#CryptoMarketWatch

In-Depth Market Discussion Under a Macro Turning Point

The current crypto market is standing at a critical window dominated by macroeconomic forces. The Bank of Japan’s (BOJ) monetary policy meeting on December 18–19 is no longer just “important” — it has the potential to set the short-term direction for global risk assets, including cryptocurrencies.
1. Why Is This BOJ Meeting So Critical?
From a market consensus perspective, the rate hike is largely already priced in:

Probability of a hike: above 90%
Base case expectation: a 25 bps increase to 0.75%
Highest Japanese policy rate since 1995
What supports this decision is not only inflation, but a structural improvement in Japan’s domestic economy:
Large manufacturers’ confidence has reached a four-year high
Corporate profitability is improving, with sustained wage growth momentum

A healthier wage–inflation cycle is gradually taking shape

These signals significantly weaken the rationale for ultra-loose monetary policy and accelerate the unwinding of yen carry trades, which has become a key source of recent volatility in global risk markets.
2. What Does the Yen Carry Trade Unwind Mean for Crypto?

For years, ultra-low-cost yen funding flowed into high-risk assets such as U.S. equities and crypto. As Japan approaches a clear policy turning point:

Carry-trade capital begins to exit
Leverage across global markets is reduced
Risk appetite weakens noticeably
This explains a key shift we’re seeing now:
Crypto’s “independent trend” is fading, and macro forces are reclaiming control.
3. bitcoin and Ethereum: Price Action & Market Psychology
🔹 Bitcoin (BTC)
Completed a correction from the $90,336 high
Found short-term support near $85,278
Current structure: rebound followed by hesitation
Bulls have not collapsed
But aggressive buying enthusiasm is clearly limited
The market is in a “wait-for-confirmation” phase
At this stage, BTC is acting more like a sentiment barometer than a trend leader.
🔹 Ethereum (ETH)
Stabilized and rebounded around $2,789
Supported by the fundamental narrative of the Fusaka upgrade
ETH’s relative resilience suggests:
Capital has not fully exited the crypto market
Funds are becoming more selective, favoring assets with clear fundamentals and narratives

4. Three Key Factors to Watch Next
BOJ’s Policy Execution and Messaging
25 bps hike with neutral guidance: selling pressure may ease
Unexpected 50 bps hike or hawkish tone: could trigger another market-wide correction

The real risk lies not in the rate hike itself, but in the post-meeting statement and forward guidance.
Consistency of Federal Reserve Signals
If multiple Fed officials converge on a hawkish stance:
Global liquidity conditions will remain tight
Risk asset valuations may face renewed pressure
Year-End Liquidity Tightening
Institutions often take profits and rebalance portfolios near year-end
Volatility around key technical levels may increase sharply
5. Conclusion: This Is a Phase Where “Doing Less” Matters More
The core market takeaway right now can be summarized as:
“The long-term structure remains intact, but short-term direction is undecided.”
Long-term capital accumulation has built a potential “moat” for the market
Short-term price action will likely be decided by the BOJ’s final policy outcome

Trading Perspective (not financial advice):
Maintain extremely low trading frequency
Avoid emotional chasing or panic selling
Wait for key macro events to be fully priced in
High-quality opportunities often emerge after uncertainty is resolved
In a macro-driven environment like this, patience itself becomes an edge.