The butterfly effect behind the liquidation of 160,000 people last night
Friends, when you opened your trading software this morning, did you feel your heart skip a beat? Bitcoin pierced through 85,000 overnight, with over 500 million dollars evaporating across the network; this is not just an adjustment, it’s practically a collective 'position cleanup'.
But today we’re not discussing the liquidation disaster; instead, let’s talk about the 'behind-the-scenes player' that many overlook: the Bank of Japan.
Yes, that’s Japan, where the interest rates have been low for decades to the point that you might overlook their existence. Yesterday, they quietly made a significant move: raising the benchmark interest rate from 0.5% to 0.75%. Don’t underestimate this 0.25%; in Japan’s monetary policy over the past few decades, it can be considered an 'epic shift'.
Why can a rate hike in Japan turn the crypto market upside down?
The reasoning isn't complicated but very important: A 'main pipeline' of global liquidity suddenly began tightening its valve.
In the past decade, countless international speculators have played a classic trick: borrowing cheap yen, converting it into dollars or other currencies, and then investing worldwide in US stocks, emerging markets, and of course, enticingly volatile crypto assets. It's like betting on a high-yield gamble with almost zero-interest loans; isn't that thrilling? It's exhilarating.
So when Japanese interest rates rise, even if it's just by 0.25%, it means that this 'cheap funding pipeline' has started charging. Those high-leverage positions will face choices immediately: quickly sell assets to pay off debts, especially liquid Bitcoin and Ethereum, which often become the first to be sold.
Thus, a chain liquidation has begun.
Interestingly, the market is always more 'cunning' than you think. After the news landed, Bitcoin did not continue to crash but instead hovered around $87,000.
Some people think this is 'bad news exhausted,' while others murmur it is a 'downward continuation.' My view is that this is more like a liquidity signal testing the market; is the tightening of this 'main pipeline' a one-time warning or the prelude to long-term tightening?
Key insights: How to view the subsequent impacts?
Leverage self-check: If you are used to high-leverage operations, it is recently advised to leave more breathing space in your positions. The era of globally cheap yen is changing, and volatility may not be small.
Correlation awareness: Don't just focus on the candlestick charts. Take a look at the central bank calendars of various countries, the US dollar exchange rate, and even government bond yields. The linkage between the crypto market and traditional macroeconomics is closer than many people imagine.
Emotional cycle: After each rapid liquidation, the market often needs some time to digest positions. A short-term rebound may not necessarily indicate a trend reversal, so don't rush to go all in.
Finally, let’s say something poignant yet realistic:
The market never punishes anyone alone; it only punishes those who ignore changes in the rules. When 'cheap money' decreases, the logic supporting asset prices will also quietly change, especially for those prices built up through leverage, which often drop the fastest.
Therefore, instead of being anxious about the market situation, it's better to check your own positions: Is the leverage too high? Are the assets overly concentrated? Does the strategy rely on the assumption of perpetual growth?
Remember, in this market, those who survive the longest are not necessarily the ones who predict the best, but those whose positions can withstand surprises.
If you also feel it's time to reassess your risk preparedness, like and follow me@崎哥说币 #比特币流动性 $BTC $ETH
