The market got a heavy blow right at the start of December. The Bank of Japan raised interest rates again, same old trick, same old taste—just like they did last year.

To put it simply, the core logic here is the “yen carry trade” acting up. Japan has kept ultra-low interest rates for years (sometimes even negative), giving global capital a perfect arbitrage opportunity: borrow yen at almost zero cost, convert it to dollars, and invest in US stocks, tech stocks, bonds, or cryptocurrencies—wherever the returns are highest. The cost is so low it’s negligible, so almost any investment is profitable.

This playbook has provided years of cheap liquidity for global risk assets. But as soon as the yen’s interest rate goes up, the game changes—the cost of borrowing spikes, and the arbitrage margin shrinks. Those funds have to pull out and repay the yen, and the first assets to get dumped are often cryptocurrencies. Why? Compared to traditional assets like US stocks, high-yield bonds, and gold, crypto is riskier and valuations are more speculative. When institutions need to cash out fast, highly liquid coins like BTC and ETH get hit first—they’re easy to sell to repay debts.

Which coins suffer the most? BTC and ETH take the most direct hit due to their high liquidity and heavy arbitrage positions. But the worst off are the altcoins—already suffering from poor liquidity and little institutional interest. When leverage is pulled and liquidity dries up, the price drops can make you question your life choices.

This bull run has basically marked the end of the altcoin season’s frenzy. The end of the bull market is here, and the bear market vibes are getting stronger. Hold on tight to your USDT, observe more and act less, and don’t rush into any trades. Ironically, some people actually find opportunities in the bear market that they missed in the bull run—after all, many got burned during the bull, but a cool head in the bear market can turn things around.