💰【Market Quick Questions】The interest rate cut should have been a positive development, so why did Bitcoin fall below 85,000, and Ethereum lose the 3,000 mark, dragging down mining stocks by over 10%? Behind this is not just short-term volatility, but a triple variation of global macro liquidity, arbitrage structure, and on-chain selling pressure. Have you seen the true logic behind this 'decline script'?
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📉 At the start of this week, the crypto market has almost entirely retraced. On the surface, it is price volatility, but in essence, three deep-seated factors are fermenting simultaneously:
🔻 1. Yen interest rate hike: the 'silent strangulation' of arbitrage capital
For the first time in nearly thirty years, the Bank of Japan is making a substantial shift, with the probability of interest rate hikes reaching 97%. Historical data shows that the yen's interest rate upcycle is often accompanied by a 20%-30% correction in Bitcoin. The core reason is that a large amount of global capital had borrowed yen at close to zero interest rates to leverage buy Bitcoin and other risky assets. Now, with borrowing costs rising, they are forced to close positions to repay yen debts, leading to sustained selling pressure. If Japan continues to raise interest rates and reduces its $550 billion ETF holdings in 2026, the liquidity contraction effect will further intensify.
🔻 2. Federal Reserve's 'Expectation Gap': Gave sugar, but not enough
Although interest rates have dropped, the market is more concerned about 'how much further can they go down'. The upcoming non-farm payroll and CPI data will be key to testing the quality of the 'soft landing' of the U.S. economy. If employment weakens or inflation rebounds, the Federal Reserve may slow the pace of rate cuts or even hint at reducing its balance sheet again. The lack of coordination in global monetary policy is creating a liquidity trap that is more complex than simple tightening.
🔻 3. On-chain selling pressure intensifies: miners and early holders exit simultaneously
The shutdown of mining operations in Xinjiang has led to a sharp drop in hash power, and some miners are accelerating the sale of Bitcoin to maintain cash flow; at the same time, on-chain data has detected an increase in the activity of long-term holders (OG) addresses, with a stronger willingness to realize profits. Coupled with a one-day net outflow of $350 million from ETFs, market makers concentrated their adjustments during U.S. trading hours, creating a chain reaction of 'Eastern shutdown, Western sell-off.'
📊 Simple Summary:
The retreat of the yen arbitrage wave + cooling liquidity expectations + miners and old money collectively changing positions = the core driving force behind this round of deep correction.
⚡ Short-term key levels:
• If the support at $85,000 holds firm and the Bank of Japan leans dovish with moderate U.S. data, the market is expected to see a rebound;
• If the support is broken, the next focus range will shift down to $80,000–82,000.
🌪️ The market always moves forward amidst contradictions. The current volatility is essentially a recalibration of the capital structure. Will you choose to buy on dips or continue to observe? How long do you think this round of correction will last? Feel free to share your judgments and strategies in the comments!
Extra: If Ethereum really launches, its popular meme coin P U P P I E S 🐶 in the ecosystem may also rise together with Ethereum — becoming the upcoming blazing sun!
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