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Earlier today, the Bank of Japan announced an interest rate hike along with a reduction in bond purchases. The development was enough to send jitters in the crypto market, with the Bitcoin price dropping to the crucial support of $65,500 and bouncing back above $66,000 as of press time. 
<h2 id="bank-of-japan-rate-hike">Bank of Japan Rate Hike</h2> 
Earlier today, the Bank of Japan raised interest rates to 0.25% leading to a strong volatility in Bitcoin, equity, and the Japanese Yen. The central bank further stated that it would be reducing its monthly bond purchases to around ¥3 trillion ($19.6 billion) by the first quarter of 2026. Interestingly, the analysts were predicting a more aggressive reduction in the bond-buying program. 
The continuous fall of the Japanese Yen against the US dollar has forced the central bank to conduct rate hikes this year. It is for the first time in two decades that the interest rates have turned a net positive in Japan. Charu Chanana, head of currency strategy at Saxo Markets told <a rel="nofollow" href="https://www.bloomberg.com/news/live-blog/2024-07-31/bank-of-japan-monetary-policy-decision" target="_blank">Bloomberg</a>: 
<blockquote>
 “This must be one of the BOJ’s most hawkish moves given how low it has set the standard to be. Pressure on the yen will likely continue if the Fed stays away from a clear indication of a September rate cut later today. Japanese equities warrant a cautious stance, and banks will likely be disappointed by the shallower BOJ cut to bond purchases.”
</blockquote> 
Also Read: <a href="https://coingape.com/bitcoin-whales-scoop-5900-btc-in-recent-correction-recovery-expected-soon/" target="_blank" rel="noopener">Bitcoin Whales Scoop 5,900 BTC In Recent Correction</a> 
<h2 id="bitcoin-volatility-spikes">Bitcoin Volatility Spikes</h2> 
In the last three hours, the <a href="https://coingape.com/price/bitcoin/" target="_blank" rel="noopener">Bitcoin price</a> volatility has shot up bouncing twice from the support of $65,500 levels. This volatility can increase further going into increase with the Fed meeting later today along with approaching the Bitcoin options expiry on Friday. Furthermore, <a href="https://coingape.com/breaking-mt-gox-moves-45511-bitcoins-to-repay-creditors-another-btc-selloff-ahead/" target="_blank" rel="noopener">Mt. Gox</a> moving over $3.15 billion in BTC earlier today has also played its part in the current volatility. 
Along with BTC, the broader crypto market has also been showing volatility with the Ethereum price flirting around $3,300. Also with <a href="https://coingape.com/blackrock-ethereum-etf-hits-new-milestone-net-inflows-turn-positive/" target="_blank" rel="noopener">Ethereum ETF flows</a> turning positive today, it could signal a healthy move in ETH going ahead. On the other hand, the <a href="https://coingape.com/xrp-jumps-9-as-odds-of-ripple-sec-lawsuit-settlement-increases/" target="_blank" rel="noopener">XRP price surged</a> by 9% defying broader market sentiment. 
The US Fed meeting later today won’t see any major development in terms of interest rate cuts, predict analysts. However, there’s a strong hope of a 25 basis points rate cut in September. 
Also Read: <a href="https://coingape.com/us-fed-meeting-expectations-no-rate-cut-expected-in-july-fomc-whats-next/" target="_blank" rel="noopener">US Fed Meeting Expectations: No Rate Cut Expected In July FOMC</a> 
The post <a href="https://coingape.com/bank-of-japan-rate-hike-leads-to-bitcoin-volatility-all-eyes-on-us-fed-meeting/">Bank of Japan Rate Hike Leads to Bitcoin Volatility, All Eyes on US Fed Meeting</a> appeared first on <a href="https://coingape.com">CoinGape</a>.

Bank of Japan Rate Hike Leads to Bitcoin Volatility, All Eyes on US Fed Meeting

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