Last night's Bitcoin really knows how to keep people on their toes. It surged from $87,100 all the way up to $90,400, approaching a new high, only to be slammed back below $86,000 in the blink of an eye, with 24-hour liquidation exceeding $500 million. Many are exclaiming that the bull market is returning, but the problems exposed by this decline are far more complex than they appear on the surface.

To put it simply, this volatility is essentially high leverage self-destructing. Those long positions using 10x, 20x leverage chasing the top are forced to close when the market slightly retraces. Exchanges, for risk control, can only liquidate at market prices, which triggers chain reactions of forced liquidations, amplifying the downward move infinitely. This isn't a trend reversal; it's a collective stampede of leveraged players.

But the real risk hasn't even arrived yet. The market's current biggest concern is the Bank of Japan's interest rate decision on December 19. It may seem distant, but it actually affects global capital flows. For decades, institutions have borrowed Japanese yen at near-zero costs and converted it into dollars to invest in high-yield assets, including Bitcoin. If Japan raises interest rates, the cost of borrowing yen increases, forcing these funds to sell assets and exchange yen to repay debts. How terrifying could this chain reaction be? The lesson from July last year still lingers—when Japan hikes rates, global markets become turbulent.

So, the current market conditions require vigilance not only for the risks of high leverage but also for the subsequent impacts of the December central bank decision.