The Bank of Japan's decision is approaching, and Bitcoin is caught in the expected volatility turmoil in economic news

Bitcoin (BTC) is currently trading around $90,357.50, and the market is experiencing intense volatility driven by global economic news. According to real-time data, the current market sentiment is as bearish as 46.79%, reflecting cautiousness among investors regarding the short-term outlook.

Chain Reaction Triggered by Economic News

This week’s market story began with an unexpected inflation data release. The report showed that the rise in prices was far below market expectations, initially sparking bullish sentiment in the crypto market, causing Bitcoin to rise. However, this short-lived rally was soon overshadowed by pessimism. Analysts believe that the negative outlook currently prevailing in the market may persist until 07:30 tomorrow morning.

What truly has the market on edge is the imminent Bank of Japan decision. The Bank of Japan is expected to announce its interest rate decision at 07:30 (local time) tomorrow, with widespread market expectations of a rate hike. This decision could intensify concerns over carry trade risks and exert ongoing downward pressure on crypto assets. This also explains why early-week gains are viewed by many traders as a trap—markets seem to be rising, but are actually brewing for a decline.

Technical Outlook: Liquidity Traps Appear Frequently

From a technical perspective, the bear flag pattern has been confirmed broken, and subsequent rebounds have all failed. Over the past four trading days, Bitcoin has repeatedly failed to recover key support levels, with each bounce turning into a liquidity trap, making intraday traders the biggest victims.

Bitcoin has fallen below the $86,000 level, with a low of $85,481. Many technical analysts have lowered their target to $76,000 based on the breakdown of the bear flag pattern. However, after the Japanese interest rate decision is announced, the market may experience a reversal, with short-term gains possibly reaching $96,000.

More Uncertainty Brewing

Looking ahead, the crypto market will face more tests. Court rulings on import tariffs in January and the MSCI delisting meeting could bring additional shocks, pushing Bitcoin to test lower support levels. These overlapping economic news and policy events will keep investors highly cautious in the coming weeks. The current situation serves as a reminder to all participants: in a backdrop of high global economic uncertainty, the market may seize the opportunity to produce deeper corrections.