How will Bitcoin price react as BOJ holds interest rate?

Bitcoin price traded cautiously on Friday after the Bank of Japan kept its benchmark interest rate at 0.75%. 

Investors are balancing short-term relief against ongoing liquidity concerns linked to Japan’s policy decision.

The BOJ voted 8–1 on Jan. 23 to maintain its interest rate at the level set following its hike in December. This was the highest rate in about 30 years. 

Why the BOJ decision matters for Bitcoin

Markets had largely expected the BOJ rate to hold steady, and the decision removed the risk of an immediate policy shock. Instead of moving sharply as it had after earlier rate hikes, Bitcoin’s (BTC) initial response reflected the calm, remaining slightly below $90,000.

The central bank’s statement wasn’t entirely neutral. The BOJ increased its inflation forecasts, allowing for additional rate hikes in the event that price pressures persist.

The shift in Japan’s stance away from extremely loose monetary policies over the last two years has significantly influenced global liquidity, a factor that carries considerable weight for cryptocurrency markets.

Following the BOJ’s interest rate increase in July 2024, Bitcoin fell roughly 26%, from $68,000 to $50,000 in the days that followed. A similar move in January 2025 resulted in a roughly 25% drop over a few weeks, from $74,000 to almost $55,000.

After the December 2025 hike to 0.75%, Bitcoin stayed relatively steady contrary to expectations. It hovered around $90,000, showing that traders had already priced in part of the move. 

The Bank of Japan’s decision to hold rates steady has removed the immediate shock of another hike, explaining why Bitcoin is moving sideways near $89,000-$90,000. Analysts say the cryptocurrency could stay near this range or pull back further unless buyers push it above $92,000–$94,000. 

Any meaningful gains will depend on investors taking on more risk or improvements in global economic conditions.

Bitcoin price technical analysis

Bitcoin appears to be on unstable ground. The price has fallen below the 20-day moving average and is testing the 50-day average near $92,000, a level that has repeatedly capped recovery attempts over the past weeks. The overall trend suggests the market is still in a corrective phase.

As sellers intervened during the most recent bounce, the rally stalled between $97,000 and $98,000, creating a lower high. This rejection occurred in the upper Bollinger Band, which has often capped upward movements.

Momentum indicators show caution. The relative strength index has dropped to the mid-40s after reaching overbought levels earlier this month, suggesting falling demand as opposed to sideways consolidation.

Following a period of compression, volatility has begun to rise, making downward movements more likely.

Immediate support sits at $89,500–$90,000. That zone has held so far, but a daily close below $89,000 could lead to a deeper pullback toward $87,000–$88,000, near the lower Bollinger Band.