Bitcoin Price Forecast: Macro Shifts and BoJ Policy Signal Bullish Bias
Author: Bob Mason
Published: December 28, 2025
Key Points
- Bitcoin (BTC) surged towards $90K as Japan's inflation eased, reducing fears of aggressive Bank of Japan (BoJ) rate hikes.
- Anticipation of a Federal Reserve (Fed) rate cut in March, along with changing BoJ policy sentiment, supported a bullish outlook for BTC.
- Despite two weeks of outflows from US BTC-spot ETFs, macroeconomic signals remain favorable for Bitcoin.
Market Dynamics
On December 26, Bitcoin reached a session high of $89,383, driven by softer inflation data from Japan, which alleviated concerns regarding the BoJ's monetary policy. The Japanese Government Bond (JGB) yields fell from a peak of 2.1%, the highest since 1999, while the USD/JPY exchange rate remained stable above 155. The Nikkei 225 index also saw a modest increase of 0.60%, indicating that the yen carry trade was still viable.
Inflation and Interest Rates
Tokyo's annual inflation rate dropped to the BoJ's target of 2.0% in December, down from 2.7% in November. This decline in inflation has reduced expectations for aggressive rate hikes by the BoJ, which could lead to a more favorable environment for risk assets, including Bitcoin. The relationship between Bitcoin and JGB yields highlights the sensitivity of the crypto market to changes in BoJ policy.
US Economic Outlook
The US economy showed strong growth of 4.3% in Q3, with inflation pressures remaining. However, a cooling labor market and expectations of a new Fed Chair who may favor lower interest rates have kept hopes for a rate cut alive. The probability of a March rate cut has increased, which could further influence Bitcoin's price positively.
ETF Outflows and Market Sentiment
Despite the positive macroeconomic backdrop, the US BTC-spot ETF market experienced significant outflows, totaling $589.4 million in the week ending December 26. This trend has left Bitcoin trading below the $90,000 mark. Notably, the iShares Bitcoin Trust saw the largest outflows, while the Fidelity Wise Origin Bitcoin Fund reported inflows.
Technical Analysis and Price Outlook
The Bitcoin Fear & Greed Index indicated oversold conditions, suggesting a potential price recovery. However, several downside risks remain, including the possibility of a high neutral interest rate from the BoJ and continued ETF outflows. The technical indicators show Bitcoin trading below its 50-day and 200-day Exponential Moving Averages (EMAs), indicating a bearish bias, but fundamentals suggest a potential upswing.
Conclusion
The short-term outlook for Bitcoin remains cautiously bullish, with key support at the $80,000 level. A sustained move above this level could lead to a target of $95,000 in the short term and $100,000 in the medium term. Upcoming macroeconomic data and Fed meetings will be crucial in shaping market sentiment.
Future Considerations
Monitoring macroeconomic developments, ETF flows, and technical indicators will be essential for tracking Bitcoin's market trends in the coming weeks.