VT 
Bitcoin has extended its downward momentum from 93,060, posting fresh daily losses and keeping the medium-term bias firmly bearish. Price action remains volatile, with rallies capped near bespoke resistance at 90,220. The 261.8% Fibonacci extension from the recent swing aligns with a key downside target at 85,560, reinforcing the bearish outlook.
Fed Cut Debate, Stock Market Divergence and Bond Shock from Japan
The crypto market is caught between Fed rate cut speculation and tightening global liquidity. Traders are watching the December Fed meeting, where policymakers may deliver the first rate cut since the tightening cycle began. While inflation has cooled, Fed officials remain cautious, signaling that any easing will be gradual. This uncertainty has weighed on Bitcoin, which thrives in liquidity-rich environments.
Meanwhile, the U.S. stock market has shown resilience, with the S&P 500 holding near highs despite volatility in crypto. The divergence underscores investor preference for equities, which benefit from corporate earnings and fiscal support, while Bitcoin remains more sensitive to liquidity shifts and investor psychology.
Adding to the pressure, Japanese government bond yields surged to multi-decade highs in late November. The 30-year JGB climbed above 3.4%, while the 20-year rose near 2.9%, sparking fears of a BOJ policy shift. Rising yields tightened yen liquidity and triggered unwinding of the carry trade, a funding strategy that had supported risk assets globally. The shock spilled into crypto markets, with Bitcoin sliding from 92,000 to 86,000 and over half a billion dollars in leveraged positions liquidated. Analysts noted this was one of the clearest examples of how the Japanese bond market turmoil directly impacted Bitcoin.
Bitcoin (BTCUSD) Technical Analysis
- Support: 85,560 is the Fibonacci extension target, followed by 83,600 acting as the deeper bearish extension
- Resistance: A sustained move above 92,220 would negate the bearish bias
- Bearish case: Sell rallies into with 90,220 as resistance. Target 85,560 and 83,600 with stops above 92,220.
- Bullish setup: Long only if price breaks and holds above 92,220, watching out for minor retracement around 90,220.
- Range play: Trade between 83,600 and 90,220. Sell near resistance and buy near support.
Bearish Bias Holds as Liquidity Tightens
The decline of Bitcoin reflects both technical weakness and macro headwinds. Unless the Fed signals a clear path to rate cuts in December, liquidity-sensitive assets like Bitcoin may remain under pressure. The surge in Japanese bond yields has added another layer of stress, draining global liquidity and forcing risk-off positioning. Meanwhile, U.S. equities highlight the divergence in risk appetite, with investors favoring stocks over crypto.
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