The current market is undeniably in a very bad state. However, if we look closely at the macro context and important timelines, we can see that this decline is not entirely due to unexpected factors, but largely driven by expectations ahead of events.
First of all, today is the VIX expiration date – a time when history shows that the Nasdaq tends to have more negative than positive movements. When volatility levels are 'settled', capital tends to flow out of risky assets, leading to selling pressure in the stock market and spilling over to crypto.
Secondly, next Friday is the event of the Bank of Japan (BoJ), where there is a high likelihood of an interest rate hike announcement. In the past, this event has twice caused a sharp drop in Bitcoin, making investors extremely sensitive. Therefore, the market declining from now on is likely a front-running before the event, rather than a direct reaction to bad news.
The important point here is that the BoJ event itself is not necessarily of long-term negative nature. But because the market's memory is still there, traders will always act before the risks occur. This explains why we are witnessing a defensive sell-off instead of a complete panic.
In a reasonable scenario, the market may have 1-2 more negative sessions, enough to fully release the pent-up negative expectations. After that, when the event passes and no major shock occurs, a positive reaction is likely to emerge, especially when cash flow begins to position for a new cycle heading towards 2026.
In summary, this is an uncomfortable but necessary phase. The impatient will be removed from the market, while those who understand the nature of cash flow and crowd psychology may see this as a preparation time, rather than a moment to despair.
