BOJ Hikes Interest Rates to 30-Year High, Will Bitcoin Repeat 20-30% Post-Hike Crashes?

The Bank of Japan (BOJ) raises its interest rates by 25 bps to 0.75%, the highest level in about 30 years. The BOJ signaled its readiness for further hikes next year. It causes Bitcoin to waver, currently rising amid volatility in the Yen and the US Dollar.

Bank of Japan (BOJ) Delivers Second Rate Hike This Year

The Bank of Japan hiked interest rates by 25 basis points to a 30-year high as inflation remains elevated. BOJ Governor Kazuo Ueda said the board unanimously decided to hike rates, citing growing confidence in the economic outlook.

The move marked its second rate hike this year, following a 25 bps hike in January, with policymakers signaling further rate increases.

“Real interest rates are expected to remain significantly negative after the policy change, and accommodative financial conditions will continue to firmly support economic activity,” as per the BOJ statement.

However, the Yen has weakened to around 156 per dollar, with markets fully pricing in the rate hike. This indicates less risk of the Yen carry trade unwind unless it strengthens against the US dollar.

The US 10-year Treasury yield climbed to around 4.14%, reversing a brief dip in the previous session. Also, the US dollar index (DXY) jumped to around 98.52, as investors weighed the prospects for further Fed rate cuts next year after the CPI inflation cools.

Will Bitcoin Crash Following Its Historical Pattern?

Bitcoin has recorded sharp declines following previous BOJ rate hikes since 2024, primarily due to the unwinding of Yen carry trades. Following the last three rate hikes, Bitcoin has crashed 23-31%.

Notably, Bitcoin fell 31% after the Bank of Japan increased interest rates by 25 bps in January 2025. Experts have warned that a potential repeat could push BTC price below $70,000 from levels around $85,000.

In the near term, multiple headwinds persist, aligning with bearish technical signals, market structure, capital flows, and on-chain data.

BTC price bounces as Yen weakens and US dollar rises after the BOJ rate hike. It is currently trading range-bound between $85K and $88K levels, but remains under selling pressure amid liquidity crunch and holiday season.

Bitcoin and the broader crypto market are bracing for volatility ahead of today’s ‘triple witching’ and crypto options expiry. It means downside risks remain as traders watch for sharp moves today and the coming days.

A breakout below $85,100 could accelerate selling. For the long term, fundamentals remain bullish. 10x Research said, “While our near-term stance remains bearish, the coming year will present a compelling buying opportunity ahead of a larger upside move into late 2026, 2027, and 2028.”