Crypto Market in Sideways Movement: Bitcoin Struggles with $86,000 Level Ahead of Bank of Japan Interest Rate Decision

Sideways Movement Dominates the Crypto Market

The crypto market continues to experience pronounced sideways movement. Bitcoin is struggling with the $86,000 USD mark, while Ethereum has slipped just below the psychologically important threshold of $3,000 USD to around $2,900 USD ^[1]. The ongoing uncertainty is fueled by a combination of hawkish central bank signals, high capital outflows from Bitcoin ETFs, and technical deleveraging in the futures market ^[1].

Interest Rate Decision from Japan Weighs on Risky Assets

A major headwind for the market is the upcoming interest rate decision by the Bank of Japan. The central bank has indicated a potential rate hike to 0.75 percent, putting pressure on yen carry trades ^[1]. The decision is scheduled to be made on Friday, December 19, 2025 ^[1]. This particularly weighs on risky assets such as cryptocurrencies ^[1].

Simultaneously, the U.S. Federal Reserve signaled a significantly more restrictive stance for 2026 despite a 25 basis point rate cut ^[1]. This combined effect from both central banks intensifies pressure on the crypto market.

Massive Outflows from Bitcoin ETFs

Bitcoin ETFs have recorded outflows of nearly half a billion U.S. dollars since the beginning of the week, with daily redemptions of approximately 200 to 300 million dollars each ^[1]. Total assets under management stand at approximately $115 billion USD ^[1]. These sustained outflows indicate that institutional investors are reducing their positions.

Technical Deleveraging in the Derivatives Market

In the derivatives market, much points to technical deleveraging. Negative funding rates, high open interest of around $4.3 billion USD, and liquidations of approximately $600 million USD within 24 hours show that traders are unwinding positions and taking profits while trading volume declines ^[1]. Comparable price corrections in the past have also been accompanied by such unwinding of overleveraged positions ^[1].

Ethereum Under Bearish Pressure

Technical analysis of Ethereum shows a persistently bearish structure. Following a parabolic rise in July to an all-time high of around $4,950 USD in August, the ETH price corrected through a falling channel pattern as sellers took profits ^[2]. Ethereum's price level of around $2,928 USD is significantly below both major moving averages ^[2].

The Ethereum price is trading below the 50-day and 200-day Simple Moving Averages (SMA), cementing the overarching bearish trend ^[2]. The SMAs have also formed a death cross at approximately $3,489 USD, with the 200-day SMA ($3,564 USD) crossing above the 50-day SMA ($3,221 USD) ^[2].

The Relative Strength Index (RSI) has turned negative, falling from above the 50 midline to 41, indicating that ETH is under intense selling pressure ^[2].

Critical Support Levels

On the technical side, the 0.786 Fibonacci level at $2,760 USD is the most immediate support level for Ethereum ^[2]. A daily close below this level would weaken any bullish hopes and increase the probability of a move toward the 1.0 Fibonacci level near $2,175 USD ^[2].

Should buyers defend the 0.786 level and momentum stabilize, the Ethereum price could attempt a recovery toward $3,220 USD (0.618 Fib) ^[2]. A stronger recovery would require reclaiming $3,547 USD (0.5 Fib), followed by $3,870 USD (0.382 Fib) ^[2].