TLDR
- Bitcoin’s price pressure grows as Japan hikes rates, affecting global liquidity.
- Market data suggests Bitcoin may drop below $80K due to BOJ’s rate hike.
- 91% of economists expect a 25bps rate hike from the Bank of Japan next week.
- Bitcoin traders are bracing for potential 20% to 25% drop in response to BOJ move.
Bitcoin has seen significant price pressure as market expectations for a Bank of Japan (BOJ) interest rate hike rise. As traders adjust their positions, the likelihood of a rate increase next week has soared. Analysts suggest that Bitcoin could slide further, potentially nearing the $80,000 mark, due to tightening global liquidity and shifts in investor sentiment.
Bank of Japan Rate Hike Expected to Raise Borrowing Costs
The Bank of Japan is widely anticipated to raise interest rates during its upcoming policy meeting on December 18–19, with a 91% probability of a 25-basis-point hike. This move would push the BOJ’s policy rate to 0.75%, its first increase since January 2025.
Following years of ultra-low rates, the BOJ is expected to adjust its stance in response to inflationary pressures and a weakening yen. The rate hike is also seen as a response to ongoing wage negotiations in Japan, which are expected to show higher pay increases, further fueling inflation concerns.
The anticipated rate hike in Japan has global consequences. When Japan raises rates, borrowing yen becomes more expensive. As a result, investors often move away from riskier assets like Bitcoin in favor of safer investments, which leads to a drop in demand for cryptocurrencies. This dynamic has historically resulted in Bitcoin experiencing significant price declines.
Bitcoin Faces Potential Drop Below $80,000 Before Year-End
Current market data shows a growing chance that Bitcoin could dip below $80,000 by the end of 2025. Prediction market platforms like Kalshi now estimate a 28% chance of Bitcoin falling below this level in the coming weeks. As of December 14, 2025, Bitcoin is trading just over $88,000, but continued pressure from global macroeconomic factors could lead to further declines.
This is not the first time Bitcoin has faced such pressure during periods of tightening by central banks. When interest rates rise, especially in major economies like Japan, investors often reallocate their portfolios to avoid riskier assets. Bitcoin, being a volatile asset, is particularly vulnerable to such shifts. In the past, such rate hikes have coincided with Bitcoin price drops of 20% to 25%, according to analysts.
Bitcoin Investors Hold Long-Term View Amid Short-Term Volatility
Despite the immediate downward pressure, some long-term Bitcoin investors remain optimistic. Figures like Michael Saylor, a well-known advocate for Bitcoin, have continued to purchase more Bitcoin even in times of market volatility. Saylor has signaled that his investment strategy remains focused on the long-term potential of Bitcoin, suggesting that such short-term market fluctuations are part of the broader crypto market cycle.
Investors who are committed to Bitcoin’s long-term potential may view price dips as buying opportunities. While the short-term outlook appears uncertain due to the global economic environment, many believe Bitcoin’s inherent value will continue to attract long-term investors, even if the price temporarily falls below $70,000.
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