Bitcoin has moved closer to the $90,000 mark after recent economic developments have sparked renewed interest in the cryptocurrency. The November Consumer Price Index (CPI) report revealed that US inflation had dropped to 2.7% year-over-year, significantly below economists’ forecasts of 3.1%. This unexpected easing of inflation helped reignite risk appetite across global markets, and Bitcoin responded by rallying toward this notable psychological threshold.
According to market analysts, the lower inflation rate signals a positive shift in the economic landscape, narrow down the gap to the Federal Reserve’s 2% inflation target. Crypto trader Back noted a rise in open interest alongside Bitcoin’s price rebound, suggesting that investors are opening new long positions rather than simply forcing out short sellers. However, this price movement appears to be driven more by liquidity than a fundamental shift, and traders may need to reassess their positions in the days following the initial data release.
In tandem with this inflation news, the Bank of Japan (BOJ) executed a critical policy adjustment by raising its short-term interest rate by 25 basis points to 0.75%—the highest level in nearly 30 years. This decision has been attributed to persistent inflation above the bank’s target of 2%, driven by escalating import costs and stronger domestic pricing dynamics.
Yen Weakens Despite Rate Adjustment
Despite the rate hike, the Japanese yen experienced a decline, falling to 156.03 per US dollar from 155.67 following the BOJ’s announcement. In the wake of this development, Bitcoin briefly jumped from around $86,000 to $87,500 before stabilizing near the $87,000 mark. This market response aligns with expectations, as the rate hike had been largely anticipated and speculators had maintained long positions in the yen, limiting any drastic strengthening.
Furthermore, the anticipated strengthening of the yen that might have unwound carry trades—a strategy where investors borrow in lower-yielding currencies to invest in higher-yielding assets—did not materialize. Concerns that the BOJ’s actions could destabilize these trades appeared to be exaggerated, as even after the increase, Japanese interest rates remain comparatively low against their US counterparts.
Market Stability Indicators
Onchain analysis paints a picture of stabilization within the Bitcoin market following a tumultuous period. Data from CryptoQuant indicates that Bitcoin has entered a “repair phase,” with key metrics such as net-unrealized profit and loss showing that unrealized losses are no longer deepening. As traders pull back from panic selling, the inflow spent-output profit ratio hovers near breakeven, reflecting a more measured approach in current trading strategies.
As traders continue to engage, the volatility has appeared less destructive and more reactionary to pricing movements rather than indicative of ongoing structural selling pressure. Active address inflows remain elevated, while the MVRV (Market Value to Realized Value) ratio has flattened, suggesting that trading activity is occurring within a narrower range.
From a technical standpoint, Bitcoin must clear the $90,000 threshold decisively to demonstrate buyer conviction and longevity in its current momentum. A daily close above this level, alongside reclaiming the monthly volume-weighted average price (VWAP), could pave the way for more substantial gains, with sell-side liquidity lurking between $90,500 and $92,000.
Bitcoin now trades in the vicinity of $87,000 following its brief peak at $87,500, indicating that while the market is reacting positively to both economic indicators, the journey to $90,000 remains fraught with challenges and opportunities alike.
