When it comes to the driving forces of the crypto market, everyone’s first reaction is to keep an eye on the Federal Reserve. But have you ever considered that the Japanese yen actually plays a significant role as well?

A rough estimate shows that at least 30% of the momentum in this Bitcoin bull market comes from yen carry trades. The logic is simple—institutions borrow ultra-low interest yen from Japan, convert it to US dollars, and pour it into high-risk assets, with cryptocurrencies naturally being one of the key targets. This strategy has worked time and again during periods of monetary easing.

But what if the Bank of Japan actually announces a rate hike on the 18th? A strengthening yen would directly break the current carry trade balance. Under the pressure of capital outflows, Bitcoin, already in a bear market phase, could face even more intense selling pressure.

Of course, there’s another variable: if the Federal Reserve cuts rates as expected in December, that could buffer some of the impact. But until then, the market may have to withstand this cold wave from Tokyo first.