Just now, there was a fierce move in the Shanghai silver market, with prices hitting new highs all the way up—the short squeeze drama was quite spectacular.

The powder keg behind this surge is the market's renewed frenzy over betting on a Fed rate cut. The probability forecast once shot above 85%. At the same time, the Bank of Japan is sending increasingly strong signals about a rate hike, which is fueling anxiety over whether to unwind carry trades.

On the surface, this is a feast for precious metals. But digging deeper, this actually points to several more critical issues:

**Liquidity hunger has seeped into every corner:** Even a market as large as silver can experience a short squeeze driven by tight inventories and expectations, which shows just how desperate global markets are for easy money. Capital is searching everywhere for any asset with a compelling story, and this sentiment itself is fuel.

**Market mentality is shifting from risk aversion to chasing gains:** The silver surge isn’t just because it’s a safe haven—it’s also because it’s seen as extremely sensitive to loose monetary policy and economic stimulus. This underlying logic is similar to that of cryptocurrencies—especially assets like ETH, which represent the future of the digital economy. Heightened expectations for rate cuts effectively lower the thresholds for holding risk assets.

**Divergence in monetary policy between the East and West has become a new theme:** I previously mentioned that a potential Bank of Japan rate hike could cause carry trade capital to flow back, which would be a blow to the market in the short term. But now, expectations for a Fed rate cut are even stronger, and these two forces are tugging at the global capital pool. Short-term volatility will definitely intensify, but in the mid-to-long term, if major Western central banks turn the liquidity taps back on, the impact on the global risk asset pool will be much greater.

So what does this have to do with the crypto market?

The logic is simple—don’t look at any market in isolation. Capital is fluid, logic is interconnected, and sentiment is contagious.