Stock markets fell, and this has caused the cryptocurrency market to experience uncertainty due to the Bank of Japan raising its target range for 10-year yields to 50 bps.
To provide flexibility in the central bank's monetary policy, Bank of Japan Governor Haruhiko Kuroda on Tuesday increased the target range for 10-year rates from 25 to 50 basis points.
How Japan's Monetary Policy Will Affect the Price of Bitcoin and Ethereum
However, this led to a dramatic decline in stock markets worldwide. The U.S. Dollar Index (DXY) drops to 103.96, while futures for the Dow Jones, S&P 500, and Nasdaq 100 all experience declines of almost 1%. As a result, the cryptocurrency market responded.
According to American economist Peter Schiff, the Bank of Japan's course reversal indicates that additional increases will occur. It predicts that in 2023, inflation will increase, the Dollar will weaken, and asset prices will decline.
Effects on the Crypto Market
After Bitcoin and Ethereum prices increased by more than 2% from the bottom, the cryptocurrency market started to settle a little. However, the Bank of Japan's monetary policy change might affect cryptocurrency prices in 2023.
The price of one bitcoin (BTC) is currently $16,816. The low and high points for the past 24 hours are $16,398. In the past 24 hours, the trade volume has surged by around 65%. Short-term price increases may result from the U.S. dollar's continued drop and the yen's strengthening.
The price of Ethereum (ETH) is currently $1,207 and has increased by over 2% over the last day. The 24-hour low and high are $1,160 and $1,210. Trading volume increased by about 50%.
Due to the increase in Bitcoin and Ethereum prices, some upward movements have been seen in altcoins, including Dogecoin, Shiba Inu, Cardano, and XRP.
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Analysts forecast for the coming year
The Wolf Of All Streets, a cryptocurrency analyst, claimed that BOJ tightening is increasing market uncertainty. He tweeted, "The Bank of England broken and Bank of Japan broken."
Rekt Capital stated that maintaining the $17,150 level for Bitcoin and altcoins will be essential.
