🔥Will Japan's interest rate hike impact the cryptocurrency market?
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As the Bank of Japan's monetary policy meeting on the 19th approaches, the impact of interest rate hikes on the crypto space has become a focal point. The market has currently priced in a 25bp hike to 0.75%, with a probability close to 98%, marking the highest level in nearly twenty years. The core impact path lies in: rising financing costs for the yen, accelerated unwinding of carry trades, capital flowing back to the domestic market, and a temporary tightening of liquidity in risk assets, putting short-term pressure on mainstream coins like BTC and ETH. Historically, after three rate hikes in March and July 2024 and January 2025, BTC has experienced a pullback of over 20%, with a maximum of about 31%.
In terms of scenarios:
• In line with expectations (25bp, neutral stance), the market may initially absorb uncertainty, leading to short-term fluctuations and corrections;
• Hawkish (signals of larger or sustained rate hikes), the magnitude of the pullback may widen;
• Below expectations (maintaining interest rates), sentiment may recover, but the rebound space could be constrained by year-end capital conditions.
The overall idea is to focus on positions and rhythms, reassessing opportunities once the meeting results are clear, and closely monitoring the strength of mainstream asset support and changes in policy statements. The above is a market observation and information sharing; rational communication is welcome.
