$ETH $BTC The Bank of Japan is going to raise interest rates again, why is the crypto market so 'calm' this time?
Last time when rates were raised, Bitcoin plummeted from 65,000 to 50,000, and Ethereum fell below 2,000 from 3,000, leaving the market in despair. But this time, the script may be different — two key reasons explain why panic may not be repeated:
🔥 1. The market was well-prepared
Net long positions in yen have accumulated significantly, and speculative trading is unlikely to push prices up crazily in the short term; more importantly, Japanese government bond yields have risen sharply this year, with both short and long-term yield curves hitting new highs, indicating that rate hike expectations have already been priced in.
🔥 2. The Federal Reserve just sent a 'reassurance'
This week, the Federal Reserve cut rates by 25 basis points and introduced liquidity support policies, leading to a generally more accommodative global funding environment. As a result, the risk of large-scale unwinding of yen arbitrage trades and sudden liquidity withdrawal at the end of the year has significantly decreased.
⚠ But the rate hikes are not over yet...
Internal sources reveal: The Bank of Japan believes that interest rates need to be raised to at least 0.75% or more, and may even approach 1%, to reach the end of this round of rate hikes. The market estimates the 'neutral interest rate' (the level at which policy is neither loose nor tight) to be around 1%-2.5% — this means there is still room for further increases.
Currently, nearly all 50 analysts predict that next Friday the Bank of Japan will raise rates to 0.75%. The real point of interest is: Will the central bank announce a new analysis of the neutral interest rate? This will directly reveal the future path of interest rate hikes.
💰 What does this mean for the crypto market?
In simple terms: This time the market has a buffer, has expectations, and the liquidity environment is supported by the Federal Reserve. The chain reaction of 'yen soaring → funds withdrawing → a major drop in the crypto market' is now less probable.
The narrative in the crypto market is shifting from 'global liquidity tightening' to 'asset allocation shifting'. Don't forget, when traditional markets become more volatile, the independent market for digital assets is often brewing.
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How do you think Bitcoin will move after this rate hike?
📈 Bad news is out, rebound soon
📉 Continue to fluctuate, waiting for the next signal
💬 Let's discuss your judgment in the comments!
