Last night's market could be described as a 'night of terror.' The Bank of Japan once again signaled a rate hike, instantly igniting global risk aversion, with US stocks and cryptocurrencies being pressed down together. Bitcoin briefly fell below $84,000, and even blockchain concept stocks like Coinbase and MicroStrategy were crazily sold off.
Japan's rate hike expectations caused the crypto market to hit the brakes instantly
Japan's government bond yields have soared to the highest level in decades, and yen carry trades are starting to accelerate their unwinding. The result is:
Bitcoin was directly smashed below $84,000 late at night, and then rebounded strongly, briefly standing back above $87,000, with bulls and bears locked in a fierce battle on the market.
Overall market sentiment remains very tense, the fear index has soared.
Ethereum is also experiencing fluctuations, once peaking near $2800.
Nearly $600 million was liquidated overnight
According to Coinglass data:
In the past 24 hours, the total liquidation across the network was $587 million
Long positions liquidated: $460 million
Short positions liquidated: $120 million
170,000 people were liquidated
The largest liquidation order came from Hyperliquid's BTC contract, amounting to $15.6 million
Once again, I remind everyone: the market is turbulent, avoid leverage.
The four major U.S. stock indices have all retreated
Risk aversion sentiment has also dragged down the four major U.S. stock indices:
Dow Jones: -0.9% (down 427 points)
Nasdaq: -0.38%
S&P 500: -0.53%
Semiconductors: -0.07%
The technology and high-risk sectors are under obvious pressure.
Blockchain concept stocks have become the biggest 'disaster area'
Last night, the worst was not the coins, but the blockchain concept stocks:
MicroStrategy (MSTR): Approaching a 52-week low, down 3%, has lost 40% in the past 30 days
Coinbase (COIN): Closed at $262, down 4.76% for the day, nearly 20% down for the month
Circle (CRCL): Down about 5%
Robinhood (HOOD): Down over 4%
Bitmine (BMNR): Plummeted over 12%
Once the tide of risk aversion comes, the tolerance for concept stocks is very low.
Why might this wave trigger a chain reaction?
Analysts remind: once a sharp repricing occurs in the global bond market, investors often withdraw from all risk assets immediately, cash is king.
This situation is actually not unfamiliar to us - just in August 2024, when the Bank of Japan unexpectedly raised interest rates, the market experienced a hard landing:
Bitcoin plummeted 15% in one day
Global stock markets evaporated trillions of dollars
The scale of yen arbitrage transactions is estimated at $4 trillion
Japan remains the largest overseas holder of U.S. Treasury bonds (holding $1.1 trillion)
Cryptocurrencies, as the top assets in the risk spectrum, are extremely sensitive to liquidity tightening; any slight disturbance often leads to them being the first to be hit.
Summary: Short-term volatility will be large, but the long-term trend depends on liquidity
Currently, the expectation of Japan raising interest rates is strengthening global risk aversion sentiment, and short-term violent fluctuations may continue.
However, the good news is: Bitcoin has pulled back from $84,000 to the $86,000-$87,000 range, indicating that buying pressure is not as 'devastating' as it seems.
Next, key attention should be on a few things:
Is the Bank of Japan really raising interest rates?
Will U.S. Treasury yields continue to rise?
Can the crypto market hold key support?
For the short term, please fasten your seatbelts, the volatility will only become more intense.
