Bitcoin falling: Investors are cursing, but is the blame on Asian giants?

When Bitcoin plummeted to the $60,000 zone, it formed the third-largest oversold area in history. Amid the cries of massive liquidations, millions of retail investors began shouting “market manipulators” and “mass ETF sell-offs,” but when analyzing on-chain data deeply, the reality is quite different. This drop was not caused by a “black swan” nor driven by major crypto figures actively selling. What truly impacted wallets was the collapse of yen arbitrage driven by Asian giants, desperate institutions burning capital on AI, and a group of crypto veterans attacking each other out of panic. The most disturbing part? There was no policy collapse, no institution went bankrupt, yet the decline was more severe than any documented extreme risk event. The reality that runs counter to perception: risk leaked from the crypto circle into traditional finance, and you thought you were in an “internal race” when, in fact, the dominoes of global finance were falling onto your portfolio.

The Truth Behind the Cursing: The Intermarket Yen Massacre

The first and most lethal invisible driver comes from outside the crypto ecosystem: the intermarket massacre caused by Asian giants. It has nothing to do with internal manipulation; at its core is the collapse of “yen arbitrage.” Previously, with near-zero interest rates, large Asian entities borrowed yen at little to no cost, exchanged for dollars, and bought Bitcoin, gold, and high-yield assets, making massive profits. Now that interest rates have risen, bond yields have soared, and lenders are demanding repayment. These institutions have been forced to liquidate quickly, and do you know which asset becomes the “preferred ATM” when cash is tight? Exactly, Bitcoin, due to its high liquidity.

The situation worsened exponentially in Hong Kong, where several funds had 100% of their assets in BlackRock IBIT (Bitcoin ETF) and were highly leveraged. When yen arbitrage closed faster and silver plunged 20% in a single day, the funding chain of these funds broke. Liquidation was mandatory: on February 5th, IBIT trading volume hit an astonishing $10.7 billion—double the previous record—and $900 million in options premiums set a new all-time high. This is not normal trading; it’s a clear sign of forced mass selling. What 90% of people call “cryptomarket volatility” is, in reality, an explosion of leverage imbalances in the traditional financial system.

Institutional Liquidation: When “Deep Wallets” Run Dry

The second driver is more corporate: the “buyers” we considered unshakable—sovereign and pension funds with endless pockets—are now also out of money. Over a decade and a half of low interest rates, these institutions invested huge sums in illiquid assets: private equity, real estate, AI startups. These assets now make up 23% of their total portfolios. But with macroeconomic shifts and rising interest rates widening capital deficits, plus AI becoming an “obsessive money-burning competition”—with $66 billion planned for spending in 2025—cash simply isn’t enough. The solution? Sell what’s easiest to liquidate. Bitcoin, being volatile and with uncertain short-term prospects, has become the “first liquidation option” to raise quick cash.

This sale doesn’t mean betting against Bitcoin; it’s a passive maneuver by institutions—like someone pressed for cash selling their valuable jewelry instead of their real estate. But when multiple institutions sell simultaneously, it creates devastating systemic selling pressure, and retail investors end up absorbing the shock.

The OGs’ Collective Panic: When Experienced Traders Get Spooked

The third and most visceral driver comes from within: the emotional sell-off by crypto OGs. These veterans who boast of having “weathered numerous highs and lows” are daily immersed in communities, reading Ray Dalio’s warnings about the “end of the long cycle,” watching news about the AI bubble, unemployment data, and geopolitical risks. The more they analyze, the more anxious they become, initiating a cascading sell-off that feeds back negatively: you sell to me, I sell to you. The result? The S&P index didn’t crash, but the crypto market collapsed first. It wasn’t an external capital attack; it was OGs themselves getting scared.

Worse? These same people believe they are “contrarian investors,” but when an entire group turns contrarian, it becomes the biggest consensus. A collective panic is more severe than any structured collapse. Meanwhile, institutions took advantage of the “bloodied chips” discarded by desperate OGs, trading at prices 50% lower than four months ago.

Signals That Matter Now: Forgetting the Fund Guesswork

We’ve reached a critical point: has this drop already bottomed out? The honest answer is: don’t try to guess. This decline wasn’t caused by deteriorating Bitcoin fundamentals but by global liquidity restrictions and cross-sector risk exits that triggered passive declines.

What truly matters now are two concrete signals: first, whether the outflow of capital from IBIT has finally stopped (indicating yen arbitrage closure is over), and second, whether large on-chain transfers have decreased significantly (indicating passive institutional liquidations are ending). Ignore those KOLs shouting “buy now at the bottom” or “absolute zero”; they’re just chasing traffic or simply don’t understand the market.

For investors, the safest strategy now isn’t to guess the bottom but to wait for the right signals. It’s better to miss the lowest point than to enter unknown risks. Bitcoin’s current price hovers around $68,190 (with a 0.18% change in 24 hours), but these short-term fluctuations lack structural significance.

A New Reality: The Crypto Market Is No Longer an Isolated Lake

The “illogical” fall of Bitcoin revealed a fundamental truth: the crypto market is no longer a small, isolated lake. It’s increasingly interconnected with traditional finance and global liquidity flows. Future risks won’t be obvious black swans but “intersector lightning,” “emotional lightning,” and “passive sell-off lightning” operating behind the scenes, outside your view.

Can your cryptocurrencies withstand this turbulence? Remember: don’t let collective panic guide you. Pay attention to the two signals mentioned—they’re more useful than analyzing hundreds of candlestick charts. True opportunities are often hidden precisely in the majority’s panic.