Market timing remains the most important variable in this cycle, as investors face a true test of patience.
From a technical perspective, Bitcoin has pushed back to the $79,000 zone, regaining early February levels.
However, the price is still more than 10% below January’s opening price of $87,000, indicating that a large group of buyers from the first quarter remain underwater, keeping the Bitcoin bottom debate very much alive.
Historically, Bitcoin bottoms have tended to form after extended periods of downward pressure. In the 2017-2018 cycle, BTC pushed nine consecutive red monthly candles before bottoming out, and the 2021-2022 cycle followed a similar structure.
However, this time Bitcoin has only recorded five red monthly candles so far, indicating that the market may still be in the bottom phase.
Interestingly, the market’s patience has not yet fully translated into capitulation.
One analyst be shows that Long-Term Holders (LTH) supply at a loss is approaching levels last seen around Bitcoin’s bottom in 2018. However, the market may still need more loss realization to reach 2022 bear market stress levels before a bottom is confirmed.
Essentially, it appears that BTC, both in terms of technical signals and chain signals, is still bottoming out.
Against this background is that of Bitcoin [BTC] current price below $80,000, just another bull trap in disguise?
Bitcoin is chopping below resistance, fueling a bull trap and a brief debate
In addition to technical and on-chain signals, historical patterns also trend toward a bearish outlook for BTC.
From an investor perspective, March and April showed a strong recovery, with a gain of 13.7% after the 25% correction in January and February.
However, within the broader market context, investors view May as a weaker month because Bitcoin has rarely endured three consecutive bullish months during bear phases.
Against this background a whale opened a 20x leveraged Bitcoin position worth almost $40 million.
The trader’s last ten trades have generated $1.7 million in unrealized profits, indicating a strong ability to handle volatility. Given BTC’s current positioning, the chances of a new profitable move seem relatively high.
In this context, a heavy long position near downside zones increases liquidation risk.
As the chart shows, Bitcoin liquidations cluster at over $230 million in long positions around the $77k level.
With historical patterns, technical indicators, and on-chain data still suggesting that BTC may not have bottomed out yet, the $40 million short position appears to be a strategic play, potentially creating a bull trap.
Final summary
- Bitcoin continues to consolidate below $80,000 as technical, on-chain and historical signals indicate the bottom may not have been reached yet.
- Heavy long positioning around $77,000 increases liquidation risk, supporting the case for a strategic short amid potential bull trap conditions.