Bitcoin’s Recovery Shows Signs of Weakness

Bitcoin managed to climb back above $90,000 recently, which is interesting because that level has often acted as support in the past. But I’m noticing something odd about this recovery. It doesn’t feel quite right to me. The move seems a bit forced, maybe even artificial.

Market analyst Rekt Fencer shared some thoughts on social media that caught my attention. He’s suggesting Bitcoin might be setting up what he calls a “massive bull trap.” That’s when the price breaks through resistance—like the $90,000 mark—only to reverse and head lower. It tricks investors who bought at the peak into thinking they’ve made a good move, but then they get stuck holding positions as prices fall.

Historical Patterns Look Concerning

Fencer pointed to something that happened back in early 2022. Bitcoin reclaimed its 50-week moving average back then, which is currently sitting above $102,300. After that move, the cryptocurrency plunged about 60%, dropping below $20,000 by June of that year.

The recent recovery from lows around $84,000 might look promising on the surface, but Fencer thinks we shouldn’t get too excited. Bitcoin is still trading below that 50-week moving average, which is worth noting. If history repeats itself—and I’m not saying it will, but if it does—Bitcoin could potentially drop to around $36,200. That would represent the low point of this bearish cycle.

But here’s the thing: markets don’t always follow the same patterns. Just because something happened before doesn’t mean it’ll happen again. Still, it’s worth keeping an eye on.

Some Analysts See a Different Picture

Not everyone shares this bearish outlook, though. Market researcher Miles Deutscher has a much more optimistic take. He says there’s a 91.5% chance Bitcoin has already hit its bottom. That’s a pretty specific number, and I’m not sure how he calculates it exactly, but his reasoning is interesting.

Deutscher points to the recent flood of negative news stories. We’ve had concerns about Tether, worries about China’s crypto policies, and general market uncertainty. He thinks these periods of intense negative sentiment often mark local price bottoms. When everyone’s pessimistic, that’s sometimes when things start turning around.

He’s also noticing changes in market flows. The selling pressure from large investors—what he calls “OG whales”—seems to be easing up. Order books are showing more buying interest, which could mean sentiment is stabilizing.

Market Conditions Are Shifting

The liquidity situation appears to be changing too. Market conditions have been tightening in recent months, which might sound bad, but it could actually help prices find a floor. There’s also talk about potential changes at the Federal Reserve. A new chair with more dovish policies, combined with the end of quantitative tightening, could create a more favorable environment for buyers.

Deutscher’s main point is that with so much fear and uncertainty in the market, plus these improvements in trading flows, the odds favor Bitcoin having found its bottom. I can see his logic, but I’m not completely convinced either way.

What strikes me is how divided the expert opinions are. You’ve got one side warning of a potential 60% decline, and the other side saying we’ve probably already seen the worst. Both sides make reasonable arguments, which makes this market particularly tricky to navigate.

Personally, I think the truth might be somewhere in the middle. Bitcoin could test lower levels without necessarily dropping 60%. Or maybe it consolidates here for a while before making its next move. Markets have a way of surprising everyone, and crypto markets especially so.

The $90,000 level will be important to watch. If Bitcoin can hold above it convincingly, that would be a positive sign. But if it keeps struggling around this area, the bull trap scenario becomes more plausible. Either way, it’s probably wise to approach this market with some caution right now.