2026-01-03 02:22:11

When the market crashes, fear always outweighs rationality. Behind this recent decline, there are actually some deeper factors—institutional capital adjustments and changes in global liquidity.

Over the past two days, looking at the candlestick charts can make you break out in a cold sweat. BTC has fallen from $90,000 to below $86,000, ETH has broken through $3,000, and the altcoin sector is in chaos. The square is filled with panic voices: "Stablecoins are about to be regulated!" "Global liquidity is drying up!" "This time, it's really going to crash!"

But having been in this circle for many years, I’ve seen a few real bear markets. Although this drop is frightening, its nature is actually different—this is market self-repair, not a sign of systemic risk.

**The core reasons are actually just two**

First is the action by the Bank of Japan. They raised interest rates to 0.75%, the highest in thirty years. At first glance, it doesn’t seem like a big deal, but this move has caused ripples in the global financial markets.

Over the past decade and a half, a classic arbitrage strategy has been in play: borrowing yen (with near-zero interest rates) to invest in high-yield assets like US stocks and cryptocurrencies. The interest rate differential has been highly profitable. Now that borrowing costs in yen have increased, this game can no longer continue. Institutions are pulling back funds to cover their positions, and the first to be cut are the most liquid, high-risk assets like cryptocurrencies.

History shows: after the Bank of Japan’s three previous rate hikes, Bitcoin experienced 20%-30% corrections. This time is no different.

Second is the ongoing pressure from regulatory policies. These factors combined can indeed trigger a technical market crash. But that doesn’t mean anything—corrections are healthy, and markets can’t go up in a straight line forever.

The real opportunity often hides within this kind of panic.

BTC-1,21%

ETH0,89%

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DogeBachelor

· 01-05 19:58

The Bank of Japan's move directly spoiled the good days of carry trade, and the institutions are now coming in to buy the dip. --- Every time there's a sharp drop, people shout about a crash. I really don't understand what's going on with these folks; the history is right here. --- Basically, it's about adjusting positions. Those who panic sell end up crying the hardest. --- Breaking 86,000 from 90,000 is indeed frightening, but I wonder if the shorts are smiling right now. --- The logic behind this decline is very clear. Strangely, some people still can't understand it. --- Does a 0.75% interest rate hike in the yen really have that much power? It feels a bit exaggerated. --- The opportunity is right here. The bold should get in now. --- It's the same old story: crying for help when falling, regretting when rising. --- Playing the arbitrage game is really unsustainable; borrowing yen and making a killing. --- That said, a technical breakdown doesn't mean the fundamentals are flawed. This logic needs to be clearly distinguished.

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zkNoob

· 01-05 13:34

The Bank of Japan's move truly shattered the arbitrageurs' dreams. The strategy of borrowing yen to invest in coins has been played for so many years, and finally someone is here to put an end to it. --- Here comes another 20-30% correction, history just keeps repeating itself. --- Panic selling is mostly just to wash out chips; the big players have already finished eating. --- Every time they say the market will crash, but the market remains so resilient. --- When interest rates rise, the game rules change, and that's the most painful part. Institutions are now forced to cut losses or actively rebalance their portfolios, and the difference is significant. --- Regulation plus central bank suppression is indeed a bit harsh. But on the other hand, a bull market without adjustments is actually more terrifying.

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LightningSentry

· 01-05 12:37

The yen arbitrage explosion, I saw this coming a long time ago. Institutions are just cutting positions, nothing surprising or alarming.

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AlwaysMissingTops

· 01-04 03:12

The Bank of Japan's move directly revitalized the arbitrage game, institutions have to cut losses Damn, finally someone is clarifying, it's not as simple as a collapse This wave is just a correction, we can keep holding, no need to follow the trend and cut History indeed repeats itself, a 20-30% correction is normal Opportunity? That depends on who has the courage to buy the dip. Anyway, I can't afford it anymore The real test during panic moments is psychological resilience—see who can survive until the end The rising cost of borrowing yen is clear logic; just worried there might be more surprises later Feels like every time there's a sharp drop, people talk about a collapse, but the market is doing fine? Borrowing yen for arbitrage, this trick has been played for so many years and is finally broken—so exciting

