The crypto circle directly staged a "stunning reversal" this afternoon! In the early hours, Bitcoin plunged below $86,000 in a panic drop, Ethereum broke through the $2800 mark, causing many retail investors to panic sell and exit; but unexpectedly, in the afternoon, the bulls collectively gained strength, with BTC surging violently and stabilizing at $87,835, ETH rebounded straight back to $2,895, completing a deep V-shaped rebound in half a day, severely punishing those who sold in the early morning, leaving them regretful and biting their thighs!

Actually, the early morning plunge was foreseen, rooted in a concentrated outbreak of negative news last night. US PMI data both fell short of expectations, and the Fed's rate cut expectations were further delayed, making it unlikely to loosen monetary policy before June. The tightening of liquidity suppressed risk assets; combined with Trump's tariff threats and escalating US-Iran geopolitical conflicts, safe-haven funds flooded into gold, turning the crypto market into the first choice for capital fleeing, triggering panic selling.

From a technical perspective, the rebound was not accidental. During Bitcoin's sharp decline in the early hours, trading volume surged, clearing out panic sell-offs completely. The afternoon rebound was supported by volume, with Bitcoin stabilizing above the key support level of $87,500; ETH recovered all its losses more strongly, but caution is needed—there is resistance at $88,500 for BTC, and $2,950 for ETH is a tough hurdle. If it can't break through, it will still oscillate and bottom out, so don't chase highs blindly.

This week is a "super data week," and the future depends on two key events: the Federal Reserve interest rate decision on January 30, which will set the direction based on Powell's rate cut stance; and the core PCE inflation data on January 29, which, if it exceeds expectations, will shatter the rate cut fantasy. Tonight, attention should also be paid to US new home sales and consumer confidence index; poor data could trigger emotional swings.

In the short term, this is just a correction after panic, not a reversal! Those holding coins should stay cautious, and those without coins should not rush to buy the dip—wait until the data "boots" land before acting. The key to survival in the crypto world has always been controlling position sizes and maintaining rationality; don't be swayed by short-term volatility.