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

Bitcoin

Bitcoin Price Mixed Ahead of BoJ Decision Despite Feds Dovish Cut

Bitcoin‘s price momentum shows mixed signals after the Federal Reserve’s recent dovish rate cut, trading at around $90,200 while facing uncertainty ahead of the Bank of Japans December 19 decision. This could lead to continued volatility, with potential support from liquidity injections but risks from global rate hikes.

• Bitcoin trades below $100,000 for the fourth straight week despite stock market gains.
• Coinbase analysts highlight the Feds 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.

What is Bitcoins price momentum after the Federal Reserve rate cut？

Bitcoin price momentum remains subdued, hovering at approximately $90,200 after the Federal Reserves 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 Feds 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. Japans 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 Feds supportive measures.

Source: Amberdata

Coinbase‘s analysis further emphasizes the Fed’s role in fostering a favorable landscape. They describe the central banks 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.