Bitget App
Trade smarter
Open
HomepageSign up
Bitget>
News>
Markets>
Bitcoin Updates: Japan's Rising Yields Highlight Crypto Market's Liquidity Challenges

Bitcoin Updates: Japan's Rising Yields Highlight Crypto Market's Liquidity Challenges

Bitget-RWA2025/12/01 11:04
By: Bitget-RWA
- Bitcoin fell below $87,000 as Japanese bond yields surged to 17-year highs, triggering a $150B market cap loss and exposing crypto liquidity vulnerabilities. - Weak order books and 31% Bitcoin volume drop exacerbated the selloff, with $637M in liquidations and 220,000 traders losing positions. - Ethereum's speculative overheating contrasted with Bitcoin's fragility, as funding rates spiked to 20.4% amid dormant network activity. - BOJ's potential rate hike signals end to ultra-low rates, tightening globa

Bitcoin Experiences Sharp Decline Amid Japanese Bond Yield Surge

In the early hours of December 1, Bitcoin's value tumbled below $87,000 during Asian trading, wiping out $150 billion from its market capitalization. This dramatic drop was triggered by a spike in Japanese government bond yields, which led to a liquidity-driven selloff. The event exposed the crypto market's fragility, as thin order books struggled to absorb the sudden wave of institutional selling during a period of heightened macroeconomic uncertainty.

Japanese 10-year bond yields soared to 1.84%, marking their highest level in 17 years, while two-year yields surpassed 1% for the first time since 2008. These developments signaled a possible end to the Bank of Japan's prolonged era of ultra-low interest rates. The resulting shift disrupted global carry trades, tightened liquidity, and prompted investors to retreat from riskier assets across financial markets.

Trading Volumes Hit Historic Lows

The downturn was intensified by exceptionally low trading activity, with weekly crypto volumes dropping to $127 billion—the lowest since July 2025. Bitcoin's trading volume alone fell by 31% to $59.9 billion, and Ethereum's volume plunged 43%. This lack of market depth transformed what might have been a routine correction into a full-blown liquidity crisis. Timothy Misir, head of research at BRN, described the situation as a "liquidity-driven repricing," emphasizing that Bitcoin's fall below key resistance levels exposed deeper structural vulnerabilities. The selloff also resulted in nearly $637 million in liquidations, affecting over 220,000 traders.

Contrasting Trends Between Bitcoin and Ethereum

The market's instability was further highlighted by differing trends in Bitcoin and Ethereum. While open interest in Bitcoin futures dropped to $29.7 billion, Ethereum saw an increase of $900 million, with funding rates soaring to 20.4%—placing them in the top percentile for the past year. According to 10x Research, this imbalance points to excessive speculation in Ethereum, despite limited network activity, raising concerns about potential mispricing of risk. Additionally, Bitcoin's dip below the short-term holder cost basis—a key bull market indicator—suggests the possibility of a more significant correction ahead.

Impact of Bank of Japan Policy Signals

Macroeconomic factors centered on signals from the Bank of Japan. Governor Kazuo Ueda hinted at a possible interest rate increase at the upcoming December 18-19 meeting, which fueled a rally in the yen and reversed the longstanding yen carry trade that has supported risk assets for years. Arthur Hayes, co-founder of BitMEX, noted that higher rates would increase borrowing costs for global speculators, hastening the process of deleveraging. The strengthening yen and rising Japanese yields put additional strain on leveraged positions, with Polymarket assigning a 52% probability to a 25-basis-point rate hike.

Key Levels and Market Outlook

Looking forward, Bitcoin faces a crucial support test in the mid-$80,000 range. Failure to recover the low-$90,000s could see the decline extend toward $67,700, as technical patterns such as the bear flag indicate. On-chain analysis shows retail investors are buying at lower prices, while institutional players remain cautious. Meanwhile, stablecoin reserves on exchanges have increased, suggesting that capital is waiting to re-enter the market once conditions improve.

