The Bank of Japan is very likely to announce an interest rate hike to a 30-year high of 0.75% this week. At first glance, this seems far from the crypto world, but global financial markets are interconnected, and a major central bank decision often triggers a chain reaction in the crypto market.

What does a rate hike mean? The most direct effect is that the yen will be supported and may strengthen. Institutions and retail investors who previously borrowed yen for cheap financing and invested in high-risk assets (including cryptocurrencies) will face higher borrowing costs. In the short term, this will indeed create pressure on the market, especially for those coins that are leveraged.

However, this isn't necessarily all bad. Historical experience shows that in an environment where traditional financial yields remain relatively low, institutional and investor demand for crypto assets may persist in the long term. Markets will fluctuate, but truly valuable assets are often able to withstand these short-term shocks.

For retail investors, the key is not to be driven by panic. If you believe in the fundamentals of certain projects, short-term interest rate fluctuations should not be a reason to cut your positions. On the contrary, this is a good time to test the resilience of your holdings. Those with larger positions can moderate risk and leave some room; those with lighter positions, if they see panic-driven corrections, might find opportunities to gradually build positions.

The news is just the news; the market's true direction is still determined by fundamentals and major trends. Stay rational and don't let short-term noise dictate your actions.