4E: Japan's rate hike expectations trigger a chain reaction, a certain exchange's bitcoin falls below $84,000, and the end of Fed QT becomes a key variable

According to 4E's observation, market sentiment suddenly turned cold on December 1, with Bitcoin once dropping to $83,786 during the session, accumulating a decline of nearly 30% from the early October high. The core trigger came from the sharply rising expectations of a rate hike by the Bank of Japan: traders priced in a 76% chance of a rate hike in December and nearly 90% for January next year. After Kazuo Ueda released signals of "tightening ahead of schedule," Japan's two-year government bond yield rose to a 16-year high, and capital began to rapidly adjust for a potential policy shift. The rate hike expectations have negatively impacted global risk assets, and yen carry trades are seen as a potential systemic risk point—the market still remembers the turmoil in August this year when a rapid yen surge triggered a global chain sell-off. Another major shock came from a certain exchange. The company announced the establishment of a $1.44 billion cash reserve and, for the first time, admitted that it might sell Bitcoin under certain conditions, shaking its core narrative of "never selling coins," and causing an intraday plunge of 12%. Although it still increased its holdings by 130 BTC last week, the combination of debt pressure and market turmoil has made sentiment more sensitive.On the macro side, the probability of a 25bp rate cut by the Federal Reserve in December has risen to 87.6%, and QT will officially end today. Over the past two years, QT has withdrawn more than $2 trillion in liquidity, and stopping balance sheet reduction is seen as a key event marking the liquidity bottom of this cycle, which may help ease short-term market panic.4E Commentary: The rapid repricing of sentiment was triggered by Japan's rate hike expectations and the "coin selling" hint from a certain exchange, compounded by declining trading volumes and the looming risk of yen carry trades. In the short term, the market remains in a fragile zone. The end of QT by the Federal Reserve is one of the few positive signals and will determine whether risk assets can enter a "policy buffer period." The restoration of risk appetite will require the implementation of Japanese policy and a stabilization signal from BTC to resonate together.