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ToggleAfter experiencing heavy selling pressure in February, the Bitcoin (BTC) market seems to have found some breathing room. However, beneath the seemingly improving data, top analysts see a hidden danger.
Renowned on-chain analyst Willy Woo recently pointed out that the strengthening of short-term fundamentals has indeed opened the door for Bitcoin to attack the "mid-$80,000" level (which also aligns with the cost basis of short-term holders). However, he immediately poured cold water on this, emphasizing that this rebound will be an extremely dangerous "bull trap."
Contracts are driving the market; the bottom has not yet been reached.
Willy Woo emphasizes that the core driving force behind this potential rebound is "futures contract traders," rather than genuine long-term spot investors. This type of market movement, driven by derivatives liquidity, often results in dramatic whipsaws and liquidation crashes, leading to an extremely fragile market structure.
"Be careful, this could be a bull trap; the bottom structure hasn't formed yet. Based on the liquidity charts I've observed, we're only about a third of the way through this bear market," Willy Woo warned.
Buying activity has indeed returned, but further confirmation is still needed.
Despite the worrying macroeconomic structure, microeconomic data does show a recovery in buying interest. According to statistics from blockchain data platform CryptoQuant, the 30-day average trading volume Delta (Volume Delta, a measure of net buying and selling power) of the two major exchanges has successfully turned positive:
- Binance: From a loss of $145 million on February 16, it has made a significant comeback to a gain of $21 million .
- Coinbase: Recovered to approximately +14 million USD from -$88 million in mid-February.
CryptoQuant analyst Darkfrost stated, "This is an encouraging shift after a period dominated by selling pressure. However, this trend still requires further confirmation."
FOMC and Geopolitics: Amidst a Pandemic of Macroeconomic Variables
In addition to on-chain data, the overall economic environment has also added significant uncertainty to the market. The report points out that despite escalating geopolitical tensions with Iran, Bitcoin has recently outperformed the stock market and commodities.
However, the market is holding its breath for the upcoming Federal Open Market Committee (FOMC) meeting. According to the CME FedWatch tool, the probability of keeping interest rates unchanged at this meeting is almost certain. Therefore, Fed Chairman Jerome Powell's forward guidance on the future path of interest rate cuts will be absolutely crucial in determining the next move for Bitcoin and all risk assets. In the absence of spot liquidity and confirmation of a bottom, investors should remain highly vigilant regarding this rebound.
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