Crypto breaks higher as BOJ decision clears a macro overhang

Bitcoin and ether climbed above key technical levels on Friday, tracking gains in Asian equities after the Bank of Japan raised interest rates to their highest level in three decades and cooling U.S. inflation data revived appetite for risk assets.

Bitcoin rose above $87,000 in Asia trading, while ether pushed higher alongside broader market strength, as investors looked past the BOJ?s long-telegraphed move and focused instead on easing global financial conditions.

Cardano?s ADA, Solana?s SOL, dogecoin (DOGE), bnb (BNB) and xrp (XRP) rose as much as 3%, with the broad-based CoinDesk 20 index rising 2%.

The move higher came after a volatile, yet relatively range-bound, session that saw more than $576 million in crypto liquidations over 24 hours, largely concentrated in long positions, per CoinGlass.

Such liquidation flows are indicative of how crowded positioning had become during the recent rebound, and the use of high leverage remains dominant, albeit for capturing small gains.

Japan?s 10-year government bond yield briefly touched 2% for the first time since 2006 after the central bank lifted its benchmark rate, a move that had been widely expected following weeks of hawkish signals from Governor Kazuo Ueda.

Rather than spooking markets, the decision was absorbed smoothly, with the yen weakening and Asian stocks rising.

The MSCI Asia Pacific Index gained 0.7%, led by technology shares, while futures tracking U.S. equities extended their rebound overnight. The S&P 500 rose 0.8% and the Nasdaq 100 jumped 1.5%, helped by a strong outlook from Micron Technology (MU) that eased fears around artificial intelligence spending and stretched valuations.

Risk sentiment was further supported by softer U.S. inflation data, which reset expectations that the Federal Reserve could begin cutting rates in the coming months.

Meanwhile, on-chain data suggests some pressure may be easing.

Long-term bitcoin holders are close to finishing a prolonged selling phase, according to K33 Research, after roughly 20% of supply rotated back into the market over the past two years.

Still, traders remain cautious. The latest bounce has been driven more by macro relief than conviction, leaving crypto vulnerable to sharp moves as markets head into year-end with thinner liquidity and elevated leverage.