Bitcoin Attempts Recovery After Brutal Sell-Off as Analysts Warn of Much Deeper Risk

Key Takeaways

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  Bitcoin is recovering near $87,000 after a sharp sell-off and heavy liquidations.
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  Shorts were hit harder, suggesting aggressive late-stage bearish positioning.
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  Oversold indicators hint at a possible bottom, but monthly MACD signals risk of deeper downside.

The cryptocurrency is trading around $87,000 at the time of writing, showing mild intraday gains following a violent wave of liquidations that rattled investor confidence across the digital-asset market, pushing the price to almost $80,000.

Fresh derivatives data shows $66.52 million in Bitcoin liquidations, with shorts accounting for the majority ($43.53M) while longs lost $22.99M. Despite the slight rebound, sentiment remains fragile as traders debate whether the correction is ending or just beginning.

Heavy Selling Pressure Eases but Recovery Still Faces Strong Resistance

The recent upmove follows a steep plunge that sent Bitcoin rapidly through multiple support zones. The RSI — which recently collapsed to deeply oversold territory — is now attempting to stabilize, a zone that historically preceded strong bullish reversals only six times in Bitcoin’s entire price history, based on data shared by Crypto Rover.

Short-term momentum is improving, but the broader picture remains unclear. On the 4-hour chart, buyers are returning near the $86,000–$87,000 range, yet indicators like the MACD remain structurally bearish, signaling that the recovery has not yet shifted larger-timeframe momentum.

Analysts Split: Bottoming Event or the Start of a Larger Meltdown?

Market strategists are sharply divided on what comes next. Big-picture analysts warn that Bitcoin may not be out of danger. Ali, a widely followed market watcher, pointed out that each time the monthly MACD turned bearish in past cycles, Bitcoin eventually fell roughly 60% on average. If that pattern repeats, it would imply a potential drop toward $40,000.

On the other hand, bullish analysts emphasize the historical rarity of current oversold conditions, arguing that long-term accumulation zones have typically formed when fear reached extremes.

They also note that participation remains strong: the global crypto market cap has risen 1.61% to $2.97 trillion, and Bitcoin 24-hour volume surpassed $64.5 billion, suggesting the downturn has not pushed investors away.

Critical Levels Ahead Will Determine Whether Panic Turns Into Consolidation

Bitcoin’s price performance over the next few trading sessions could define the market narrative heading into December. If bulls can defend support in the mid-$80,000 range, the recent breakdown may transition into a sideways consolidation phase.

But if that floor gives way again, fears of a deeper bear-market structure — like the one projected by the MACD model — could escalate rapidly.

For now, Bitcoin remains suspended between fear and resilience — rebounding from oversold territory, yet still overshadowed by the possibility of a far larger correction.