Bitcoin Falls 6% as Japan’s Yen Surge and Yield Policy Shift Trigger Risk-Off Sentiment.

• Japan’s yen surged with the ten-year government bond yield climbing to 1.879%, the highest level since June 2008.

• Bitcoin declined 6% to $85,886, causing nearly a billion in liquidations.

Bitcoin Faces Heavy Sell Pressure as Global Bond Shock Ripples Through Markets

Bitcoin traded at $85,886 at press time, down more than 6% over the last 24 hours. Market capitalization dropped to $1.71 trillion, while trading volume surged 76% to $ 67.96 billion. The sharp increase in volume reflects intense sell-side activity amid tightening liquidity conditions across global markets.

Japan yen & Bond Yields Hit 16 Year High and Spark a Massive Risk Unwind.

Japan’s ten-year government bond yield climbed to 1.879%, the highest level since June 2008. The rapid rise has raised expectations that the Bank of Japan may raise rates at its December meeting.

For decades, investors borrowed cheap yen to buy risk assets, including equities and Bitcoin. A strengthening Japanese currency now makes those positions more expensive to maintain.

Analysts say the reversal of the yen carry trade is pressuring the entire crypto market. More than 600 million dollars in Bitcoin positions were liquidated as the yen surged. What began as a local bond move has spread globally through leveraged positions, margin calls, and forced selling across major exchanges.

The Yen Carry Trade Unwind Becomes a Systemwide Shock

Several analysts described the event as an execution rather than a collapse. Japan’s jump in yields reignited the most extensive arbitrage trade in modern financial history. For 30 years, investors borrowed nearly free yen and poured the funds into technology stocks, U.S. Treasuries, and digital assets.

When yields rise, the yen strengthens. This makes existing leveraged trades unprofitable, which forces positions to unwind. Selling triggers more selling as margin calls cascade across exchanges. The result has been one of the most violent stress events in Bitcoin’s trading history.

In early October, crypto markets saw $19 billion liquidated in a single day. In November, $3.45 billion left Bitcoin exchange-traded funds, with BlackRock’s fund losing more than $2 billion in its worst month since launch. December opened with another $646 million wiped out before midday as the yen surged again.

Liquidations Intensify and Correlations Rise

According to Coinglass data, more than 237,000 traders suffered liquidation losses over the last 24 hours. Liquidations totaled $781. 73 million across the market, with the most significant single order valued at $15.6 million on Hyperliquid.

Bitcoin’s correlation to major United States equity indices has also strengthened. Correlation is 46% with the Nasdaq and 42% with the S&P 500. This shows Bitcoin trading as a liquidity asset rather than a haven hedge.

Whales Accumulate as Retail and Leveraged Traders Exit

Despite the recent drawdown, the chain data shows that whales accumulated more than 375k Bitcoin during the market stress. Miners also reduced their selling significantly, which may soften downside pressure. These inflows suggest that long-term holders view the correction as an opportunity rather than as the end of the cycle.

Analysts are tracking a dense cluster of new buyers around the $85k zone. Blockchain data marks this range as an emerging support level, as many recent entrants may defend their positions if prices retest the region.

All Eyes on the Bank of Japan December Decision

The decisive moment arrives on December 18 when the Bank of Japan reveals its next policy move. A rate hike combined with guidance for further tightening could drive Bitcoin toward $75k as liquidity continues to unwind.

A pause in policy may trigger a powerful short squeeze that sends Bitcoin back toward $100,000 in a matter of days.

For now, Bitcoin remains at the center of a historic shift in global financial conditions. Markets are being reminded that even in a digital age, the price of money still sets the direction for every risk asset, including the most prominent cryptocurrency.