The Bank of Japan is expected to decide whether to raise interest rates on Thursday or Friday this week. Currently, prediction platforms indicate a high probability of a rate hike at 98%, which means that the likelihood of a rate increase by the Bank of Japan this week is almost certain. So the question arises, what impact will a rate hike by Japan have on the cryptocurrency market?

In recent instances of Japan's interest rate hikes, in March 2024, July 2024, January 2025, and this upcoming one that is almost a certainty.

Theoretically, when Japan raises interest rates, funds from around the world should flow back. This means that the liquidity in our market would be drained, so it should theoretically decline. However! The first three rate hikes did not have a significant impact on the cryptocurrency market, and there was no noticeable decline in the 1-2 months before and after.

Looking into the reasons, it may be because, although Japan's interest rate hikes would lead large investors who borrow yen on leverage to close their long positions in international markets, our cryptocurrency market remains a very small part of the vast financial system, so the impact is limited.

Additionally, with Christmas approaching this month, historical data shows that over the past 11 years, the number of times the market has risen around Christmas exceeds half. The actual instances of decline are few. Therefore, it is inevitable that there will be an optimistic trend around Christmas.

Anyway, even if there is a decline before Christmas, I am 100% confident that the space is limited. It will just be another test of the 80000 level. That's all. #币圈 #日本加息