Bitcoin Price At Risk Of A Crash To $75 As A Major BoJ Risk Looms

Bitcoin price remained under intense pressure this weekend, and may be at risk of a deeper dive, potentially to $75,000 ahead of the Bank of Japan interest rate decision. 

Bitcoin (BTC), the original cryptocurrency, was stuck at the psychological point at $90,000. This price is about 29% below its highest point this year, a sign that it remains in a deep bear market. 

The coin may crash this week as investors anticipate the upcoming Bank of Japan rate hike on December 19. Data on Polymarket show that there is a 98% probability that the bank will hike rates by 5 basis points as it combats the elevated inflation. 

The upcoming BoJ rate hike is notable for a few reasons. First, it will reinforce its independence as Sanae Takaichi, the current prime minister, favors low interest rates. 

Second, the rate hike comes a week after the Fed slashed by 25 basis points, bringing the benchmark policy to between 3.50% and 3.75%. The divergence between the Fed and BoJ often leads to the unwinding of the carry trade that has existed for decades. 

Third, history shows that Bitcoin price drops by double digits when the BoJ hikes rates. The most severe drop happened last year when the bank hiked rates for the first time in decades. 

Meanwhile, the Federal Reserve guided to just one rate cut in 2026, much lower than what analysts were expecting. While Trump may appoint a puppet as Fed Chair, there is a likelihood that other officials will act as a moderating force. Three Fed officials dissented in the last meeting, a trend that may continue next year. 

Technical analysis suggests that the Bitcoin price has more downside to go in the coming weeks. It has already formed a death cross pattern on the daily chart.

Bitcoin is now in the process of forming a bearish flag pattern, which is made up of a vertical line and an ascending channel. Like the death cross, this pattern often leads to more downside.

BTC price remains below the Ichimoku cloud and the Supertrend indicators, a sign that bears are in control. Therefore, the most likely outlook is where it continues falling, with the initial target being the November low of $80,000. 

A plunge below that level will point to further downside, potentially to the support at $74,500, the lowest level in April this year.