## Bitcoin's Perspective on Monetary Policy Changes: An Analysis Through the Lens of Interest Rate Hikes

The increase in interest rates by the Bank of Japan to the highest level in three decades has defied common expectations in risk asset markets. Instead of panicking, Bitcoin demonstrated strength, moving toward $88,000 on the last trading day. The current BTC price at $95.30K indicates that the market is adapting to new macroeconomic realities.

Arthur Hayes, an experienced cryptocurrency market observer, pointed out the hidden logic behind this change. His analysis suggests that further interest rate hikes in Japan will be difficult due to the country's structural economic challenges. Hayes forecasts a scenario where the Japanese yen weakens to parity of 200 against the dollar, and Bitcoin continues to grow, ultimately reaching the one million dollar level.

## Conflict Between Market Expectations and Economic Reality

Although nominally, interest rate hikes should be negative for cryptocurrencies, we observe an optimistic reaction. Analysts from Temple 8 Research explain this discrepancy: the market interpreted the move as the last increase in the cycle. Their forecast indicates that no further interest rate hikes will occur before 2027, due to the need to protect the yen and avoid an explosion in debt service payments from Japan's stimulus package.

"It is impossible to simultaneously drive growth through fiscal spending and slow down the economy through higher rates" – this is a key argument in understanding monetary policy. If rates reach 1.5%, the costs of servicing new public debt will become unsustainable for the budget.

## Technical Bitcoin Bottom and Market Sentiment

BTC experienced a low of $84,390 following surprising inflation data from the USA. Checkonchain, a blockchain analytics platform, identifies $81,000 as psychological support, related to the baseline price for US spot Bitcoin ETFs.

However, according to analysts, the market has not yet undergone an "authentic capitulation event." Current support levels may be tested again if investor sentiment worsens. At the same time, the equity sector signals strength – Nasdaq 100 contracts rose by 1.5%, and historically, the second half of December brings seasonal gains.

Traders remain cautious, waiting for clear signals whether the current rebound is the beginning of an upward trend or merely a technical correction. The interest rate hike in Japan and its consequences for global capital flows will be a key factor in the direction of changes in the coming weeks.