Bitcoin Recovery Gathers Steam as Analysts Call $80K Bottom, Cite 91% Probability of New Highs

Technical Patterns Signal High-Probability Recovery

Bitcoin is showing signs of recovery after hitting a local low of $80,500 last week, with analysts presenting compelling evidence that the bottom may already be in place. According to a capitulation-volume model analyzed by Bitcoin analyst Astronomer, the recent price action mirrors historical patterns that have consistently preceded major rallies ^[1].

The model, based on three consecutive high-volume red weekly candles, has identified 11 similar instances throughout Bitcoin's history. In eight of these cases — representing 73% of occurrences — the pattern marked the beginning of a new leg higher that ultimately led to fresh all-time highs. In two additional cases, Bitcoin rallied approximately 35% before any continuation of a broader downtrend ^[1].

This historical analysis forecasts a 91% chance of Bitcoin reaching $118,000 from current prices, a 99% probability of hitting $112,000, and a 75% chance that the broader bull market continues ^[1]. Only one historical instance resulted in sustained downside, making it a clear statistical outlier.

Hayes: Liquidity Expansion to Drive Next Leg

Former BitMEX CEO Arthur Hayes has reinforced the bullish case, maintaining that Bitcoin's recent 35% drawdown to $80,500 marks the cycle floor ^[4]. Hayes cited an imminent end to the Federal Reserve's quantitative tightening cycle and rising US bank lending as key factors supporting his thesis.

"We chop below $90K, maybe one more stab down into low $80k's but I think $80K holds," Hayes stated, arguing that liquidity expansion, rather than sentiment, will drive the next upward move ^[1]. The Fed is expected to stop shrinking its balance sheet after this week, while bank lending increased in November, creating what Hayes described as a "rising-tide effect" for crypto ^[4].

Fed Policy Uncertainty Adds Volatility

Bitcoin's recovery attempt comes amid significant shifts in Federal Reserve rate-cut expectations. Following a stronger-than-expected nonfarm payrolls report showing 119,000 jobs added versus 53,000 expected, market participants have dramatically recalibrated their outlook ^[3].

CME Group data currently shows a 78.9% probability of a 0.25% rate cut in December, sharply higher than the 44% probability seen just one week earlier ^[3]. New York Federal Reserve President John Williams signaled that a near-term rate cut remains possible, citing labor-market softness as a greater concern than inflation ^[3].

Economist Mohamed El-Erian described the volatility in Fed expectations as "stunning," attributing it to "shutdown-disrupted data, a dual-mandate squeeze, a lame-duck Chair, and the lack of a clear strategic framework" ^[4].

Technical Resistance Ahead

Despite the optimistic longer-term outlook, Bitcoin faces immediate technical challenges. The 20-day exponential moving average at $94,620 is likely to act as a major hurdle on the upside ^[2]. If the price fails to break above this level, bears could attempt to push Bitcoin down to $73,777 ^[2].

A "death cross" formation on November 15, when the 50-day simple moving average crossed below the 200-day equivalent, adds to near-term uncertainty ^[5]. However, buyers need to push and maintain the price above the 20-day EMA to build momentum toward the psychological $100,000 level ^[2].

Sentiment Shows Signs of Recovery

Market sentiment indicators are beginning to improve after hitting extreme lows. The Crypto Fear & Greed Index has nearly doubled from its joint lowest levels for 2025, sitting at 19/100 on Monday ^[5]. This recovery in sentiment, combined with historical technical patterns and improving liquidity conditions, suggests the worst of the correction may be behind the market.