The Fed's interest rate cut expectations have not yet been solidified, and suddenly the Bank of Japan dealt a heavy blow to the market.

The president of their bank hinted today that an interest rate hike might happen this month. Once the news spread, Japanese government bond yields surged to levels not seen in over a decade—money began to flow back to Japan.

The key point is that Japan is the number one overseas buyer of US Treasuries, holding a position of 1.2 trillion USD. If they tighten their monetary policy and pull back money from the US market, US Treasury yields will inevitably rise. This is certainly not a good sign for the crypto market.

Yesterday, Bitcoin provided the answer: a single-day plunge of over 8%, with the price directly crashing below $84,000. Why did it drop? Two reasons are very straightforward—

First, there is an expectation of tightening global liquidity, and hot money will not flood into risk assets as it did before; second, if U.S. Treasury yields do not come down or even rebound, the Fed's room for cutting interest rates will be severely constrained. Either of these two factors can press cryptocurrencies down.

My judgment is simple: don't stubbornly hold on in the short term. The situation in Japan is still up in the air, and market sentiment is like a powder keg right now. During such times, volatility can be deadly. What should retail investors do? Keep your hands steady, observe more and operate less. Don't rush to catch the falling knife; it's better to wait for the market to digest the panic and show clear signs of stabilization before entering.