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Why prices are dropping hard and what you must do now!?
Fear and selling are creating a mess, but stay calm. To get through this, you must understand exactly why money is disappearing from the market.
Jayson Still
January 20, 2026
TL;DR BOX
Global markets are getting hammered. Why? Because Japan raised interest rates (messing up a huge global trade strategy) and the U.S. looks like it might head into a recession.
Key points
The Fact: The Bank of Japan raised interest rates, triggering a massive global liquidation of the "Yen Carry Trade," forcing financial institutions to sell profitable assets to cover margin calls globally. Simultaneously, tensions between the Trump administration and the Fed are escalating with grand jury subpoenas, weighing heavily on market sentiment.
The Mistake: Thinking "bad news is good news." Not anymore. Weak economic data now just screams "Recession," causing investors to flee to cash.
The Action: Sit on your hands. Do not try to be a hero and buy the dip yet. Wait for things to calm down.
Critical Insight
This is a mechanical margin call, not a fundamental failure of blockchain technology. Institutions are selling Bitcoin and Ethereum because they have to (to raise cash), not because they want to.
Table of Contents
🌊 1. The "Yen Carry Trade" (The Invisible Tsunami)
This is the biggest reason for the crash, but nobody talks about it simply. Let’s break it down.
The Setup: For years, big hedge funds have been playing a game called the "Carry Trade."
They borrow money in Japanese Yen $JPYC ( ▲ 0.13% ) because the interest rate was basically 0% (free money!).
They use that free money to buy high-return stuff like U.S. tech stocks and Crypto.
The Crash: Last week, the Bank of Japan decided to raise interest rates. Suddenly, that "free money" wasn't free anymore. The Yen got stronger, and the cost of those loans skyrocketed.
The Result: Imagine you borrowed money to buy a house, and suddenly the bank demands the cash back immediately. What do you do? You sell the house. Big institutions are currently selling their Bitcoin $BTC ( ▼ 3.48% ) , Ethereum $ETH ( ▼ 7.08% ) , and Solana $SOL ( ▼ 4.97% ) - not because they hate crypto, but because they are forced to in order to pay back their Yen loans.
Key Takeaway: This is a "mechanical" sell-off. It’s about paying debts, not because Blockchain technology failed.
👻 2. The Recession Ghost
For most of this year, everyone thought the U.S. economy would have a "soft landing" (low inflation without crashing the economy).
Well, that dream is dying.
Recent reports show the job market is getting weaker. This triggered something called the "Sahm Rule" - a historically accurate indicator that says, "Hey, we are probably in a recession right now."
Why this matters for your bags: In the past, bad economic news was celebrated because it meant the Federal Reserve (The Fed) would cut interest rates to help. Now? Bad news just means the economy is breaking. When people are scared of a recession, they don't buy "risky" magic internet money. They buy cash and government bonds.
Until the fear settles, Bitcoin is being treated like a tech stock, not digital gold.
🏛️ 3. Washington Drama & The AI Bubble
It’s a big week for news, and most of it is adding fuel to the fire.
The Fed vs. Politics: Tensions are rising between the Trump team and Fed Chair Jerome Powell. There are even grand jury subpoenas flying around regarding internal renovation costs. Markets hate uncertainty, and right now, Washington is a drama factory.
Fed Chair Jerome Powell.
The AI Reality Check: Crypto has been riding the coattails of the AI boom (Nvidia $NVDA ( ▼ 4.38% ) , etc.). But investors are starting to ask, "Wait, are these AI companies actually making money yet?" As tech stocks drop, they drag crypto down with them.
What to watch this week:
Inflation Data (CPI/PPI): If inflation is hot and the economy is slowing, that is a worst-case scenario.
Bank Earnings: Big banks (JPMorgan, Goldman Sachs) are reporting earnings. This will tell us if the economy is actually healthy or just pretending.
🛡️ The Game Plan: How to Survive
So, the sky is falling. What should you do?
Stop Aggressive Buying: Do not try to catch a falling knife. The market is emotional right now.
Watch for "Decoupling": Right now, when the Stock Market (Nasdaq) drops, Bitcoin drops. We want to see Bitcoin stop following the stock market before we re-enter.
Patience is Profit: This is a liquidity flush. It hurts, but it clears out the gamblers. The institutions are selling because they have to. Once they are done selling, the prices will stabilize.
Final Thought: This is a bumpy ride, but remember: Volatility is the price you pay for performance. Stay liquid, stay calm, and don't let the macro storm wreck your long-term vision.
Crypto Fire Memes 🤣
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🥡 Key Takeaways
It’s Not About Crypto: Bitcoin isn't crashing because the tech broke. It’s crashing because of global chaos - specifically the Yen "Carry Trade" blowing up and fears of a U.S. recession.
Forced Selling: Big institutions are selling crypto because they have to, not because they want to. They need cash immediately to pay back loans. This creates "artificial" low prices.
All Eyes on The Fed: Everyone is waiting for Jerome Powell to cut interest rates. Until money becomes "cheap" again, risky assets like crypto will struggle.
Don't Be a Hero: Now is not the time to go "all in" with leverage. The smart move is to sit tight, protect your cash, and wait for the chaos to settle before buying back in.
Disclaimer: This newsletter is for informational purposes only and should not be considered investment advice. Traders should conduct thorough research, understand the risks, and carefully evaluate their decisions before investing in cryptocurrency.
If you’re interested in other topics and want to stay ahead of how Crypto is reshaping the markets, from whale strategies to the next major altcoin narrative, you can explore more of our deep-dive articles here:
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