Next week, the crypto market is about to change. The US November non-farm payroll data and the Bank of Japan interest rate decision—any one of these alone could shake the market, but now they’re happening together.

First, about the US non-farm payroll. There’s a common pitfall—many still use old logic, believing that strong employment data = a good market. Wrong. The game rules have flipped.

**Weak Non-Farm = Bullish for Crypto**

If new jobs are far below 50,000 or the unemployment rate exceeds 4.4%, these numbers look painful but are actually bombshell good news for crypto. Why? Because worse data makes the Fed more likely to back down, increasing expectations of accelerated rate cuts. In a low-interest environment, institutions and retail investors will pour money into risk assets. High-volatility assets like Bitcoin and Ethereum become twice as attractive. Historically, in similar situations, daily gains over 10% are common, with some even jumping 15% directly.

Conversely, if non-farm payrolls are particularly strong (over 150,000 new jobs), that’s trouble. Rate cut expectations cool down immediately, and funds start to withdraw. The crypto market could be hammered down by 8-15% in the short term, no questions asked.

**The Bank of Japan is more straightforward—rate hike confirmed**

On December 19, the Bank of Japan is almost certain to raise interest rates from 0.5% to 0.75%. That’s the highest in 30 years. It may not sound like much, but the significance is huge.

The yen’s appreciation will trigger a devil’s chain: Japan’s ultra-low interest carry trade begins to unwind. Simply put, some borrow yen at low interest to invest in risk assets for arbitrage. Now, with the yen strengthening, this trade becomes unprofitable, and funds rush back. Risk assets are hammered violently. The Bitcoin flash crash in summer 2024 was mainly caused by Japanese carry trade unwinding.

**Three possible scenarios, which one will unfold?**

【Moderate volatility】Weak non-farm data, Japan raises rates as expected, balancing each other out. The crypto market fluctuates within ±8%, staying relatively stable. This is the ideal scenario.

【Nightmare scenario】Strong non-farm data, Japan hikes rates simultaneously, stacking the shocks. Crypto could drop 10-20%. Although less likely, if it happens, it’s a total indiscriminate hit.

【Black swan reversal】Extremely weak non-farm data, the BOJ suddenly turns dovish (cancels rate hike or signals easing). Crypto could rebound over 20%, with weekly gains exceeding 20%. The probability is low, but if it occurs, it’s a bargain opportunity.

**How to respond**

This week, crypto market nerves will be on edge. Short-term volatility risk is high. What to watch? Mainly the deviation between actual non-farm numbers and market expectations, plus the wording in the BOJ statement afterward—hawkish or dovish signals, which will influence capital flows.

Risk control must stay tight. Manage your positions well, set stop-losses properly, and don’t let short-term swings wipe out long-term gains. In the long run, the Fed’s rate cut cycle remains the main driver for crypto, but the BOJ’s normalization policy has become a new variable—something to watch carefully.