The logic of retail investors and the actual logic: why did Bitcoin drop first and then surge, leaving retail investors far behind? Everyone only saw the short-term crash caused by the yen's interest rate hike, but they didn't notice the crazy rise after the short-term drop. Retail investors are only driven by market sentiment, leading them to follow the trend and panic sell. Clearly, it was already known that interest rates would rise, so why wait until the moment of the rate hike to follow the trend and sell?
This time, the Japanese interest rate hike will cause a drop, but it won't be as severe as before. Moreover, after a drop, there will be a crazy surge.
One reason is that it has already dropped in advance; the market has already priced it in. This time, Bitcoin's drop has already reached an extreme low volume, indicating a reluctance to sell. The market manipulators only need to push it down a bit to ignite the start of the decline, and then just wait for retail investors to trample each other and hand over their chips to buy at the bottom.
Please remember, the process of decline is a process of the manipulators selling while buying back at the bottom, not a process where the manipulators force the chips down to lower prices for everyone. The low prices are created by retail investors cycling their chips among themselves. The manipulators operate like this: first, they push out A chips, retail investors follow suit and sell, buying A chips, retail investors buy a small amount at the bottom, the manipulators continue to push out A chips, retail investors panic sell, the manipulators buy B chips... and so on, ultimately the manipulators will have far more chips left than the initial A chips they started with. Retail investors will have fewer chips left than they initially held. Because after the panic selling, most retail investors dare not buy, while the manipulators do the opposite.
From a second perspective, no one seems to have carefully considered whether Japan's interest rate hike to 0.75% will lead to a cliff-like liquidity pullback? Let me give you the simplest example: yen interest rate hike, dollar interest rate cut, does that mean the yen rises while the dollar falls? Does it mean that the same 100 dollars that could originally be exchanged for 15500 yen might only be exchanged for 14000 yen? At that time, if you borrowed 15500 yen from the Bank of Japan, you would now need 15500/14000*100=110.7142857 dollars to repay. Is it appropriate to repay the loan now? The interest rate is a bit higher, but you have to pay more dollars; you only consider the bank interest but not the exchange rate?
It is not that the yen's interest rate hike will lead to global liquidity withdrawal, but rather the expectation of a stronger yen synchronized with an expectation of a weaker dollar that will lead to withdrawal. Therefore, the upcoming hawkish remarks from Japan are the real culprits.
