A clear explanation: The impact of "Japan's interest rate hike + China's regulatory tightening" on the future market.

I. Japan's interest rate hike = "Earthquake-level changes" in the monetary system

1. Why is Japan important?

Japan is one of the largest providers of overseas funds in the world (interest rate arbitrage).

For decades, Japan has been:

Low interest rate → Yen is cheap

Japanese institutions lend out yen → Invest in US Treasury bonds/US stocks/gold/cryptocurrency

This is called yen carry trade.

If Japan starts raising interest rates → Carry Trade unwind

This will cause:

The pressure for the appreciation of the yen is increasing.

Global capital is forced to withdraw from US Treasuries, US stocks, and cryptocurrency markets → back to Japan

Global risk assets face systemic deleveraging.

Historical validation: In 2015 and 1998, once Japan's monetary policy tightened, global markets experienced severe fluctuations.

2. If Japan only raises interest rates "symbolically once"

The impact is minimal, but market sentiment will panic in the short term.

You will see:

Short-term fluctuations in U.S. Treasury yields

The US stock market / cryptocurrency will experience a rapid decline.

But after the drop, it will stabilize quickly, as this does not represent a long-term trend.

This belongs to a "one-time impact".

3. If Japan continues to raise interest rates - this is the key.

If it becomes an interest rate hike cycle, it means:

The era of global ultra-loose monetary policy has officially come to an end.

Funds withdrawn from high-risk assets

Liquidity in the crypto market is being squeezed.

The trend you will see is likely to be:

(1) Leading assets such as BTC and ETH first fell and then stabilized.

Because the leverage of institutions needs to be reduced.

Arbitrage positions need to be closed.

However, top assets will first stop falling at the bottom due to their "hedging properties."

(2) Altcoins will enter a deep decline period.

Liquidity tightening → The first to be killed are altcoins

High-frequency quantitative funds will directly cut positions.

Hot sectors will retreat in 6–12 months

(3) The overall market capitalization of cryptocurrencies may shrink by 20–40%.

It's not a crash; it's a chronic contraction.

IV. The Impact of China's Continued Strong Regulation of Cryptocurrencies

Actually, it doesn't have much of an impact because:

China's regulation is now a "stock policy", not a "new policy".

The market has already priced in.

China regulation ≠ capital leaving

Because:

Chinese users have long primarily used overseas exchanges.

China's regulatory measures are stricter for institutional participation, but have little impact on the global flow of crypto funds.

In the past 5 years, there has not been a single crypto bull market that was driven by China.

What you really need to care about is:

U.S. policies, ETF inflows, Japanese interest rates, global liquidity, rather than Chinese regulation.

Chinese regulation will only lower the "heat", but it will not determine the market direction.

5. Core question: Will the market continue to decline?

Depends on two paths:

Path A: Japan raises interest rates only once (symbolically) → The market drops in the short term, then stabilizes with fluctuations.

BTC, ETH: After the drop, they will be bought back by ETFs and institutions.

Shanzhai: Under short-term pressure, but not likely to collapse.

Crypto overall: Panic once, but won't walk a long bear.

This is a "controllable decline"

Path B: Japan starts a rate hike cycle → Market enters a mid-term decline of 6-12 months

BTC may retrace deeper into the range (for example, the lower edge of the 25k-45k range)

ETH, SOL, and altcoins have a larger decline than BTC.

Tightening liquidity leads to weak rebounds.

The new narrative will be postponed (AI chain, L2, BTC ecosystem, etc.)

This is a "mid-term bearish"

So which possibility is greater now?

According to the current global economic data (2025), Japan:

Inflation remains unstable

Wage growth is insufficient

Japanese companies still rely on a weak yen for exports.

So it's more likely to be "micro-interest rate hikes, non-cyclical."

In other words, there is a high probability of following Path A: a short-term decline, but not entering a deep bear market.

Here are the key points for you (the three most important sentences)

The impact of Japan's interest rate hike on the global market is 100 times more lethal than China's regulations.

If Japan only raises interest rates symbolically, the market will experience a short-term decline + volatile recovery.

Only when Japan enters a sustained interest rate hike cycle will crypto enter a true mid-term bear market.