We may see another large-scale cryptocurrency market crash in December.
But this could be the last bottom before the rebound in 2026.
Japan is likely to raise interest rates again around the meeting on December 18 to 19.
This is important because Japan has kept interest rates very low for many years.
Due to the low cost of funds, investors borrow yen and invest that money in stocks, cryptocurrencies, and other assets.
This is known as yen carry trading.
After Japan raises interest rates, the cost of borrowing yen increases. When borrowing costs are high, investors will be forced to repay loans. To do this, they will sell assets. This selling pressure impacts global markets.
This can be clearly seen in the charts.
In July 2024, when Japan raised interest rates, Bitcoin dropped about 26% within a week.
In January 2025, when the Bank of Japan raised interest rates again, Bitcoin fell by about 25% in the following weeks.
The market quickly drops after each rate hike in Japan.
If Japan raises interest rates again in December, we may see similar actions:
Stock market crash
Rapid cryptocurrency sell-off
High volatility
Forced liquidations
This type of movement usually happens quickly, rather than slowly.
But this is just a short-term situation. The Japanese economy is currently weak.
The latest GDP data released by Japan is -0.6%, worse than the expected -0.4%.
Because of this, Japan is unlikely to maintain a tightening policy for the long term.
Meanwhile, the Japanese government has announced a 17 trillion yen economic stimulus plan aimed at supporting economic growth and stabilizing the market.
Buying bonds can increase liquidity and help stabilize the market system.
Therefore, after experiencing a rapid sell-off, the market usually begins to stabilize.
After the panic selling ends:
Weakness has disappeared
Selling pressure decreases
Bases begin to form
Now, let's look globally.
The United States, China, and Canada have begun to gradually relax monetary policy.
Over time, this will increase liquidity across the market.
This is why this matter is important.
The interest rate hike in Japan may bring short-term pain, but after the adjustment, the situation may improve.
If liquidity continues to recover, the market in 2026 (including the cryptocurrency market) may still perform strongly. $BTC
