For the first time in three decades, the Bank of Japan raised its interest rate to 0.75%, yet investors shrugged off the move. The rally was primarily fueled by cooling US inflation data, which reignited trader appetite for risk assets.
BTC and ETH cleared key technical resistance levels amid rising Asian equity indices. During the Asian session, Bitcoin consolidated above the $87,000 mark, dragging altcoins higher.
The current momentum follows a bout of high volatility. According to CoinGlass, 24-hour liquidations totaled $576 M. Long positions accounted for the majority of these wipeouts, indicating an overleveraged market. Traders are attempting to capture even minimal moves using borrowed funds, creating risks of cascading liquidations.
BOJ’s Cautious Stance
The Bank of Japan voted unanimously to raise the short-term interest rate from 0.5% to 0.75% — the highest level since 1995. Yields on 10-year Japanese government bonds jumped to a 26-year peak. The central bank stated it would continue raising rates if its economic and price forecasts materialize.
During the press conference, Governor Kazuo Ueda refrained from hawkish rhetoric. He offered no clear guidance on the timing or pace of further policy tightening, noting only the need to assess incoming data.
The absence of aggressive signals triggered a drop in the yen, while the dollar hit a new one-month high above 157 yen. The market feared drastic measures, but Ueda opted for a wait-and-see approach.
Macroeconomic Backdrop
Easing inflationary pressure in the US strengthened expectations of an imminent Fed pivot. The tech sector responded with gains: the S&P 500 added 0.8%, and the Nasdaq 100 jumped 1.5%. Strong forecasts from Micron Technology further boosted sentiment, alleviating investor concerns about returns on AI spending.
On-chain data for Bitcoin also signals reduced selling pressure. Analysts at K33 Research note the exhaustion of the active distribution phase by long-term holders (LTH). Over the past two years, this investor cohort rotated approximately 20% of supply back into the market, but this process has now slowed.
Traders remain cautious ahead of year-end. Thinner liquidity during the holidays traditionally leaves the market vulnerable to sharp price swings, despite the current positive macroeconomic outlook.
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