Journalist
Posted:
If history is any guide, the crypto market may be staring at a major bearish catalyst. The Bank of Japan (BOJ) has officially raised interest rates by 75 basis points, making this the biggest increase in more than 30 years.
As AMBCrypto noted, BOJ rate hikes have historically led to double-digit declines in Bitcoin [BTC]as rising leverage costs prompt foreign investors to reduce their risks and unwind BTC positions, fueling short-term FUD.
So far this cycle has been going the same way. An analyst marked a major BTC dump ahead of the BOJ meeting. The sales came mainly from major players, with a total amount of 24,000 BTC. That’s more than $2 billion in selling pressure.
Source:
The data on the chain also reflects this.
Notably, Bitcoin’s key figures are still in the red, showing that real-time losses are being realized. Particularly STHs with a cost basis nearly $101,000 is now about 16% underwater, reinforcing ongoing capitulation pressure.
Against this design, the recent one BOJ rate hike is piling up a major macro headwind.
In this context, both historical patterns and on-chain signals suggest that investors are actively rebalancing in anticipation of a possible repeat of the flush. Naturally, the question arises: is Bitcoin’s breakthrough below $80,000 near?
The Bitcoin liquidation frenzy turns into structural support
The fourth quarter is developing as a cycle defined by massive crypto manipulation.
On shorter terms, Bitcoin has been extremely volatile, largely due to whale-induced liquidations. For example, on the 30-minute chart on December 18, BTC fell $3k, wiping out about $140 million worth of longs.
The same trend can be seen on the macro level. Long liquidations run 2 to 3x higher than shorts, putting BTC in a loop around $90,000. In short, whales ‘intentionally’ prevent the market from getting too hot.
Source: TradingView (BTC/USDT)
This is clear from the data.
At the time of writing, Bitcoin’s Open interest (OI) is still about 30% below high-leverage levels before the October crash, indicating that traders remain cautious rather than chasing risky short-term gains.
With that in mind, a similar collapse (BOJ-related FUD notwithstanding) seems less likely. Once fears subside and investors rebalance, the $85,000 level could instead act as a strong foundation for Bitcoin’s next move.
Final thoughts
- BOJ’s 75 basis point rate hike triggers Bitcoin’s deleveraging, reviving fears of a sub-$80,000 flush.
- Despite liquidation volatility, low leverage and declining OI suggest that $85,000 could provide a strong BTC base.