The Bank of Japan is set to announce a significant interest rate hike of 25 basis points on December 19, marking the first such increase in thirty years. This move signals the end of the era of negative interest rates. It is not only a policy shift for Japan but could also trigger a reshuffling of global capital flows.

For a long time, the yen has been the preferred tool for arbitrage capital due to its low interest rates. Many international investors and institutions have financed in yen, taking advantage of near-zero borrowing costs to enter the crypto market, driving up the prices of BTC and other cryptocurrencies. This massive pool of cheap funds has been a key driver of this round of market rally.

But now, the story is reversing. Once the yen interest rate rises, borrowing costs will spike, and this arbitrage capital will inevitably start to withdraw rapidly. Historical experience shows that whenever global central banks begin tightening cycles, Bitcoin often faces sharp corrections. During the last major liquidity tightening, BTC's decline once reached 50%. Japan’s move this time appears even more abrupt—thirty years of accumulation could be adjusted overnight, with considerable impact.

Technical indicators are already warning. BTC has broken through multiple key support levels in succession, Ethereum has followed suit with a decline, and the total liquidation on the network has exceeded $800 million. Market panic is spreading, with altcoins bearing the brunt—many small tokens have already been halved in value.

There are only 48 hours left before the policy takes effect. During this window, the risks facing BTC are indeed increasing—any breakdown could trigger a chain reaction. The key question is: when hot money starts fleeing, where is the bottom? This is the ultimate question facing every participant.