Bitcoin sank to its lowest level in months after Japan approved a sweeping $273 billion stimulus package, triggering panic selling across crypto markets and wiping out more than $1 trillion in value.
Key Takeaways
- Japan approved a massive $273 billion stimulus package, raising investor fears about inflation and global economic instability.
- Bitcoin plunged below $83,000, marking a more than 4.5 percent daily drop and its worst month of losses in 2025.
- Over $1.9 billion in crypto liquidations occurred in 24 hours as derivatives traders scrambled to hedge further losses.
- Dormant wallets transferring BTC to exchanges added to the sell pressure amid broader concerns over interest rates and liquidity.
What Happened?
Bitcoin continued its downward spiral on Friday, falling below $83,000 after Japan announced a massive economic stimulus program to counter inflation and revive growth. The sudden move triggered shockwaves across global markets, especially in the crypto space, where Bitcoin has been viewed as a hedge against inflation but now faces increased volatility and investor unease.
Japan’s Stimulus Triggers Global Selloff
Japanese Prime Minister Sanae Takaichi’s cabinet approved a new economic stimulus worth JPY 21.3 trillion ($135.4 billion) in government spending, with the total package expected to reach $273 billion when including private sector boosts. The aim is to ease the inflation burden on households and businesses, but the move also fuels concerns over Japan’s rising debt and the impact of loose fiscal policy.
- JPY 17.7 trillion allocated to general spending, the largest since the COVID pandemic.
- JPY 2.7 trillion earmarked for tax cuts.
- Analysts warn of potential ripple effects on global markets due to Japan’s unpredictable fiscal trajectory.
Kohei Okazaki, chief market economist at Nomura Securities, told Bloomberg, “”
Bitcoin Hits New Lows, Liquidations Mount
Bitcoin fell sharply to $83,312 during early trading on Bitstamp, dropping more than 4.5 percent on the day and losing over 20 percent in value over the past month. This marks its worst monthly performance since earlier this year, dragging the broader crypto market down with it.
- Crypto markets lost over $1 trillion in total value.
- $1.93 billion in liquidations recorded in the past 24 hours.
- Dormant BTC wallets suddenly moved tens of thousands of coins to crypto exchanges, triggering panic
Traders scrambled to react as put options at the $85,000 strike overtook call positions in BTC options markets, signaling a turn toward defensive hedging and expectation of further downside.
Technical Pressure and External Risks Weigh on Sentiment
Bitcoin’s downturn was worsened by weak technical indicators, thin liquidity, and macroeconomic uncertainty. Fear over the Federal Reserve’s next moves on interest rates, combined with global instability and potential software anomalies, compounded investor anxiety.
- Bitcoin fell below $90,000 for the first time in seven months.
- Risk appetite is shrinking as investors retreat from volatile assets.
- Altcoins like Dogecoin also suffered double-digit losses, hitting key support levels.
There were brief recovery attempts fueled by positive earnings reports from firms like Nvidia, but they failed to reverse the prevailing bearish trend.
CoinLaw’s Takeaway
In my experience, big economic policy changes in major economies like Japan don’t stay local. They rattle global confidence, especially in high-risk markets like crypto. What caught my eye here is how quickly sentiment shifted. One moment Bitcoin was holding strong post-record highs, and the next it’s crashing through multiple support levels. That kind of volatility shows how interconnected monetary decisions and market psychology really are. While stimulus might help Japan’s households, it just made crypto investors globally a lot more nervous. I wouldn’t be surprised if the next few weeks remain choppy, especially with the Fed and holiday liquidity coming into play.
