Bitcoin (BTC) Rebounds as BoJ Calms Yen Fears Despite ETF Outflows

Bitcoin (BTC) rebounded from $84,500 as the Bank of Japan raised interest rates on Friday, December 19, but signaled a cautious policy outlook. USD/JPY rallied 1.45% to close the session at 157.703, boosting yen carry trades into risk assets.

However, the US BTC-spot ETF market saw net outflows in the week, leaving BTC below the $90,000 handle.

Despite another choppy week, hopes for a Fed rate cut and easing concerns over a yen carry trade unwind indicate a bullish outlook.

Below, I consider the key drivers behind recent price trends, the short-term outlook, the medium-term trajectory, and the key technical levels traders should watch.

US BTC-Spot ETF Demand Wanes

The US BTC-spot ETF market saw net outflows of $479.1 million in the reporting week ending December 19. Outflows for the week reversed inflows of $286.6 million from the previous week, weighing on sentiment.

Key flow trends for the week included:

• iShares Bitcoin Trust (IBIT) reported net outflows of $240.3 million.
• Bitwise Bitcoin ETF (BITB) had net outflows of $115.1 million.
• ARK 21Shares Bitcoin ETF (ARKB) saw net outflows of $100.7 million.
• Meanwhile, Fidelity Wise Origin Bitcoin Fund (FBTC) had net inflows of $33.1 million.
• In total, six of the eleven issuers reported net outflows while one had net inflows.

Demand for US BTC-spot ETF flow trends remains key for the supply-demand balance. Outflows for the week left BTC down 0.20% for the current week despite Friday’s BoJ-triggered 3.22% rally.

US BTC-spot ETF issuers have seen net outflows of $298.2 million in December, leaving BTC down 2.63% in the current month. November’s net outflows of $3.47 billion sent BTC down 17.42% in the month.

However, a more dovish Fed rate path, a resilient US economy, fading fears about a yen carry trade unwind, and progress toward crypto-friendly legislation support a bullish outlook.

Analysts and Indicators Signal BTC Rebound

BlackRock’s iShares Bitcoin Trust (IBIT) was a talking point on Saturday, December 20, down 9.59% year-to-date. Bloomberg Intelligence Senior ETF Analyst Eric Balchunas commented on the ETF’s ranking on the 2025 Flow Leaderboard, stating:

“IBIT is the only ETF on the 2025 Flow Leaderboard with a negative return for the year. CT’s knee-jerk reaction is to whine about the return, but the real takeaway is that it was 6th place DESPITE the negative returns (Boomers putting on a HODL clinic). Even took in more than gold, which was up 64%. That’s a really good sign long-term IMO. If you can do $25b in a bad year, imagine the flow potential in a good year.”

Market intelligence platform Santiment also suggested a potential rebound based on social media trends, stating:

“For both swing trading and long-term trading, prices typically follow the path that retail traders least expect. When there are expected price climbs, prices fall. When there are expected price falls, prices climb.”

Santiment shared a chart highlighting major fear across social media, signaling a rebound is more likely.

The Bitcoin Fear & Greed Index remains in the Extreme Fear zone. Extreme fear suggests that investors are overbearish, a potential buying opportunity. Crucially, a rebound would align with the bullish short- to medium-term price outlook.

Downside Risks: A Hawkish Fed, BoJ, US Data, and ETF Outflows

While analysts expect a price recovery, downside risks remain, including:

• The BoJ signals a neutral interest rate of between 1.5% and 2%, driving yen and triggering a yen carry trade unwind.
• The Fed cools bets on a March rate cut.
• BTC-spot ETFs face renewed outflows.

These scenarios would likely push BTC toward the November 21 low of $80,523.

In summary, the short-term outlook remains cautiously bullish as fundamentals outweigh the technicals. The medium- to longer-term outlook is constructive.

Technical Analysis

Despite a recovery from the $80,000 handle, BTC remained below the 50-day and 200-day Exponential Moving Averages (EMAs), signaling a bearish bias. However, fundamentals are beginning to diverge from the technical trend, suggesting a potential upswing.

A breakout above the $94,447 resistance level would bring the 50-day EMA into play. A sustained move above the 50-day EMA would indicate a near-term bullish trend reversal, supporting a move toward the $100,000 psychological resistance level and the 200-day EMA. Significantly, a breakout above the EMAs would reinforce the bullish short- to medium-term price outlook.

Bearish Structure at Risk: What Happens if BTC Holds $80,000?

Holding above the $80,000 level would pave the way toward the upper trendline. A sustained move through the upper trend line would invalidate the bearish structure, affirming the bullish short-term (1-4 weeks) target of $95,000 and the medium-term (4-8 weeks) target of $100,000.

However, a break below the November low of $80,523 on November 21 would invalidate the short- to medium-term bullish outlook.

Track BTC market trends with our real-time data and insights here.

Outlook: $80,000 Support Key to Bullish Outlook

US economic indicators, Fed chatter, and US BTC-spot ETF market flow trends will be drivers in the shortened week ahead.

Key US data include Q3 GDP and labor market data. An upward revision to Q3 GDP growth and stronger jobs data would ease bets on a March Fed rate cut, weighing on sentiment.

However, speculation about a more dovish incoming Fed Chair may bolster bets on a March cut, lifting sentiment. According to the CME FedWatch Tool, the chances of lower interest rates in March increased from 49.5% on December 12 to 55.8% on December 17.

Considering the current market dynamics, the outlook remains bullish, with a 6-12 month price target of $150,000. The Fed’s easing monetary policy cycle and strong BTC-spot ETF year-to-date inflows, despite the market correction, suggest a potential breakout year ahead. Crypto-related legislative developments may also boost demand, given the progress of the Market Structure Bill on Capitol Hill.

Stay informed on BTC trends by monitoring macroeconomic developments, ETF flows, and technical indicators here.