Brothers, I'm stunned by the drop!
This wave of market movement early Friday morning may be more dangerous than you think.
The current market is like a pressure cooker, it's about to burst. The Bank of Japan is about to hold a meeting on the 18th and 19th, and the latest news is that raising interest rates to 0.75% has entered the final coordination stage.
This is the highest interest rate level in 30 years!
What data are you looking at? The pricing on Polymarket shows that the probability of an interest rate hike has soared to 98%. In other words, almost everyone believes that this knife is definitely going to drop.
What does this have to do with our cryptocurrency trading?
The relationship has grown! This involves an operation that makes all the big players tremble - closing the 'yen arbitrage positions'.
In the past, the yen interest rate was low, and borrowing money was as easy as drinking water; people borrowed yen to exchange for dollars to buy coins and profited from the difference. But now Japan has raised interest rates, the cost of borrowing has increased, and people may even have to pay to borrow.
What will happen at this time?
Those big players and institutions that borrowed yen to buy coins must sell the coins they hold to pay back the yen debt in order not to face liquidation.
That's why BTC crashes down whenever it encounters pressure now, because everyone is rushing to get out, all are taking profits, and no one wants to take the last baton.
If you understand this logic, you will realize that the current decline is not because the crypto market is failing, but because the liquidity valve on the Japanese side is about to close.
This macro-level negative news is essentially 'unsolvable' in the short term. Whether you are a technical analyst or a believer, before the interest rate hike is finalized, this wave of panic is hard to dissipate.
A word of advice to the brothers: In such times, do not try to catch falling knives. Don't rush to bottom fish just because it's cheap; there's a 98% probability that it's not a joke.
A gentleman does not stand under a dangerous wall. Before the results come out on Friday, it's more important to control your hands and protect your principal than anything else. After this wave of cutting, we can then enter the market to pick up the bloody chips, isn't it fragrant?
