Crypto Market Watch

The Bank of Japan’s monetary policy meeting scheduled for December 18–19 has entered its final coordination stage. Market consensus on an interest rate hike has further strengthened, with the probability remaining above 90%. The general expectation is a 25 basis point increase to 0.75%, which would mark the highest interest rate level since 1995.

Previously, the Bank of Japan’s quarterly short-term economic outlook survey showed that confidence among large manufacturers rose to a four-year high, supported by strong wage growth momentum. This data further reinforces the case for a rate hike. At the same time, pressure from the unwinding of yen carry trade capital continues to be released. In addition, global risk asset sentiment has turned more cautious, and the sustainability of short-term independent trends in the cryptocurrency market is increasingly being questioned.

From a market perspective, Bitcoin has completed a correction from its recent high of 90,336, finding short-term support around 85,278, followed by a period of sideways consolidation and a modest rebound. The pattern of a rally followed by a pullback reflects cautious market sentiment.
Meanwhile, Ethereum, supported by the fundamentals of the Fusaka upgrade, stabilized and rebounded around 2,789, continuing to demonstrate relatively strong downside resilience.

Key Points to Watch Going Forward

1. Implementation of the Bank of Japan’s rate hike
If the expected 25 basis point increase is implemented, it may help ease selling pressure in the market. However, any unexpected statements or a larger 50 basis point hike could trigger a new round of market corrections.

2. Consistency of Federal Reserve policy signals
Whether hawkish remarks from multiple Federal Reserve officials form a clear consensus will directly affect liquidity conditions for risk assets.

3. Year-end liquidity tightening
Institutional profit-taking at key price levels may intensify, increasing short-term market volatility.

Conclusion

Overall, the market is currently in a critical phase dominated by external tightening expectations. While long-term capital accumulation has helped build a potential support “moat” for the market, short-term price direction will largely depend on the Bank of Japan’s decision.

For short-term trading, extreme caution is advised. Traders should reduce trading frequency, focus on trend-following opportunities after key price level breakouts, and remain patient ahead of major macro events such as the Bank of Japan’s policy decision.