Emergency Alert: Countdown to Bank of Japan Interest Rate Hike, Trillions in Global Funds May Withdraw from Cryptocurrency!
The Bank of Japan may adjust its interest rate policy in the near future, with market expectations rising for a rate hike in December or early next year. If the rate hike materializes, it could trigger a return of some cross-border arbitrage funds. In the past, due to the yen maintaining low interest rates for an extended period, many international funds borrowed yen and converted them to dollars to invest in global risk assets, including cryptocurrencies. If Japanese interest rates rise, this portion of funds may face repayment pressure, thereby exerting selling pressure on risk asset prices.
Meanwhile, the market's previous optimistic expectations regarding a rate cut by the Federal Reserve are being revised, with the overall global liquidity environment showing a tightening trend. The synchronized policy shift of major central banks in the East and West may pose pressure on market liquidity.
From an internal market structure observation, Bitcoin prices have corrected from previous highs, and the spot ETF has recently shown net outflows of funds, with market sentiment becoming cautious. Leveraged traders have suffered significant losses amidst volatility, further exacerbating the fragility of the market structure. In addition, the activity and asset prices of some mainstream blockchain ecosystems have also declined, reflecting a decrease in market risk appetite.
I believe that around the major central bank meetings at the end of the year, combined with reduced liquidity due to traditional holidays, the possibility of abnormal market fluctuations cannot be ignored.
For ordinary investors, the primary task at this stage is to manage risks. It is advisable to remain cautious, strictly control positions and leverage levels, and avoid aggressive operations in a highly uncertain environment. Before the market shows clearer signs of stabilization, maintaining patience and retaining sufficient liquidity is a more prudent strategy.
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