A hawkish BoJ rate hike would likely derail the short-term bullish outlook. The BoJ’s consensus on the neutral interest rate could be crucial for BTC. A 1% neutral rate would signal one further rate cut, fueling yen carry trades. However, a 1.5% to 2.0% neutral rate would signal multiple BoJ rate hikes, which would likely trigger a yen carry trade unwind. A 17.4% drop would send BTC toward $75,000, its lowest level since April 2025.
Downside Risks: A Hawkish BoJ, US Data, and ETF Outflows
While spot ETF inflows lifted sentiment, downside risks linger, including:
- A BoJ rate hike, with warnings of further monetary policy tightening in 2026.
- Hotter US inflation and stronger jobs data curb March Fed rate cut bets. The US Jobs Report and CPI Report are out on Tuesday, December 16, and Thursday, December 19, respectively.
- BTC-spot ETFs face renewed outflows.
These scenarios would likely push BTC below $90,000, exposing the November 21 low of $80,523.
However, a less dovish Fed would likely ease carry trade unwind risks and bolster demand for BTC-spot ETFs, supporting a near-term move to $95,000.
In summary, the short-term outlook remains cautiously bullish as fundamentals outweigh the technicals. The medium- to longer-term outlook is constructive.
Technical Analysis
Despite reclaiming the $90,000 handle, BTC remained below the 50-day and 200-day Exponential Moving Averages (EMAs), signaling a bearish bias. However, fundamentals are beginning to diverge from the technical trend, suggesting a potential upswing.
A breakout above the $94,447 resistance level would open the door to retesting the 50-day EMA. A sustained move above the 50-day EMA would enable the bulls to target the $100,000 psychological resistance level. Significantly, a sustained breakout above the 50-day EMA would signal a bullish trend reversal, aligning with the bullish short- to medium-term price outlook.