The post Bitcoin Price Mixed Ahead of BoJ Decision Despite Fed’s Dovish Cut appeared on BitcoinEthereumNews.com. Bitcoin’s price momentum shows mixed signals afterThe post Bitcoin Price Mixed Ahead of BoJ Decision Despite Fed’s Dovish Cut appeared on BitcoinEthereumNews.com. Bitcoin’s price momentum shows mixed signals after

Bitcoin Price Mixed Ahead of BoJ Decision Despite Fed’s Dovish Cut

2025/12/14 18:26
  • Bitcoin trades below $100,000 for the fourth straight week despite stock market gains.

  • Coinbase analysts highlight the Fed’s balance sheet shift as a form of stealth quantitative easing benefiting crypto into early 2026.

  • Potential Bitcoin price drop to $70,000 if historical patterns from Bank of Japan rate hikes repeat, based on past 20-30% declines.

Explore Bitcoin price momentum after Fed’s dovish cut and BoJ’s looming decision. Discover analyst projections, risks, and market impacts for informed crypto investing today.

What is Bitcoin’s price momentum after the Federal Reserve rate cut?

Bitcoin price momentum remains subdued, hovering at approximately $90,200 after the Federal Reserve’s dovish rate reduction earlier this week. Although U.S. equities surged on the news, Bitcoin followed a classic “buy the rumor, sell the news” pattern, resulting in a price dip. Analysts from Coinbase suggest that the Fed’s policy shift toward net liquidity injection could provide underlying support for cryptocurrency markets extending into the first quarter of 2026.

The Federal Reserve’s decision to ease monetary policy has injected optimism into traditional markets, yet Bitcoin has not mirrored this rally. At the time of reporting, the cryptocurrency had stayed under the $100,000 threshold for four consecutive weeks, reflecting investor caution amid broader economic signals. This divergence underscores Bitcoin’s unique position as a risk asset influenced by both macroeconomic policies and cryptocurrency-specific factors.

How will the Bank of Japan interest rate decision affect Bitcoin?

The Bank of Japan’s interest rate decision on December 19 poses a significant risk to Bitcoin’s trajectory, potentially triggering renewed volatility similar to events in August of the previous year. Japan’s status as the largest holder of U.S. government debt amplifies its influence; a rate hike could unwind Yen carry trades, pressuring global risk assets including cryptocurrencies. Historical data indicates that prior BoJ rate increases led to Bitcoin price declines of 20% to 30%, with one analyst warning of a possible drop to $70,000 if patterns repeat.

Options market indicators reveal bearish sentiment ahead of the decision. The 25-Delta Risk Reversal metric stands negative at -3.7 for December 19 expiries and 6.4 for December 26, signaling heightened demand for put options as institutional players hedge against downside risks. This activity points to year-end caution, where market participants anticipate potential disruptions from tighter Japanese monetary policy.

Source: Swissblock

Swissblock analysts provide a more optimistic view, stating that Bitcoin could confirm bullish momentum if it reclaims the $93,500 level, according to their proprietary models. This threshold serves as a critical resistance point; breaking above it might signal renewed upward pressure. However, the broader market remains constrained by these upcoming events, including the MSCI index review for cryptocurrency treasury firms scheduled for mid-January.

The MSCI review could impact institutional adoption if crypto-related firms face exclusion, potentially dampening sentiment. Combined with the BoJ announcement, these factors contribute to a choppy trading environment. If Bitcoin navigates these hurdles successfully, a decisive rebound becomes more probable, allowing the asset to capitalize on the Fed’s supportive measures.

Source: Amberdata

Coinbase’s analysis further emphasizes the Fed’s role in fostering a favorable landscape. They describe the central bank’s move from balance sheet runoff to net injection as “light quantitative easing” or “stealth QE,” which injected $40 billion in liquidity recently. This policy evolution, coupled with a less hawkish outlook for 2026, may bolster crypto markets by improving overall liquidity and reducing borrowing costs for risk assets like Bitcoin.

“We think the Fed’s transition from balance sheet runoff to net injection is seen as ‘light quantitative easing’ or ‘stealth QE,’ which may support crypto markets,” stated Coinbase analysts in their report. This perspective aligns with observations from on-chain metrics, where Bitcoin’s current positioning suggests resilience within bull market norms.

