Bitcoin price prediction: BTC upside recovery limited as BOJ hikes rate despite positive CPI

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Bitcoin CPI optimism meets global liquidity risks

Highlights

Bitcoin rebounded to $87,500, but the downtrend persists below key EMA resistance levels
Soft U.S. CPI supported risk sentiment, yet BoJ rate hike may tighten liquidity conditions
ETF inflows surged sharply, hinting at institutional accumulation beneath volatile price action

The recent move follows Thursday’s sharp selloff that began right after the release of U.S. inflation data. November headline CPI came in at 2.7% year-over-year, well below the 3.1% estimate. Core CPI also surprised to the downside at 2.6%. This was one of the most risk-supportive inflation prints of 2025. Bitcoin initially responded as expected, jumping above $89,000 within minutes of the CPI release. The move reflected bets that lower inflation could accelerate Federal Reserve rate cuts.

Bitcoin price dynamics (Nov - Dec 2025). Source: Tradingview

However, the rally stalled as the 50 and 100 EMA cluster around $89,000 blocked further gains. What followed was a violent reversal. Within half an hour, Bitcoin dropped sharply to $84,400, setting a new weekly low. The rejection at EMA resistance triggered a wave of short-term selling, even though the inflation data itself favours a medium-term bullish bias.

BTC institutional demand builds, but EMA resistance keeps short-term bias tilted lower

While the CPI data support loosening conditions in the U.S., Friday morning’s rate hike by the Bank of Japan changes the broader picture. The BoJ lifted rates to 0.75%, triggering a possible repatriation of capital back into Japan. Higher Japanese bond yields can unwind global carry trades and pull liquidity out of U.S. markets, tightening global financial conditions. That shift could temporarily weigh on risk assets like Bitcoin, despite the supportive U.S. CPI backdrop.

However, Bitcoin’s early Asian session recovery may be hinting at deeper institutional interest. Latest data from Farside Investors show Bitcoin ETFs attracted $457 million in net inflows, the strongest daily figure in more than a month. Fidelity’s Wise Origin Bitcoin Fund accounted for $391 million, followed by BlackRock’s iShares fund at $111 million. These flows suggest ongoing accumulation beneath the surface.

Price must now break through the $89,000 EMA cluster before any extended rally can be confirmed. A close above this level would signal strong institutional conviction and potentially restart the broader uptrend. Until then, the short-term downtrend continues to dominate.

In recent analysis, we discussed how Bitcoin traded near $86,500 after a failed breakout above $90,000 triggered a two-way liquidation. Spot demand stayed weak as a $320 million liquidation event reshaped short-term market structure.

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