Bitcoin climbed to $88,000 on Friday after the Bank of Japan lifted interest rates to their highest level in 30 years, a move that failed to trigger the risk-off reaction many had expected or drive investors into the yen.
Crypto market volatility remained elevated, with bitcoin rebounding from an early low near $85,200 around 1:00 a.m. UTC to $88,000 within five hours. The advance marked the fourth time this week that bitcoin has risen more than 2%, though each rally has been short-lived, with price action continuing to resemble the choppy patterns seen in previous crypto bear markets.
Broader markets showed little sign of stress. Nasdaq 100 futures gained 0.62% over the same five-hour window, while the yen weakened, signaling that the BOJ’s decision was largely priced in and that investors were not rushing to rotate out of risk assets.
A BOJ rate hike is typically viewed as a headwind for risk assets, as higher Japanese borrowing costs can prompt the unwinding of yen-funded carry trades — strategies that involve borrowing cheaply in yen to invest in higher-yielding assets such as U.S. equities, bonds and cryptocurrencies. That dynamic, however, did not emerge following Friday’s decision.
Derivatives positioning
Bitcoin’s rally was underpinned by increased leverage rather than short covering. Open interest rose faster than price, indicating fresh long positions entering the market. The aggregate funding rate across exchanges climbed to 0.085%, the highest since Nov. 21, according to Coinalyze, after dipping into negative territory several times over the past month.
Positive funding rates typically signal bullish sentiment, as long-position holders pay funding to those on the short side. Bitcoin’s long-to-short ratio also showed a bullish skew, with 66% of traders positioned long over the past four hours.
Elsewhere, derivatives signals were less supportive. Open interest in Solana and XRP fell 4.4% and 2.6%, respectively, despite minimal price changes, suggesting futures traders are gradually trimming exposure to higher-risk tokens. Funding rates for Cardano’s privacy-focused token NIGHT remained deeply negative at -0.1987%, pointing to a strong preference for short positions.
Token talk
The broader altcoin market continued to struggle, with CoinMarketCap’s “altcoin season” index dropping to a fresh cycle low of 14 out of 100. Ether stood out, outperforming bitcoin with a 1.5% gain against BTC between 2:50 a.m. and 10:30 a.m. UTC, although the ETH/BTC pair had been trending lower earlier in the week.
Bitcoin’s uneven price action has weighed on altcoins, with several tokens coming under pressure in recent hours. RNDR, IMX, WLFI and ATOM all moved lower as uncertainty lingered.
For altcoins to regain momentum, bitcoin likely needs to break above key resistance levels and consolidate, allowing capital to rotate from BTC into more speculative assets. The subdued appetite for speculation is reflected in CoinDesk’s memecoin index, which rose 2.42% since midnight UTC, compared with a 3.68% gain in the broader CoinDesk 20 index over the same period.
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