The recent pressure on the crypto market is not only from the Federal Reserve; the Bank of Japan's actions are also worth paying attention to. The central bank just raised interest rates to a 30-year high of 0.75%, and this move could have a greater impact on Bitcoin than many people imagine.

Let's first look at the power of Japan's move. Many people are not fully aware of Japan's position in the global financial landscape, especially in the crypto sector. As long-term holders of Bitcoin, Japanese institutions' actions often influence the market. A quick look at history reveals the pattern: over the past thirty years, whenever the central bank raises interest rates by more than 0.5%, Bitcoin has generally experienced a correction, averaging around 15%, and in severe cases, dropping as much as 23%. The reason is straightforward—interest rate hikes boost the yen's value, prompting institutional investors to withdraw overseas funds, which naturally affects crypto assets as well. Now that rates have surged to 0.75%, it's like sounding a "retreat horn" for these institutions, and the subsequent selling pressure is enough to make one's scalp crawl.

But the Federal Reserve's actions are even more outrageous. On one hand, they are flooding the market—injecting $38 billion in liquidity in just ten days after ending QT; on the other hand, they are aggressively draining liquidity through reverse repurchase agreements, with the overnight reverse repo scale soaring to $10.361 billion on December 18. This kind of simultaneous inflow and outflow confuses traders in the industry. Some say it's more absurd than going long and short at the same time—purely a waste of money that adds to market chaos.

The combined pressure from these two forces makes the Christmas market outlook quite bleak. The market faces not just a single risk but multi-dimensional squeezing. The most prudent approach at this stage is to stay alert, manage positions carefully, and avoid being caught off guard by this "double kill" market trend.