Bitcoin investors may not have seen the end of the recent pain, as analysts warn of lingering leverage in the market that could trigger additional downward moves.
Crypto analyst James Check described the recent market turmoil as a “2-sigma long liquidation event”, which wiped out a significant portion of leveraged traders. While most of the leverage has already been removed, Check cautioned that the market still has a “nose” for sniffing out remaining positions:
“We wouldn’t be too surprised if we wick into the $70k–$80k zone to flush the final leverage pockets.”
A 2-sigma liquidation event refers to a statistically significant price movement—two standard deviations from the mean—that forces mass liquidation of leveraged positions. Bitcoin fell over $24,000 in just 10 days, reaching a seven-month low near $82,000 on November 21.
Signs of a Local Bottom
Despite the sharp sell-off, the market shows tentative signs of stabilization. Augustine Fan, head of insights at crypto trading software provider SignalPlus, told Cointelegraph that Bitcoin may have found a local bottom:
“Markets are currently so oversold from both sentiment and technical perspectives (such as Bollinger Bands), and prices are likely to have seen local lows for now, absent any new exogenous factors.”
Fan expects Bitcoin to trade between $82,000 and $92,000 in the near term, with the next significant support level around $78,000. A sustained break below this could open further downside, though this is not considered the base case.
Whale Activity Remains Key
On-chain data from CryptoQuant also highlights a tentative recovery shaped by institutional redistribution and structural weakness, signaling a possible local bottom. Analyst Carmelo Alemán noted:
“The recovery is promising, but the end of the bearish phase requires a clear shift in whale behavior.”
Despite overall stabilization, the 1,000 to 10,000 BTC whale cohort continues to sell, preventing full confirmation of a trend reversal. Analysts suggest that a sustained rebound will depend on these large holders switching from distribution to accumulation.