rumor, buy the fact': sell first and buy later; once the interest rate hike is confirmed, prices often reverse. For Bitcoin, this pattern is not new.
A historical review: The impact of interest rate hikes on Bitcoin
Looking at historical data, #日本央行加息 shows how directly it affects Bitcoin.
In March 2024, after the interest rate hike, #BTC fell by about 23% at one point.
In July 2024, it fell again by 26%.
In January 2025, the pullback was close to 31%.
It can be seen that every interest rate hike has almost spared Bitcoin. Market participants generally expect the next interest rate hike, and Bitcoin traders begin to reduce risk exposure in advance, which is one of the reasons BTC has seen a decline ahead of the announcement.
Of course, this historical pattern does not mean that it will repeat every time, but it explains why market nerves are always particularly tense.
The sell-off may have already begun.
Interestingly, past sell-offs triggered by interest rate hikes usually occur after the policy is announced, but this time, net capital inflow data from exchanges shows that the market has already begun selling off in advance. In other words, investors do not have to wait for the policy to be released to take action; risk management awareness is very strong.
Meanwhile, financing rates have also shown early declines and fluctuations, indicating that leverage has already begun to decrease. It can be understood that the market has 'digested' some of the interest rate hike pressure in advance.
What will happen after the meeting?
This time, the Bank of Japan's policy adjustment is different from previous ones:
Policy changes have been brewing for several months, and the market is mentally prepared.
Yen arbitrage trades have already been closed, and tightening liquidity is no longer surprising.
Therefore, most of the pressure may have already been reflected in the price. Next, the key variable for Bitcoin's movement may be the yen's reaction itself:
If the yen significantly strengthens after the decision, risk assets including Bitcoin may continue to be under pressure.
If the yen's increase is limited, then the market's selling space may not be large, and there may even be relief in the short term.
In summary, this interest rate hike itself is no longer the most important; the key is how the market digests this policy and the subsequent performance of the yen.
What should investors think?
Currently, Bitcoin's movement is mainly influenced by the anticipated interest rate hikes, with traders reducing risk exposure and unwinding leverage in advance, causing market volatility to appear sooner.
If you are an ordinary investor, patience is more important than chasing highs and cutting losses:
Pay attention to the movement of the yen, as it may determine the next direction for Bitcoin.
Understand that the market has already digested some of the risks in advance and do not be frightened by short-term fluctuations.
Wait until the first wave of sentiment is digested before considering layout or reverse operations.
In short, Bitcoin will not turn upside down because of a single interest rate hike, but the fluctuations before and after each policy implementation may bring short-term opportunities. Understanding market logic is more reliable than blindly following the crowd.
Summary
Bitcoin has recently weakened, mainly due to market expectations of a 25 basis point interest rate hike by the Bank of Japan.
Historical data shows that interest rate hikes often lead to Bitcoin pullbacks, but the market has already begun to react in advance.
Leverage has decreased, and funds have been withdrawn in advance, partially releasing short-term selling pressure.
The next movement depends more on the yen's reaction rather than the interest rate decision itself.
Lighten up: BTC is 'crossing the river and dismantling the bridge' in advance, waiting for the river to calm down before deciding to jump or walk, which may be more stable.
