Bitcoin could face additional downward pressure towards the $70,000 level if the Bank of Japan (BoJ) decides to raise interest rates on December 19, according to several senior analysts.
Historically, increases in interest rates by the Bank of Japan have led to sharp corrections in Bitcoin
Data collected by analyst AndrewBTC shows a clear pattern since 2024: every increase in interest rates by the Bank of Japan has coincided with a decline in Bitcoin exceeding 20%. Bitcoin fell nearly 23% in March 2024, 26% in July 2024, and 31% in January 2025 after previous moves to tighten policy.
AndrewBTC warns that a similar bearish scenario could repeat if the Bank of Japan implements another interest rate hike in its next meeting. Recent polls from Reuters also indicate that most economists expect the Bank of Japan to continue tightening policy in December.
Japan's role in global liquidity flows
Historically, interest rate hikes from the Bank of Japan tend to strengthen the Japanese yen, raising borrowing costs and reducing the appeal of risk assets. This often forces investors to unwind yen-funded trades, leading to a contraction in global liquidity.
When liquidity pressures increase, Bitcoin typically comes under pressure as traders reduce leverage and lower the risk of their portfolios in a more cautious environment. Analyst EX notes that, under current macro conditions, Bitcoin could realistically "drop below $70,000."
Technical indicators suggest further downside risks
On the daily chart, Bitcoin is forming a classic bearish flag pattern, a technical structure that often indicates a continuation of the downward trend. This pattern emerged after Bitcoin's sharp sell-off from the $105,000–$110,000 range in November, followed by a narrow consolidation towards the highs.
If Bitcoin falls below the lower trend line of the bearish flag, a renewed drop toward the $70,000–$72,500 area becomes more likely. Analysts like James Check and Sellén have echoed similar negative scenarios over the past month.
