The recent interest rate hike by the Bank of Japan has become the focal point of market discussions. Many are speculating whether the ongoing downward trend in recent days is an early digestion of this expectation. Some believe that once the rate hike is implemented, it might actually trigger a rebound.

I don't fully agree with this logic. While a short-term rebound is possible, I think a more likely outcome is a false alarm.

The reason is simple—after the rate hike announcement, Japanese investors will start withdrawing funds from other markets and flowing back, which directly leads to a liquidity crunch in the market. When that moment arrives, it will be the real danger.

Earlier this year, during the rate hike announcement, the market seemed quite calm. But no one expected that on a morning in early February, the market would suddenly plunge. I remember it very clearly—ETH dropped by a thousand points directly, and exchanges also crashed due to a surge in traffic. That scene was really crazy; I watched as my account’s principal of over 40,000 US dollars instantly turned into 1,200 US dollars, and my phone kept sending liquidation notifications. My husband’s account was also wiped out for several tens of thousands. I was completely stunned at the time, and even now I break out in a cold sweat when I think about it.

Having experienced that kind of despair, my strategy before this rate hike has been very conservative—only taking long positions, with small positions and low leverage. Instead of betting on a possible sharp decline, it’s better to stay alive first. Opportunities will always be there, but the principal is only one. Let’s encourage each other.