Bank of Japan surprises with interest rate hike! BTC draws a line at midnight, retail investors cut losses and leave, but he buys 470 million…
Yesterday, the Bank of Japan raised interest rates by 25 basis points, bringing the rate to 0.75%. The market had generally anticipated this, so the news felt somewhat like a sell-the-news reaction, and the market's response was not particularly intense.
However, the fundamental issue behind this has not changed: the interest rate hike in Japan will increase the funding costs for yen arbitrage trades, which may lead to a withdrawal of funds that were previously borrowed in yen for cryptocurrency trading, posing a potential pressure on the market. Historically, after each interest rate hike in Japan, Bitcoin has seen a 20%-30% drop within 4-6 weeks.
Currently, Bitcoin does show signs of attempting to stop the decline on the 4-hour chart, but the overall momentum remains weak, with $90,000 being a critical psychological and technical level. Until it can stabilize above $90,000 with volume, market confidence is likely to remain difficult to restore, and it will probably continue to experience weak fluctuations.
If data performs well by that time, it could strengthen market expectations for the Federal Reserve to maintain an accommodative policy, making it possible for January to see a decent rebound. Conversely, if the data is poor, concerns about an economic recession will prevail, delaying any rebound.
Besides the key level of $90,000, important support levels also need to be monitored, around $83,680. The market needs a real surge in volume to change the current weak pattern.
The attitude of institutional funds is very important. Keep an eye on the fund flows of Bitcoin spot ETFs. If there is a net inflow for more than three consecutive days, or a single-day net inflow exceeds $500 million, this is typically a strong signal for large institutions to re-enter the market, which will serve as a powerful catalyst for a rebound.
With the Bank of Japan's interest rate hike finalized, why has the market reacted so negatively? Key signals have emerged, and the next layout point is here!策略分享
