Currently, what is the most dangerous enemy of Bitcoin and why?

Bitcoin has faced numerous macroeconomic challenges over the years, but one force is emerging as the most persistent pressure point: the Bank of Japan. Recent analysis from Merlijn The Trader has identified a notable pattern: whenever Japan raises interest rates, Bitcoin absorbs a sharp decline. With the upcoming interest rate decision on December 19, traders are closely monitoring whether this pattern will repeat. Currently, Japan holds more US debt than any other country, meaning changes in its monetary policy will have far-reaching impacts on global liquidity. As the Bank of Japan shifts away from its extremely accommodative stance, it will influence global borrowing costs, tighten liquidity channels, and put pressure on risk assets. Bitcoin has consistently reacted to these policy adjustments, and data is increasingly difficult to ignore.

A Model of Suffering: How Bitcoin Reacts to the Bank of Japan’s Interest Rate Hikes History clearly shows this. In March 2024, when Japan increased interest rates, Bitcoin dropped about 23%. The next rate hike in July 2024 caused another 30% decline. And when the Bank of Japan raised its policy rate again in January 2025, Bitcoin fell an additional 31%. These are not minor dips but the most significant adjustments in the cycle. Consistent reactions indicate that yen carry trade positions play a crucial role. When Japan raises interest rates, leveraged global positions become more expensive to maintain. Investors reduce risk, withdraw liquidity, and minimize risk in their portfolios. Bitcoin often becomes an indirect victim in this process, especially when short-term liquidity dries up from the system. Next Decision: December 19 Could Shape the Next Step With the Bank of Japan (BoJ) expected to raise interest rates on December 19, traders are becoming increasingly cautious. Merlijn notes that if this pattern repeats, Bitcoin could return to the $70,000 region, significantly lower than current support levels. While nothing is certain, historical symmetry is hard to ignore. Each previous rate hike has been followed by a notable correction, and the market is currently showing initial signs of hesitation. The accompanying chart with his analysis reflects this uncertainty. A series of vertical lines indicate correlations between previous rallies and deep red correction zones, with the upcoming event positioned on a similar background. The message is very clear: the biggest enemy of Bitcoin today may not be short-term traders, ETF flows, or even US inflation, but rather Japan’s monetary policy changes. Why Could This Time Still Surprise Traders? Despite the threat, some analysts suggest the impact could be less severe if the market has already priced in this correction. Bitcoin’s recent stability has reduced excess leverage, and liquidity risks are now better understood. However, the fundamental truth remains: Japan’s decisions carry global weight, and Bitcoin feels those impacts more directly than ever. As the market approaches December 19, attention shifts to a key question: will this cycle break the pattern or further expose Bitcoin’s vulnerability to yen tightening? What happens next will shape market sentiment into early 2026.