Bitcoin has begun a modest recovery after a brutal sell-off that dragged prices down to nearly $80,000, with the cryptocurrency currently trading around $87,000.
The recent rebound comes after intense liquidation waves wiped out over $66 million in Bitcoin contracts, predominantly shorts, signaling significant market volatility.
However, despite the bounce, momentum indicators and trader sentiment remain fragile, hinting at the possibility of a deeper correction ahead.
According to Crypto Rover on X, Bitcoin’s Relative Strength Index (RSI) has dropped to levels seen only six times in its entire history, historically zones tied to strong bullish reversals.
This rare oversold condition is sparking discussions over whether these patterns will hold or unravel amid heavy selling pressure.
Technical Indicators Signal Mixed Outlook
The cryptocurrency momentum is attempting to improve, with buyers re-entering around the $86,000–$87,000 price range, but key technical signals are still bearish.
The monthly MACD (Moving Average Convergence Divergence) indicator, which tracks long-term momentum, remains in a bearish configuration.
According to Ali Charts on X, the last three times Bitcoin’s monthly MACD turned bearish, it resulted in an average 60% price drop, suggesting a potential slide towards $40,000 if history repeats itself.
Derivatives data supports this skepticism, with Bitcoin liquidations totaling $66.52 million recently — the majority of these were short positions losing $43.53 million, while longs accounted for $22.99 million.
The battle between longs and shorts underscores how fragile the current recovery is.
Despite this, some analysts point to ongoing strong market participation, with Bitcoin’s 24-hour trading volume exceeding $64.5 billion and the overall crypto market capitalization rising 1.61% to nearly $3 trillion, highlighting investor resilience amid fear.
Critical Support Levels to Watch
Bitcoin’s performance in the coming days will be crucial in setting the tone for December.
Should the price hold firm in the mid-$80,000 range, it could signal the start of a sideways consolidation phase, allowing the market to absorb recent shocks.
Conversely, if prices fall below this critical support, it may trigger a more severe correction aligned with bearish MACD projections.
Overall, Bitcoin is poised between recovery and a potential deeper bear market. Traders remain on edge as market forces continue to push and pull, with historical patterns and fresh liquidation data shaping cautious optimism versus growing concern.