The Bank of Japan's move causes the crypto market to fluctuate—many people think it's just sentiment, but in fact there is a clear chain of funds at play behind the scenes.

In a low-interest environment, arbitrageurs borrow yen → exchange for USD → buy risk assets like Bitcoin, which seems risk-free and profitable. But once the Bank of Japan raises interest rates, the game changes. The yen appreciates, borrowing costs skyrocket, and the entire arbitrage model collapses instantly. At this point, funds have no choice—sell coins → exchange for yen → repay debts. This is not bearishness; it's forced liquidation.

Why is this round of decline particularly damaging? Several factors stack up: liquidity was already at a cyclical low, high-leverage funds had accumulated at high levels, and the overall market vulnerability is very high. What do the data say? Since the beginning of 2024, after each rate hike by the Bank of Japan, Bitcoin's retracement has exceeded 20%, indicating that this chain is not just a rumor.

What to do now? Three practical points: First, keep leverage no more than 3x; if not, just stay in spot and be at ease; second, set proper stop-losses—don't gamble on "holding on" as luck; third, keep enough cash on hand, and wait for major events to settle before acting.

To put it simply, this is not a technical correction but a large-scale withdrawal of funds globally. surviving and riding out the volatility is much more valuable than trying to buy at the lowest point.