According to the chain’s analyst Willy Wu, Bitcoin may experience a short-term rally that will hold investors back before the broader trend continues.
“Bull trap formation,” Wu said in an X message on Saturday, referring to a fake breakout where the market is entering a sustained trend. He added that it could last “until (the end of) April”.
Wu said his outlook is based on liquidity conditions rather than price levels. “If the capital comes back with the right type of long-term investors, I’ll be happy to change my view,” Wu said.
Bitcoin is “hard” in the middle of a bear market
From a long-term liquidity perspective, Wu said that Bitcoin (BTC) is “firmly in the middle of its bear market.” “Typically, after a quick flood down like ours, BTC likes to go sideways and rally where resistance is tested,” Wu said.
After reaching its all-time high of $126,000 in October, it is down about 46.82% and traded at $67,012 at the time of publication, according to CoinMarketCap.
Wu said this level is not the bottom for Bitcoin and the asset could see further downside. Crypto sentiment platform Santiment shared a similar view on Saturday, pointing out that whales are selling aggressively, while retail investors are buying below $70,000.
“When retail buys during whale sales, it usually indicates that the correction is not yet over,” Sentiment said.
Bitcoin investor flows have been in a “continuous recovery”.
Wu said that despite Bitcoin failing to maintain the “mid-70s” range after reaching $74,000 on Wednesday, investor flow has been in a “steady recovery” since mid-February.
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Wu is not the only analyst who thinks Bitcoin is in a bear market. Crypto analyst Benjamin Cowen recently told The Journal that 2026 is a “bear market year” for Bitcoin and is unlikely to make new highs.
“Despite the recent rally, Bitcoin is still in a bear market,” chain analyst firm CryptoQuant said Thursday.
This comes after the Crypto Fear and Greed Crypto Index, one of the most widely used gauges of crypto investor sentiment, returned to the “extreme fear” level after a brief recovery on Wednesday.
Magazine: The Debate About Bitcoin’s Four-Year Cycle Is Over: Benjamin Cowen
