Countdown to the Bank of Japan Rate Hike: ETH Storm Eve, Is Your Position Still Stable?

Attention! The Governor of the Bank of Japan, Ueda Kazuo, has just sent a key signal: the December 19 meeting may initiate a rate hike, the biggest move since 1995! The market has already exploded, but the most dangerous might not be the stock market, but cryptocurrencies—especially $ETH. The eye of the storm is forming, are you ready?
The probability of this rate hike has soared to over 80%, possibly raising interest rates by 25 basis points, or even an aggressive 50 basis points. Why is ETH the first to be affected? Behind it is the collapse of the world's largest “Yen arbitrage trade”: investors borrow near-zero-cost yen and flood into high-yield assets like US stocks and cryptocurrencies. As ETH, a major player in DeFi leverage, faces the withdrawal of arbitrage funds, it could face a chain of liquidations.
History is always warning us: in July 2024, when the Bank of Japan raised rates, Bitcoin plummeted 23% in a single day, with over $20 billion in liquidations across the network. This time is different—the market has already priced in some of it, with open leveraged contracts down 40% from the peak, but the risk has not diminished at all. Data shows nearly $1 billion in leveraged crypto positions are still hanging high, and ETH’s key support level is at $2,600. If it breaks below, it could trigger a “very high risk” avalanche of sell-offs.
ETH’s Achilles’ heel lies in the DeFi ecosystem: layered leverage and concentrated institutional holdings make it more sensitive than BTC and SOL. If the rate hike on December 19 is confirmed, a wave of leveraged position liquidations could sweep through the market instantly; but if it’s unexpectedly delayed, short covering might trigger a rebound. However, don’t blindly buy the dip! Before the meeting, any leveraged position is on thin ice.
This macro shift is destined to reshape the crypto landscape. Can ETH hold its line? Or will it plunge along with the Yen arbitrage collapse? Share your thoughts in the comments: Have you reduced your holdings, or are you prepared to hold firm? Share your strategies and let’s discuss how to face this storm together!