The wave of decline at the beginning of December was quite fierce. BTC directly broke through the support level of $86,000, hitting a low of $85,604, and mainstream tokens generally lost over 5% within 24 hours. Even more heartbreaking is that the total liquidation amount across the network for a single day exceeded $400 million — this has become the norm since November. Counting from the historical high of $126,000 in October, BTC has now retraced over 20%.

The numbers are straightforward, but what truly deserves attention is the invisible hand behind them: the shift in the monetary policy of the Bank of Japan.

The market has now priced in a 76% probability of an interest rate hike at the meeting on December 18-19, and by January next year, this figure is expected to soar to 90%. If the Bank of Japan really takes action, it is likely to be a 25 basis point first rate hike — which means the nearly ten-year era of negative interest rates will come to an end.

Why does the Bank of Japan have almost no room for maneuver? Let's look at a few hard indicators: the core CPI has been above the 2% target for 20 consecutive months; this spring's wage negotiations saw an increase of 5.28%, the highest in 33 years; the Japanese yen has depreciated nearly 15% against the US dollar this year, and the pressure from import costs has already transmitted across various sectors. Even more critically, the scale of the Bank of Japan's balance sheet has expanded to over 135% of GDP, and this expansion model simply cannot be sustained.

Ueda Kazuo's recent public statements have also been very clear, with the wording shifting from "whether adjustments are needed" to "when adjustments will be made." Once the global liquidity landscape is reshaped due to a shift in Japanese policy, the crypto market, which is highly sensitive to capital flows, is likely just beginning to experience volatility.