These past few days, the private messages are all asking the same question: Japan is going to raise interest rates, should the crypto market run? I understand everyone's panic, but the market has never been driven by guesses; it speaks with data. Instead of panicking blindly, it's better to look back at history and observe the patterns.

Let's first review the market reactions to Japan's previous rate hikes.

In March 2024, Japan officially bid farewell to the era of negative interest rates. On the day the news was announced, the crypto market indeed took an 8% plunge. It sounds frightening, but three days later, the market recovered, and then entered a prolonged period of consolidation.

In July of the same year, the rate was raised from 0 to 0.25%. This time, the market reaction was even more intense—major indices retraced nearly 30%, and many retail investors were scared and sold off. Ironically, that sell-off became a good entry point, and the subsequent bull market reached new highs without resistance.

By January this year, the third rate hike brought it to 0.5%. The market trembled again, retracing about 8%, but quickly followed the upward trend of global stocks.

Do you see the pattern? Fear from negative news often leads the way, but the real risk has never been that big. The market has already overreacted.

This time is actually similar. Why do I believe a major crash won't happen? Three reasons.

**First, expectations have already been fully digested.** Everyone now knows Japan will raise interest rates, and institutional investors won't sit idly by. Defensive measures have been taken early, and those who need to retreat have already done so. Look at how Bitcoin retraced from its highs—that's the market's early response.

**Second, global liquidity hasn't truly tightened.** The Federal Reserve's stance determines the flow of global funds; Japan raising rates alone can't change the overall picture. U.S. stocks and crypto assets still remain key recipients of global capital. These few rate hikes in Japan won't cause a big wave.

**Third, overreactions tend to reverse.** The market is now like a frightened bird, amplifying any small movement. But at such times, reverse catalysts are often nearby—a positive news event could be more powerful than at any other time in history.