From the perspective of the Japanese yen interest rate hike: The underlying logic of Bitcoin's initial drop followed by a rise, and why retail investors always miss out?

Most people only see the short-term plunge of Bitcoin triggered by the Japanese yen interest rate hike, but overlook the strong rebound that follows the crash. This is precisely the cognitive gap between ordinary investors and market operators. Clearly, the expectation of an interest rate hike has long been established, yet many people insist on waiting until the moment it happens to follow the trend and sell off, ultimately being left far behind by the market.

In this interest rate hike of the Japanese yen, the intensity of Bitcoin's decline will not replicate the past drastic drop; instead, it will welcome a surge after a brief dip. The core reason is that the market has already digested the negative impact of the interest rate hike in advance, and the current decline shows extreme contraction characteristics, indicating that the selling willingness of on-site chips is nearing exhaustion. Major funds only need to slightly push down the market to ignite the downward trigger, and they can sit back and wait for retail investors to panic and sell off, taking the opportunity to accumulate at lower prices.

The decline seen by retail investors is a loss and exit, while for the major players, it is a good opportunity to harvest chips. The major players first sell off some chips to trigger panic; when retail investors follow suit and sell, the major players buy back; after a few retail investors bottom fish, the major players will push down again, further exacerbating the panic, and this operation is repeated. Ultimately, the chips held by the major players far exceed the initial amount sold, while retail investors, due to panic, dare not buy back, resulting in a significant reduction in their positions.

More critically, a Japanese yen interest rate hike to 0.75% may not necessarily trigger a cliff-like tightening of global liquidity. The combination of the yen interest rate hike and the dollar interest rate cut will drive the appreciation of the yen and the depreciation of the dollar. At this point, the dollar cost of repaying yen debt will increase significantly—previously, 100 dollars could be exchanged for 15,500 yen, but now it can only be exchanged for 14,000 yen, requiring more than 10 additional dollars to repay the same amount of yen debt. What truly affects liquidity is not the interest rate hike itself, but the subsequent hawkish stance of the Bank of Japan.