Number Circle Observation | Bitcoin's resilience and Christmas market patterns under Japan's interest rate hike wave

One of the hottest topics in the crypto circle recently is the upcoming decision by the Bank of Japan on whether to raise interest rates. According to betting data on the prediction market Polymarket, the probability of a rate hike has reached 98%. In other words, a rate increase by the Bank of Japan is almost a certainty this time. So, what does this mean for Bitcoin and the entire crypto market?

Context of the Bank of Japan’s Rate Hike: Three Rate Hikes Have Basically No Impact on Bitcoin

Looking back at the recent rate hike history of the Bank of Japan, it clearly illustrates everything:

• March 2024: End of the negative interest rate era
• July 2024: Rate hike to 0.25%
• January 2025: Rate hike to 0.5%
• Expected this time: Rate hike to 0.75%

The pace of these rate hikes seems incremental, but examining Bitcoin’s price movements one to two months before and after each of the first three hikes shows no significant downward trend. This phenomenon has sparked considerable discussion in the crypto community—why is the market reacting so calmly?

The reason lies in the fact that, although a yen rate hike may prompt some leveraged international investors borrowing in yen to close long positions, Bitcoin still accounts for a very small portion of the global financial system. This means that the direct impact of rate hikes on the crypto market is greatly diluted. From another perspective, the market volatility caused by Japan’s rate hikes appears insignificant compared to the overall resilience of the digital space.

Leverage Liquidations and Micro Market Impact: How Limited Is the Effect of Rate Hikes?

It’s worth noting that rate hikes do not necessarily lead to declines. In fact, during the periods surrounding the first three rate hikes by the Bank of Japan, Bitcoin often performed strongly, experiencing significant gains. However, the true drivers behind these increases were not the rate hikes themselves but the influx of institutional capital into crypto assets.

Coincidentally, this period also saw a surge of spot ETFs entering the market, with continuous capital inflows from ETFs being the real upward force. In other words, rate hikes are just background noise, while the real engine of the crypto market always lies in capital flows. For participants in the digital space, this observation reminds us to focus on capital movement rather than policy changes.

Historical Christmas Market Trends and the Outlook for the Crypto Space

Historical data shows that the Christmas season is generally favorable for the crypto market. Over the past 11 years, there have been 8 instances of price increases in the week before Christmas and 6 instances in the week after Christmas, indicating an overall positive trend. This pattern has been widely circulated and validated within the crypto community.

However, this year’s specific trend has not been as strong as usual, suggesting a higher probability of rare events occurring. An ideal scenario would be for Bitcoin to retest around $80,000, providing a better entry point for latecomers.

Looking ahead, participants in the crypto space have good reasons to remain optimistic. With the gradual infusion of liquidity in 2026, continued development of crypto applications, the booming RWA (Real-World Asset) market, and ongoing improvements in global crypto payment systems, the digital space is entering a critical period of mainstream integration. These developments will ultimately bring unique growth opportunities to the entire crypto ecosystem.