While Bitcoin (BTC) continues to struggle to find a clear direction, an analyst is attempting to identify correlations with the Bank of Japan’s monetary policy. In the event of a rate hike, the analyst anticipates a drop to $70,000. Is this relevant?
Will Bitcoin (BTC) fall back to $70,000 due to Japan’s monetary policy?
Whether in a bull or bear market, a succession of more or less shaky analyses promise a Bitcoin (BTC) price at this or that level.
With BTC trading 29% below its all-time high of October 6, analyst AndrewBTC shared his view on X that the asset could drop to $70,000 if the Bank of Japan (BoJ) raises its key interest rates by 25 basis points.
According to him, every time the BoJ has raised its key interest rates, BTC has fallen by more than 20%:
Analysis by AndrewBTC
While BTC could indeed drop to $70,000 in the short term, the hypothesis presented here seems to be nothing more than a convenient shortcut.
First of all, the chart used as an example here is from Bitstamp, not the TradingView index, which instead shows a 16% decline in March 2024. But more importantly, just because two events occur at roughly the same time doesn’t mean they’re necessarily correlated.
In March 2024, for example, it is important to note that the price of BTC was consolidating after a rally that had been driven by the launch of spot Bitcoin ETFs in the United States. Last January, we faced a similar scenario, following the market euphoria that followed Donald Trump’s election.
Even if there were a correlation between Japan’s key interest rates and Bitcoin—which is far from proven given the limited history of rate hikes—it should be noted that the hypothetical December 19 hike is already factored into the market. If there is any influence, this possibility may already be reflected in current prices.
Japan or not, BTC did, however, fall back below $90,000 over the weekend and is currently trading at $89,700. If the decline continues, it could be attributed primarily to the usual four-year cycles, according to which Bitcoin alternates between bear and bull markets around its successive halvings.