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GateUser-e51e87c7

· 01-03 02:52

The Bank of Japan's recent actions are indeed aggressive; the arbitrage game has completely collapsed, and institutional liquidations are inevitable. The opportunity is right here; those who can't grasp it will always be shouting about a crash. This dip is not a risk signal, but rather self-repair; it's just a cycle in history. The panic sellers who get scared out are just laying the groundwork for those who come later. Liquidity crunch tests the mentality the most; true investors are now quietly building positions. Don't be scared by the panic on the square; these voices are always the same. The crackdown on stablecoins is unlikely to really happen; it's just a trick to fool beginners.

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GweiWatcher

· 01-03 02:52

Yen arbitrage explosion, institutions cut losses. This time, it's truly self-healing rather than a black swan event. History has its clues, don't panic.

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governance_ghost

· 01-03 02:48

Japan's rate hike is essentially breaking the arbitrage chain, forcing institutions to cut losses while we are stuck at the bottom. The yen arbitrage strategy is indeed very comfortable, but now that costs have risen, everything must be liquidated. Crypto is the first to bloodbath, which is not surprising. A 20%-30% correction is a repeat of history; there are really no new tricks this time, just a painful timing of shakeouts. If there's truly a chance in panic, I believe it, it all depends on who dares to buy the dip. --- I'm tired of hearing about daily crashes; you haven't really experienced a true bear market. --- To put it plainly, institutions are replenishing their positions while retail investors are just taking the hits. That's just the game rules. --- Talking about regulation of stablecoins is just scaring new retail investors; the core issue is not here at all. --- The recent aggressive moves by the Bank of Japan are indeed a bit fierce, a bloody lesson that arbitrage games can't go on forever. --- I've long been used to regulatory pressure; the key is when institutions will recover their funds. --- Self-repair and healthy adjustments—sounds good, but retail investors are just tools for being harvested. --- Opportunities hidden in panic... but the premise is that you have to survive until that moment.

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BlockTalk

· 01-03 02:45

The Bank of Japan's recent move is indeed aggressive; arbitrage games have collapsed, and institutions can only cut losses, while retail investors are just screaming along. Really, everyone who has seen a bear market knows this is nothing; the real time to get in is after the adjustment. Panic selling is cheap now; those who buy the dip now will be the ones benefiting later. This round of decline is different in nature; don't listen to that group in the square shouting about a collapse—history just keeps repeating itself. The yen's interest rate hike was long overdue; market self-repair is normal, and institutions just cut their orders, and that's it. Honestly, the bottom often comes like this; it depends on who can hold on without cutting losses. People who understand the mechanism have already gotten in; those panicking are still asking whether to liquidate everything.

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DeFi_Dad_Jokes

· 01-03 02:38

Japan's recent rate hike really targeted the market; the arbitrage game is indeed no longer playable, but the panic selling was too rapid. --- It's another bear market argument. I trust your judgment, but can we really bottom out this time? --- A reasonable correction, but I'm worried retail investors will sell everything at the lowest point. --- Institutions are replenishing their positions, while we're bottom fishing. That's the difference between retail investors and big capital haha. --- The Bank of Japan's move has turned crypto into a cash machine. If they make a few more "adjustments" like this, my wallet will really collapse. --- So only the poor are afraid; the rich just see it as a discount season. --- Looking for opportunities in panic? I just want to know how you distinguish between opportunities and traps.

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BankruptWorker

· 01-03 02:32

The Bank of Japan's move directly disrupted the arbitrage game, causing institutions to cut losses and escape. It's all clearly written in history. This wave is actually just a correction, no need to panic too much. The real show is still to come. Buying around 8.6K might be a good opportunity... Healthy correction, a one-sided rise is abnormal. Only beginners panic. Once it stabilizes, I'll start to position myself. Panic is a signal. Once again, the Bank of Japan's traditional tactic, always the same routine. Rumors are flying everywhere, nothing new, still playing along. Institutions cutting orders are just giving retail investors a chance to get in. Once you see through it, there's no need to panic.

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