Bitcoin could be on the verge of a short-term price rally that may catch many investors off guard before a continuation of the broader downtrend, according to insights shared by on-chain analyst Willy Woo. He referred to this phenomenon as a “bull trap” in a recent post on X, suggesting that this misleading breakout might occur until the end of April.
Woo emphasized that his analysis is rooted in liquidity conditions rather than mere price levels. He stated, “If capital comes back in force with the right type of long-term investors, then I”ll happily change my views.” Currently, he considers Bitcoin to be “solidly” positioned within the middle of its ongoing bear market.
From a liquidity standpoint, Woo explained that following rapid downward price movements, Bitcoin tends to stabilize and experience sideways trading, potentially leading to a rally that tests existing resistance levels. Since reaching an all-time high of $126,000 in October, Bitcoin has declined approximately 46.82%, trading at $67,012 as of the latest data from CoinMarketCap. Over the past month, the leading cryptocurrency has recorded a 3.74% increase.
Woo cautioned that the current price level is not indicative of a bottom, and further declines may be expected. Supporting this view, the crypto sentiment platform Santiment noted that large holders, or “whales,” are actively selling their assets while retail investors are purchasing below the $70,000 mark. Santiment commented that this trend typically suggests the correction phase is still ongoing.
Despite Bitcoin failing to maintain the “mid-70s” range following a spike to $74,000 earlier in the week, Woo highlighted that investor flows have been showing signs of “consistent recovery” since mid-February. He is not alone in his assessment; other analysts, including Benjamin Cowen, have expressed similar sentiments regarding the current bear market conditions, projecting that 2026 may not yield new all-time highs for Bitcoin.
On a related note, analytics firm CryptoQuant reiterated on Thursday that Bitcoin remains entrenched in a bear market despite recent upward movements. This outlook aligns with findings from the Crypto Fear and Greed Index, which recently dipped back into “extreme fear” territory after a brief recovery earlier in the week.
