Analyst: Bitcoin Expected to Rebound, But Dropping Below $80K Could Signal Tough Times Ahead

Bitcoin’s recent fluctuations have led to short-term holders selling off their assets, shifting market sentiment from optimistic to pessimistic amid increasing selling pressures. Analyzing the current scenario, experts believe that the market is at a pivotal moment where upcoming movements could indicate either a minor setback or the start of a more serious decline. While technical indicators hint at a potential rebound, breaking through the $80,000 support level could pose risks for the market.

Key Takeaways

Recent volatility in Bitcoin has led to increased selling pressure and a shift from positive to negative market sentiment.
The $80,000 support level is crucial; maintaining it may point toward recovery, while breaching it could lead to further declines.
On-chain metrics suggest potential undervaluation of Bitcoin at its current price.
The proposal from MSCI regarding companies with substantial Bitcoin holdings has created uncertainty in the market.
Some analysts remain optimistic long-term, with predictions of substantial future growth in Bitcoin’s value.

Bitcoin’s Market Dynamics and Key Support Levels

Bitcoin has recently experienced significant volatility, affecting short-term holders who are now capitulating and causing a shift in market sentiment. The selling pressure has surged, particularly among leveraged positions, resulting in a cautious atmosphere.

According to analysis from CryptoQuant, familiar patterns from previous market corrections are emerging. The current market stands at a key point—what happens next could define whether this is a fleeting dip or the onset of an extended downturn.

At this moment, there are two interpretations of Bitcoin’s price action:

The price indicates the bottom of a correction within an ongoing bull cycle.
The decline could signal a longer bear market if the worst is yet to come.

Importance of the $80,000 Support Level

Technical indicators suggest various outcomes depending on Bitcoin’s ability to maintain essential price levels. The combined analysis of short- and long-term SOPR by CryptoQuant indicates a strong likelihood of a rebound in the short term. Nevertheless, failing to hold the $80,000 support could open the floodgates for extended price weaknesses.

Bitcoin Technical Analysis

Notably, analysts believe that a significant drop beyond 70% from its all-time high, which has been characteristic of past bear markets, seems improbable this time. Concurrently, on-chain analyses indicate Bitcoin might be undervalued at current levels.

The BTC NVT Golden Cross indicator recently dipped below -1.6, historically signifying that Bitcoin’s market capitalization is undervalued relative to its on-chain activities, suggesting it may revert toward the mean in the near future.

Bitcoin NVT Golden Cross

This technical signal has pinpointed favourable points for entering long positions in the past. However, experts advise caution against using leverage given the current market volatility.

In early November, Bitcoin’s dominance surpassed 60% but stabilized around 59% as investors flocked to BTC amid broader market downturns, as per reports from NYDIG.

Bitcoin Dominance Chart

The weekend witnessed the second-largest recovery in four months following a challenging week marked by selling pressures.

Impact of Index Classification on Market Sentiment

Recent findings highlight that MSCI’s consultation on potentially excluding firms holding over 50% of their assets in Bitcoin from global indexes played a role in the drastic market collapse that saw $19 billion liquidated within 24 hours.

This proposal could force Bitcoin-centric companies like MicroStrategy into selling by index funds that track MSCI benchmarks, adding structural uncertainty to an already vulnerable market affected by Trump tariffs, weak Nasdaq performance, and excessive leverage.

In response to these MSCI concerns, Michael Saylor asserted that MicroStrategy operates as a publicly traded entity generating $500 million in recurring software revenue and Bitcoin-backed credit products, rather than as a passive fund or holding company. He emphasized the launches of five new digital credit tools totaling $7.7 billion in notional value this year, showcasing MicroStrategy as an innovator rather than merely a treasury holder.

Days after the crash, JPMorgan contributed to bearish sentiments with a report stressing MSCI risks. However, traders criticized the timing of the report, noting JPMorgan's historical trend of releasing negative analysis during market downturns.

The definitive decision from MSCI is expected on January 15, 2026, with any changes potentially instituted the following month. While some analysts believe that the crash was primarily due to tariff announcements and liquidations in derivatives, rather than index classification apprehension, the consultation has nonetheless introduced persistent structural uncertainties that could linger until the announcement.

Long-Term Outlook Amidst Short-Term Setbacks

Despite recent market difficulties, leading analysts maintain a bullish long-term perspective. For instance, PlanB has reiterated forecasts from 2019 anticipating Bitcoin’s market capitalization could reach $10 trillion, translating to $500,000 per coin by 2028 following the ongoing halving cycle.

This model previously predicted a rise in Bitcoin's market cap from $100 billion to $1 trillion during the 2020-2024 period, an outcome that unfolded as anticipated.

However, technical analysts have noted that Bitcoin closed its second consecutive weekly candle beneath the 50-week EMA, a historically troubling pattern that preceded 50% declines in both 2018 and 2022.

Opponents of the four-year cycle theory argue that this paradigm may no longer hold relevance as Bitcoin progresses and institutional adaptation accelerates. Analyst Ted Pillows suggested that this cycle might be “dead,” while others maintain that Bitcoin's fundamental adoption curve remains intact regardless of transient volatility or discussions regarding index classifications.

If Bitcoin can recover above $90,000, breaking past $100,000 would likely spur significant Fear of Missing Out (FOMO) among traders who previously sold their positions, expecting even lower prices around $75,000.