The past few days of the New Year opening have indeed been somewhat stiff. Bitcoin has failed to break above 90,000, Ethereum repeatedly tests below $3,000, and the total liquidation amount across the network has exceeded $200 million, with over 160,000 traders forced to liquidate. It looks like a perfect storm of liquidity shortage and emotional panic—big funds are still on holiday, retail investors and quantitative algorithms are selling off each other, and any rebound is doomed to be pushed back down.

But a closer look reveals that there are actually many signals hidden in these times. Veteran market participants know well that true opportunities often emerge in the most desperate moments.

**Technical Perspective**

BTC is currently fluctuating between 87,000 and 88,000, with the 86,000 to 86,500 range being the recent critical threshold. A break below this could test the 84,000 level below. Interestingly, on-chain data shows that large wallets are actually accumulating during the decline. This indicates that genuine long-term capital is using short-term panic to buy in, forming a stark contrast to retail investors' panic sentiment.

ETH's situation is similar. The 2,950 to 2,980 price range has been tested repeatedly over the past few days, with 2,880 to 2,900 serving as the last line of defense. If this week can see a volume breakout above 3,000, it could trigger a chain reaction, leading to a substantial rebound.

**Sentiment Indicators Flare Red, But the Story Hasn't Collapsed**

The Fear & Greed Index currently shows an extreme fear state, which usually indicates that market psychology is extremely fragile. However, the major negative news has almost been fully priced in.

On the other hand, the Federal Reserve has cut interest rates three times in December, and the liquidity environment isn't as tight as imagined. Although there has been recent outflow from Bitcoin ETFs, this doesn't change the long-term trend of institutional allocation to crypto assets—MicroStrategy recently added over 2,000 Bitcoin at an average price of $970,000, a move that is essentially a vote of confidence with cash.

**A New Narrative Is Brewing**

Looking ahead to 2026, new tracks such as AI and crypto integration, RWA (Real-World Asset on-chain), and privacy coins have entered the eyes of leading institutions. Some big funds have already begun to deploy in these directions, indicating that the market isn't waiting for a rebound but is preparing for the next cycle.

Ultimately, the current downturn is more like consolidation rather than a true recession. Those who can stay clear-headed and find support points during this time are often the winners in the subsequent upward trend.