Attention! Something big is coming! The Bank of Japan's interest rate hike has become a nightmare for Bitcoin! Let's analyze its impact on Bitcoin step by step, from the short, medium, and long term.
Short-term (1-3 months): Significant pressure, support levels being tested. The Bank of Japan's interest rate hike will tighten global liquidity, with Bitcoin bearing the brunt. Historically, in 2024, the Bank of Japan raised interest rates three times, and Bitcoin experienced deep corrections, with declines of 23%-31%. With this rate hike anticipated, Bitcoin has already retreated from its highs and is currently trading in the $84,500-$85,600 range, showing technical weakness. The market expects that after the rate hike, Bitcoin may test the $70,000-$85,000 support zone. If it breaks below $86,313, it may test the $78,000 low. However, the market's Fear & Greed Index is at "Extreme Fear," the RSI is oversold, and whales are increasing their holdings, suggesting conditions for a technical rebound. In the next 1-4 weeks, the rate hike will dominate market sentiment, and the price is likely to test support, with trading likely to fluctuate widely between $78,000 and $90,500.
Mid-term (3 - 12 months): Watching the Fed, recovery is hopeful. After digesting the impact of interest rate hikes, Bitcoin's trend will reflect global macroeconomic conditions, especially the Fed's monetary policy. If the Fed cuts interest rates, with a loosening of US dollar liquidity, the Bitcoin bull market engine will start, likely challenging the range of $100,000 to $120,000; if high interest rates are maintained or rate hikes are restarted, Bitcoin will struggle to have an independent bull market and may face long-term consolidation. Fortunately, there are positive changes within Bitcoin, with deepening institutionalization. Although there has been recent net outflow in the US spot Bitcoin ETF, it remains a compliant entry point for traditional funds in the long term, smoothing out volatility; the holder structure is also becoming healthier, shifting from short-term traders to long-term holders, reducing panic selling. Referencing the Bank of Japan's exit from negative interest rates in 2024, Bitcoin is expected to rebound and create new highs within six months after a short-term adjustment. Thus, the mid-term trend has a high possibility of a V-shaped or U-shaped recovery, with strength and speed depending on the timing of the Fed's policy shift.
Long-term (over 1 year): Fundamentals are stable, outlook is optimistic. The Bank of Japan's policy does not change Bitcoin's long-term value. Its fixed total supply of 21 million coins and the halving every four years maintain its scarcity; global adoption is accelerating, with countries, enterprises, and mainstream financial infrastructures advancing; under geopolitical conflicts, the 'digital gold' attribute of 'super-sovereign asset' enhances its hedging function. Several mainstream institutions have positive long-term price forecasts, targeting between $140,000 and $220,000, justified by Bitcoin's enhanced status as a store of value and settlement network in the digital economy.
Abo's summary and strategy: The Bank of Japan's interest rate hike is an important stress test for Bitcoin by the end of 2025, which will lead to short-term to mid-term price adjustments and increased volatility, but it does not undermine the foundation of a long-term bull market. For investors, short-term risk control is essential, avoiding high leverage, focusing on oversold rebound opportunities, and strictly implementing stop-losses; mid-term, accumulate positions gradually on dips, paying attention to Fed policies and ETF fund inflows; long-term, remain steadfast in holding and dollar-cost averaging, focusing on fundamental growth and increased adoption rates. Market attention will soon shift from Japan's interest rate hike to when the Fed will pivot, which is the key to the next major uptrend.
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