This is why I recently started to turn bearish, focusing on one core issue: the Bank of Japan.
#日本央行加息 $BTC On Thursday, the Bank of Japan will announce its interest rate decision. Many people are not taking it seriously yet, but that recent wave of declines has actually priced in some expectations of "Japan possibly raising interest rates" ahead of time. During those days, it wasn't just Bitcoin that was falling; the Nikkei index also plunged overnight, which is not a coincidence but rather the same capital chain contracting simultaneously.
#美国非农数据超预期 What the market truly fears is not whether "that small interest will be raised," but a more lethal question —
Will yen carry trades be forced to liquidate?
If you understand yen carry trades, you know why this is dangerous.
For the past decade, Japan has maintained near-zero interest rates, even negative rates, effectively turning the yen into the cheapest financing tool in the world. The operational path for a large amount of capital is extremely simple:
👉 Borrow yen
👉 Exchange for dollars
👉 Buy U.S. stocks, tech stocks, or even high-volatility risk assets like Bitcoin
This is the typical logic of yen carry trades and has been the invisible fuel for the continuous rise of global risk assets over the past few years.
However, this strategy has one absolute premise: the yen must continue to weaken.
Once the Bank of Japan sends a signal to raise rates, or even just shifts to a hawkish stance, the yen starts to strengthen, and problems arise immediately —
The cost of borrowing increases, the exchange rate starts to bite back, and what seemed like a comfortable leverage suddenly becomes a burden.
At this point, there is only one choice for capital:
Cut positions and repay loans.
Note that in this process, what gets sold off is often not the yen,
but — U.S. stocks, tech stocks, and high-risk assets like cryptocurrencies.
This is also why the market is concerned about a repeat of the chain reaction seen in July and August 2024:
It’s not just a single market experiencing a blowup, but rather the carry trade chain being forced to contract simultaneously, triggering a cross-market resonance decline.
So at this point in time, my choice to be bearish is not because I suddenly doubt the long-term value of Bitcoin,
but because —
Before the thunder from the Bank of Japan fully strikes, risk assets are very hard to be truly safe.
At this level of macro variable, once the direction is wrong, you won't have time to escape.
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