WHY ARE MARKETS DUMPING?
Bank of Japan is set to do a rate hike this week.
And history shows that $BTC doesn't like a BOJ rate hike.
This week, the Bank of Japan interest rate decision will happen on 19th December.
Prediction markets are pricing a 25 bps rate hike with 97% probability; that would make this the first rate hike since Jan 2025.
This matters because Japan is now moving against the global trend; while most major central banks are easing, the BoJ is tightening.
And this isn’t just about rates.
The BoJ has confirmed that starting January 2026, it plans to sell ETF holdings worth roughly $550 billion.
It is also slowing the QE program from April 2026, which has been running for a long time.
But what impact will it have on Bitcoin?
Let's take a look at the past rate hikes by BOJ.
• March 2024 hike → BTC fell 20% in 6 weeks
• July 2024 hike → BTC dropped 26% in one week
• January 2025 hike → BTC fell over 30% in 4-6 weeks.
Every hike triggered a sharp crypto sell-off.
So it’s reasonable for markets to be cautious.
But this time, the setup is actually a bit different.
In all three cases, Bitcoin was at or near all-time highs.
Today, BTC is already down around 30% from recent highs.
That means a good part of the tightening impact may already be priced in.
Because of that, the rate hike itself may not be the key risk.
The real signal will be BoJ’s guidance for 2026.
Two scenarios matter:
Hawkish 2026 outlook:
More rate hikes and faster bond selling,
This will unwind the yen carry trade and could cause severe damage to both stocks and crypto.
Measured outlook:
A hike followed by a pause for the coming meetings.
This will probably cause a flash crash, and then the markets could rally for some time.
Has Bitcoin double topped… again?
We hit $108K in January. Then $112K in May.
Now price is stalling, leverage is building, and corporate treasuries are borrowing billions at the cycle’s edge.
Is this 2021 all over again?
Let’s unpack what’s really going on. 🧵👇
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