The Bank of Japan is expected to raise its key interest rates on Friday, which is a historically negative signal for riskier assets like Bitcoin.
Bitcoin may face a continued correction towards the $70,000 level if the Bank of Japan continues to raise interest rates as expected on December 19, according to several macro-focused analysts.
Key Points
* The Bank of Japan's tightening could pressure Bitcoin through the draining of global liquidity.
* Macro and technical signals align around a bearish target at $70,000.
### The Bank of Japan's interest rate hikes preceded Bitcoin price corrections of 20-30%
Every interest rate hike by the Bank of Japan since 2024 has coincided with declines in Bitcoin's price exceeding 20%, according to data highlighted by Andrew Bitcoin in a post on X on Saturday, where he noted Bitcoin declines of nearly 23% in March 2024, 26% in July 2024, and 31% in January 2025.
Andrew Bitcoin warned that the risks of a similar downturn could emerge again if the Bank of Japan raises interest rates on Friday. A recent Reuters survey showed that a majority of economists expect another interest rate hike at the Bank of Japan's policy meeting in December.
The theory focuses on Japan's role in global liquidity.
In the past, the Bank of Japan's interest rate hikes have strengthened the Japanese yen, making borrowing and investing in riskier assets more expensive. This often forced traders to unwind so-called "yen carry trades," which reduced liquidity across global markets.
With liquidity tightening, Bitcoin has come under pressure as investors reduced leverage and cut exposure during risk-off periods.
An X analyst said Bitcoin "will drop below $70,000" under these macroeconomic conditions.
### The bearish flag in Bitcoin targets the same area at $70,000
The daily chart for Bitcoin also showed technical warning signs, with the price moving in a classic bearish flag formation.
The pattern formed after a sharp collapse of Bitcoin from the region between $105,000–$110,000 in November, followed by a narrow ascending consolidation channel. Such structures usually indicate temporary stops before the trend continues.
A confirmed break below the lower trend line of the flag could trigger another push down, with the measured move indicating a target area of $70,000–$72,500. Multiple analysts, including James Cheek and Selene, shared similar bearish targets last month.
This article does not contain investment advice or recommendations. Every investment and trading step carries risks, and readers should conduct their own research when making decisions.
