Market Pullback Deepens as Macro Headwinds Hit Crypto: Bitcoin Below $88K, Ethereum Under Pressure, XRP Struggles at $1.87

December has opened with a sour tone across major cryptocurrencies, as rising geopolitical and monetary policy concerns trigger a broad-based retreat. Bank of Japan Governor Kazuo Ueda’s recent signals that interest rate increases remain a possibility—contingent on economic data—have sparked renewed fears of a Yen carry trade unwind. This unwinding scenario threatens to drain capital from risk assets and leaves crypto bulls scrambling for defensive positions. Bitcoin trades near $87.96K (down from prior resistance attempts), Ethereum retreats below $2.80K at $2.96K, while XRP hovers around $1.87—all reflecting renewed selling pressure that has cascaded throughout the sector.

The Macro Picture: Why BoJ Hawkishness Matters for Crypto

The catalyst for this week’s downturn extends well beyond technical charts. Central bank messaging, particularly from the Bank of Japan, carries outsized weight when funding mechanisms like Yen carry trades are involved. These trades typically see investors borrowing in low-yielding currencies (like the Japanese Yen) to invest in higher-returning assets. When interest rate signals turn hawkish, liquidity flows reverse sharply, and risk assets—including cryptocurrencies—often bear the brunt. This dynamic has created a cascading sell-off that feels broader than typical profit-taking, suggesting that macro fundamentals are now the primary driver of price action across BTC, ETH, and XRP.

Bitcoin: Defending the $87K Zone as $80K Looms

Bitcoin’s recent action tells a cautionary tale for bulls. Having failed to sustain itself above the $92,800 resistance last week, the flagship asset has capitulated into Monday’s session, retreating below the $87K psychological level. Current levels of $87.96K represent a fragile equilibrium—any meaningful deterioration in macro sentiment could trigger a direct test of the November 21 low at $80,600.

Technical deterioration is evident across multiple indicators. The daily Relative Strength Index (RSI) has fallen to 33, approaching oversold conditions that typically precede momentum-driven downtrends rather than simple corrections. The MACD indicator is similarly troubling, threatening a bearish crossover below its signal line—a pattern that confirms selling intensity over potential relief rallies.

Should the $80,600 floor fracture under continued selling, subsequent downside targets include the April 7 low at $74,508—a level that would represent a significant reset of prior gains. For those tracking BTC to NZD conversions or similar currency pairs, such a move would cascade through multiple markets. However, dovish policy signals from the FOMC or a reversal in BoJ rhetoric could spark relief buying toward $90,000, offering a tactical entry point for contrarian traders.

Ethereum: The $2.8K-$2.1K Question

Ether’s weakness mirrors Bitcoin’s directional breakdown but with distinct technical implications. Having retreated to approximately $2.96K, Ethereum is now testing the lower edge of its established demand zone around $2.80K. While buyers have attempted to establish support here, market microstructure suggests these bids are being overwhelmed rather than creating a short-covering bounce—a bearish signal for near-term sentiment.

The critical threshold lies at $2.623, the November 21 low. A decisive daily close below this level would invalidate the recent consolidation pattern and expose Ethereum to a sharper decline toward the June 22 low at $2.111. Similar to Bitcoin, momentum indicators on the daily timeframe are deteriorating, with the MACD structure weakening and the RSI providing ample room for further downside before oversold extremes emerge. The lack of clear buyer conviction at current levels suggests this breakdown scenario carries elevated probability if macro conditions remain unfavorable.

XRP: Holding $1.90 as the Final Line

XRP presents perhaps the starkest technical setup of the three majors, trading precariously near the $1.87 level—well below the psychological $2.00 handle that has anchored sentiment for weeks. The 4%+ decline on Monday alone reflects accelerating selling, and the token’s technical structure offers limited comfort.

The daily RSI at 40 indicates rising selling momentum with significant room to deteriorate before reaching true oversold territory. Bears have a clear objective: the $1.90 support derived from the June 22 low. A breach of this level would erase the majority of recent breakout gains and signal capitulation. Should this critical support hold, a recovery attempt toward the descending resistance trendline near $2.20 remains theoretically feasible, though near-term momentum favors further downside.

Forward Outlook: Macro Dependency and Risk Management

The current environment underscores a critical market dynamic: macroeconomic policy now commands more influence over crypto price discovery than technicals alone. While support levels matter, central bank communications—particularly from the BoJ—and currency market dynamics will likely determine whether these technical floors hold or capitulate.

Traders should monitor upcoming economic data releases and FOMC communications closely. A dovish surprise could rapidly reverse the current momentum, while persistent hawkish rhetoric increases the probability of deeper corrective moves across BTC, ETH, and XRP. In this environment, disciplined risk management and position sizing become essential—maintaining awareness of both the technical break levels and the macro catalysts that drive them.