Bitcoin slipped to around $85,200 on Friday as Asian stocks steadied after a tech-led bounce on Wall Street, and traders turned their attention to Japan, where a Bank of Japan rate move later in the day could jolt currencies and bonds.
The mood improved after a shock slowdown in US consumer price inflation to 2.7%, although analysts cautioned the reading looked clearly distorted lower by the government shutdown and should not be taken at face value.
Market snapshot
Bitcoin: $85,811, down 1% Ether: $2,836, down 0.1% XRP: $1.79, down 3.8% Total crypto market cap: $2.97 trillion, down 1.4%Bitcoin Pullback Reframes Debate Around Dormant Capital And DeFi Use
Crypto traders focused on positioning and flows rather than the headline macro print. Bitfinex analysts said current data shows institutional buyers absorbing around 13% more Bitcoin than the about 450 newly mined coins produced daily on a rolling basis.
“This marks the first meaningful supply flip since early November, despite recent concerns around ETF outflows.”
“From a technical perspective, there is strong buying support in the $82,000–$85,000 range,” they said. “A sustained hold in this zone would reinforce bullish momentum by strengthening buyer confidence. This, in turn, could attract fresh liquidity through higher ETF inflows and reduced selling pressure, supporting further accumulation to the upside.”
Some market watchers used the pullback to push a longer-term use case story. Dom Harz, co-founder of BOB, said Bitcoin’s fluctuations this week do not diminish its long-term potential.
“Despite holding almost $2 trillion in market capitalization, the vast majority of BTC remains dormant, with about 0.3% actively deployed in native Bitcoin DeFi,” he said. “This untapped liquidity represents a transformative opportunity to put the asset to work for lending, borrowing, and yield generation, while BTC collateral remains natively secured on Bitcoin.”
Inflation Keeps Pressure On BOJ As Yen Stability Hangs In Balance
In rates, Fed pricing moved only marginally after the inflation data, with a January cut implied at 27%, while March nudged up to 58% from 54% before the release.
Japan took centre stage in Asia. Markets implied around a 90% chance the BOJ would lift its policy rate by a quarter point to 0.75% later Friday, and traders watched closely for guidance on how far policymakers may want to go next.
Investors currently wager on just one additional move to 1.0% in 2026. Any hint of a steeper path could steady the embattled yen, while adding pressure to government bonds.
Data released on Friday showed Japan’s core CPI rose 3.0% in November, unchanged from the previous month, keeping inflation in focus heading into the BOJ decision.
Equities tracked the improving tone. Japan’s Nikkei rose 0.6%, South Korea climbed 1.2% after strong results from chipmaker Micron Technology, and MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.2%.
Central Bank Signals Complicate Global Bond And FX Trades
In the US, S&P 500 futures and Nasdaq futures held flat after the overnight rebound, and bond markets reacted cautiously to the CPI report. Ten-year Treasury yields sat around 4.126%, below a recent 3-1/2-month high of 4.2%.
Central bank divergence added another thread for global markets. British bonds fell after the Bank of England cut rates as expected, but only after a tight 5-4 vote, while policymakers signalled caution on the pace of future easing and markets pushed the next fully priced cut out to June.
The European Central Bank took an even tougher line, holding rates at 2.0% and signalling a likely end to its easing cycle, with markets implying only a small chance of any cut through 2026. Sweden and Norway also kept policy steady, although Norway left the door open to one or more cuts.
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