Bitcoin breaks below the triangle convergence zone. With the Federal Reserve's rate hike imminent, will the Christmas rally still happen?

Bitcoin experienced a gradual decline over the weekend, briefly falling below 88K this morning. The latest report from 10x Research indicates that Bitcoin’s price broke below the lower boundary of the triangle convergence zone, creating a fragile situation amid declining liquidity toward the end of the year. This week, the Bank of Japan (BOJ) may again raise interest rates by one basis point, increasing the risk of yen arbitrage unwind, which could also lead to high-risk assets like Bitcoin being impacted first. It can only be said that during periods of poor liquidity, rather than expecting a Christmas rally, moderately reducing leverage is the primary principle for risk management.

10x Research: Bitcoin Breaks Below Triangle Convergence Zone

The latest report from 10x Research points out that as the cryptocurrency market approaches the end of the year, volatility narrows, and liquidity and participation decline, forming a fragile underlying situation. Positions in Bitcoin and Ethereum derivatives suggest that traders are reducing short-term exposure while maintaining defensive strategies rather than chasing upside potential. ETF capital flows, stablecoin issuance, and futures positions all point to the same conclusion: without new capital inflows, upward momentum will be difficult to sustain.

The report notes that options market pricing for range-bound movements has become increasingly consistent, but if support levels fail, risks will clearly tilt to the downside. Especially after Bitcoin’s price broke below the triangle convergence zone this morning, the next key support is at 84K.

Japan’s Rate Hike Imminent, Will the Christmas Rally Come?

Analyst Jeff Park also points out that 2025 will be a year full of contradictions for many Bitcoin traders, because mainstream risk assets like the seven giants, artificial intelligence, and even gold are performing well amid depreciation expectations, while Bitcoin has lagged abnormally. He believes one fundamental reason for this discrepancy comes from the options market, especially Bitcoin native investors (whales or OG), who sell call options using held Bitcoin as collateral, causing continuous selling pressure during Bitcoin’s decline and creating a more serious negative impact on the entire market.

Crypto analytics firm Glassnode states that several indicators currently point to a “mild bear market” phase, characterized by low capital inflows and continued selling by large holders. The firm notes that because prices are stuck within a “weak but bounded range,” the accumulation of unrealized losses, along with the passage of time, becomes a negative factor. Unrealized losses have surged to 4.4%, the highest level in nearly two years, after spending most of the time below 2%. This signals a shift from market euphoria to “high tension and uncertainty.”

As for the Christmas rally investors are hoping for, there is high uncertainty because Bitcoin is currently in a correction phase, likely to fluctuate between 85K–95K USD in the short term. However, this week, the Bank of Japan (BOJ) may again raise interest rates by one basis point, increasing the risk of yen arbitrage unwind, which could also cause high-risk assets like Bitcoin to be impacted first. It can only be said that during periods of poor liquidity, appropriately reducing leverage is the primary rule for risk management.

(The shadow of rate hikes looms over the crypto market, could this week’s BOJ decision trigger Bitcoin dropping below 70K?)

This article about Bitcoin breaking below the triangle convergence zone and whether the upcoming BOJ rate hike will bring a Christmas rally first appeared on Chain News ABMedia.