$BTC $ETH A decision by the Bank of Japan could shake up the entire crypto market.

On December 19th, Japan is very likely to initiate its most significant policy shift in thirty years—ending negative interest rates and officially starting a rate hike cycle. What does this mean for global capital markets? A collective withdrawal of liquidity.

Few truly understand the role the yen plays in global finance. Over the past decade, Japan’s ultra-low interest rate environment has made the yen the cheapest borrowing tool. Arbitrage traders have borrowed large amounts of yen, then invested in US stocks, high-yield bonds, cryptocurrencies, and other risky assets. How large is this capital? No one can measure precisely, but clues can be seen in the forex market and asset prices.

Once Japan raises interest rates, this logic will completely reverse: the cost of borrowing yen rises, the appeal of holding high-risk assets diminishes, and arbitrage positions will inevitably be closed—exchanging back to yen and flowing back to Japan.

When money starts to exit, what suffers first? The answer is harsh: the highest-risk assets. Bitcoin, Ethereum, altcoins—they cannot escape. The market has already sensed this shift, and traders are privately discussing a number: the $63,000 level for BTC. If the policy truly materializes, whether this support line can hold will determine the subsequent market rhythm.

Every round of global liquidity tightening sees the crypto space as the first to bleed. Not because fundamentals worsen, but due to the cold logic of capital chains—when arbitrage opportunities disappear and financing costs rise, institutions and big players are the first to exit high-volatility assets.

The current issue isn’t “whether to run,” but “whether there’s time to run.” Once the policy is announced, market reactions will be faster than imaginable. The initial capital withdrawal, testing of support levels, and sharp drops in altcoins could all happen in a chain reaction within 72 hours.

The next two weeks are critical: observe whether capital has already exited before the policy, see if Bitcoin can hold key support levels, and assess the risk of altcoins’ further decline. Before the storm hits, the market never rings the bell early. If your trading still relies on chasing rallies, panic selling, and gut feelings, now is the time to adjust your strategy.