BOJ Rate Hike Looms Large Over Bitcoin's 21% Rally

Bitcoin's recent surge of over 21% in the past week has investors on edge as they await the Bank of Japan's (BOJ) interest-rate meeting in September. The current price of $77,202.63 reflects this optimism, with the Crypto Fear and Greed Index sitting at 73, indicating a 'greed zone' sentiment.

The BOJ is expected to raise rates at its policy meeting on September 18th, which has led markets to sharply increase their bets on a rate hike. Overnight-index swaps are now pricing in an 82% probability of a hike, up from 23% before the July meeting.

Kento Minami, senior economist at Daiwa Securities, notes that BOJ officials will likely emphasize upside inflation risks without explicitly stating the next hike will come in September. This could be seen as a nod to markets for an early rate increase.