Japan's policy changes could have far-reaching effects on global financial markets, especially in the cryptocurrency sector, where assets with higher volatility are often the first to react to tightening liquidity. With upcoming U.S. employment and ISM reports, the coming week will challenge the market's ability to withstand a shift where fundamental factors may finally take precedence over leveraged speculation.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
PoolX: Earn new token airdrops
Lock your assets and earn 10%+ APR
Lock now!

You may also like

SPAR Switzerland Launches Nationwide Crypto Payments in App

Quick Take Summary is AI generated, newsroom reviewed. SPAR Switzerland now accepts Bitcoin and 100+ cryptocurrencies directly in its mobile app. The update eliminates third-party processors and uses QR-based on-chain payment flows. This expansion follows earlier Lightning Network and Binance Pay pilots that began in 2025. Switzerland’s supportive regulations make it a leading region for retail crypto adoption.References X Post Referencespar

coinfomania2025/12/01 20:45
Bitcoin Updates: Yen Carry Trade Reversal: The $20 Trillion Factor Disrupting the Crypto Market

- Bitcoin's price drop below $87,000 in December linked to BOJ's hawkish pivot and unwinding $20T yen carry trade, triggering $643M in crypto liquidations. - BitMEX founder Arthur Hayes identifies $80,000 as potential support level but warns U.S. Treasury issuance and AI sector risks could prolong volatility. - South Korea's expanded crypto "travel rule" increases compliance costs for exchanges , compounding market pressures amid global macroeconomic uncertainty. - Bitcoin Munari's $0.22 presale and Blazpa

Bitget-RWA2025/12/01 20:38
Nigerian Police Target Counterfeit Employment Schemes Linked to Rising International Scams

- Nigerian Police warns against fake job portals falsely claiming government recruitment, urging verification via official channels. - Global fraud cases highlight corporate misconduct: Stride and Primo Brands face lawsuits over inflated enrollment/failed strategies causing stock crashes. - Jayud Logistics investigated for stock manipulation via social media schemes, while WPP's misleading statements triggered 18% stock drop. - Authorities emphasize need for regulatory oversight as cybercrime and financial

Bitget-RWA2025/12/01 20:38
FDUSD's SPAC Merger Seeks to Strengthen U.S. Regulatory Adherence and Bolster Institutional Confidence

- First Digital Group plans to go public via a $1.5-2.5B SPAC merger with KYON, aiming to list FDUSD on Nasdaq by Q2 2026. - FDUSD, a dollar-pegged stablecoin with $908M supply and $785B in transactions, faces legal disputes over alleged TUSD reserve misuse. - The SPAC route accelerates public market access, backed by $100M from Temasek and Andreessen Horowitz for regulatory compliance. - Challenges include competing with USDT/USDC dominance and navigating U.S. regulatory scrutiny amid rising stablecoin ma

Bitget-RWA2025/12/01 20:38

Trending news

More
1
SPAR Switzerland Launches Nationwide Crypto Payments in App
2
Bitcoin Updates: Yen Carry Trade Reversal: The $20 Trillion Factor Disrupting the Crypto Market

Crypto prices

More
Bitcoin
Bitcoin
BTC
$85,397.41
-6.49%
Ethereum
Ethereum
ETH
$2,756.84
-8.94%
Tether USDt
Tether USDt
USDT
$1
+0.01%
XRP
XRP
XRP
$2.01
-8.08%
BNB
BNB
BNB
$817.63
-8.53%
USDC
USDC
USDC
$0.9998
-0.03%
Solana
Solana
SOL
$124.62
-9.14%
TRON
TRON
TRX
$0.2772
-1.80%
Dogecoin
Dogecoin
DOGE
$0.1339
-10.42%
Cardano
Cardano
ADA
$0.3779
-10.72%
How to buy BTC
Bitget lists BTC – Buy or sell BTC quickly on Bitget!
Trade now
Become a trader now?A welcome pack worth 6200 USDT for new users!
Sign up now
Trade smarter