The night before last, everyone was still discussing "How long will the bull market be delayed," and this morning, we were caught off guard by the Bank of Japan's rate hike news—Bitcoin dropped below $85,000, Ethereum lost the $3,000 support level, 110,000 traders were liquidated within 24 hours, and the market cap evaporated by nearly $2.9 billion. This drop looks frightening, but the key point is that it might just be the beginning. Don't rush to buy the dip yet; we need to understand what's really going on.

Many people panic as the market falls, thinking that market confidence has disappeared. Actually, the core issue isn't that complicated—it's simply "liquidity has been locked up." The culprit points to the Bank of Japan's unprecedented tightening move in thirty years. Over the past decade or so, the Bank of Japan has maintained zero or even negative interest rates, effectively giving large institutions free money. These institutions hold almost free yen and then jump into crypto arbitrage, earning from exchange rate differences and price gains. This capital flow has been a major source of liquidity supporting the crypto market.

The problem is—after the Bank of Japan's meeting, the game rules have completely changed. The probability of raising interest rates to 0.75% soared to 98%. What does this mean? It means the cost of borrowing yen has skyrocketed. Previously, it was "free arbitrage"; now, it’s "borrowing to trade crypto will lose principal." From another perspective, who would still dare to play? Institutions are rushing to sell their crypto assets and convert back to yen to pay off debts. Bitcoin, as a market indicator, is naturally the first to be hit. This isn't a project issue; it's purely a "forced capital flight," a classic liquidity crisis.