Bitcoin (BTC) may experience further corrections towards the $70,000 mark if the Bank of Japan (BoJ) goes ahead with a projected interest-rate increase on Dec. 19, as indicated by several macroeconomic analysts.
Key insights:
BoJ tightening could exert pressure on Bitcoin by depleting global liquidity.
Both macro and technical indicators suggest a downside target of $70,000.
Previous BOJ hikes led to 20-30% BTC price declines
Every BOJ rate increase since 2024 has been associated with Bitcoin price drop-offs of over 20%, according to data shared by AndrewBTC.
In a post on X, the analyst noted BTC declines of approximately 23% in March 2024, 26% in July 2024, and 31% in January 2025.
AndrewBTC cautioned that similar downside risks might arise if the BOJ raises rates this Friday. A recent Reuters survey indicated that most economists expect another rate hike at the upcoming December policy meeting.
The analysis focuses on Japan’s influence on global liquidity.
In prior instances, BOJ rate hikes strengthened the yen, making borrowing and investing in riskier assets more costly. This typically led traders to unwind so-called “yen carry trades,” resulting in decreased liquidity across international markets.
As liquidity waned, Bitcoin faced pressure as investors reduced leverage and exposure during risk-averse periods.
Analyst EX predicted BTC could “fall below $70,000” under these macro conditions.
Bitcoin bearish flag indicates same $70,000 target
Bitcoin’s daily chart has also shown technical warning signs, with price action consolidating within a typical bear flag pattern.
This pattern emerged after BTC sharply broke down from the $105,000–$110,000 range in November, followed by a narrowly ascending consolidation channel. Such formations often suggest temporary pauses prior to trend continuation.
Related: BTC OGs selling covered calls is the main culprit suppressing price: Analyst
A decisive breakdown below the flag’s lower trendline could initiate another downward movement, with a measured move targeting the $70,000–$72,500 range. Several analysts, including James Check and Sellén, have indicated similar downside targets recently.
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
