Madman's Diary: The Final Hurdle of Rate Hikes, Bitcoin's Year-End Market Has "Hope"

According to the latest market data, Bitcoin is currently priced at $90.16K, up 1.07% in the past 24 hours. With the Christmas season approaching, the crypto market is entering a noteworthy window of opportunity. The Bank of Japan is set to make an interest rate decision this week, a move that could influence global financial markets.

Bank of Japan Rate Hike Imminent, 98% Probability Near

The Bank of Japan will announce its interest rate decision this week. Based on real-money bets on Polymarket, the probability of a rate hike is as high as 98%. In other words, a rate increase by the Bank of Japan this week is virtually certain. The market is no stranger to this decision — the Bank of Japan has already undergone multiple interest rate adjustments over the past year:

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

This series of actions signals the gradual tightening of Japan’s monetary policy.

Looking Back at History: Bitcoin’s Response to the Last Three Rate Hikes

Reviewing the last three rate hike events, Bitcoin’s performance was surprisingly “unresponsive.” Within 1-2 months before and after the hikes, Bitcoin did not show significant declines. The underlying logic is simple — a rate hike in Japan does indeed prompt leveraged investors borrowing in yen to close long positions, but within the vast global financial system, Bitcoin remains a relatively niche asset class, with minimal impact.

However, an interesting observation is that in most cases, Bitcoin experienced substantial rallies before and after these rate hikes, often coinciding with continuous ETF capital inflows. In other words, the main driver behind Bitcoin’s rise is not the rate hike itself, but the ongoing institutional capital inflows. Therefore, the conclusion is — Japan’s rate hikes have extremely limited direct impact on the crypto market.

Christmas Season Trend Forecast: Insights from 11 Years of Data

Turning to more recent market cycle patterns, 11 years of data reveal an interesting Christmas effect:

• Probability of price increase in the week before Christmas: 8 out of 11 times
• Probability of price increase in the week after Christmas: 6 out of 11 times
• Overall tendency: bullish

But this year’s situation is slightly different. Bitcoin’s current trend is not as strong as expected, which increases the likelihood of a low-probability event occurring. The most ideal market scenario would be a retracement back to around $80,000, providing a better entry point for latecomers.

Future Imagination Space: Liquidity, RWA, and Payment Ecosystem

Looking ahead, several factors make 2026 worth anticipating. First is the gradual injection of liquidity — ongoing institutional interest will continuously support the market. Second is the summer wave of RWA (Real-World Asset Tokenization), which will further expand blockchain’s application boundaries in finance.

Finally, the improvement of global crypto payment systems is also promising. With technological advancements and regulatory frameworks gradually established, cryptocurrencies are steadily entering mainstream financial systems. All these changes together suggest that the crypto ecosystem is moving toward a new development phase — from niche experimentation to large-scale application.

Based on the market observations from Madman’s Diary, the current environment is full of challenges but also opportunities. The short-term noise from Japan’s rate hike will fade, and the true market direction will be determined by long-term capital flows and ecosystem development.