Bank Of Japan Rate Hike May Drop Bitcoin Below $70K

The Bank of Japan's (BOJ) anticipated interest-rate hike on December 19 could lead to a further drop in Bitcoin toward the $70,000 area. This move may reduce global liquidity and increase downward pressure on risk assets.

Higher rates tend to strengthen the yen, raising borrowing costs and prompting traders to unwind positions funded by low-cost yen loans.
Previous BOJ rate hikes have resulted in Bitcoin drawdowns exceeding 20%: -23% in March 2024, -26% in July 2024, and -31% in January 2025.
Bitcoin recently showed a bear flag after falling from the $105,000–$110,000 range in November.
Bitcoin slipped below $90,000 in thin trading, indicating caution among traders.
Ether remained more resilient than many altcoins, suggesting selective risk-taking.
Market participants are positioning ahead of key US data and central bank events that could influence market flows.
Analysts warn Bitcoin could fall below $70,000 under current macroeconomic conditions.

The correlation between BOJ policy changes and Bitcoin's performance is noteworthy; higher funding costs in Japan can lead to global asset sales as positions are adjusted. However, markets may already be pricing in the expected rate hike, potentially limiting its impact.