Bitcoin experienced a significant overnight drop, triggering substantial liquidations in the crypto market. Concerns over potential monetary tightening by the Bank of Japan (BoJ) contributed to the selloff. Bitcoin’s ability to recover in the coming hours will be crucial in determining its short-term trajectory.
What to Know:
- Bitcoin experienced a significant overnight drop, triggering substantial liquidations in the crypto market.
- Concerns over potential monetary tightening by the Bank of Japan (BoJ) contributed to the selloff.
- Bitcoin’s ability to recover in the coming hours will be crucial in determining its short-term trajectory.
Bitcoin took a tumble below $85,000, resulting in nearly $600 million in liquidated long positions across the crypto market within a 24-hour period, fueled by growing expectations that the Bank of Japan might raise interest rates this week. As of press time, Bitcoin has slightly recovered to around $86,000. This sharp decline erased $218.7 million in Bitcoin long positions and $213 million in Ethereum longs.
Market analysts suggest the selloff is linked to renewed concerns that the BoJ will tighten monetary policy at its upcoming meeting, which could impact the yen carry trade that often supports risk assets. When the BoJ increases rates, investors who borrow yen at low rates to invest in higher-yielding assets may need to unwind those positions.
Bitcoin had maintained levels above $90,000 for much of December, but once that level was breached, spot selling intensified, and liquidations cascaded through the order books. The broader market also felt the impact, with Ethereum, Solana, XRP, BNB, Cardano, and Dogecoin all experiencing declines.
Bitcoin’s recent weakness can also be attributed to a “sell-the-news” reaction following the Federal Reserve’s December 10 meeting, where the central bank cut rates but signaled only limited easing in 2025. Additionally, tech and AI stocks have seen declines due to disappointing earnings, which has dampened the high-beta trade that previously boosted crypto alongside speculative equities.
Spot Bitcoin ETF flows have also moderated recently, recording $286.6 million in net inflows last week. While still positive, these flows are not maintaining the consistent demand levels that supported Bitcoin’s price throughout much of 2025.
The next few hours will be critical to see if Bitcoin can rebound from this leverage-driven crash. Any positive momentum could signal renewed confidence in the market.
Related: Bitcoin Bearish Turn Deepens: Key Averages Signal Drop
Source: Original article
Quick Summary
Bitcoin experienced a significant overnight drop, triggering substantial liquidations in the crypto market. Concerns over potential monetary tightening by the Bank of Japan (BoJ) contributed to the selloff. Bitcoin’s ability to recover in the coming hours will be crucial in determining its short-term trajectory.
Source
Information sourced from official Ripple publications, institutional research, regulatory documentation and reputable crypto news outlets.
Author
Ripple Van Winkle is a cryptocurrency analyst and founder of XRP Right Now. He has been active in the crypto space for over 8 years and has generated more than 25 million views across YouTube covering XRP daily.
Editorial Note
Opinions are the author's alone and for informational purposes only. This publication does not provide investment advice.
