The Bank of Japan's interest rate hike has landed, and the global market's "stress test" officially begins.
This is not a drill; it marks the official end of the 30-year "super cheap yen era." Japan has raised its interest rate to 0.75%, the highest level since 1995.
Why can this "domino effect" collapse the cryptocurrency market? It's simple: the world's largest sources of cheap funds have been tightened. For the past thirty years, the "yen carry trade" worth trillions of dollars has been the core engine of global liquidity. Institutions and individuals borrowed yen at nearly zero cost and then bought high-risk assets like U.S. stocks, U.S. bonds, and Bitcoin.
Now, the rules of the game have changed. The soaring borrowing costs mean countless leveraged positions must be forcibly liquidated. A massive amount of funds will withdraw from global risk assets (including cryptocurrencies) to convert back to yen to repay debts. This process is a global capital extreme stress test.
History does not lie, and the data is chilling: Looking back at the last three interest rate hikes by the Bank of Japan, Bitcoin fell 20%-30% in the following 4-6 weeks. If history repeats itself this time, based on the current price level, Bitcoin could test below $70,000.
Currently, liquidity is oxygen. When oxygen is withdrawn, the weakest parts will suffocate first. Highly leveraged altcoins will face more severe declines than BTC, and some projects may go to zero in the liquidity crisis.
This is not panic; it is a sober recognition of reality. In the face of a definitive tightening tide, any "long-term narrative" seems pale. Now is not the time for fantasies; it is the time to preserve strength and watch cautiously.
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