Last night, the Federal Reserve indeed cut interest rates by 25 basis points, causing the U.S. stock market to surge accordingly, with the Dow Jones soaring nearly 500 points in a single day. But what about Bitcoin? It remained motionless. Even more concerning is that next week, the Bank of Japan is very likely to take reverse action—over 90% of economists are betting they will raise interest rates.

This situation is a bit interesting: one side is printing money, while the other is tightening.

First, let's talk about the Federal Reserve. The rate cut was made, but the market had already digested this news. Wall Street veterans took the opportunity to sell during the good news, and Bitcoin naturally didn't keep pace. More importantly, Powell's words leaned hawkish, implying "don't expect many more rate cuts in the future." The faucet hasn't been fully turned off, yet it’s already being turned back.

The real trouble lies in Japan. Over the past decade or so, global institutions have been borrowing near-zero-cost yen at an aggressive pace, then converting it into dollars to buy various assets—Bitcoin being one of the biggest pools of liquidity. Now, if Japan raises interest rates, the cost of these arbitrage trades will skyrocket instantly. What will these institutions do? They will have to sell their assets and exchange back into yen to pay off debts. What does this mean? A global "liquidity drain" is about to unfold, with the crypto market bearing the brunt.

My view is simple: don’t be fooled by the superficial actions of the Federal Reserve’s rate cut. The real storm is on the other side of the Pacific. Global liquidity is undergoing a fundamental shift—liquidity easing in the U.S. is weakening, while Japan is about to tighten. And the cryptocurrency market, being extremely sensitive to capital flows, will be caught in the middle, squeezed from both ends.

Next week’s Bank of Japan decision night will be a crucial point. Once the direction is clear, you can either avoid the risk or prepare to buy the dip.