[Analysis] "Rising expectations of a Bank of Japan rate hike in December…Bitcoin plunges in Asian session amid liquidation pressure"

Rising prospects of a BOJ rate hike in December and escalating diplomatic tensions between the U.S. and Venezuela have combined to rapidly spread global risk-off sentiment, according to an analysis.

On the 1st (local time), crypto-focused media BlockBeats reported that Kazuo Ueda, governor of the Bank of Japan (BOJ), recently sent hawkish (preference for tighter monetary policy) signals, stoking market expectations of a rate increase within the year. Added to this was heightened diplomatic tension between the U.S. and Venezuela, which expanded selling pressure across risk assets.

Amid such macroeconomic uncertainty, Bitcoin (BTC) plunged during Asian trading hours. In particular, the "high-density liquidation zone" concentrated with liquidation orders around $92,300 collapsed, triggering chained liquidations, and analysts say the pace of the decline accelerated after that zone broke. If investor sentiment continues to weaken, there is also the possibility of testing the large liquidity pool in the $82,300 range.

Bitunix analysts said, "With the BOJ’s shift toward a hawkish stance and the addition of geopolitical variables, risk assets are broadly under pressure," adding, "BTC displayed a typical pattern in which the accumulated liquidation cluster near the peak was cleared at once, resulting in a structural break." They continued, "Whether funds are reintroduced into the lower liquidity zone will determine short-term directionality," and projected, "In the near- to mid-term, it is highly likely that a corrective phase will continue amid increased volatility."