Today, the biggest variable in the market is not within the crypto world, but rather from across the Pacific - the Bank of Japan suddenly signaled an interest rate hike.

Does this sound far from us? Wrong. Japan's interest rates have been asleep for over twenty years, and once they wake up, the entire pattern of global capital flows will have to be reshuffled.

**First, let's talk about the core logic:**

Japan's interest rate hike means that the world's largest "arbitrage capital pool" is about to start shrinking. For years, Japan has maintained ultra-low interest rates, allowing a large amount of capital to borrow cheap yen to buy U.S. Treasury bonds, U.S. stocks, gold, and even crypto assets. Now, if Japan tightens its monetary policy, this money must flow back.

Reflow means that US Treasuries will be dumped, US stocks will be smashed, gold won't hold up, and the crypto market will be the hardest hit.

**What's more troublesome is that the Federal Reserve has also been dragged into it.**

Once Japan raises interest rates, the global interest rate center will be passively elevated. If the United States continues to maintain its current interest rate policy, capital may actually flow out of the U.S. Therefore, foreign media are now speculating that the Federal Reserve will either release a more hawkish signal or extend the duration of high interest rates longer than the market expects.

This is why all the rebounds have been weak lately. There is simply no money in the market, and market makers are hesitant to go long significantly; trend funds are just watching. Now with Japan doing this again, it is like adding insult to injury.

**However, speaking of which—**

The more extreme the panic, the more likely a short-term recovery will occur. The panic sentiment is now close to freezing point, and various technical indicators show overselling. Once the market confirms that Japan's interest rate hike will not be implemented immediately, the rebound could be stronger than expected.

**In summary:**

Japan's interest rate hike is no small matter; it will affect global liquidity. The Federal Reserve may be forced to adjust expectations. Short-term market volatility may increase, but it could also present an opportunity for a rebound.

Maintain a stable mindset; the big market movements often start after the storm.