Risk-Off Wave Hits Major Cryptos as Central Bank Hawkishness Threatens Key Support Zones

The crypto market entered the new year under pressure, with Bitcoin, Ethereum, and XRP all facing significant headwinds from broader macro forces and deteriorating technical setups. Central bank policy shifts—particularly hawkish signals from Japan’s banking authorities—have sparked a broader “risk-off” sentiment that is systematically testing the resolve of crypto bulls.

The Macro Backdrop: Why Markets Are Retreating

Bank of Japan Governor Kazuo Ueda’s recent comments about potential interest rate increases have reignited concerns about Yen carry trade unwinding. This mechanism historically drains liquidity from high-yield and speculative assets, including cryptocurrencies. When carry trades unwind, investors scramble to exit risky positions and repatriate capital, creating a cascade of selling pressure across the board.

For traders monitoring BTC to NZD conversions or other cross-asset exposures, this macro shift amplifies currency volatility alongside crypto price declines, compounding the challenge of maintaining stable value exposure.

Bitcoin: Losing the $87,000 Floor

Bitcoin has retreated below the $87,000 mark, surrendering ground that had been defended throughout November and early December. Current price action represents a failure to hold support following last week’s unsuccessful probe toward $92,800. The latest data shows BTC trading around $92.89K with a -0.91% 24-hour move, signaling continued consolidation in a downtrend rather than stabilization.

The daily RSI has dipped to 33, approaching oversold conditions but not yet triggering capitulation signals. The MACD indicator is warning of a potential bearish crossover, suggesting momentum is firmly in sellers’ hands.

Looking ahead, bears have a clear battle plan: the November 21 low at $80,600 represents the next critical floor. Should macro pressures intensify and this support collapse, Bitcoin could face deeper mean reversion toward the April 7 lows near $74,500. Alternatively, a dovish pivot from the Federal Reserve could reignite risk appetite and propel prices back toward $90,000 resistance.

Ethereum: Heavy Supply at the $2,800 Pivot

Ethereum’s December started poorly, with the token shedding approximately 5% as it tested the lower edge of the $2,800 demand zone. Despite buying interest at this level, order flow reveals that bulls are merely cushioning the fall rather than orchestrating a short squeeze recovery.

The latest reading shows ETH at $3.27K with a +2.09% daily gain, suggesting some volatility relief, but this doesn’t eliminate the structural risk. The psychological “line in the sand” remains the November 21 low at $2,623. A daily close below this would signal that the recent consolidation pattern has failed, opening a potential flush toward the June 22 low around $2,111.

Like Bitcoin, Ethereum’s MACD is flirting with bearish crossing territory, confirming that selling pressure is mounting on the daily timeframe.

XRP: Testing the $2.00 Psychological Handle

XRP is holding the $2.00 round number level but with diminishing conviction. The token suffered losses across the weekend and continued to decline Monday, creating an uncomfortable setup just above this psychological barrier.

However, the latest data paints a different picture: XRP is trading at $2.30 with a +5.54% 24-hour rally, suggesting either a technical bounce or renewed buying interest. If this holds, bulls could target a rebound toward the descending trendline near $2.20. A breakdown would expose the $1.90 support—the June 22 low—where bears would confirm the breakdown of the recent breakout structure.

The daily RSI sits at 40, indicating room for additional downside before oversold conditions trigger a forced short-covering bounce.

What Traders Should Watch

The key variable remains macro sentiment and central bank policy. Any dovish commentary from major central banks could trigger a sharp relief rally across all three assets. Conversely, further hawkish signals will likely accelerate the current correction, testing the deeper support levels outlined above. Position management and stop discipline remain essential until a clearer directional bias emerges.