Bitcoin (BTC) Price Surges Toward $90K: Fueled by Inflation Data and Japan’s Historic Rate Hike
Bitcoin rockets toward a key psychological level, shrugging off traditional market jitters.
The Catalysts: A One-Two Punch
Fresh inflation data prints cooler than expected, sending a shockwave through legacy finance. Meanwhile, the Bank of Japan ends its long-standing negative interest rate policy—a historic pivot that's ironically boosting crypto's appeal as a non-sovereign asset. Traders aren't just watching; they're voting with their wallets.
Decoupling Narrative Gains Steam
The move underscores a growing narrative: digital assets are increasingly dancing to their own tune. While conventional wisdom said rising rates should crush risk assets, Bitcoin is doing the opposite—flirting with $90,000 as if to remind everyone that its monetary policy is written in code, not dictated by a central committee. It's the ultimate hedge against monetary experimentation, a fact not lost on global capital.
The Bigger Picture
This isn't just a price spike; it's a signal. Each breach of a round-number resistance becomes a headline, pulling in fresh institutional interest and further legitimizing the asset class. The market's reaction to macro shifts is becoming more sophisticated, more immediate. Forget 'digital gold'—this is digital adrenaline.
So, while traditional analysts scramble to adjust their models (again), Bitcoin charges ahead. It turns out, the best response to economic uncertainty isn't always hiding in bonds—sometimes, it's coding your own bank. And as for the old guard's reaction? Let's just say their 'carefully considered' forecasts are looking about as stable as a fiat currency in a hyperinflation spiral.
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.
JUST IN
: Bank of Japan hikes rate to highest level in 30 years
pic.twitter.com/5Rdwz2eOEO
— Barchart (@Barchart) December 19, 2025
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.
Don’t fight the BOJ: -ve real rates is the explicit policy. $JPY to 200, and $BTC to a milly. pic.twitter.com/PdZh87ruVI
— Arthur Hayes (@CryptoHayes) December 19, 2025
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.
