Bitcoin’s recovery from a plunge below $81,000 last week began positively but appears to have stalled in recent days. Analysts are questioning whether the lowest point has been reached, or if there will be additional downturns.

A Santiment analyst noted that social media sentiment has shifted notably towards bearishness, with more discussions about a bear market. Historical analysis suggests that significant reversals often happen when retail investors have lost hope, as the market tends to move against common expectations.

Furthermore, Bitcoin’s 30-day and 365-day MVRV ratios indicate unrealized losses for traders, remaining in negative territory.

Pressure from Large Holders

Derivatives traders seem to be shorting again, anticipating further declines in BTC, albeit at lower volumes than earlier in the month. Caution is warranted as several indicators signal hesitance to declare a definitive bottom, including diminishing network activity and fewer active addresses.

The analyst pointed out that wallets holding between 10 and 10,000 BTC have been diminishing their amounts for six consecutive weeks after increasing their holdings earlier this month, with confirmation from CryptoQuant.

While the analyst expressed skepticism about a strong recovery to six figures as long as whales reduce their holdings, they do expect a short-term bounce.

“Overall, data points to the most likely scenario being a short-term bounce. A rebound above $90K again soon wouldn’t be a major surprise at all,” said the analyst.

A tweet by Santiment read:

“📊 Bitcoin’s distressing descent to $80K has sparked at least a modest recovery to $88K. Now, questions linger about whether last week’s dip represents the best buying opportunity we’ll encounter. Dive deeper in our latest analysis. 👇 Link to analysis Image Link

Slow Recovery Continues

Bitcoin did bounce back to around $89,000; however, Swissblock analysts remarked that ‘momentum still hasn’t sparked.’

“The momentum remains severely negative, at levels typically observed during late-stage capitulation. Until we see a shift in momentum, any increase is merely a tactical response.”

Additionally, analyst James Check highlighted that more leveraged positions may be cleared, warning that BTC could drop to between $70,000 and $80,000 to eliminate the remaining leverage.

As of now, BTC has been trading sideways, unable to surpass $88,000, currently hovering near $87,500 at the time of this report.