Bitcoin Updates: Bitcoin's Sharp Drop Contrasts with Japan's Economic Stimulus Amid Global Liquidity Puzzle

Bitcoin has dropped to its lowest price in seven months, causing most retail investors to face losses as U.S. spot

exchange-traded funds (ETFs) experience massive capital outflows. The decline, which has wiped out about 30% of Bitcoin's value since it peaked at $126,000 in October, has been intensified by global economic instability and negative technical trends. , saw a record-breaking $523 million withdrawn in a single day on Nov. 18—its worst daily performance since launching in January 2024.

The sharp decline happened alongside Japan’s announcement of a $135.4 billion stimulus package on Nov. 21, the country’s biggest since the COVID-19 crisis. Prime Minister Sanae Takaichi’s administration

for families and businesses struggling with inflation, which has remained above the Bank of Japan’s 2% target for 43 straight months. The plan features JPY 17.7 trillion in general spending and JPY 2.7 trillion in tax relief, far surpassing last year’s JPY 13.9 trillion package. As the yen fell to its weakest since January 2025 and 40-year bond yields climbed to 3.697%, by increasing liquidity or instead prompt global risk reduction that hurts speculative assets.

Bitcoin’s value has slipped below $85,500, continuing a downward trend that began after its October record high. This drop has left most ETF investors underwater, for spot Bitcoin ETF holders now around $90,000. Outflows from ETFs have picked up speed as the likelihood of a Federal Reserve rate cut in December fell below 50%, and technical signals turned negative. —where short-term price averages fall below long-term ones—has heightened caution, and Bitcoin has breached key support levels, including both the 50-day and 200-day moving averages.

Bitcoin has broken through major support zones on its way to a seven-month low, sparking heavy redemptions from spot ETFs and deepening pessimism in the market. Investors are closely watching how Japan’s huge fiscal stimulus will impact the market, as experts remain split on whether it will lead to more risk-off behavior or inject new liquidity into digital assets.

The scale of ETF withdrawals has been unprecedented.

in outflows during November, beating the previous record of $3.56 billion set in February. BlackRock’s alone lost $2.47 billion this month, making up 63% of all redemptions, while Fidelity’s Wise Origin Bitcoin Fund saw $1.09 billion withdrawn. The sell-off has coincided with Bitcoin’s fall to $83,461 on Nov. 21—a seven-month low—and , with $243.56 million in Bitcoin positions closed out in just 24 hours.

Opinions among analysts are mixed.

signal a rotation of funds into alternative cryptocurrencies like and , which have attracted new investments as Bitcoin ETFs lose assets. Others caution that the downturn could worsen, that markets may need to fall another 50% before a solid bottom is established. Meanwhile, open interest in Bitcoin put options at the $80,000 strike has reached $2.05 billion, indicating widespread hedging against further declines.

Japan’s stimulus and Bitcoin’s volatility underscore a contradiction: while a weaker currency policy could theoretically drive up Bitcoin demand, it is instead contributing to global risk reduction. As ETF assets shrink and institutional players adjust their strategies, Bitcoin’s future direction remains unclear. For everyday investors, the takeaway is stark: what was once seen as a reliable hedge against inflation has become a highly unpredictable asset with no assured path forward.