BOJ Rate Decision Sparks Crypto Rebound, Lifts Bitcoin Back Above $87,000

Bank of Japan raised rates to their highest level since 1995, matching expectations.

• Bitcoin recovered sharply from intraday lows following the announcement.
• Overall crypto market capitalization moved back above $3 trillion.
• XRP outperformed major tokens, supported by improving retail sentiment, as per Stocktwits data.

The cryptocurrency market rebounded Thursday night after the Bank of Japan raised interest rates to their highest level in three decades, a move that briefly lifted risk assets despite expectations that tighter policy would pressure prices.

The Bank of Japan increased its benchmark rate by 25 basis points to 0.75%, the highest level since 1995 and in line with economist expectations surveyed by Reuters. However, the BOJ added that real interest rates are expected to remain “significantly negative.” It said that accommodative financial conditions will continue to firmly support economic activity.

How Did The Crypto Market React?

Bitcoin (BTC), Ethereum (ETH), and other major tokens moved higher following the rate hike decision, pushing the total cryptocurrency market capitalization back above $3 trillion. Bitcoin’s price gained nearly 2% in the last hour, recovering from around $85,200 to $87,000 on Thursday night. On Stocktwits, retail sentiment around the apex cryptocurrency remained in the ‘extremely bearish’ zone, amid ‘low’ levels of chatter.

According to CoinGlass data, roughly $31 million in crypto positions were liquidated in the past hour, driven largely by short positions being forced out. Bitcoin, Ethereum, Solana (SOL), and Ripple’s native token XRP accounted for the bulk of the liquidations. On a 24-hour basis, leverage unwind totaled roughly $576 million, with long positions absorbing most of the damage.

XRP led gains among major tokens, with the token gaining 3.3% in the last hour. XRP’s price was trading at around $1.84 at the time of writing, with retail sentiment around the token on Stocktwits improving to ‘neutral’ from ‘bearish’ territory over the past day as chatter also rose to ‘normal’ from ‘low’ levels.

Ethereum’s price gained 2.8% in the last hour, while Solana rose 2.5%.

Analyst See Short-Term Crypto Rebound

The gains may be a knee-jerk reaction to the announcement given that numerous analysts were anticipating that the increase in rates would likely result in a downtrend for Bitcoin and other major assets. However, as per a poll on Stocktwits, many traders were accumulating crypto ahead of the announcement despite historical trends showing otherwise.

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