Bitcoin value drops to $88k over Bank of Japan central bank rate cut anticipation

Bitcoin one of the prime digital assets value dropped to $88k as market anticipates the Bank of Japan’s interest rate cut expectation to trigger negative trading activities.

The crypto market fell 1.57% in the past 24 hours, extending a 9.68% monthly decline. Traders brace for potential Bank of Japan (BOJ) rate hikes while Bitcoin hovers below $89k.

BTCUSD trades negative as data from CoinMarketCap.com signals declining trading volume. The world’s largest cryptocurrency has lost 2.33% in 24 hours to settle at $88,082 with 50.86 billion in trading volume.

Over the day, Bitcoin trading volume has dropped by 21.13%.
Bitcoin’s end-2025 narrative balances nation-state accumulation against macro risks and infrastructure growing pains.

At the press time, crypto market capitalisation is down by 1.5% on Sunday to $3.02 trillion, trades below its 7-day level of $3.08 trillion and 200-day peak of $3.48 trillion.
RSI index show at 41.34 shows oversold conditions but no reversal confirmation.

The market capitalisation of all crypto asset decline reflects macro anxiety, technical exhaustion, and derivatives deleveraging. Trading at $88.2k level on Sunday, BTCUSD faces resistance at $94k early in the month despite accumulation by large holders. The realised profit/loss metric for 1–3 month holders hit July 2022 bear market levels, signalling capitulation.

The Bank of Japan is expected to raise rates to 0.75% on December 18–19, its highest since 1995. Previous rate hikes in March 2024 (-23% BTC), July 2024 (-26%), and January 2025 (-30%) triggered sharp crypto selloffs as Japanese capital repatriation reduced global liquidity.

Traders are pricing in a repeat of this pattern, with analysts warning of potential BTC downside to $70k as the market price in 91.4% odds of a 0.75% BOJ rate hike.  Cryptocurrency analysts said BOJ’s policy statement wording – a hawkish tilt – could amplify selling amidst rising global adoption.

The UAE advances Bitcoin with strategic institutional infrastructure in Abu Dhabi and retail adoption initiatives in Dubai. The House Financial Services Committee urges the SEC to allow Bitcoin in 401(k) plans amid debates on crypto’s retirement role.

U.S. banks can now facilitate Bitcoin trades as riskless principals, streamlining transactions without holding crypto assets. El Salvador now holds 7,500 BTC worth $667 million, doubling down on its 2021 Bitcoin Law despite a 23% BTC price drop over 90 days.

The government continues daily BTC purchases and removed Bitcoin’s mandatory legal tender status in January 2025 to ease adoption friction.