Recently, this market movement has been quite interesting. After Japan's 25 basis point rate hike, the market didn't continue to decline; instead, it showed a clear rebound. Even more exaggerated are the altcoins, with LIGHT surging 70% in one day, SOPH up 40%, and a bunch of low-liquidity small coins following the trend wildly. Many retail investors, seeing this scene, immediately think that the bearish sentiment has settled and the bull market is restarting, eagerly chasing the highs.

But the logic behind this requires careful analysis.

**Why is a rate hike actually good news?**

Actually, this is a classic pattern: when the bad news is fully priced in, it becomes good news.

The rate hike has been a topic of market speculation for several months, with uncertainty lingering. Now that the rate hike has been implemented and the news is clear—25 basis points, as expected—investors feel the situation is under control. Capital that was previously suppressed begins to believe the environment is manageable and starts to buy the dip in batches. The recent decline also helped, bringing prices back to what many consider a "cheap level," naturally attracting buy orders.

But what truly warrants caution is: large funds may be preparing to exit, and what they need most is liquidity and willing buyers. How to attract retail investors to chase the highs? By creating a false signal of "rate hikes are not scary, the market is resilient," which fosters a false sense of prosperity. Look at those surging altcoins—most are coins that usually trade quietly or are even unfamiliar to many, suddenly experiencing massive upward moves. This pattern is very old.

**Three risks exposed by the surge in altcoins**

Careful observation of the coins that have surged the most reveals a commonality: they are all low-circulation, low-profile new coins or small tokens. LIGHT, SOPH, and some unfamiliar projects suddenly experience large volume increases. This phenomenon often indicates several issues.

First, such coins are easily manipulated by a few large holders, leading to volatile price swings and extremely high risks. Second, high gains often come with high risks of being dumped—big players accumulate and then artificially pump the price, leaving retail investors as the stepping stones. Third, the market’s enthusiasm is concentrated on these "junk coins," which ironically indicates a lack of sustained momentum in mainstream coins—serving as a reverse indicator.

So don’t be fooled by superficial prosperity. Trading requires patience; chasing after altcoins at the peak is the easiest way to get trapped. Keeping an eye on mainstream assets like Bitcoin is the prudent approach.