Bitcoin could experience short-term strength in the coming weeks. However, according to renowned on-chain analyst Willy Woo, such a move may not signal the beginning of a new growth cycle. Instead, it could be a typical bull trap—a false reversal signal that lures new buyers before another decline.
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Market May Send False Reversal Signal
In his commentary, Willy Woo points out that when assessing the current market situation, it is crucial to monitor primarily liquidity and capital flows, not just the price chart itself. According to him, capital movements often reveal the true state of the market before changes appear in price.
According to Woo, a typical bull trap scenario may now be forming. Bitcoin’s price could break upward short-term and create the impression of a new uptrend beginning. In reality, however, it could be merely a temporary bounce within a continued correction. Such a development could persist until approximately the end of April, according to him, unless significant capital from long-term investors begins returning to the market.
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Bitcoin May Still Be in the Middle of a Bear Phase
From a broader perspective, Woo warns that Bitcoin is likely still in the middle of a bear cycle. After sharp price declines, markets often move into consolidation periods, during which price tends to move sideways and repeatedly test key resistance levels.
Since the historic high in October, when Bitcoin traded at roughly $126,000, its value has declined approximately 46%. At the time of writing, BTC was trading around $69,000, which according to some analysts may still not represent the definitive bottom of the current cycle. Also notable is the difference in investor behavior—while retail traders at prices below $70,000 are more inclined to buy, large Bitcoin holders have been reducing their positions in recent weeks.
Nevertheless, Woo points to one positive signal. According to his data, capital flows into Bitcoin have been gradually improving since mid-February, which may indicate a return of some investors to the market. Bitcoin recently briefly reached the $74,000 level but failed to maintain this threshold and subsequently retreated to a lower price range. Analysts therefore agree that the market is still seeking balance between demand and selling pressure on TradingView.
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