After Japan's rate hike, whether cryptocurrencies are a "flash in the pan" or are "building a bottom" depends on the interplay of various forces. Overall, the market may experience short-term volatility, but in the medium to long term, there remains pressure to test and establish a bottom.

The core game logic lies in: the structural changes occurring in the global liquidity environment, with Japan tightening and the US easing, forming a "liquidity seesaw."

⚖️ Core Analysis: Long and Short Forces Battle

Force Comparison Factors Supporting a Rebound (“Bullish”) Factors Suppressing the Market and Driving It to Test a Bottom (“Bearish”)
Main Drivers The Federal Reserve begins a rate cut cycle, releasing dollar liquidity. The Bank of Japan begins a rate hike cycle, attracting capital back to Japan.
Market Sentiment Technical rebound after “bad news is fully priced in”; short-term optimism from the elimination of uncertainty. The gradual retreat of the “cheap money” era globally, putting long-term valuation pressure on high-risk assets.
Capital Flows Some liquidity flowing out of the US may seek higher-yield assets. Yen carry trades continue to unwind, with funds flowing back to Japan from the global market (including cryptocurrencies).

🔍 Key Observation Points for Future Trends

To determine which force will dominate, you need to closely monitor the following:

1. The “Hawkish” stance of the Bank of Japan
· Focus: The BoJ’s future statements on the pace, path, and terminal rate of rate hikes. If they hint at “rapid, large” hikes, it will strengthen capital inflows into Japan and be bearish for crypto markets.
· Current Signal: The recent rate hike has been digested by the market; future statements are more important than the hike itself.
2. The “Dovish” stance of the Federal Reserve
· Focus: The speed and magnitude of the Fed’s rate cuts. If cuts come faster than expected, the liquidity provided may offset Japan’s impact and support the crypto market.
· Current Signal: Market expectations for Fed rate cuts are optimistic, which is the main “narrative” driving the current rebound.
3. Internal indicators of the crypto market
· Capital Flows: Monitor the net inflow/outflow of funds into Bitcoin spot ETFs, which directly reflect institutional sentiment.
· Technicals: Watch whether Bitcoin can hold key support levels (such as previous lows) and break through important resistance levels (like $45,000). Without volume support, rebounds are unlikely to be sustained.
· Sentiment: Market fear and greed indices can serve as contrarian indicators.

📝 Summary and Recommendations

Overall, this is a contest between the “East Wind (Fed rate cuts)” and the “West Wind (Japan rate hikes).”

1. Short-term (weeks): The market may fluctuate widely between “bad news is fully priced in” and “good news is fully priced in,” making a single-sided trend unlikely. If the current rebound lacks sustained capital inflows, its height may be limited.
2. Medium-term (months): The trend will depend on which central bank’s influence is stronger. Currently, global liquidity is shrinking (Japan’s liquidity withdrawal > US liquidity injection), so the market as a whole tends to gradually test lower and seek a more solid bottom amid volatility.

This rebound should be viewed as an adjustment rather than a reversal. In the current environment, caution is safer than aggression. You can patiently wait for clearer market signals based on the key observation points mentioned above.