WHY ARE MARKETS DUMPING?
The Bank of Japan is expected to hike rates this week,$BTC and history shows that Bitcoin doesn’t react well to BOJ tightening.
📅 The BOJ interest rate decision is set for December 19.
Prediction markets are pricing in a 25 bps rate hike with a 97% probability, which would mark the first hike since January 2025.
Why does this matter?
Japan is now moving against the global trend.
While most major central banks are easing, the BOJ is tightening.
And it’s not just about rates.
• The BOJ has confirmed plans to sell ~$550B in ETF holdings starting January 2026
• It will also slow its QE program from April 2026, ending years of heavy liquidity support
What does this mean for Bitcoin?
Let’s look at history:
• March 2024 hike → BTC fell 20% in 6 weeks
• July 2024 hike → BTC dropped 26% in one week
• January 2025 hike → BTC fell 30%+ in 4–6 weeks
Every hike triggered a major crypto sell-off.
So caution right now is justified.
But this time is different.
In all previous cases, BTC was at or near all-time highs.
Today, Bitcoin is already ~30% down from recent highs.
That means a large part of the tightening may already be priced in.
Because of this, the rate hike itself may not be the real risk.
The key signal will be the BOJ’s guidance for 2026.
Two scenarios to watch:$ETH
1️⃣ Hawkish 2026 outlook
More hikes + faster balance sheet reduction
→ Yen carry trade unwinds
→ Severe pressure on stocks and crypto
2️⃣ Measured outlook
One hike followed by a pause
→ Possible short-term flush
→ Potential relief rally afterward
📌 The decision matters — but the guidance matters more.
