Bitcoin aimed for $88,000 on Friday after Japan’s central bank raised interest rates to 30-year highs.
Key points:
- Bitcoin is moving higher alongside U.S. stock futures in a surprisingly bullish response to Japan’s interest-rate hike.
- Commentators suggest the move will be a one-off, with economic pressures likely preventing further hikes.
- On longer timeframes, Bitcoin continues to carve out what appears to be a market bottom.
Arthur Hayes turned his attention to Bitcoin’s price action as the yen surged
Data from Cointelegraph Markets and TradingView showed BTC up 2.5% from the daily open.
As widely expected, the Bank of Japan (BoJ) raised interest rates to around 0.75%, the highest level in more than 30 years, bringing an end to the country’s most recent era of ultra-cheap money.
The decision stood out against a global backdrop of central-bank easing. Although the hike was theoretically a headwind for crypto and other risk assets, market reactions were notably upbeat.
“Don’t fight the BOJ: negative real rates are the explicit policy,” Arthur Hayes, former CEO of crypto exchange BitMEX, wrote to his followers on X.
“$JPY to 200, and $BTC to a milly.”
Hayes was among several commentators who ultimately viewed the rate hike as bullish for asset holders.
Echoing that view, research firm Temple 8 Research highlighted a growing tension between market expectations and Japan’s economic and political realities.
“The market sees a hawkish pivot. We see a political ceiling,” the firm wrote in a blog post last week.
Temple 8 argued that further rate increases are unlikely before 2027, citing the need to support the yen and avoid higher interest costs tied to Japan’s latest $140 billion stimulus package.
“You can’t press the gas with fiscal stimulus while slamming the brakes with rate hikes,” the post concluded.
“If rates go to 1.5%, interest payments on this new debt explode.”
Bitcoin lacks a “true capitulation event”
Bitcoin moved higher alongside U.S. stock futures ahead of Friday’s Wall Street open. At the time of writing, Nasdaq 100 futures were up 1.5%, while the S&P 500 was attempting to rebound after a flat session.
“With participation remaining strong some measures of investor sentiment shifting back to showing fear, that’s a positive backdrop to see a rally in the final weeks of the year,” trading resource Mosaic Asset Company forecast in a blog post Thursday.
“While the S&P 500 is trading weak recently, the second half of December tends to be positive from a historical seasonal standpoint.”
At the same time, BTC/USD dipped to a low of $84,390 amid heightened volatility triggered by surprise U.S. inflation data.
Traders remained highly cautious, with social media filled with calls for additional retests of key support levels.
“Bitcoin is currently carving out a bottom, but the process is far from complete,” onchain analytics platform Checkonchain warned on the day.
Checkonchain highlighted $81,000 — the cost basis for U.S. spot Bitcoin exchange-traded funds (ETFs) — as a critical line in the sand.
It added that the market has yet to experience a “true capitulation event.”
