As December just started, Bitcoin gave the market a big dump - a single-day fall of 5%. What exactly happened behind this?

The fuse is actually across the Pacific. After the Bank of Japan signaled a rate hike, the Nikkei index led the decline in Asian stock markets, and Japanese government bond prices plummeted. Don't underestimate this matter; the yen has long served as a global "lending factory," with a conservative estimate of at least $1 to $2 trillion in arbitrage funds circulating in the market.

Once the yen truly raises interest rates, this money will have to be withdrawn from dollar assets and flow back to Japan. What’s worse is that those institutions shorting the yen will be forced to systematically close their positions, directly draining market liquidity. In the short term (the next 1 to 4 weeks), both U.S. stocks and Bitcoin will be under pressure, but extending to a 3-month or even 1-year horizon may instead become a positive signal for the crypto market.

In December, several events coincided: the expectation of a Federal Reserve interest rate cut is about to materialize, the peak of Christmas holiday consumption is approaching, and Wall Street institutions are clearing their crypto assets by year-end... With these forces overlapping, the liquidity issue will only become more serious.

Not only Bitcoin, but US stocks, gold, and commodities may struggle in the mud throughout December.

The position at 86000 may temporarily support the price, but the pressure above remains heavy. In the coming weeks, we will have to see how the macroeconomic situation evolves.