Frequently Asked Questions

What factors are influencing Bitcoin’s price below $100,000?

Bitcoin’s price remains below $100,000 due to a mix of post-Fed rate cut profit-taking and anticipation of the Bank of Japan’s December 19 decision. Despite equity market gains, cryptocurrency traders exhibited caution, leading to a sell-off. Analysts project potential support from increased Fed liquidity, but global rate risks persist.

Could the Bank of Japan rate hike cause a Bitcoin price drop?

Yes, a Bank of Japan rate hike on December 19 could pressure Bitcoin downward, potentially to $70,000, based on historical reactions where past increases triggered 20-30% declines. This stems from Yen carry trade unwinds affecting risk assets. Markets are hedging accordingly, as shown by negative risk reversal metrics in options trading.

Source: X

Monitoring on-chain indicators like Relative Unrealized Loss provides additional insight into market health. Currently, this metric stands at about 10% of Bitcoin’s market capitalization, a level consistent with bull market conditions in the $80,000 to $90,000 range. A rise above 20%, however, could indicate a shift toward 2022-style bear market capitulation, especially if triggered by adverse events like the BoJ outcome or MSCI review.

Senior Glassnode researcher CryptoViz Art noted that the current reading reflects typical bull market dynamics. Exceeding the 20% threshold would signal widespread unrealized losses among holders, often preceding sharper corrections. Investors should watch this metric closely alongside macroeconomic developments.

Source: Glassnode

Key Takeaways

  • Fed’s dovish policy: The rate cut and $40 billion liquidity injection act as stealth QE, potentially supporting Bitcoin price momentum into 2026.
  • BoJ risk overhang: December 19 decision could spark a 20-30% drop if history repeats, with options data showing bearish hedging.
  • On-chain vigilance: Monitor Relative Unrealized Loss; staying below 20% indicates bull market resilience, above signals capitulation risk.

Conclusion

Bitcoin’s price momentum after the Federal Reserve’s dovish rate cut reflects a cautious market, trading steadily around $90,200 while eyeing the Bank of Japan interest rate decision on December 19. Analysts from Coinbase and Swissblock highlight supportive liquidity and key resistance levels like $93,500 as pathways to recovery, tempered by potential global disruptions. As the MSCI review approaches in mid-January, staying informed on these developments will be crucial for navigating volatility. Investors are encouraged to assess on-chain metrics and macroeconomic signals for strategic positioning in the evolving cryptocurrency landscape.

Source: https://en.coinotag.com/bitcoin-price-mixed-ahead-of-boj-decision-despite-feds-dovish-cut

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BitcoinWorld Crucial Fed Rate Cut: October Probability Surges to 94% The financial world is buzzing with a significant development: the probability of a Fed rate cut in October has just seen a dramatic increase. This isn’t just a minor shift; it’s a monumental change that could ripple through global markets, including the dynamic cryptocurrency space. For anyone tracking economic indicators and their impact on investments, this update from the U.S. interest rate futures market is absolutely crucial. What Just Happened? Unpacking the FOMC Statement’s Impact Following the latest Federal Open Market Committee (FOMC) statement, market sentiment has decisively shifted. Before the announcement, the U.S. interest rate futures market had priced in a 71.6% chance of an October rate cut. However, after the statement, this figure surged to an astounding 94%. 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Looking Ahead: What Could This Mean for Your Portfolio? While the 94% probability for a Fed rate cut in October is compelling, it’s essential to consider the nuances. Market probabilities can shift, and the Fed’s ultimate decision will depend on incoming economic data. Actionable Insights: Stay Informed: Continue to monitor economic reports, inflation data, and future Fed statements. Diversify: A diversified portfolio can help mitigate risks associated with sudden market shifts. Assess Risk Tolerance: Understand how a potential rate cut might affect your specific investments and adjust your strategy accordingly. This increased likelihood of a Fed rate cut presents both opportunities and challenges. It underscores the interconnectedness of traditional finance and the emerging digital asset space. Investors should remain vigilant and prepared for potential volatility. 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