Bitcoin (BTC) Price: Climbs Toward $90K After Inflation Data and Japan Rate Hike

TLDR

• Bitcoin briefly touched $90,000 after November CPI data showed US inflation at 2.7%, below the expected 3.1%
• The Bank of Japan raised interest rates by 25 basis points to 0.75%, the highest level in nearly 30 years
• Despite the BOJ rate hike, the Japanese yen weakened against the US dollar while Bitcoin rose to $87,500
• Onchain data shows Bitcoin is in a repair phase with unrealized losses stabilizing rather than deepening
• Bitcoin needs to close above $90,000 and the monthly VWAP to confirm buyer conviction for further upside

Bitcoin moved closer to $90,000 following two key economic events. The November Consumer Price Index report showed US inflation at 2.7% year-over-year, well below the forecasted 3.1%. This data point narrowed the gap to the Federal Reserve’s 2% inflation target.

The softer inflation reading helped revive risk appetite across markets. Bitcoin responded by climbing toward the $90,000 level.

Crypto trader Back noted that rising open interest accompanied Bitcoin’s price bounce. This suggests new positions were opening rather than just short sellers being squeezed out. Options gamma exposure remained balanced around the current price level.

However, the move appeared liquidity-driven rather than the start of a sustained trend. Traders may reassess their positions after the initial reaction to the data.

The Bank of Japan also made a policy decision. The central bank raised its short-term policy rate by 25 basis points to 0.75%. This marks the highest level in roughly three decades.

The BOJ acknowledged that inflation has stayed above its 2% target for an extended period. Rising import costs and firmer domestic price dynamics contributed to this situation. Policymakers noted that interest rates adjusted for inflation remain negative, meaning monetary conditions stay accommodative even after the hike.

Yen Weakens Despite Rate Increase

The Japanese yen slipped to 156.03 per US dollar from 155.67 after the rate decision. Bitcoin rose from $86,000 to $87,500 before pulling back to trade near $87,000.

The market reaction aligned with expectations since the rate hike was widely anticipated. Speculators had held long positions in the Japanese yen for weeks, which prevented any sharp yen-buying response.

Some observers had worried the rate hike could strengthen the yen and trigger an unwinding of yen carry trades. For decades, Japan’s ultra-low or negative interest rates made the yen a preferred funding currency for carry trades. Investors borrowed cheaply in yen to invest in higher-yielding assets including US tech stocks, Treasury notes and emerging market bonds.

These fears proved overblown. Even after the rate hike, Japanese rates remain cheaper than their US counterparts, ensuring no mass unwinding of carry trades.

Onchain Data Shows Stabilization

Data from CryptoQuant indicated Bitcoin has been transitioning into a repair phase since October. Exchange metrics such as net-unrealized profit/loss show that unrealized losses have stopped deepening.

The inflow spent-output profit ratio hovers near breakeven. This suggests coins are being sold close to cost rather than in panic. Deposit activity on major exchanges spikes mainly during brief downside moves and fades as price stabilizes.

This pattern reinforces the view that selling pressure is reactive rather than structural. Highly active address inflows remain elevated, but MVRV has flattened, indicating trade within a range rather than renewed speculative excess.

From a technical standpoint, Bitcoin needs to clear $90,000 and reclaim a position above the monthly volume-weighted average price. A daily close above this level would be pivotal. Immediate sell-side liquidity sits between $90,500 and $92,000.

Bitcoin currently trades near $87,000 after touching $87,500 following the Bank of Japan rate decision.

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