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Analysis: Market Expects Bank of Japan to Raise Interest Rates by 25 Basis Points on Friday, Uncertainties Surrounding Next Fed Chair Successor Lead to Bitcoin Decline
Summary: According to reports, Bitcoin briefly fell below $86,000, dropping over 3% in 24 hours, resulting in a total of $594 million in liquidations in the past 24 hours, with long positions liquidated at $497 million, and a total of 178,874 people globally being liquidated. The Bank of Japan is set to announce its interest rate ...
According to reports, Bitcoin briefly fell below $86,000, dropping over 3% in 24 hours, resulting in a total of $594 million in liquidations in the past 24 hours, with long positions liquidated at $497 million, and a total of 178,874 people globally being liquidated.
The Bank of Japan is set to announce its interest rate decision on December 19 (Friday), with the market expecting a 25 basis point increase in December. Several macro analysts believe that if the Bank of Japan raises rates as expected on December 19, Bitcoin may further pull back to the $70,000 level. Analyst AndrewBTC stated that historical data shows that every rate hike by the Bank of Japan since 2024 has been accompanied by a more than 20% drop in Bitcoin price, such as a drop of around 23% in March 2024, around 26% in July 2024, and around 31% in January 2025. If the Bank of Japan raises rates next week, similar downside risks may reappear.
Furthermore, former Fed Governor Kevin Warsh has surpassed Hassett in the probability of becoming the next Fed Chair, rising to first place. On the prediction market Polymarket, Warsh's probability of being nominated as Fed Chair by Trump has increased from 7% to 48%, while the probability of Kevin Hassett, Director of the National Economic Council, being nominated has decreased from a high of 85% to 42%. Wintermute stated that risk assets are showing signs of fatigue, indicating that stocks and digital tokens are digesting macro uncertainty rather than entering a sustained risk-off phase.
De Maere stated that a key factor putting pressure on the market was last week's Fed interest rate meeting. Despite the meeting widely expected to cut rates by 25 basis points, the forward guidance has shifted notably cautious: the latest Fed forecast shows only one rate cut expected for the full year of 2026, a pace significantly slower than many investors' previous pricing expectations. Currently, the market is still betting on nearly three rate cuts next year, leading to a clear divergence between investor expectations and the policy signals released by the central bank.
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Link: Analysis: Market Expects Bank of Japan to Raise Interest Rates by 25 Basis Points on Friday, Uncertainties Surrounding Next Fed Chair Successor Lead to Bitcoin Decline [Copy]
