The truth behind BTC's plunge: Not a crypto crash, but a global deleveraging triggered by the yen shock

No actual selling: ETFs, miners, and whales have not reduced their positions

The crash originated from derivatives: high-leverage longs were liquidated en masse at key price levels

Thin liquidity amplified the drop: order book gaps turned minor shocks into systemic volatility

Market structure remains intact: signs of recovery include capital inflows, increasing accumulation addresses, and declining volatility

1. Everyone was frightened by the crash, but the root cause was not the crypto market

BTC plummeted within minutes, sending market sentiment into panic. But if you only look at bitcoin, you’ll completely misjudge the situation.

This crash was not a crypto-only event, but a global asset sell-off:

US stocks plunged

US Treasury yields soared

Risk assets fell across the board

The trigger came from a market few pay attention to—Japan.

2. Japan changed its decade-long “cheap borrowing model,” instantly triggering a collapse in global risk appetite

Japan has maintained ultra-low interest rates for years, with global capital using the yen as a “low-cost funding currency” for cross-asset arbitrage (carry trade):

Borrow cheap yen

Buy BTC, tech stocks, Treasuries, or other high-yield assets

But when Japan suddenly raised borrowing costs, these funds had to flow back.

It wasn’t because BTC itself became worse, but because:

Financing became more expensive → position costs rose → carry trades had to be closed.

No conspiracy, no whale dumping, this was a typical

“macro-driven deleveraging.”

3. The first to be squeezed were high-leverage carry traders

The sudden strong rebound of the yen meant:

Leverage positions funded by yen became extremely expensive

Margin pressure increased

BTC long arbitrage costs surged

Therefore, these funds had to quickly reduce positions, triggering:

The first wave of BTC selling pressure → the downward chain reaction began.

4. The real breaking point was at $90K: a crowded high-leverage zone

BTC remained strong until the price broke through the most critical structural level: $90,000

There were:

Too many longs

Excessive leverage

Dense stop-loss and liquidation zones

The moment this level was breached:

Active selling surged, liquidity evaporated, and the market shifted from a decline to a free fall.

5. The real cause of the crash was liquidation, not selling

Long liquidations erupted in a chain reaction:

Stop-losses triggered → price dropped

Liquidations triggered → deeper drop

More leveraged positions blown up → market out of control

In just a few minutes,

over $600 million in longs were forcibly closed.

The crash was not caused by investors panic selling, but by:

forced selling.

6. Spot data reveals the truth: this was not “real selling”

After observing on-chain and ETF data, it can be confirmed:

ETFs did not reduce positions

Miners did not sell

Whale wallets continued to accumulate

The only real sellers were:

high-leverage derivatives players.

The market structure did not see “real selling pressure” as in a bear market.

7. Thin liquidity amplified the drop: a small shock became an avalanche

Recently, many exchanges have had insufficient order book liquidity:

Thin buy orders

Insufficient depth

A single large sell order could penetrate multiple levels

This turned what should have been a normal 3-5% drop into a sharp 10%+ plunge.

This same pattern occurred before BTC broke $30K in 2023.

8. This is not a bear market, but a healthy leverage flush

Typical bear market features include:

Long-term distribution of chips

Large institutions selling continuously

Significant increase in spot outflows

Long-term trend broken

This time, it’s the opposite:

Liquidations came from derivatives, not spot

Whales continue to accumulate

Funds have not left the system

Leverage ratio dropped rapidly (which is actually bullish)

This is more like a violent but beneficial “system detox.”

9. Signs of recovery have appeared: structure remains strong

On-chain and market data have already shown reversal signals:

Stablecoin inflows rebounding

Accumulation addresses increasing

Volatility declining

Derivatives leverage returning to healthy levels

As long as there is no similar black swan macro event like the Japanese policy change,

BTC’s mid-term structure remains strongly bullish.

The conclusion is

This round of BTC’s rapid crash was not an internal problem of the crypto market, but a global macro liquidity shock triggered by Japanese policy changes.

When the yen suddenly strengthened and financing costs soared, cross-asset funds that had long relied on “cheap yen carry trades” were forced to quickly flow back, triggering a chain of liquidations in the crypto market