Bitcoin has dropped to $70,000
The Bank of Japan (Japan's central bank) may raise interest rates. Many analysts believe that if this happens, Bitcoin could drop as well, possibly to around $70,000.
Why is that?
Because according to past data, since 2024, every time the Bank of Japan has raised interest rates, Bitcoin has seen significant drops (over 20%). The logic behind this is: a rate hike by Japan will strengthen the yen, increasing the cost of borrowing (especially borrowing yen to buy other assets). Many international investors previously borrowed cheap yen and converted it into dollars to buy high-risk assets like Bitcoin (this is called “yen carry trade”). Now that the yen is being raised, they need to quickly repay their loans and sell their Bitcoin, leading to a decrease in the money supply in the market.
With less money, everyone becomes more cautious about investing, making volatile assets like Bitcoin more likely to drop.
Many economists predict that the Bank of Japan will announce a rate hike on December 19.
The Bitcoin price chart also appears to be heading down (referred to in the news as a “bear flag pattern”).
· Therefore, analysts warn that if a rate hike does occur, Bitcoin may retrace to the range of $70,000 to $72,500.
When Japan tightens the “tap” (raises rates), the money in the global market decreases, and assets like Bitcoin, which rely on liquidity, may also drop.
That's the point, it's not complicated; it's just a chain reaction caused by the flow of international funds.
