The sudden bitcoin price drop has been blamed on thin liquidity during the Thanksgiving Day weekend, the Bank of Japan’s governor hinting at a December interest rate hike, China reasserting its crypto ban after signs it could be easing, questions being raised about whether stablecoin giant Tether will be able to survive a lower interest rate environment and broad market downturn, and fears that corporate bitcoin giant Strategy could sell some of its bitcoin.

“Traders are waking up this Monday after a quiet Thanksgiving to an overwhelming sense of déjà vu, as a surge in the Japanese yen is once again playing havoc with markets,” Nic Puckrin, investment analyst and cofounder of The Coin Bureau, said in emailed comments.

“With the two-year Japanese yields also spiking to the highest level since 2008 and the likelihood of a rate hike by the Bank of Japan now at 76%, the Japanese yen carry trade is once again beginning to unwind.”

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Puckrin pointed to an August 2024 bitcoin price plunge from over $66,000 to around $54,000 in just a few days, an 18% drop, that was also triggered by fears of emanating from Japan—which would imply the bitcoin price could be headed toward $70,000 per bitcoin this time around.

“Now that history is repeating itself, it’s wise to prepare for more volatility,” Puckrin said.

Other bitcoin and crypto market watchers have also warned the bitcoin price could be headed for a major price crash.

“If the market continues to decline, bitcoin could test the $60,000-$65,000 range,” Farzam Ehsani, the chief executive of cryptocurrency exchange Valr, said via email.

However, bitcoin and crypto traders have pointed to the end of Federal Reserve quantitative tightening and an expected interest rate cut in December as potentially powering a bitcoin price recovery.

“Beyond Japan, the macro backdrop remains favorable for risk assets, with the Fed ending quantitative tightening today and the chances of a rate cut on December 10 now sitting at 87%,” Puckrin added. “If you zoom out, there are still reasons to be optimistic amid all the doom and gloom.”