- Bitcoin’s current setup carries both promise and peril.
- Is BTC flashing another bull trap, or is this the setup for a full-blown squeeze?.
For Bitcoin [BTC] to stay in bull mode, it needs to crush those overhead resistance levels. Otherwise, as AMBCrypto pointed out, shorts are already circling, waiting to feast on any sign of weakness.
But reclaiming those high-value price nodes won’t be a cakewalk.
Historically, breakout euphoria tends to bait weak hands into early profit-taking, giving bears the perfect setup for a downside liquidity sweep.
Now, with BTC knocking on the door of its late-January highs around $106,249, the setup is eerily familiar. Is this the beginning of yet another well-engineered bull trap?
Spotlighting Bitcoin’s STH cohort
Since Bitcoin tore through the $93k barrier, the STH MVRV (Market-Value-to-Realized-Value) ratio has been steadily climbing, with short-term holders (> 155 days) pocketing a cool +10% on their positions.
In layman’s terms, these short-term players are sitting on unrealized profits, with their entry points comfortably below BTC’s current market value.
Source: Glassnode
Looking back at the previous cycle, we saw the STH MVRV peak when BTC tapped $98,154 on the 21st of November.
However, the rally didn’t stop there. Bitcoin continued to inch its way to the $106k mark over the next month, absorbing the pressure.
But here’s where things went south. The bid-side support couldn’t hold the line, as these STHs flooded the market with liquidity, sending the NUPL (Net Unrealized Profit/Loss) into deep red territory.
This liquidity dump triggered a market reset, with BTC ultimately closing at $76,270 by early April.
Are the bears ready to roar again?
Coinglass data is flashing a cautionary signal: Open Interest (OI) in Bitcoin derivatives has surged back to $66 billion, mirroring the levels seen when BTC was flirting with the $104k range last Q4.
It’s a high-stakes game.
Source: Coinglass
With price action testing historical ceilings, short-term holders sitting on decent gains, and Open Interest heating up, the ingredients for volatility are all in place.
The next few days might just decide whether Bitcoin’s rally has real legs – or if it’s just another bull trap in disguise.