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Bitcoin Bottoming Phase Continues Despite Short-Term Gains to $88K
Bitcoin (BTC) briefly surged toward $88,000 on Friday following the Bank of Japan’s (BoJ) interest rate increase, marking its highest level in 30 years. Despite the tightening move, markets reacted curiously bullish, with BTC joining US stock futures in gains ahead of Wall Street’s open.
Japan’s Rate Hike Sparks Optimism
Data from Cointelegraph Markets and TradingView showed BTC climbing roughly 2.5% versus the daily open. The BoJ raised rates to around 0.75%, ending Japan’s period of “cheap” money and standing out amid global central-bank easing.
Commentators like Arthur Hayes, former CEO of BitMEX, interpreted the hike as bullish. Hayes tweeted, “Don’t fight the BOJ: negative real rates is the explicit policy… $JPY to 200, and $BTC to a milly,” highlighting optimism for crypto amid currency movements.
Meanwhile, Temple 8 Research cautioned that Japan’s economic realities may prevent further hikes before 2027, citing fiscal constraints from the country’s $140 billion stimulus package.
BTC Continues Bottom Formation
Despite short-term rallies, Bitcoin remains in a broader bottoming phase. Volatility around the $84,390 low, following unexpected US inflation data, has traders wary of further downside. On-chain analytics platform Checkonchain identified $81,000—the cost basis for US spot BTC ETFs—as a critical support level. Analysts note that the market has yet to experience a “true capitulation event,” leaving the bottoming process incomplete.
Market Sentiment and Year-End Rally Potential
BTC’s recent gains coincided with modest rebounds in US futures, including a 1.5% jump in Nasdaq 100 futures and a stabilizing S&P 500. According to Mosaic Asset Company, investor sentiment remains cautious but supportive, with historical trends favoring positive performance in the second half of December.
As Bitcoin navigates volatility and macroeconomic developments, traders are closely watching key support and resistance levels to gauge the cryptocurrency’s next move.
