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BoJ move could trigger renewed Bitcoin correction
Multiple macro analysts warn that Bitcoin may extend a correction toward the $70,000 area if the Bank of Japan (BoJ) follows through with an expected rate hike on Dec. 19. Historically, BoJ tightening episodes have coincided with weaker liquidity for risk assets, and traders say the next policy action could again weigh on BTC price and crypto markets broadly.
Key takeaways
- BoJ rate increases can drain global liquidity and pressure risk assets like Bitcoin.
- Macro and technical setups point toward a downside target around $70,000–$72,500 for BTC.
- Past BOJ hikes since 2024 were followed by BTC pullbacks of roughly 20–30%.
Macro signal: BoJ tightening and liquidity drain
Analysts tracking macro flows say the mechanism is familiar: a BoJ rate hike tends to strengthen the yen and make it more expensive to fund positions via so-called yen carry trades. When those trades unwind, global liquidity tightens and leveraged exposure to risk assets is reduced — a dynamic that has historically pushed Bitcoin lower during risk-off rotations.
Data compiled by market watchers shows notable BTC drawdowns following each BOJ rate move since 2024: roughly 23% in March 2024, 26% in July 2024 and 31% in January 2025, according to one analyst's charting.
BTC/USD weekly chart
That history prompted fresh warnings ahead of the December meeting. A Reuters poll also indicated that most economists expect another BoJ hike, reinforcing the downside risk scenario. One poster on X bluntly predicted BTC will "dump below $70,000" if the BoJ tightens policy.
Technical picture: bear flag and measured move
On the technical side, Bitcoin’s daily price action has formed a bear-flag pattern after the sharp decline from the $105,000–$110,000 range in November. The narrow, upward-sloping consolidation typically represents a pause before trend continuation, and a confirmed break beneath the flag’s lower trendline would often imply a further leg down.
BTC/USD daily chart
If that breakdown occurs, the measured move from the pattern points toward the $70,000–$72,500 zone — a target echoed by multiple technical analysts, including James Check and Sellén. Traders should monitor BoJ announcements, yen funding rates, and on-chain leverage metrics to gauge whether macro and technical forces are converging toward renewed downside for BTC.
Source: cointelegraph
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