Overview
- Bitcoin has fallen about 30% from its October peak to roughly $87,800, with traders focused on the BOJ’s two‑day meeting set to conclude Friday and widely expected to deliver a second rate hike this year.
- The carry trade mechanism is reversing as higher Japanese rates and lower U.S. rates narrow the spread, prompting sales of U.S. assets to repay yen loans and draining liquidity.
- Analysts split on the macro impact, with LBank Labs’ Czhang Lin warning of a lasting crypto drag from tighter funding while Bitwise’s Matt Hougan expects opposing global forces to largely offset over time.
- Near‑term conditions look fragile due to thin year‑end liquidity, and even a well‑telegraphed BOJ move could trigger fresh volatility and liquidation cascades in crypto markets.
- Some commentary, including Graham Stephan’s, points to recent Fed rate cuts and reported balance‑sheet shifts as potential longer‑term support for risk assets, though the yen carry unwind is seen as the immediate pressure.