Bitcoin's price climbed to $88,000 following the Bank of Japan's interest rate increase to its highest level in 30 years. Despite expectations of a risk-off move, the hike did not trigger a flight to the yen, with futures traders instead piling into leveraged long positions. Ether outperformed bitcoin amid broader altcoin weakness.
The cryptocurrency market showed resilience on Friday morning as bitcoin surged from a low of $85,200 at 1:00 a.m. UTC to $88,000 over five hours, shortly after the Bank of Japan raised its interest rates. This marked the fourth time this week that bitcoin has jumped more than 2%, though each uptick has been fleeting, echoing the choppy patterns of past bear markets.
The rate hike, often viewed as bearish for risk assets due to its potential to unwind the yen carry trade—where investors borrow cheap yen to fund higher-yield investments like equities and crypto—did not unfold as anticipated. Instead, the yen weakened, and Nasdaq 100 futures rose 0.62% in the same period, indicating the move was already priced in by markets.
Derivatives data underscored bullish sentiment: bitcoin's open interest increased faster than its price, with the aggregate funding rate across exchanges reaching 0.085%, the highest since November 21. This positive rate means long-position holders pay shorts, signaling fresh leveraged buying rather than short covering. The long/short ratio showed 66% of traders leaning long in the past four hours.
Altcoins presented a mixed picture. While Solana and XRP saw open interest drop by 4.4% and 2.6% respectively, despite minimal price changes, ether gained 1.5% against bitcoin during a key morning window, bucking the downtrend. The altcoin season indicator hit new lows at 14 out of 100, and tokens like Render, Immutable X, World Liberty Financial, and Cosmos declined recently. Funding for Cardano's Night token remained deeply negative at -0.1987%, favoring shorts. For altcoins to rebound, bitcoin needs to break resistance and stabilize, potentially directing capital to riskier assets.
Overall, memecoins rose 2.42% since midnight UTC, outpaced by the CoinDesk 20 index at 3.68%, highlighting selective speculation amid uncertainty.
