BTC Nears Strength Phase but Traders Warn of a Possible Trap

Bitcoin (BTC) is attempting to transition into a phase of “strength” after weeks of range-trading between $90,000 and $86,000. While the technical structure has improved, BTC traders debate whether the move has momentum or risks of becoming a bull trap.

Key takeaways:

A Bitcoin indicator flipped firmly bullish as BTC reclaimed a position above $90,000.

Momentum and channel positioning favor continuation, but near-term overbought risks remain elevated.

Onchain accumulation continues to absorb supply, while traders disagree on whether $100,000 marks expansion or exhaustion.

BTC market signals “risk-on” tilt as BTC presses resistance

According to Bitcoin researcher Axel Adler Jr, BTC’s structure shift indicator, a composite of channel position, moving-average trend and directional movement, has decisively reversed. In late December, the signal remained below -0.3, aligning with downside pressure. 

It changed on Friday, when the indicator crossed above 0 and accelerated to +0.73 by Sunday. During the same period, BTC climbed from roughly $87,500 to $91,400, confirming a transition toward a positive regime.

Adler Jr noted:

Structural indicators are signaling a synchronized transition from a phase of weakness into a phase of strength.

The indicator moving above +0.5 historically corresponds with an uptrend. The key test now is whether the indicator can hold above 0 while the price challenges resistance at $96,000. A failure back below zero would raise the risk of a false breakout or a bull trap.

Related: Can BTC avoid bull trap at $93K? 5 things to know in Bitcoin this week

Likewise, momentum and onchain channel positioning reinforce this view. Momentum has stabilized in the 0.85–0.89 range, indicating returns are running well above the three-month average of 0.5, without reaching extreme levels. 

At the same time, channel position has reached 0.99, placing BTC near the three-week high above $92,000, with range support near $85,000. While this setup favors a breakout, proximity to the range ceiling also increases the odds of a short-term pullback before continuation.

BTC accumulation continues amid bull trap warning

Data from CryptoQuant continues to show steady absorption of supply. Bitcoin balances held by accumulating address cohorts have reached new all-time highs of 2.28 million BTC ($211 billion at time of writing), extending a trend that accelerated through 2024–2025.

Retail accumulation is rising more gradually, pointing to growing participation without signs of late-cycle euphoria, while systematic accumulation patterns remain intact. 

Against this backdrop, BTC traders remain split. Bitcoin Quantile Model creator Plan C argued that BTC is no longer in a downtrend, pointing to nearly six weeks of sideways trading within a clear channel that resembles accumulation. 

The researcher said that time spent consolidating increases the chances that a durable bottom is in place. A break above $94,500 would lead to a “swift move” toward the $100,000 level.

Meanwhile, trader Peter DiCarlo warned that the current rally could be a trap, describing a potential squeeze toward $100,000 not as confirmation of a new bull leg, but as a setup to draw in late buyers before a deeper correction to $70,000.

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