Bitcoin fell to $85,000, with Japan's interest rate hike and China's regulatory pressure triggering extreme panic in the market.

Source: BlockMedia Original Title: [New York Coin Market/Closing] Bitcoin Plummets to $85,000… Extreme Fear Spreads Amid Japan's Interest Rates and China's Regulatory Pressure Original Link: https://www.blockmedia.co.kr/archives/1013558

The market is plummeting rapidly, and investor sentiment is shrinking.

The digital asset market has once again plunged into a rapid decline, with investor sentiment sharply shrinking. According to CoinMarketCap data, Bitcoin fell by 6.7% to $85,430, breaking below the $90,000 support line; major tokens such as Ethereum, Solana, and Dogecoin all experienced double-digit declines. The total market capitalization decreased by 2.63% to $3.01 trillion, reflecting an alternative greed/fear index that dropped to 20, entering the “Extreme Fear(Extreme Fear)” range.

Mainstream tokens are experiencing a widespread decline. Ethereum dropped 9.4% in a single day to $2,753, XRP fell 8.6% to $2.01, BNB decreased by 8.8% to $817, and Solana dropped 9.5% to $124. Among them, Dogecoin fell by 10.7%, and Cardano decreased by 11.3%, indicating that meme coins and Layer 1 tokens have the most significant declines. Bitcoin Cash also fell 7.7% to $512.

Japan's Interest Rate Hike Signals Combined with China's Regulatory Warnings, Market Liquidity Rapidly Cools

This sudden drop is interpreted as a sensitive response to changes in the global macro environment. The yield on Japanese long-term government bonds rose to 1.2%, hitting a new high since 2008, leading to a rapid cooling of investment sentiment towards risk assets. Daniel O'Regan, an analyst at UBS Securities, stated: “Japanese yen carry trades have always been a key driver of global liquidity supply, and when this structure changes, cryptocurrencies are inevitably affected.”

In addition, the People's Bank of China reiterated its determination to regulate cryptocurrencies and issued warnings about the illegal use of stablecoins, which has further worsened investor sentiment. The market interprets these remarks as likely leading to increased actual regulatory efforts, triggering a rapid sell-off. Data shows that approximately $791 million in positions were liquidated in a single day, most of which were long positions, indicating that bullish investors faced losses and were forced to close their positions, significantly shrinking short-term upward expectations.

A leading Bitcoin holding company purchased an additional 130 BTC, yet its stock price still fell by 9%

The largest Bitcoin holder company, Strategy, conducted a $1.44 billion equity financing amid the market's sharp decline. The company added 130 Bitcoins in the past two weeks, expanding its total holdings to 650,000, yet its stock price fell by 9%, closing at $161.94. Strategy's chairman, Michael Saylor, stated that “it may sell some Bitcoins or derivatives for the benefit of shareholders,” further intensifying market unease.

Experts: “The downward cycle is repeated, but there is hope for a long-term breakthrough of $250,000”

Regarding the future market outlook, experts generally believe there is a possibility of further declines in the short term, but the potential for a strong market rebound in the medium to long term still exists. Legendary commodity trader Peter Brandt stated: “Bitcoin has structural characteristics, and as cycles repeat, the magnitude of adjustments gradually becomes smoother,” and predicts that “in a future strong market, it could reach $200,000 to $250,000.”

However, he defines this rebound as a “dead cat bounce” and points out that there is a possibility of falling to the $40,000 level in the short term. This analysis is based on the characteristics of Bitcoin: although the absolute price is rising, the magnitude of the fluctuations in the cycle structure is gradually decreasing.

According to Brant's analysis, past cycles of Bitcoin have shown an “exponential decay” pattern: while absolute prices rise, the proportionate adjustment decreases. Considering this, the current adjustment may be an intermediate stage towards a long-term upward cycle.