BTC Bulls Face 'Bull Trap' Alert Following $76K Price Rejection
Major resistance at six-week peaks proved too strong for Bitcoin bulls, with open interest patterns triggering concerns about a potential BTC price reversal.
The recent Bitcoin (BTC) recovery rally threatens to transform into a textbook "bull trap" scenario following price rejection at significant resistance levels.
Key points:
- An open interest divergence coupled with stagnant Coinbase spot demand confronts Bitcoin as prices climb beyond $75,000.
- Analysis suggests structural fragility could bring the rebound to an abrupt end.
- Reaching toward the $80,000 level in any upward push will prove "challenging."
Absence of "spot buying support" in BTC market
Fresh analysis from blockchain analytics platform CryptoQuant published on Tuesday cautions that Bitcoin's recent price recovery may be on the verge of collapse.
"Currently, the Bitcoin market is revealing a significant structural weakness as it shifts from a robust spot-driven environment to an excessively heated rally propelled mainly by derivatives activity," noted contributor Easy On Chain in a QuickTake blog post.
Multiple indicators lend credence to this hypothesis, with the Coinbase Premium Index among them — representing the price differential between Coinbase's BTC/USD pair and Binance's BTC/USDT pair.
Notwithstanding BTC/USD reaching six-week peaks, the index persists in dropping into negative zone, signaling an absence of spot demand from the United States.
"With this lack of spot-buying support as a foundation, we observe an extreme disconnect between different investor groups where sophisticated money is strategically distributing its holdings," Easy On Chain added.
Another CryptoQuant contributor, MAC_D, concurred with this assessment, highlighting a stark contrast between veteran and newer market participants.
"Latest on-chain metrics reveal that veteran investors are selling, while fresh investors are buying into the market, signaling a transparent shift in ownership," they stated in a distinct Quicktake post.
The fundamental concern, nonetheless, centers on open interest (OI), which indicates the market finds itself in a vulnerable position.
"When examining the 1-hour timeframe, a divergence pattern between price movement and open interest is developing. Despite strength in the spot market, futures market participants seem hesitant to assume additional risk exposure," MAC_D explained further.
"Should this absence of bullish positioning within the futures market persist, the current upward move may evolve into a bull trap."
Upward movement for Bitcoin price will be "challenging"
According to previous Cointelegraph coverage, Bitcoin encounters substantial selling pressure walls within the mid-$70,000 range, aligning with previous local lows from April 2025.
Information from CoinGlass demonstrates price action halting halfway through the ask-liquidity zone at $76,000 prior to reversing direction.
Consequently, market participants maintain a measured perspective regarding prospects for a comprehensive market recovery.
Within his most recent X analysis, Keith Alan, cofounder of trading resource Material Indicators, cited multiple moving average (MA) trend lines along with proprietary trading instruments to contextualize the probability of a complete bull-market resurgence.
"Currently, bulls are working to convert resistance at the Q2 2024 Timescape Level into support, with psychological resistance at $75k now entering the picture. Should bulls manage to push prices higher, subsequent targets lie at the Q2 2025 Timescape Levels positioned at $78.3k and $82.5k," he detailed.
"The convergence among the moving averages, Timescapes Levels and the overall structure reinforces those levels, and substantial ask liquidity is layered between the current price and those targets which will make that upward move challenging."
Trader Mister Crypto, in the meantime, participated in drawing parallels between present price action and that witnessed earlier in 2026, when BTC/USD delivered a temporary relief bounce before subsequently breaking through support levels.