Bitcoin Faces Risk of Sliding Toward $70,000 as Japan Rate Hike Odds Surge

Bitcoin is coming under renewed selling pressure as global markets increasingly price in a near-certain interest rate hike by the Bank of Japan (BOJ) next week. The move is expected to tighten global liquidity conditions, weighing heavily on risk assets such as cryptocurrencies.

Has the BOJ Rate Hike Already Been Priced In?

According to a Bloomberg chart shared by analyst Ted Pillows, the probability of a 25-basis-point rate hike at the BOJ’s December 18–19 meeting has climbed above 90%. Expectations surged following a series of hawkish comments from BOJ policymakers, as reported by Reuters.

Several analysts warn that if the BOJ raises rates to 0.75%, Bitcoin could retreat toward the $70,000 level. Historically, previous BOJ rate hikes have coincided with Bitcoin drawdowns of 20% to 25%.

The core explanation lies in the yen carry trade. As Japanese interest rates rise, borrowing yen becomes more expensive, prompting investors to reduce exposure to riskier assets, including cryptocurrencies.

However, long-term investors continue to accumulate during periods of volatility. Notably, Michael Saylor has signaled further Bitcoin purchases for Strategy, despite “extreme fear” dominating market sentiment.

A move to 0.75% would mark Japan’s highest policy rate in 30 years, bringing it closer to estimates of a neutral monetary stance. Even so, BOJ officials are expected to emphasize that financial conditions will remain broadly accommodative.

Bitcoin traders will be closely watching December 19, as a decisive technical breakdown could accelerate downside momentum. Still, some strategists, including Tom Lee, believe that once volatility subsides, Bitcoin could rebound and reach a new all-time high (ATH) early next year.