01｜First, the conclusion: the real culprit of this round of plunge is not in the crypto circle.
If you woke up today,
Found the account in a sea of red, ETH was kicked down again—
The first reaction is likely to be:
Is there some new regulation coming out domestically?
Is the Federal Reserve stirring things up again?
Is Powell going to step down?
Unfortunately, this time none of these are the main culprits.
The real trigger puller, which many people do not care about at all, is the Bank of Japan.
02｜Domestic regulation? It has been priced in long ago.
Today, there are indeed some news spreading about the risks of 'virtual currency and stablecoins.'
But to put it bluntly, it's all a repetition of old viewpoints:
Virtual currency ≠ legal tender
Strictly control related illegal financial activities
The market has been listening since 2021 until it's calloused,
Such a statement of 'emphasizing once again' is more of an emotional amplifier,
It's not the starting point of this sharp drop.
That is to say:
📌 It will make the decline look worse, but it's not the match that ignites it.
03｜Is Powell resigning? More is about gossip, not the trigger
As for the various rumors about 'Powell's departure' —
No concrete evidence from legitimate channels.
If the Federal Reserve Chair really changes midway, that would be a super black swan,
The market's reaction will never be as 'orderly' as today's decline,
But rather a complete loss of control in a massive sell-off.
So these rumors at present,
is more like the gossip of the onlookers on the sidelines of the market,
More talking points, less actual impact.
04｜The real trigger: The Bank of Japan has started to tighten liquidity
Next is the key.
📌 The most critical thing today:
The Bank of Japan has released a very clear signal of 'wanting to shift'.
What does it mean?
For more than a decade, Japan has been implementing ultra-loose policies:
Close to 0 interest rates, frantically buying bonds, desperately pouring money into the market.
Global funds treat Japan as the 'world's ATM':
Borrowing money at Japan's ultra-low interest rates → exchanging for dollars, buying US stocks, buying bonds, buying high-risk assets, including cryptocurrencies.
And now, the Bank of Japan suddenly hints:
"This faucet may need to be turned down or even turned off."
The market immediately realizes two things:
The yen may strengthen:
Those who borrowed a pile of yen at low interest rates to buy assets globally before,
Now it's time to start panicking:
👉 "If I don't repay the money, interest rates will rise, exchange rates will rise, I will be double killed."
Carry trade will be forcibly closed:
In the past decade, people have gotten used to:
Japan is sending money
Playing globally together
Risk assets are rising
Now, Japan steps on the brakes:
Who is the first to withdraw? — All high-risk, high-volatility assets that feel the least 'secure'.
And cryptocurrencies, especially ETH,
In global assets, it's a typical high beta vanguard:
When it rises, it rushes to the front, when it drops, it falls the fastest.
05｜This is not an 'ordinary correction', but a 'paradigm shift'
This round of decline is truly frightening not because it's 'dropped a few points'.
But it lies in the signal it conveys:
An important faucet that once supported a decade-long 'easy feast' globally,
are slowly being turned from 'fully open' towards 'closing'.
In one sentence:
"The era of making money while lying down is really changing."
What does this mean for the entire market?
In the past:
Excess liquidity, too much money,
Various stories and narratives can all be hyped up,
"The next skyrocketing currency" emerges endlessly.
In the future:
Money is starting to become more expensive, risk is beginning to be priced in,
The market is becoming increasingly picky —
Without real things and real value in currency, it will become increasingly difficult to survive.
06｜Why is ETH dropping particularly hard? Three 'amplifiers'
You may ask:
"Then why is ETH dropping so badly? Shouldn't BTC be the worst?"
There are several levels of 'amplifiers' here:
Too much leverage, positions too heavy
On ETH contracts and lending platforms,
Leverage has been at a high level for a long time,
Once facing macro negative news,
👉 A chain of liquidations is inevitable, not an accident.
Liquidity is thinner than BTC
If it really wants to crash, ETH is much easier to smash than BTC,
With the same amount of funds, the lethality is greater.
On the emotional level: DeFi and ecological expectations have all piled up.
ETH is not just 'a coin',
It's still the 'underlying logic' of the entire DeFi, NFT, and L2 world.
When macro liquidity tightens and narratives cool down,
It carries the expected corrections throughout the entire chain.
So what you see is:
With macro stepping on the gas, leverage + emotion helping, ETH gets kicked down the stairs.
07｜In this environment, asking 'the next skyrocketing currency' has little significance
Many people have been asking these days:
"So what should we buy now? Who is the next to skyrocket?"
To say something that may not sound good:
In the context of tightening liquidity,
Using the mindset of 'the next skyrocketing currency' again,
It's like: before the storm arrives, standing on the deck looking for a selfie angle.
What you should really ask yourself now are three other questions:
In the worst-case scenario, can I still survive?
If the market crashes again, do I still have bullets?
Do these things I hold still have a presence in a world of 'long-term tightening'?
08｜Three calm suggestions for ordinary investors
Finally, bringing this incident down to very practical operational levels:
First think 'can my position withstand it', then think 'should I buy the dip'
You did not lose because of how much it dropped this time,
But it's about whether you can still be at the table before the next opportunity comes.
Moderately 'contract the front lines'
Divert energy and chips from those small coins with stories,
Gradually shift towards assets with better liquidity and stronger resilience,
For example, core assets like BTC / ETH.
Accept a reality: the market may not turn around immediately
The Bank of Japan may have just taken the first step,
This means:
In the coming period, volatility will be greater, opportunities will also be more, but the frequency of explosions will also be higher.
The epilogue
This time ETH's crash,
It's not that some negative news suddenly fell from the sky,
But it's a continuous era lasting more than a decade,
Quietly pressed the 'switch key'.
If you can take this crash as a
"An opportunity to be forced to rethink your trading system" —
What it brings,
It may not just be a loss on paper,
But before you step into the next stage,
A lesson that must be made up.
