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Bitcoin pushed higher on Friday, defying expectations after the Bank of Japan (BoJ) raised interest rates to their highest level in three decades. Rather than triggering a risk-off reaction, the move coincided with gains across Bitcoin and US equity futures, signaling that markets may see Japan’s policy shift as limited in scope.
BTC rose roughly 2.5% on the day, briefly targeting the $88,000 level as traders reassessed the implications of the BoJ’s decision.
Why the BoJ Hike Didn’t Spook Markets
Japan’s central bank raised rates to around 0.75%, ending a long period of ultra-loose monetary policy. In isolation, tighter policy is often viewed as a headwind for speculative assets like crypto. This time, however, investors appeared to focus on what comes next — or rather, what likely doesn’t.
Several analysts argued that Japan is nearing the ceiling for further tightening. With large fiscal stimulus already in play and debt servicing costs rising, additional rate hikes could strain government finances and undermine economic growth. That view helped ease fears of a prolonged tightening cycle.
Former BitMEX CEO Arthur Hayes framed the move as structurally bullish, pointing to persistently negative real rates and long-term pressure on the yen as supportive forces for scarce assets like Bitcoin.
Risk Assets Rally in Tandem
Bitcoin’s gains came alongside a broader rebound in traditional markets. US stock index futures moved higher ahead of the Wall Street open, with technology-heavy indexes leading the advance. Market strategists noted that seasonal trends and improving sentiment could support a year-end bounce, even as volatility remains elevated.
Despite recent weakness in equities, some analysts believe the second half of December has historically favored risk assets, creating a constructive backdrop for Bitcoin and stocks alike.
Bitcoin Still Searching for a Durable Bottom
While the short-term reaction was positive, caution remains widespread. Bitcoin recently dipped below $85,000 following unexpected US inflation data, reminding traders that macro uncertainty is far from resolved.
On-chain analysts say Bitcoin is still in the process of forming a longer-term bottom. Key support levels remain in focus, particularly around $81,000 — an area closely tied to the average entry price of US spot Bitcoin ETFs. According to market watchers, a decisive break below that level could invite deeper downside.
For now, Bitcoin’s resilience in the face of tighter Japanese policy suggests underlying demand remains intact. Whether that strength can translate into a sustained recovery will depend on how markets digest upcoming macro data and whether buyers continue to defend critical support zones.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
