The market has been falling these past few days, making people anxious, and many are starting to doubt whether the bull run has ended prematurely. However, if we look at it calmly, the blame for this big dump should not fall on the crypto world itself—the real trigger is the Central Bank of Japan across the Pacific.

Ueda Kazuo has recently been hawkish, and the market is betting that there will be interest rate hikes at the end of this year or early next year, causing the yen to strengthen in response, with short-term government bond yields soaring to their highest level in sixteen years. Sounds like a matter for Japan alone? Wrong, this involves a global chain of capital.

In the past decade, Japan has maintained ultra-low interest rates and even negative interest rates, leading global institutions to borrow yen to buy U.S. stocks, tech stocks, gold, and of course, high-volatility assets like BTC, ETH, and SOL. This strategy is called yen arbitrage trading, which is essentially using cheap money to chase high returns. The reason the crypto world can surge so dramatically is largely due to this "invisible faucet".

Now the problem arises: Japan is going to raise interest rates, the cost of borrowing yen has gone up, and the yen is still appreciating. Those institutions that rely on arbitrage calculate and find that continuing to hold positions may lead to significant losses, so they start to liquidate their positions frantically—what sells the fastest? Of course, it's those with the best liquidity and the highest volatility. Thus, BTC, ETH, and US tech stocks are the first to be dumped, and in the crypto world, due to 24-hour trading and high leverage, the fall is even more severe.

But what is the essence of this wave of decline? It is a global deleveraging shock, not a systemic crisis. The Federal Reserve will still stop the balance sheet reduction, and the general direction of the interest rate cut cycle in 2026 has not changed. In the short term, there may still be a 3-5% inertia drop, but that is more of an emotional release; the previous bottoming structure of BTC has actually not been broken.

Moreover, this time Japan's interest rate hike seems more like a symbolic farewell to the era of negative interest rates, and the subsequent space is actually limited. On the other hand, in the United States, which truly dominates the crypto world, the interest rate cut path is still ongoing, and the medium to long-term liquidity trend remains upward.

Currently, altcoins have generally fallen to historical lows, at the absolute bottom range. At this time, panicking and selling at a loss may be the most regrettable action in this cycle. To take a step back, even if you really want to leave, at least wait for a rebound before making a decision?