Bitcoin is entering a very critical macro week where everyone's eyes are on the Bank of Japan (BOJ) policy meeting on December 18–19. Prediction markets are showing a 98% probability that the BOJ will raise rates, and its impact may not only be felt in Japan but also in global markets and crypto.
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Why is the BOJ so Important for Bitcoin?
Japan has been the cheapest source of liquidity from the main salon. Institutions have been borrowing yen at low interest rates and investing it in global assets — stocks, bonds, and crypto. This is called the yen carry trade.
Now this model is under pressure.
If the BOJ raises rates by 25 basis points, the policy rate may go up to 0.75%, which is seen for the first time in almost 20 years. The rate may seem small, but the liquidity impact is very large.
As borrowing becomes expensive, leveraged positions have to be closed — and the first to sell are risk assets, including Bitcoin.
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Past Data: BOJ Rate Hike and Bitcoin Dumps
Traders are not just guessing, history is clear:
March 2024: BTC ~23% dropped
July 2024: BTC ~25% dropped
January 2025: BTC dropped more than 30%
Bitcoin is currently trading below $90,000. If the pattern repeats, a 20–30% correction could take Bitcoin down to the $70,000 zone.
That's why many analysts are warning that volatility is incoming.
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Risk of Yen Carry Trade Unwind
The biggest risk is the unwinding of the yen carry trade.
Japanese bond yields are rising
Borrowing yen is becoming expensive
Investors may close positions and sell assets
Its effect may not only be on crypto but could also impact stocks and global markets.
In December, Bitcoin is already showing low liquidity and sideways movement, which is further increasing uncertainty.
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Is a Bitcoin Dump Confirmed? Not Everyone Agrees
Some macro analysts say that the BOJ hike will not be so bearish if the US Federal Reserve cuts rates.
In this scenario:
Dollar liquidity will come from Fed cuts
USD will weaken
Yen will gradually become strong
Capital may shift towards high-risk assets, like crypto
According to this view, this is a regime shift, not a full liquidity crash.
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Market is now in the Decision Zone
Right now, multiple things are creating pressure at the same time:
Stocks showing topping signals
Global yields are rising
Bitcoin's BOJ sensitivity
Year-end low volume
Therefore, the BOJ's decision could be a major trigger.
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Final Thoughts
The Bank of Japan's rate decision could be the most important macro event of the year for Bitcoin. History signals downside, but macro conditions could also provide relief in the future.
📉📈 Short-term volatility is almost guaranteed.
Smart traders operate with risk management, not emotions.
Keep a close watch on the market — both storm and opportunity are possible.
