Bitcoin narrowly holds at $86,000! A rare "bullish reset" signal emerges, is it time to buy the dip?

Recently, the crypto assets market has experienced a new round of intense fluctuations. As of December 1, 2025, the price of Bitcoin saw a significant drop, falling nearly 6% in one day, touching the $86,000 mark. According to Gate's latest market overview, Bitcoin's 24-hour trading volume is massive, and the market sentiment indicator, the “Fear and Greed Index,” is at a low level, indicating extreme market panic. However, behind the significant price pullback and over 180,000 liquidations across the network, some astute analysts and institutional investors have observed a crucial shift: a rare “bullish reset” is occurring. This may indicate that the deep leverage washout has paved the way for a healthier rebound in the future.

Market Review: A Depth Pullback Affecting the Entire Line

As December just began, the crypto market encountered a “black opening”. The price of Bitcoin briefly fell below $87,000, and at one point touched down to $86,000. This is not an isolated case, as the entire market is showing a trend of decline: Ethereum fell by 4.84%, while tokens like ZEC and DOGE saw even higher double-digit declines.

This fall has led to large-scale leverage liquidations. According to Coinglass data, approximately 180,000 to 190,000 traders have been liquidated in the past 24 hours, with a total liquidation amount reaching 537 million to 553 million dollars, the vast majority of which were bullish long positions. This phenomenon clearly indicates that the excessive optimistic leverage that had previously accumulated in the market is being rapidly cleared.

The core logic of “bullish reset”: Why does a big fall instead foster opportunities?

The current fall is interpreted by many professional institutions as a necessary “leverage washout” rather than a structural collapse of the fundamentals. This “reset” mainly includes the following positive signals:

1. Concentrated Release of Excess Leverage Risks: Partners from top venture capital firms like Dragonfly point out that low liquidity, insufficient risk management, and excessive leverage have led to large-scale deleveraging in the market. This rapid decline is akin to a high-pressure wash, clearing out the weak long positions in the market and the risks associated with excessively high funding rates. Analysts from Delta Exchange also believe that this resembles a leverage wash rather than a fundamental collapse. Once the excess leverage is cleaned up, the market structure will become more stable.
2. The resilience of key support levels is showing: Although Bitcoin has fallen from the key resistance level of $92,000, it is showing initial signs of stabilization around $86,000. From a technical analysis perspective, recovering a certain integer psychological level after a rapid decline often signals a depletion of bearish strength and an attempt by bulls to defend. Gate square data shows that relevant technical indicators such as RSI, after a deep adjustment, may provide room for a rebound.
3. The macro liquidity environment is expected to reverse: Although short-term macro headwinds (such as cooling interest rate cut expectations and weak employment data) are putting pressure on risk assets, the market is about to welcome a potential liquidity turning point. Cathie Wood, CEO of ARK Invest, clearly pointed out that with the end of the U.S. government shutdown, a massive liquidity return to the market is expected, and the Federal Reserve's quantitative tightening policy is also set to end on December 1. She believes that the current “liquidity tightening” limiting the upward movement of the crypto assets market will reverse in the coming weeks. This shift in the macro backdrop is the cornerstone of the long-term bullish logic.
4. Valuation reset brings a window for quality asset allocation: This pullback has depressed the valuations of some high-quality tokens with actual income potential to near 2024 levels. Meanwhile, the development of on-chain fundamentals has not stalled, which makes some projects relatively attractive. The market pullback period is often a strategic window for investors to allocate high-quality assets at more reasonable prices.

Looking Ahead: What Catalysts Are Needed for a Market Rebound?

Despite the emergence of initial bullish pullback signals, several analysts warn that the market is currently in a “preliminary stabilization but not reversal” phase. To achieve a complete trend reversal, the following key catalysts need to be observed:

• Clarification of the macro path: The future direction of U.S. interest rate policy and the selection of the next chairman of the Federal Reserve (President Trump stated that he will soon announce a successor) will become the most significant factors affecting global risk assets. A clear macro policy path will greatly boost market confidence.
• The continuous warming of Bitcoin ETF fund flows: As an important source of incremental funds in this bull market, the inflow momentum of Bitcoin spot ETFs has recently slowed down. If the ETFs can restore sustained net inflows, it will provide solid buying support for Bitcoin prices.
• Successfully reclaimed key resistance level: On a technical level, Bitcoin needs to successfully reclaim and stabilize above the $92,000 strong resistance area. Some analysts even regard the $100,000 to $110,000 range as an important indicator of a true reversal in market sentiment.
• Healthy Derivatives Market: During the price rebound process, it is necessary to observe a moderate increase in open interest while avoiding excessive and aggressive leverage accumulation again. A healthy and not overheated derivatives market is the foundation for a lasting bull market.

Conclusion

In summary, the recent plunge in early December 2025 appears to be a concentrated release of market risk, but it may actually have completed a valuable “stress test” and “bullish reset”. As high-leverage longs are cleared out, macro liquidity approaches a potential turning point, and quality asset valuations return to attractive ranges, the market is accumulating strength for the next phase.

For investors, closely monitoring real-time data and on-chain metrics on professional platforms like Gate is crucial. Market volatility remains high, and short-term trends may fluctuate. However, understanding the underlying logic of this “reset” will help in grasping long-term trends amid complex market conditions. As the market repeatedly validates the truth: after the most frantic sell-off, new opportunities often emerge.