BoJ policy shift sparks sell-off — BTC, ETH, XRP, BNB fall as yen carry unwinds
Crypto markets slid as Japan’s sudden shift away from ultra-loose policy pushed Japanese government bond yields sharply higher and pressured the yen carry trade. The total crypto market cap fell about 5.3% to just above $3 trillion. Bitcoin dropped ~1.2% to $85,945 (roughly 30% below its early-October peak), Ethereum fell ~1.5% to $2,812, XRP eased 1.6% to $2.01 and BNB slipped 0.9% to $828. Liquidations totaled $536 million in 24 hours, mostly long positions; total open interest fell to roughly $124 billion and the market RSI sat near 36. The Crypto Fear & Greed Index is at 23 (extreme fear). Traders are watching the Bank of Japan’s mid-December meeting — guidance toward tighter policy could trigger further yen strength, additional margin calls and renewed selling across risk assets. A narrowing of the US–Japan rate gap (if the Fed cuts while the BoJ tightens) would extend pressure on crypto. Key keywords: BoJ, yen carry trade, Bitcoin, Ethereum, liquidations, market cap, risk-off.
Bearish
The news is bearish. A clear policy shift by the Bank of Japan — signaled by sharply higher JGB yields and a stronger yen — directly undermines the yen carry trade that supplied cheap funding into risk assets, including crypto. Rapid yen appreciation and rising yields typically force deleveraging, margin calls and large long liquidations; the article notes $536M of liquidations in 24 hours and falling open interest. Short-term: expect elevated volatility, further forced selling and weakened technicals (RSI ~36, Fear & Greed 23), which can push prices lower across BTC, ETH and altcoins. Medium-term: if the BoJ confirms a tighter stance while the Fed remains on a path to cuts, the US–Japan rate gap will narrow, removing a structural tailwind for risk assets and sustaining downward pressure on flows into crypto. Historical parallels: prior episodes of rapid unwinding of currency carry trades (e.g., post-2013 taper tantrum or sudden rate-adjustment episodes) produced sharp risk-asset drawdowns and concentrated liquidations. Traders should reduce directional long exposure, monitor funding rates, liquidations data, JGB yields, USD/JPY moves and the BoJ’s December guidance; consider hedges or smaller position sizes until market stabilizes.