#数字货币市场洞察 Last night's sharp drop probably left a lot of people stunned, right? The calls for a rate cut in December are getting louder, so why is the crypto market shrinking instead?

Don’t just focus on the “rate cut” sugar-coated bullet—what’s really dragging things down is liquidity. If you piece together the recent oddities in global markets, the clues are actually pretty obvious:

First, about the rate cut. Yes, the expectation is bullish, but the good news has already been priced in to death. What institutions are more worried about now is the possible rate hike in Japan. In a situation where they're being squeezed from both sides, whatever little benefit a US rate cut could bring has already been diluted.

Next, look at the reaction in short-term government bonds. Logically, when rate cut expectations are strong, the 1-year US Treasury yield should be dropping, but instead, it’s actually ticked up a bit. That’s not a good signal—it suggests the market may have already priced in the max for rate cuts.

The long-term bond market is even crazier. Yields on 10- and 30-year bonds have recently soared. If people really believed in a rate cut, money should be piling into long bonds. Instead, they're selling—clearly, people aren’t trading on rate cut expectations.

There are two forces driving this:

First, last night’s PCE data showed that while September inflation didn’t rise, it’s still stubborn, which has people nervous about future inflation. Naturally, long-term yields went up.

Second, the talk of a yen rate hike is getting louder, and with the interest rate gap narrowing, funds are starting to flow back from US Treasuries to Japan. This wave of unwinding carry trades has driven up yields on both US and Japanese bonds.

On the surface, the three major US stock indexes are still in the green and the VIX fear index is down near 15, which looks pretty calm. But the Russell 2000 small-cap index is falling, exposing that the market’s risk appetite isn’t actually that strong.

To put it plainly, the main theme now has shifted from “betting on a rate cut” to “responding to a yen rate hike.” Funds are moving en masse. For those holding BTC, keep a close eye during Asian trading hours next week—beware of sudden sell-offs by institutions like what happened this Monday. Don’t take liquidity risks lightly.