Bitcoin Bull Trap Alert: Willy Woo Warns of Misleading Rally

On-chain analyst Willy Woo has warned that Bitcoin may be setting up for a short-term rally, which he describes as a 'bull trap', that could mislead investors. This pattern typically occurs after a sharp decline in price, where the asset moves sideways before mounting a rally to test resistance.

In an X post, Woo noted that this setup is driven by liquidity conditions, not just price levels alone. He added that he will revise his view if capital returns 'in force with the right type of long-term investors', but for now, sees Bitcoin as 'solidly in the middle of its bear market'.

Bitcoin's recent price action has been marked by a sharp decline from its all-time high of around $126,000 to its current trading level of around $67,012. This represents a 46.82% drop in value, and Woo acknowledged that investor flows have been in 'consistent recovery' since mid-February.

However, he emphasized that this improvement has not been strong enough to confirm a bottom, and the current price level is likely not the cycle low. Crypto sentiment platform Santiment shared a similar view, noting that whales are aggressively selling while retail investors buy below $70,000.