Over the past month, the performance of the Japanese Yen has been quite bizarre. The Bank of Japan voted to raise interest rates (policy rate from 0.5% to 0.75%, with all 9 votes in favor), which should normally lead to Yen appreciation. However, the reality is that it has fallen to around 157 Yen per US dollar, hitting a recent low. Meanwhile, Bitcoin has been swinging wildly between $84,000 and $95,000. What signals does this combination send to the market?

**The Dislocation Behind the Phenomenon**

According to traditional financial textbooks, this situation should not occur. Japan has long been the cheapest source of financing globally—an absolute haven for carry trades. Tightening monetary policy should trigger a wave of unwinding in this massive carry trade system, impacting risk assets. But this time, the market chose silence.

Bitcoin did not crash; instead, it oscillated at high levels. Futures data from several mainstream exchanges show that the main contracts are hovering around $87,895, even briefly dipping below $87,000. This is not a sharp plunge but a strange, directionless consolidation.

**Sentiment Dives, No Festivities at Year-End**

Market institutions share a consistent view: shortages. Not of Bitcoin, but of enthusiasm for year-end rallying. Some data agencies have bluntly stated that there are no signs of a traditional "Christmas rebound" in the current crypto market. Even the most easily hyped nodes are not being bought up. What does this imply? Investor sentiment has become quite cautious.

In this context, any price increase warrants caution. What appears to be a reversal rebound may simply be the main players adjusting positions and managing risks. In other words, any current rise could be illusory, and the real opportunity might still be ahead.

**Reevaluating from a Carry Trade Perspective**

Rising funding costs for Yen financing should theoretically trigger a wave of unwinding. But in reality, this unwinding may already be underway or much smaller in scale than the market imagines. Perhaps large funds have already anticipated this move and completed their risk hedging in advance. Or maybe the true state of global liquidity is more influential on market direction than the policies announced by central banks.

This time, the Bank of Japan’s decision symbolizes the closing of the last line of defense for cheap global financing. Yet, the market’s reaction appears indifferent. This indifference could stem from two extremes: either a deep bearish outlook, believing rebounds are pointless; or high differentiation, with participants of various sizes acting independently.

**Summary of the Current Situation**

Yen depreciation + Bitcoin volatility = market re-pricing. The traditional cause-and-effect chain seems broken, which precisely indicates that market structure is undergoing adjustment. Investors should view this period as an opportunity to reassess risks and opportunities rather than blindly chasing rallies.