Last night, Ethereum directly shot up to 2700 dollars, and many people were quite scared by this long wick candle. But to be honest, the real driving force behind this fall is not on-chain, but hidden in the Central Bank offices across the Pacific Ocean.

Japan suddenly changed its stance. The Governor of the Central Bank, Ueda Kazuo, was still playing the game a few days ago, but this time he directly laid it on the table: "We are seriously considering raising interest rates." The market exploded instantly, and traders frantically bet that action would be taken on December 19, with the probability skyrocketing to 76%. It should be noted that Japan has been playing the zero interest rate game for almost ten years, and now they say they won't play anymore?

Why did this issue fall on ETH? We need to talk about the famous "Yen arbitrage" strategy. Over the past few years, a bunch of institutions borrowed yen almost for free and then rushed into the high-risk, high-return pool of the crypto market. Now the Central Bank of Japan is tightening, and borrowing costs are rising sharply, forcing those with leveraged funds to painfully close their positions and run away. That’s how Ethereum's support level got breached.

What about the Federal Reserve? It's quiet. Although the market is still betting on a rate cut in December, the officials aren't saying a word, leaving everyone uncertain. Just think about it, on one hand, Japan might turn off the taps, while on the other hand, the U.S. might turn them on. With these two major Central Banks going in opposite directions, who knows where the money will flow in the end?

So the current situation of ETH is a bit awkward—technically it's still fine, but the macroeconomic knife is hanging over its head, and both bulls and bears are waiting for a signal.