Bitcoin rose to $88,000 on Friday after the Bank of Japan lifted interest rates to their highest level in three decades, a move that failed to spark the risk-off reaction many had anticipated or trigger a flight into the yen.
Volatility remained a defining feature of crypto markets, with bitcoin rebounding from a low near $85,200 around 1:00 a.m. UTC to $88,000 within five hours. The gain marked the fourth time this week that bitcoin has advanced more than 2%, though each rally has quickly faded, reinforcing a choppy trading pattern reminiscent of prior crypto bear markets.
Traditional markets signaled little concern over the BOJ’s decision. Nasdaq 100 futures rose 0.62% over the same period, while the yen weakened, suggesting the rate hike was largely priced in and investors were not rushing to rotate out of risk assets.
A Bank of Japan rate increase is typically seen as a headwind for risk assets, as higher Japanese borrowing costs can prompt the unwinding of yen-funded carry trades — strategies that involve borrowing at low rates to invest in higher-yielding assets such as U.S. equities, bonds and cryptocurrencies. That dynamic, however, failed to materialize following Friday’s move.
Derivatives positioning
Bitcoin’s derivatives market pointed to growing speculative positioning rather than short covering. Open interest climbed faster than price, indicating fresh leveraged long positions entering the market. The aggregate funding rate across exchanges rose to 0.085%, the highest since Nov. 21, according to Coinalyze, after turning negative several times over the past month.
Positive funding rates typically reflect bullish sentiment, as long-position holders pay funding to those holding shorts. Bitcoin’s long-to-short ratio also showed a bullish tilt, with 66% of traders positioned long over the past four hours.
Elsewhere, derivatives signals were less constructive. Open interest in Solana and XRP declined 4.4% and 2.6%, respectively, despite price moves of less than 1%, suggesting futures traders are gradually reducing exposure to more speculative assets. Funding rates for Cardano’s privacy-focused token NIGHT remained deeply negative at -0.1987%, highlighting a strong bias toward short positions.
Token talk
Altcoins continued to lag, with CoinMarketCap’s “altcoin season” index slipping to fresh cycle lows at 14 out of 100. Ether bucked the trend, outperforming bitcoin with a 1.5% gain against BTC between 2:50 a.m. and 10:30 a.m. UTC, though the ETH/BTC pair had been in a downtrend earlier in the week.
Bitcoin’s uneven price action has weighed on the broader altcoin market, with several tokens selling off in recent hours. RNDR, IMX, WLFI and ATOM all declined as uncertainty persisted.
For altcoins to regain momentum, traders say bitcoin needs to break above key resistance levels and consolidate, allowing capital to rotate from BTC into higher-risk bets. The muted 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.
