BTC Breaks $85K Support as Japan’s 10Y Yield Climbs to 1.84% — Should Investors Brace for More Selling?

Bitcoin has dropped below the $85,000 support level as Japan’s 10-year bond yield reached 1.877%, the highest since April 2008. The cryptocurrency now trades at $85,071.60, down 7.28% in the past 24 hours.

The surge in Japanese yields has pushed the probability of a 25 basis point rate hike by the Bank of Japan to 56%. Market participants face growing uncertainty about whether further selling pressure lies ahead.

Bitcoin’s market capitalization has contracted to $1.69 trillion after reaching $2.25 trillion in previous months. Trading volume has spiked 92.97%, signaling intensified selling activity across exchanges.

Japan’s Yen Surge Forces Crypto Market Unwind

Japan’s yield movements have triggered the unwinding of the yen carry trade. Conservative estimates place this arbitrage strategy at $3.4 trillion, while realistic figures suggest $20 trillion.

For three decades, global investors borrowed near-zero interest yen to purchase higher-yielding assets. These included technology stocks, U.S. Treasuries, and Bitcoin. That era appears to be ending.

The mechanism is direct. Rising yields strengthen the yen. Leveraged positions become unprofitable. Forced selling begins, triggering margin calls and liquidations across markets.

Before midday, $646 million in crypto positions were liquidated. This follows October 10’s record single-day wipeout of $19 billion in digital assets. The crypto market has erased $150 billion in value.

Previously, Japanese investors purchased U.S. Treasuries to secure returns when domestic yields hovered near zero. Now, with Japanese yields rising, capital is flowing back home. This shift pushes U.S. yields higher, unsettling equity markets globally.

MicroStrategy and BTC ETFs Face Pressure as Fed Decision Looms

MicroStrategy shares fell over 7% to their lowest level since October 2024. The stock has declined 55% since October 6th in one of its steepest drops on record.

According to Lookonchain, the company holds 650,000 Bitcoin worth $55.85 billion, with an average purchase price of $74,436. Its unrealized profit stands at $7.47 billion, representing a 15.44% gain.

CEO Phong Le stated MicroStrategy could sell Bitcoin if two conditions align. These are: stock price falling below 1x mNAV and capital markets closing. The company’s mNAV collapsed to 0.95 as of November 30 but has recovered to 1.14.

STRATEGY JUST ADMITTED IT COULD SELL BITCOIN.

Read that again.

For five years, Michael Saylor told the world: “You do not sell your Bitcoin.” He built an empire on that conviction. 649,870 BTC. The largest corporate treasury in history.

On November 29, 2025, CEO Phong Le broke… pic.twitter.com/f9oWfypp05

— Shanaka Anslem Perera ⚡ (@shanaka86) December 1, 2025

Meanwhile, Bitcoin ETFs experienced contrasting monthly performance. November saw $3.45 billion in outflows, with BlackRock‘s fund losing $2.34 billion in its worst month since inception.

Major institutions including Fidelity, Coinbase, Binance, Bybit, and BlackRock sold over 10,000 Bitcoin ahead of today’s Federal Reserve meeting. BlackRock alone offloaded over 2,100 Bitcoin worth above $185 million.

December has started positively for Bitcoin ETFs. One-day net flow reached 592 Bitcoin, or $51.15 million. Seven-day net flow totaled 2,984 Bitcoin, equivalent to $257.71 million, according to Lookonchain.

Dec 1 Update:#Bitcoin ETFs:
1D NetFlow: +592 $BTC(+$51.15M)🟢
7D NetFlow: +2,984 $BTC(+$257.71M)🟢#Ethereum ETFs:
1D NetFlow: +25,800 $ETH(+$72.83M)🟢
7D NetFlow: +106,212 $ETH(+$299.84M)🟢#Solana ETFs:
1D NetFlow: +83,144 $SOL(+$10.52M)🟢
7D NetFlow: +773,311… pic.twitter.com/kIXMTi5g5L

— Lookonchain (@lookonchain) December 1, 2025

The Federal Reserve is expected to end its quantitative tightening program and review the rate cuts later today. This means the Fed will stop removing liquidity from markets and begin recycling it instead. The move represents a step closer to quantitative easing.

Tom Lee, the CIO of Fundstrat and Chairman of Bitmine, has now said in a recent interview with CNBC that BTC will hit above $126K in the next 60 days

“I do think Bitcoin can make an all time high by the end of January,” he said.

Bitcoin Chart Shows Oversold Conditions With Critical $85,000 Support Test

Bitcoin’s daily chart shows a strong downtrend since late November. The cryptocurrency peaked around $120,000 in mid-July, with a secondary peak near $118,000 in late October.

The Relative Strength Index stands at 32.52, approaching oversold territory below 30. The indicator is declining sharply, confirming strong bearish momentum. The moving average on RSI also trends downward.

The MACD reads 533.47 versus a signal line of -3,898.00. The histogram shows -4,431.46 with predominantly red bars. This indicates sustained selling pressure with no signs of bullish crossover.

Key resistance levels sit at $93,000 to $95,000, $100,000, and $105,000 to $107,000. Critical support zones are positioned at $85,000, $83,750, and $80,000.

A double top formation at $120,000 and $118,000 suggests a classic bearish reversal pattern. Price has broken below multiple support levels, establishing lower highs and lower lows consistently.

If the Bank of Japan raises rates and signals further hikes on December 18, Bitcoin could test $75,000. A pause could trigger a short squeeze reclaiming $100,000 within days. The $85,000 level remains critical for near-term direction.