The recent buzz around the Bank of Japan's rate hike topic shows no signs of fading, with many speculating: Is this ongoing adjustment a market preemptively digesting expectations? Some even believe that the official implementation of the rate hike could trigger a rebound.

But upon closer reflection, this logic has flaws. A short-term rebound is indeed possible, but more likely, it’s just a false alarm.

The real danger lies in liquidity. After the rate hike announcement, Japanese investors will accelerate their withdrawal from global markets and repatriate funds, which directly leads to a liquidity crunch in the crypto market. That moment is the true window of concern.

The rate hike cycle early last year is a textbook example. When announced, the market still seemed relatively stable, and no one expected what would happen in the following weeks. On that trading day in early February, the market plunged—ETH suddenly dropped over a thousand points in a gap, exchanges experienced delays due to surging traffic, and order queues formed. That scene was truly chaotic. Many accounts shrank from tens of thousands to just two digits within a few hours, with liquidation notices flooding in. The entire market was gripped by panic.

Having witnessed that despair firsthand, I am especially cautious about the operations on the eve of this central bank policy—only participating in bearish positions, with light holdings and low leverage. Instead of betting on that illusory crash and profit, it’s better to ensure the safety of the principal during this window. After all, opportunities are plentiful, but the principal cannot withstand too much turbulence.