The nightmare of August 5, 2024 may be set to replay in the summer of 2026.

That sudden crash—you remember it, right?

On August 5, 2024, Bitcoin fell 20% in a single day, and the entire network saw over 1 billion US dollars liquidated. The whole market was strewn with the dead; even old hands in the market were stunned.

After reviewing what happened, the culprit wasn’t Mt. Gox, and it wasn’t the U.S. government dumping.

It was the reversal of the yen carry trade.

Now, it seems the same plot is about to unfold again.

On June 18, the U.S. Federal Reserve’s FOMC released hawkish signals, suggesting that rates could be raised in 2026.

The next day, the Bank of Japan’s Deputy Governor Iimene Yoshi-sanz (Shin?) directly said:

“We will continue to further raise interest rates.”

Then Japanese officials simultaneously reiterated that action would be taken against yen forex speculation.

The USD/JPY promptly dropped to around 161.1.

—Two of the world’s largest liquidity providers are tightening in sync within the same cycle.

Does this scene feel familiar?

In July 2024, U.S. recession fears heated up while Japan raised rates. When these two forces twisted together, global carry trades collapsed. A large amount of funds borrowed in yen to buy U.S. bonds, U.S. stocks, and even to buy Bitcoin with leverage were forced to liquidate.

The result was: U.S. stocks fell, Japanese stocks fell, and BTC suffered the worst drop.

So what about now?

A hawkish Fed + Japanese central bank rate hikes—exactly the same recipe.

The probability of a carry trade reversal may be higher than 60%.

Why?

Because the size of the yen carry trade is larger than it was in 2024.

Back in 2024, the USD/JPY was still around 150. Now it’s already pushed up to 161. Carry trade profits are getting thinner, and with even the slightest disturbance, these funds will act like startled birds—frantically closing positions.

And how much of this capital has flowed into the crypto market? No one can give an exact number, but just look at the correlation between BTC and the U.S. stock market—you’ll know that quite a bit has.

What will institutions sell first? The most liquid assets. BTC is easier to sell than junk bonds, and easier to sell than U.S. stocks.

Compared with July–August 2024, what’s different this time?

The difference is: last time it was a combo of “recession expectations + rate hikes”; this time it’s a combo of “hawkish expectations + actual rate hikes.”

In 2024, Bitcoin fell from 70,000 to just over 50,000—a 20% drop. If a reversal kicks in again, given the higher leverage and more fragile liquidity in today’s market, the drop could be even larger. #我的Gate交易时刻 #沃什首秀美联储利率不变 #Gate现货交易量增幅全球第一 $BTC $ETH $SOL