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Bitcoin weakened in early Asia trading on Monday, sliding under $87,500 as Japanese bond yields spiked to levels not seen since 2008. The move strengthened the yen, accelerated carry-trade unwinds, and triggered a wave of crypto liquidations during thin liquidity hours.The pressure followed a sharp rise in Japan’s short-term government bond yields — a shift that traders increasingly interpret as a sign the Bank of Japan (BOJ) may be preparing its first rate hike in more than a decade.Japan Yields Surge, Sending Shockwaves Through Crypto MarketsJapan’s 2-year bond yield briefly reached 1.01%, the highest in 17 years, after BOJ Governor Kazuo Ueda said policymakers would assess whether a rate hike is appropriate at this month’s meeting.The comments accelerated yen buying and caused leveraged traders to unwind risk positions funded through yen carry trades — a dynamic that has supported global risk assets throughout 2025.Crypto, which is extremely sensitive to overnight liquidity moves in Asia, was hit immediately:Bitcoin dropped below $87,500, triggering forced liquidationsEther slid toward $2,850Both BTC and ETH long positions saw more than $290 million combined in liquidationsLiquidity remained thin across perpetual futures markets, magnifying the downside movePrediction markets reacted quickly. On Polymarket, the probability of a December BOJ rate hike rose to roughly 50%, up seven percentage points on the day.Why Japan Matters: Yen Strength and Carry Trades Put Pressure on CryptoThe yen’s rapid strengthening is central to the market volatility. For much of the year, traders have borrowed cheaply in yen to buy higher-yielding assets — including equities and crypto.A sudden shift toward BOJ tightening leads to:A stronger yenForced deleveraging of carry tradesLower liquidity for risk assetsAccelerated crypto sell-offs during Asia hoursGiven Bitcoin’s high leverage footprint on offshore exchanges, funding conditions tied to FX markets often amplify downside volatility.Market SnapshotBitcoin (BTC)Fell below $87,500More than $150M in long liquidationsDealers flagged additional downside risk if yen strength continuesEther (ETH)Dropped toward $2,850Approximately $140M in long liquidationsFunding rates compressed sharply, indicating a market-wide deriskingGoldGoldman Sachs reports 70% of institutional investors expect gold prices above $5,000 by 2026Rising safe-haven demand underscores broader macro uncertaintyNikkei 225Declined 1.3%Investors priced in an 87% chance of a December Fed rate cutChina’s manufacturing data remains a key near-term catalystWhat Traders Are Watching NextThis week’s crypto performance may hinge on two variables:BOJ communication ahead of its December meetingYen strength, particularly if USD/JPY breaks lower and accelerates carry-trade unwindsAny further hawkish signal from BOJ leadership would likely spark additional regional volatility — and by extension, more pressure on crypto markets during Asia trading hours, according to CoinDesk.

$BTC is trading in a corrective downtrend after failing to hold above recent highs near the mid‑90k region, with near‑term support emerging just under 90k and resistance around 93k–95k. Overall structure still looks like a bull‑market pullback, but on‑chain and technical signals show mixed sentiment and elevated risk in the short term.Current price and trendRecent daily closes show BTC slipping from about 93.5k on 4 December to around 89.4k on 6 December, forming a short‑term descending pattern. BTC is fluctuating in a volatile range roughly between the high‑80k and low‑90k area, with sellers capping moves above ~93k. Technical pictureSeveral analysts describe the recent structure as a breakdown from a bear‑flag pattern, opening room for a deeper dip toward the high‑60k to low‑70k region if selling accelerates, even if that target is not reached immediately. Real‑time indicator dashboards lean bearish to neutral on the daily timeframe, with momentum gauges like RSI near or below mid‑levels and many moving‑average signals flashing “sell” after the failure to sustain the all‑time high above 120k. On‑chain and macro signalsOn‑chain data shows long‑term holders recently taking profits while some “whale” wallets distribute, which points to weaker conviction and a more fragile support zone in the current range.At the same time, on‑chain regime studies still frame the late‑2025 drawdown (over 30% off the high and more than 1 trillion USD wiped from total crypto market cap) as a sharp but typical bull‑cycle reset rather than a confirmed new bear market. Sentiment and narrativesETF flows have softened and even flipped to net outflows on some days, which has reduced one of the big demand engines that drove BTC to its all‑time high earlier in the year. Some large institutions and research desks (including major exchanges and asset managers) still project a potential recovery phase into late December and 2026, contingent on improving global liquidity and more stable macro data, though they also highlight the risk of another leg down if risk assets sell off again.Key levels and risk viewImportant supports to watch now are the high‑80k area (current spot zone) and deeper zones in the mid‑70k to low‑70k region if volatility spikes; losing these would increase the odds of a larger cycle reset.On the upside, bulls likely need to reclaim and hold above roughly 95k–100k to signal that the correction has ended and that the broader uptrend toward new highs is resuming.If you share your time frame (scalping, swing, long‑term) and whether you hedge or use leverage, a more tailored trading plan around these levels can be outlined.

$BTC
$BTC