Bitcoin (BTC) recently underwent a sharp correction, plunging 9% from its all-time high of $99.5K to $90.7K within just a few days. The sudden drop, fueled by panic selling from short-term holders (STH), sent shockwaves across the crypto market. Despite the volatility, many analysts believe this downturn mirrors past patterns—particularly the 2020 Thanksgiving selloff—and could set the stage for a strong recovery in the coming weeks.
As of the latest update, Bitcoin has rebounded slightly, stabilizing above $93,000 after a turbulent 24-hour period. This rebound raises a critical question: Was the flash crash on November 26 a temporary setback or the start of a deeper correction? More importantly, can history repeat itself and pave the way for another upward surge?
Panic Selling Triggers Sharp Bitcoin Correction
The primary driver behind Bitcoin’s recent price drop appears to be mass liquidation by short-term holders. According to crypto analyst James Van Straten, nearly $4 billion worth of Bitcoin was dumped between November 25 and 26—a selloff that surpassed even major market movements like August’s carry trade unwind.
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This wave of panic selling created a cascading effect, triggering stop-loss orders and amplifying downward pressure. Short-term holders, often more sensitive to price swings than long-term investors, likely exited positions amid fear of further losses, especially with low trading volumes during the US Thanksgiving holiday.
Alex Thorn, Head of Research at Galaxy Digital, highlighted that low liquidity periods such as Thanksgiving often exaggerate price movements. With fewer buyers in the market, even moderate sell pressure can lead to outsized declines. He pointed out that a similar event occurred in 2020 when Bitcoin dropped 17% over three days around Thanksgiving—only to surge over 300% in the following five months.
“Does history rhyme?” Thorn asked, suggesting that current market dynamics may be echoing that pivotal moment.
Historical Precedent: The 2020 Thanksgiving Dip
The 2020 Thanksgiving selloff remains one of the most telling benchmarks for today’s market behavior. At the time, Bitcoin fell from approximately $19,000 to $16,000 amid profit-taking and macro uncertainty. However, instead of entering a prolonged bear phase, BTC quickly regained momentum and began a historic bull run that carried it past $60,000 by early 2021.
This pattern is now being closely watched by analysts who believe seasonal trends and investor psychology play a significant role in Bitcoin’s price action. The end-of-year period often sees increased volatility due to reduced liquidity, portfolio rebalancing, and tax-related selling—yet it has also historically been a launching pad for major rallies.
Van Straten emphasized that after steep corrections like the one in late November 2025, Bitcoin tends to find strong support at key valuation metrics—most notably the Short-Term Holder Realized Price (STH Realized Price). This metric represents the average price at which coins held for less than 155 days were last transacted, serving as a psychological and technical floor during downturns.
“After the massive flush out during Thanksgiving 2020, Bitcoin went vertical from $10K to $60K, with many pullbacks along the way. The STH Realized Price was a key support level, and it could play a similar role now.”
Will $90.7K Mark Bitcoin’s Local Bottom?
While some analysts see signs of stabilization near $90.7K, others remain cautious about calling a bottom just yet. BTC trader Cryp Nuevo warned that further downside risk remains, with potential support levels between **$85,000 and $88,000**.
“The downtrend could extend a bit further before we see any significant recovery,” Nuevo stated, advising traders to remain vigilant and avoid premature bullish positioning.
Market structure also suggests that sustained recovery will depend on several factors:
- Whether long-term holders (LTH) continue accumulating during dips
- If institutional inflows resume post-holiday
- How macroeconomic conditions evolve, including Fed policy expectations
For now, Bitcoin holding above $93K offers a glimmer of hope. A successful retest and defense of this level could confirm that selling pressure is subsiding and investor confidence returning.
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Frequently Asked Questions (FAQ)
Q: What caused Bitcoin’s 9% drop in late November?
A: The decline was primarily driven by panic selling from short-term holders, exacerbated by low liquidity during the US Thanksgiving holiday. Nearly $4 billion in BTC was sold off in two days, triggering cascading liquidations.
Q: Is this selloff similar to previous market corrections?
A: Yes—especially comparable to the 2020 Thanksgiving dip, where Bitcoin fell 17% but later surged over 300% in five months. Analysts believe current conditions may mirror that bullish setup.
Q: What is the Short-Term Holder Realized Price (STH Realized Price)?
A: It's the average price at which BTC held for less than 155 days was last moved. It often acts as strong support during corrections and helps identify potential accumulation zones.
Q: Could Bitcoin fall below $90K again?
A: Some traders warn of further downside toward $85K–$88K if selling pressure persists. However, historical trends suggest that such levels would likely attract strong buying interest.
Q: When might Bitcoin start recovering?
A: Analysts anticipate a potential rebound after the Thanksgiving holiday period ends and liquidity improves. Past data shows strong post-holiday rallies are common in low-supply environments.
Q: How should investors respond to this volatility?
A: Staying informed through on-chain metrics and macro trends is crucial. Dollar-cost averaging (DCA) and avoiding emotional trading can help navigate uncertain markets.
Looking Ahead: Can Bitcoin Reclaim Momentum?
Despite the recent turbulence, the broader outlook for Bitcoin remains cautiously optimistic. The current correction aligns with typical market cycles—sharp rallies followed by healthy pullbacks—as speculative excesses are flushed out.
With Bitcoin stabilizing above $93K and historical precedents favoring post-Thanksgiving recoveries, many experts believe this dip could serve as a strategic entry point for long-term investors. On-chain data continues to show resilience among hodlers, while exchange outflows suggest accumulation rather than widespread capitulation.
Ultimately, whether $90.7K marks the local bottom or merely a midpoint in a longer consolidation phase will depend on how the market absorbs selling pressure in the coming weeks. But if history truly rhymes, Bitcoin may be setting up for another powerful leg upward—just as it did in late 2020.
As traders watch for signs of stabilization and renewed buying momentum, one thing is clear: volatility is not the enemy of progress in crypto—it’s often its catalyst.
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