Bitcoin Stuck at $86k: Bond Selloff and Japan Rate Hike Fears Grip Asian Markets

Bitcoin's price action hit a wall at the $86,000 mark as Asia's trading day kicked off. The stall comes as traditional financial tremors—a bond market selloff and whispers of a Bank of Japan rate hike—send shockwaves across asset classes.

Why the crypto chill?

It's a classic risk-off shuffle. When bond yields spike and central banks in major economies like Japan even hint at tightening, capital gets nervous. That traditional flight-to-safety sentiment often sidelines speculative bets, and right now, crypto is getting caught in the crossfire. The $86,000 level isn't just a number; it's a psychological battleground where bullish momentum meets macroeconomic gravity.

The Japan factor

All eyes are on the BOJ. A potential shift from its long-held ultra-loose policy doesn't just affect the yen—it recalibrates the cost of capital for the entire region. Higher rates in Japan could suck liquidity out of riskier plays, proving once again that in global finance, someone else's monetary policy is your problem. It's the ultimate 'not my department' move that moves everyone's market.

What's next for digital gold?

This is a stress test for Bitcoin's 'uncorrelated asset' thesis. Short-term, it's stuck reacting to bond vigilantes and central bank chatter. Long-term? This pressure might just prove its resilience. Every traditional market convulsion adds another page to the decentralized manifesto.

So, while traders watch the $86,000 ledge, the real story is playing out in bond pits and central bank meeting rooms. Crypto might be the future, but it still has to survive the present—a present currently being dictated by the very institutions it seeks to bypass. Funny how that works.

Market snapshot

• Bitcoin: $86,991, up 1.4%
• Ether: $2,805, down 0.5%
• XRP: $2.02, down 0.8%
• Total crypto market cap: $3.03 trillion, up 0.8%

Bond Market Stress Builds As BOJ Signals End To Ultra Loose Policy

Equity markets in the region tried to stabilize, although investors stayed cautious. MSCI’s broad index of Asia Pacific shares outside Japan ROSE about 0.6%, while Tokyo’s Nikkei 225 edged 0.5% higher after a sharp drop in the previous session.

Behind the nerves sits a week-long selloff in Japanese government bonds, which gathered pace after Bank of Japan governor Kazuo Ueda laid the groundwork for an interest rate increase later this month.

Traders increasingly expect the BOJ to move away from its ultra-loose stance, a shift that could Ripple through global funding markets.

10-year Japanese government bond yields ticked up another 1.5 basis points in morning trade to around 1.88%, the highest level in 17 years, ahead of a key 10-year auction. On Monday, they had already jumped 6 basis points, while the MOVE spilled into overseas markets and pushed 10 year US-Treasury yields up to about 4.08%.

In credit markets, investors kept a close eye on Chinese developer China Vanke, which recently surprised markets by seeking a delay on a local bond repayment. The company has now asked holders to wait a year to be made whole, a move that underscores ongoing liquidity strains in the country’s property sector.

Markets Price In December Fed Cut As Economic Data Softens

In the US, futures on the S&P 500 were little changed after the index fell 0.5% on Monday and the Nasdaq 100 slipped 0.4%.

Data from the Institute for Supply Management showed US manufacturing contracted for a ninth straight month in November, with the headline index easing to 48.2 from 48.7, and components such as new orders, employment and backlogs all weakening.

BREAKING:

*U.S. NOVEMBER ISM MANUFACTURING PMI SURVEY FALLS TO 48.2; EST. 49.0; PREV. 48.7

pic.twitter.com/ex7Uo9SoLq

The softer tone in the data has reinforced bets that the Federal Reserve is nearing a turn in policy. Interest rate futures now imply about an 86% chance of a 25 basis point cut at the Fed’s Dec. 9 to 10 meeting, helped by signs of cooling activity and a gradual easing in inflation pressures.

Fed officials will receive one more reading on their preferred inflation gauge before that decision, with Friday’s report expected to show that price pressures remain present but contained. Even so, many analysts see the labour market as the key factor that will shape the pace of cuts next year.

Risk Aversion Rises As Bitcoin Drop Spills Into Crypto-Exposed Equities

Crypto-exposed stocks felt the impact of Bitcoin’s slide as risk aversion picked up. Shares of MicroStrategy, the largest corporate holder of Bitcoin, fell sharply, while Coinbase and Robinhood dropped by around mid-single digits. Bitcoin miners such as Marathon Digital and Riot Platforms slid between about 7% and 9% as lower prices squeezed margins.

On-chain data added another layer of concern for crypto traders. Analysts at Bitfinex said recent losses in bitcoin have triggered a wave of realised losses bigger than those seen at the two major lows earlier in the current cycle, in Aug. 2024 and April 2025, describing a market under stress and searching for liquidity as weaker holders capitulate.

They noted that such heavy loss realization has often occurred NEAR the later stages of corrective phases, when selling pressure exhausts itself and conditions stabilize.