Bitcoin traders have a reason to watch Tuesday's BOJ rate decision. Yen shorts are at a nine-year high
Bitcoin traders are bracing for potential market volatility ahead of the Bank of Japan's interest rate decision on Tuesday. A potential rate hike could trigger an unwinding of yen-funded carry trades, which have historically supported risk-on assets like cryptocurrency.
Why it matters
Global financial markets, including crypto, are sensitive to Japanese monetary policy shifts due to the prevalence of yen-based carry trades.
The Bank of Japan is widely expected to raise its benchmark interest rate to 1% from 0.75% on Tuesday, bringing it to its highest level since 1995. That may sound like a routine policy decision from a central bank on the other side of the world and a non-event for crypto markets.
The article provides a technical market analysis based on historical data and current financial trends.
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