Bitcoin is currently in the eye of a storm shaped by deterministic macro events and a fragile technical structure. The market generally expects the Bank of Japan to announce an interest rate hike at its monetary policy meeting on December 18-19, which may also mark a key turning point in the ultra-loose era lasting for decades. This event resonates with the strong suppression of multiple technical indicators on Bitcoin's daily and four-hour charts, pointing to a high probability of a deep retracement risk. This article will integrate macro logic and detailed technical analysis to outline the key trading map for the coming week.
In this round of market, we let everyone arrange positions in advance from 89,500 to around 93,500 and have reduced positions by 80%. Near 92,300 to 92,800, we shorted from 89,500 and reduced positions by 80%. The remaining small part of the bottom position can wait for the market to effectively break through near 94,500 before closing short positions, and consider adding long positions when the 4-hour or daily level confirms. If it effectively breaks below 89,000 to 88,000, close the long positions and wait for a rebound near 89,000 to 89,500 to consider adding short positions, targeting 875 to 838 to 785 nearby!
1. Macro storm eye: The Bank of Japan's interest rate hike has become a foregone conclusion, and global liquidity is facing withdrawal.
1. Highly certain interest rate hike event
Bank of Japan Governor Ueda Kazuo, in a rare mention during his speech on December 1, directly stated that he would weigh the pros and cons of raising interest rates at the December meeting, which was interpreted by the market as the clearest hawkish signal. Since then, market expectations have surged. According to the latest survey, over 90% of economists expect the Bank of Japan to raise rates by 25 basis points at the meeting on the 18th-19th, increasing the policy rate from 0.50% to 0.75%. Market pricing shows that the probability of this rate hike has reached 85%-90%, with little uncertainty.
2. Core transmission mechanism: unwinding of yen carry trades
The reason why the Bank of Japan's interest rate hike poses a significant threat to Bitcoin lies primarily in the reversal of "Yen carry trades." Over the past decade or so, investors have been accustomed to borrowing yen at near-zero interest rates, converting them into USD to purchase high-yield risk assets like Bitcoin. Once the Bank of Japan raises interest rates:
Yen strength: Interest rate hike expectations have driven significant appreciation of the yen. Rising financing costs: Borrowing yen is no longer inexpensive.
Forced liquidation: To repay yen loans or avoid losses, global traders will be forced to sell Bitcoin and other assets in sync, triggering a chain sell-off. BitMEX co-founder Arthur Hayes bluntly stated that this is equivalent to "removing the fuel from the casino."
3. Historical reflections and market impacts
This impact is not theoretical. In August 2024, the unexpected interest rate hike by the Bank of Japan led to a 20% drop in Bitcoin in a single day. On December 1, 2025, just due to Ueda Kazuo's hawkish hint, Bitcoin plummeted from 92,000 USD to below 86,000 USD in just a few hours, with over 650 million USD liquidated across the network, perfectly illustrating the market logic of "expectations lead the way." Therefore, before the decision is officially made, the market's risk-averse sentiment and preemptive liquidation behavior will continue to exert pressure on risk assets.
2. Technical dilemma: Multiple cycles of pressure converge, the road to the upside is fraught with thorns
Under the macro clouds, the technical structure of Bitcoin appears particularly fragile.
1. Multi-cycle "Ichimoku Kinko Hyo" cloud covers the top
Daily level: The cloud (lagging span) forms a heavy ceiling. The area around 92,200 is the current conversion line and base line area, as well as the bottom of the cloud, forming strong pressure recently. The area around 98,500 above is a thicker resistance zone of the cloud body, making it very difficult to break through.
At the four-hour level: Although it is a bullish cloud in the short term, the upper edge of the cloud at 91,100 USD and the baseline at 91,800 USD together form the first firewall for rebounds.
Hourly level: The top of the cloud and Fibonacci retracement levels in the 91,350-91,500 USD range form a dense resistance band.
2. Key resistance and market sentiment
Bitcoin has attempted multiple times to break through the resistance band of 93,000-94,000 USD but failed each time, quickly retreating thereafter. This indicates that the buying power at high levels is insufficient, and selling on rallies is the mainstream sentiment. The KDJ daily death cross is spreading downwards, further confirming that short- to medium-term momentum is weakening.
3. Weak support below and deep targets
Once bearish momentum is triggered by macro events, the support below will face severe tests. The recently recognized strong support area is between 88,000 and 89,000 USD. If lost, the market may begin a journey to probe deeper areas. It may touch target levels of 88,500, 87,500, or even 83,800 and 78,500 USD to form technical resonance. If a bearish flag is formed, the deep correction target could point to around 67,700 USD.
3. Trading strategy: go with the trend, precision ambush
In summary, before the Bank of Japan's decision on December 18, adopting a strategy of positioning short orders on rallies has a high logical win rate (expected to exceed 65%). The key lies in refined entry and strict risk management.
Core trading plan: short in batches
1. Entry area (in batches)
First entry area: 91,000 - 91,500 USD
Basis: The upper edge of the four-hour cloud layer, the top of the hourly chart cloud, the Fibonacci 0.236, and the convergence zone of multiple resistance lines.
Second entry area: 92,000 - 92,200 USD
Basis: Daily level conversion line/base line and core resistance area at the bottom of the cloud.
2. Profit targets (partial take profit)
Target one: 89,500 - 88,000 USD (upper edge of recent strong support area, partial take profit possible)
Target two: 88,500 - 87,500 USD (core demand area, if broken, the trend strengthens)
Target three: 83,800 USD (previous deep correction level, key psychological threshold)
Deep target: 78,500 USD (important support area under the extension of the trend)
3. Risk control (absolute bottom line)
Unified stop-loss level: above 94,000 USD
If the price strongly breaks through the multiple resistances at the daily level and stabilizes above the 93,000-94,000 resistance band, the technical structure will be damaged, the bearish logic will fail, and a decisive stop-loss must be implemented.
4. Risks and uncertainties
"Buy on expectations, sell on facts" risk: The market may have partially digested the impact of the interest rate hike. If the decision meets expectations and the statement is dovish, Bitcoin may rebound sharply after the short-term bearish sentiment is exhausted. Attention should be paid to Powell's remarks on the future interest rate path after the decision.
Unexpected dovish reversal: Although the probability is extremely low, if the Bank of Japan unexpectedly holds still, it will trigger a sharp decline in the yen and a violent rebound in risk assets, and shorts need to exit immediately.
The resilience of support below: the 88,000-89,000 USD area is an important defense line for the bulls, the first touch will lead to fierce competition, and the market may fluctuate repeatedly.
The upcoming policy shift of the Bank of Japan is generating a strong "chemical" reaction with Bitcoin's fragile technicals, creating a high probability scenario for a deep pullback. The essence of trading lies in "predicting, following, and reacting." Currently, aligning with the convergence of macro and technical trends, positioning short orders below key resistance areas is the "prediction" and "following." Strictly adhering to stop-losses and being alert to the instant reversal of market sentiment after the decision lands is a more important "reaction."
The content of this article is solely Jiang Feng's personal market analysis and views sharing and does not constitute any investment advice. Cryptocurrencies are highly volatile, and the risks are extremely high, please make cautious decisions and bear your own profits and losses.
Written by: Jiang Feng Capital (formerly known as E B trader)
