Bitcoin Expected to Drop Below $70K Due to Japan's Hawkish Stance: Analysts Weigh In

Bitcoin Expected to Drop Below $70K Due to Japan's Hawkish Stance: Analysts Weigh In

Summary: Bitcoin could see further declines towards the $70,000 mark if the Bank of Japan (BoJ) implements a predicted interest rate hike on December 19. Analysts suggest that tightening measures from the BoJ may reduce global liquidity, negatively impacting Bitcoin prices.

Key Takeaways:

The BoJ’s tightening measures could put pressure on Bitcoin by decreasing global liquidity.
Both macroeconomic and technical indicators suggest a potential price target of around $70,000 for Bitcoin.
Past rate hikes by the BoJ have historically led to significant corrections in Bitcoin prices.

BoJ Rate Hikes Have Preceded Significant Bitcoin Price Corrections

Every rate increase by the BoJ since 2024 has coincided with Bitcoin price drops exceeding 20%. According to analyst AndrewBTC, declines of about 23% occurred in March 2024, 26% in July 2024, and 31% in January 2025 were noted.

BTC/USD weekly chart. Source: TradingView/AndrewBTC

AndrewBTC cautioned that potential risks for another decline could resurface if the BoJ raises interest rates on Friday. A recent survey conducted by Reuters indicated that a majority of economists expect another rate hike during the December policy meeting.

This situation highlights Japan's crucial role in the worldwide liquidity landscape. Historically, when the BoJ increases rates, it tends to strengthen the Japanese yen. This strength makes borrowing and investing in riskier assets more expensive, often leading traders to unwind “yen carry trades,” which in turn diminishes liquidity in global markets.

As liquidity tightens, Bitcoin often experiences downward pressure, as investors decrease their leverage and exposure during more cautious market conditions. Analyst EX stated that Bitcoin might “dump below $70,000” under these economic conditions.

Source: X

Technical Analysis Suggests Bearish Trends for Bitcoin

Bitcoin’s daily price chart is showing technical red flags, as its price action is currently consolidating within a typical bear flag formation.

BTC/USD daily chart. Source: TradingView

This pattern emerged after Bitcoin sharply declined from the $105,000 to $110,000 range in November, followed by a tight upward-sloping consolidation trend. Patterns like this generally indicate a temporary pause before the prevailing trend continues.

Related: BTC OGs Selling Covered Calls is Suppressing Prices: Analyst

If Bitcoin breaks down below the flag's lower trendline, it could result in another downward move, with price projections suggesting a target in the $70,000 to $72,500 range. Several analysts, including James Check and Sellén, have indicated similar bearish targets over the past month.