Is the Recent Action by the BoJ Responsible for Bitcoin’s Price Decline?

Bitcoin experienced a significant downturn on Monday, wiping out a portion of its recent gains after reaching a peak of $93,000 last week. The Bitcoin token (BTC) dropped to $84,880, triggering a wider crash across the cryptocurrency market that impacted most altcoins. Consequently, the total market capitalization of all cryptocurrencies fell by approximately 8%, bringing it down to $2.9 trillion.

Key Takeaways

Bitcoin's Price Drop: Bitcoin's recent drop to $84,880 has resulted in a broader market crash.
Influence of the BoJ: The Bank of Japan's (BoJ) recent statements regarding potential interest rate hikes are speculated to impact Bitcoin's price.
Market Reactions: The Japanese yen strengthened, and government bond yields rose, affecting global financial markets.
Technical Analysis: Bitcoin has been in a downtrend, with signs of a potential double-bottom pattern forming at $80,637.

Is the Recent Action by the BoJ Responsible for Bitcoin’s Price Decline? - 1

Is the BoJ's Recent Shift Affecting Bitcoin?

One potential factor contributing to the decline in Bitcoin's price is a sudden shift from the Bank of Japan. Kazuo Ueda, the bank's governor, announced that the BoJ will assess the pros and cons of raising interest rates by examining various economic factors, including inflation and global financial markets.

As a result of these developments, the Japanese yen strengthened, and bond yields surged, with the 10-year yield reaching a multi-decade high of 1.876%. Consequently, the Nikkei 225 and Topix indices saw declines.

A possible rate hike by the BoJ is significant as it would occur concurrently with the Federal Reserve’s interest rate cuts. This divergence could lead investors to adjust their carry trade positions, reminiscent of last year when the BoJ began increasing rates.

In July 2024, the Fed cut rates while the BOJ raised rates, leading to the unwinding of carry trades, which had a notable effect on Bitcoin.

It is likely that a similar situation may arise on December 10th, when the Fed is expected to cut rates while the BoJ raises rates, potentially causing Bitcoin to find a low by mid-December.
— Benjamin Cowen (@intocryptoverse) December 1, 2025

The actions of the BoJ hold weight since it is the second-largest central bank in the world by assets, with over $5.8 trillion, surpassing the Fed’s total of $5.14 trillion.

Market Position Adjustments and Other Influences

Additionally, Bitcoin's price decline can be attributed to market participants readjusting their positions following the expiration of options last Friday, which exceeded $13 billion. It is typical for Bitcoin to experience heightened volatility around significant expiry dates.

Other factors contributing to the drop in BTC's price include increased liquidations and outflows from exchange-traded funds (ETFs).

Technical Analysis of Bitcoin's Price

bitcoin price
BTC price chart | Source: crypto.news

Bitcoin's price has been trending downward since it formed a double top at $124,630, with a neckline at $107,270. A double top is a common bearish reversal pattern, indicating potential future declines.

Currently, Bitcoin has displayed a pattern of forming lower lows and lower highs, alongside a death cross, which occurs when the 50-day moving average crosses below the 200-day moving average.

However, there are signs indicating that the coin may be establishing a double-bottom pattern at $80,637, with a neckline at $93,065. This suggests that Bitcoin might still experience a rebound, provided it remains above the double-bottom level at $80,637.