Bitcoin Price Drops Follow BOJ Rate Hikes: Is Another Crash Developing?

Since 2024, Bitcoin (BTC) has posted four major corrections after interest rate hikes by the Bank of Japan (BOJ), with declines ranging from 18% to 28%. This dynamic places renewed attention on the BOJ’s June 16 policy decision. 

Data currently point to a variety of pressures on BTC, with BTC whale distribution and exchange inflows possibly carrying more weight than Japanese monetary policy.  

BOJ hikes and Bitcoin drawdowns: Will history repeat?

The relationship between BOJ policy and Bitcoin has gained attention because each rate increase since Japan ended its negative interest rate policy has been followed by a sizable correction. 

Following the March 19, 2024, hike, Bitcoin corrected by 18%. The July 31, 2024, increase preceded a 18.5% decline. 

After the Jan. 24, 2025, hike, Bitcoin fell nearly 25%, while the Dec. 19, 2025, decision was followed by a 28% drawdown. 

Across the four events, Bitcoin’s average decline was 22.4%. 

BTC/USD, one-week chart. Source: Cointelegraph/TradingView

The sell-offs did not occur under identical conditions. The March 2024 correction followed Bitcoin’s breakout to new all-time highs during the spot Bitcoin exchange-traded fund (ETF) cycle. The July 2024 decline followed months of consolidation below peak levels and coincided with the sharp unwind of the yen carry trade, which affected global markets. 

The January and December 2025 drawdowns followed extended rallies and periods of contraction for both BTC spot and futures 30-day demand. 

BTC: spot and perpetual futures demand growth contraction. Source: CryptoQuant

The relationship between BOJ policy and Bitcoin is often linked to the yen carry trade. For years, investors borrowed yen at low rates and deployed that capital into higher-yielding assets, including stocks and cryptocurrencies. 

When the BOJ raises rates, some of those positions can be reduced, weighing on risk assets. The July 2024 hike coincided with one of the largest carry-trade unwinds in recent years and a sharp sell-off across global markets, not only BTC. 

The influence of that particular condition appears smaller today. The BOJ has already raised rates to 0.75% from -0.1% in March 2024, while Japan’s 10-year government bond yield climbed to 2.68% from 0.63% over the same period. 

Japan’s 10-year bond yield increase since 2024. Source: TradingEconomics

With Japan’s borrowing costs already higher than during the negative-rate era, each additional hike represents a smaller policy shift than the BOJ’s initial move away from ultra-loose monetary policy. The June 16 meeting would extend an existing tightening cycle rather than introduce a new one. 

Likewise, market analyst Cryptic Trades noted that concerns about a renewed yen carry-trade unwind are overblown, arguing that Japan has effectively moved away from its deflationary policy framework in 2024. The analyst added,

“The Yen Carry Trade has been dead ever since 2024. It is also a BIG nothing burger for the markets.”

Related: Bitcoin price may slide toward $30K as institutions dump 450% of daily BTC supply

BTC whales add to the pressure

While the BOJ meeting is a macro event that traders may monitor, onchain data points to a more immediate source of pressure.

Crypto analyst MorenoDV noted that Binance has recorded rising BTC inflows from wallets holding 100–1,000 BTC and 1,000–10,000 BTC since the sell-off began in early June. As a result, the exchange’s 30-day whale inflow sum has climbed to $6.6 billion. 

Bitcoin whale to exchange flow. Source: CryptoQuant

The pressure is already visible in realized activity. Short- and long-term whales have collectively locked in more than $2.5 billion in losses during the decline, indicating that some large holders have actively reduced exposure.

Short-term whales appear particularly vulnerable. The cohort is carrying roughly $16 billion in unrealized losses after briefly returning to profit for around 10 days in early May. Those positions now sit close to break-even levels, creating a potential source of supply during rebounds. MorenoDV said, 

“Taken together, these three readings describe the stress profile of a late-stage bear market: capitulating whales, distribution into weakness, and a fragile short-term cohort with its finger on the trigger.”

Related: Bitcoin may act as a ‘canary in the coal mine’ as risk-off pressure spreads: Bitwise