Bitcoin Faces Pressure as Japan’s Bond Yields Hit 17-Year High
A spike in Japanese bond yields, alongside economic and geopolitical instability, has sparked concerns that Bitcoin (BTC) could see a sharp correction in the coming weeks.
Japan’s 20-year government bond yield soared to 2.265%, its highest level since 2008, as investors brace for possible rate hikes by the Bank of Japan (BOJ) and rising inflationary pressures. This mirrors market conditions from August 2024 when a strengthening yen triggered a sell-off across equities and crypto markets.
Historically, rising Japanese bond yields have signaled tightening financial conditions, prompting risk-off sentiment in global markets. A stronger yen can also reduce demand for carry trades, where investors borrow in yen to invest in higher-yielding assets like BTC.
Amid this backdrop, traders are now eyeing $70,000 as a key downside target for Bitcoin, especially with lingering macroeconomic uncertainties, an escalating tariff war, and a lack of bullish catalysts in the run-up to the U.S. presidential election.
“Institutional investors are reducing exposure to crypto due to the broader uncertainty. Bitcoin could easily drop into the $70K-$80K range unless conditions improve,” said Jeff Mei, Chief Operating Officer at BTSE, in a message to CoinDesk.
Mei added that a reversal in market sentiment would likely require an end to the tariff standoff and a resumption of interest rate cuts by the Federal Reserve, both of which remain uncertain.
From a technical standpoint, BTC is at a critical juncture, according to Augustine Fan, Head of Insights at SignalPlus. “Bitcoin’s realized volatility is rising, and the current price action is breaking key support levels. Without a bullish catalyst, further downside seems likely,” he said.
A CoinDesk report on Sunday also highlighted that BTC is now testing its 200-day simple moving average (SMA)—a key technical indicator. A sustained close below this level could confirm a deeper correction, adding to bearish sentiment.
