Bitcoin, Ethereum, XRP Analysis: Japan’s Bond Crisis is Painting Strong Bullish Scenarios

Japan’s bond market is showing signs of stress, and it’s starting to reflect in crypto prices. Bitcoin (BTC), Ether (ETH), and XRP (XRP) all show bullish signals as investors look for alternatives to traditional assets.

Why is Japan’s Bond Crisis Pushing Bitcoin Price High?

Yields on Japan’s 30- and 40-year government bonds have climbed to their highest levels on record.

The 30-year yield reached 3.185% on May 20, while the 40-year auction saw its weakest demand since 2012. Investors are pulling back from super-long-term JGBs, citing concerns over Japan’s mounting fiscal pressures and aging population.

Japan’s Ministry of Finance is now considering a shift in its debt issuance strategy—cutting back on long-term bonds and increasing short-term debt to keep total annual issuance at 172.3 trillion yen (about $1.21 trillion).

The move aims to reduce borrowing costs, but it also signals panic within one of the world’s largest sovereign debt markets.

Japan’s debt load, now above 260% of GDP, is raising fresh doubts about the country’s ability to manage its long-term finances.

The Bank of Japan has started unwinding years of easy policy, reducing its bond purchases and leaving markets with less support. With institutional demand weakening, yields are rising as the market adjusts to a world without central bank intervention.

This unfolding crisis has ripple effects. Japan is the largest foreign holder of US Treasurys. A major shift in its domestic debt strategy could lead to portfolio rebalancing abroad, unsettling global bond markets.

According to analysts at Bitwise Asset Management, Japan’s fiscal crisis is “a stress test for modern fiat systems” like cryptocurrencies. They argue that Bitcoin is increasingly being seen as a safe-haven asset in this environment.

🇯🇵 LATEST: Japan’s bond market crisis may be fueling Bitcoin’s surge to $112K, as institutional investors eye $BTC as a hedge against rising sovereign credit risk, says Bitwise. pic.twitter.com/ov3sTFGiSw

— CW (@CW8900) May 26, 2025

The shift is also visible in derivatives markets. Bullish options trades are betting on BTC hitting $200,000 or even $300,000 this year, according to CoinGlass data. Still, such moves would require continued macro pressure and risk-off sentiment.

Bitcoin in Final Phases of Bullish Reversal Breakout

Bitcoin is forming a bullish inverse head-and-shoulders pattern on the 3-day chart, a setup that often signals strong upside potential. The pattern’s neckline sits near $110,000, a level that BTC is currently testing.

If the price breaks above this neckline with volume, the technical target points to around $170,000. That projection is based on the height from the head, low near $57,000, to the neckline, then added to the breakout level.

Before that happens, however, Bitcoin could face a short-term pullback. The 50-period exponential moving average (EMA), currently near $93,300, may act as a support zone. A correction toward this level would keep the pattern intact and potentially offer a stronger base for a breakout.

Momentum indicators like the RSI are nearing overbought territory, suggesting that a pause or minor dip is likely before any continuation higher. Traders are watching the neckline closely for confirmation.

Ethereum to $4,000 if Bitcoin Rallies?

Ethereum is attempting to reclaim its long-term ascending trendline support, which it lost earlier this year. The trendline, drawn from the 2022 lows, had served as a key support level during ETH’s previous bull run.

ETH is currently trading around $2,648, just above its 50-day and 200-day exponential moving averages. A successful retest and close above the trendline could signal renewed bullish momentum.

If the reclaim holds, Ethereum could eye a move toward its next major resistance level near $4,000. That level capped gains during multiple rallies between late 2023 and early 2025.

XRP Eyes 60% Rally As Japan Debt Crisis Worsens

XRP has broken out of a falling wedge pattern, a bullish reversal setup that often signals a strong move to the upside. The breakout follows weeks of consolidation between two downward-sloping trendlines.

The price is now trading around $2.31, slightly above its 50-day EMA at $2.19. Holding above this level could confirm the breakout and open the door for a potential rally toward the next key resistance near $3.65.

The volume remains relatively low post-breakout, suggesting that the move may need stronger confirmation. Still, the technical structure favors further upside if buyers step in.

XRP’s 200-day EMA, currently around $1.40, remains a key support level in case of a short-term pullback.