Asia Market Update: Bitcoin Stays Around $86k Amid Bond Selloff and Japanese Rate Hike Concerns

Bitcoin is currently trading near $86,000 at the open of the Asia market on Tuesday, following a significant downturn in cryptocurrencies and a global bond selloff. This situation has left traders cautious, limiting gains in regional stock markets. As of now, Bitcoin is approximately 30% below its peak in October and has faced substantial liquidations over the past day.

Key Takeaways

Bitcoin is trading around $86,000, down over 5% from the previous day.
Major liquidations in cryptocurrencies amounted to roughly $251.69 million, with Ethereum also seeing significant losses.
Concerns over rising bond yields in Japan are affecting global markets as the Bank of Japan signals a shift in monetary policy.
Investors are bracing for a potential interest rate cut by the Federal Reserve in December as US economic data softens.
Crypto-related stocks have taken a hit due to Bitcoin's decline, with significant drops seen in companies like MicroStrategy and Coinbase.

Bitcoin

Bitcoin’s Current Position and Liquidation Impact

At the Asia market opening on Tuesday, Bitcoin was trading at approximately $86,000 as a steep decline in the cryptocurrency space and a global bond selloff weighed heavily on market sentiment. The largest cryptocurrency, often seen as an indicator of risk appetite, experienced a decline of over 5% on Monday, briefly touching below the $85,000 mark. It has been noted that Bitcoin is still approximately 30% lower than its peak reached in October.

In the past 24 hours, Bitcoin saw the most substantial liquidations, totaling around $251.69 million. Ethereum followed, with liquidations at roughly $111.31 million, while other cryptocurrencies like Solana (SOL) and Zcash (ZEC) also experienced smaller liquidations, reported by CoinGlass.

Market Snapshot

Bitcoin: $86,991, up 1.4%
Ether: $2,805, down 0.5%
XRP: $2.02, down 0.8%
Total Crypto Market Cap: $3.03 trillion, up 0.8%

Rising Tensions in the Bond Market: What the BOJ Indicates

The equity markets across Asia made attempts to stabilize; however, investor sentiment remained cautious. The MSCI index for Asia Pacific shares outside Japan increased by about 0.6%, while Japan's Nikkei 225 rose by 0.5% after experiencing a sharp decline in the previous session.

This sense of nervousness can be traced back to a week-long selloff in Japanese government bonds, which intensified after Bank of Japan Governor Kazuo Ueda hinted at a potential interest rate increase in the coming weeks.

Market participants are increasingly anticipating a shift away from the Bank of Japan's ultra-loose policies, a move that could affect global funding environments. Recently, the yield on 10-year Japanese government bonds increased by 1.5 basis points to approximately 1.88%, marking the highest level in 17 years, ahead of an important auction. The previous trading day saw a jump of 6 basis points, affecting overseas markets and pushing 10-year U.S. Treasury yields up to around 4.08%.

U.S. Market Influences: Fed Rate Cuts on the Horizon?

Futures for the S&P 500 in the U.S. remained stable after a 0.5% decline on Monday, with the Nasdaq 100 dipping 0.4%. Data from the Institute for Supply Management indicated that U.S. manufacturing has contracted for nine consecutive months. In November, the headline index fell to 48.2 from 48.7, showing weak performances in new orders, employment, and backlogs.

This softer economic data has led to heightened expectations that the Federal Reserve might shift its policy soon. Current interest rate futures indicate an approximately 86% likelihood of a 25 basis point cut at the Fed's meeting scheduled for December 9-10, fueled by indications of declining economic activity and easing inflation pressures.

Before the Fed’s decision, officials will examine a final reading on their preferred inflation measure, with upcoming reports expected to show that while inflation pressures persist, they remain manageable. Nonetheless, many analysts believe that the labor market will significantly influence the pace of future interest rate adjustments.

Rising Risk Aversion: The Effect of Bitcoin's Decline on Crypto Stocks

As Bitcoin continues to drop, risk aversion has risen, impacting stocks exposed to the cryptocurrency market. Shares of MicroStrategy, the largest institutional holder of Bitcoin, saw a sharp decline, as did Coinbase and Robinhood, which each dropped around mid-single digits. Bitcoin mining companies, such as Marathon Digital and Riot Platforms, experienced more substantial losses ranging between 7% and 9% as dwindling prices pressured margins.

On-chain metrics provided additional concerns for traders in the crypto market. Analysts from Bitfinex noted that recent dips in Bitcoin have triggered extensive realized losses, surpassing amounts recorded during the significant lows of August 2024 and April 2025, illustrating a stressed market in search of liquidity as weaker holders capitulate. Historically, such considerable loss realizations have occurred as markets near the later stages of corrective phases, suggesting selling pressures may soon dissipate and market conditions stabilize.