BTC is nearing a level of strength but traders are warning of a potential pitfall

Bitcoin (BTC) is attempting to move into a “strength” phase after weeks of trading in ranges between $90,000 and $86,000. Although the technical structure has improved, BTC traders argue that the move is motivated or at risk of becoming a bull trap.

Main Receptors:

The Bitcoin indicator turned sharply upside down as BTC reclaimed the area above $90,000.

Momentum and channel positioning favor continuation, but recent overbought concerns remain elevated.

Onchain stocks continue to contain supply, with traders disagreeing on whether $100,000 represents expansion or weakness.

As BTC presses resistance, the BTC market tilts to “risk on”.

According to Bitcoin researcher Axel Adler Jr., the BTC structure reversal indicator, a combination of channel position, average trend and directional movement, has decisively reversed. At the end of December, the indicator was below -0.3, adjusting to low pressure.

It changed on Friday, when the indicator crossed above 0 and accelerated to +0.73 on Sunday. At the same time, BTC rose from $87,500 to $91,400, confirming a move into positive territory.

Adler Jr. said:

Structural indicators indicate a coordinated transition from a phase of weakness to a phase of strength.

An indicator that moves above +0.5 corresponds to a bullish trend historically. The main test now is whether the indicator can hold above 0 and when the price challenges resistance at $96,000. A fall below zero raises the risk of a false breakout or bull trap.

Related: Can BTC Avoid Bull Trap at $93K? 5 things to know in Bitcoin this week

Similarly, momentum and onchain channel positioning reinforce this view. Momentum has stabilized in the 0.85-0.89 range, indicating that returns are moving well above the three-month moving average of 0.5, without peaking.

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

BTC stocks continue to be in a bull trap warning

CryptoQuant data continues to show steady supply. Bitcoin balances held by storing address pools hit a new all-time high of 2.28 million BTC ($211 billion at the time of writing), extending the accelerated trend through 2024–2025.

Retail inventories are gradually increasing, indicating that participation is growing without signs of a late-cycle euphoria, while systematic accumulation patterns remain intact.

Against this backdrop, BTC traders remain divided. Bitcoin Quantile Model creator Plan C has argued that BTC is no longer in a downtrend, pointing to a nearly six-week sideways trade in a clear channel that looks like stock.

According to the researcher, the time spent on integration increases the chances of a sustainable bottom. A break above $94,500 would lead to a “quick move” to the $100,000 level.

Meanwhile, trader Peter DiCarlo warned that the current rally could be a trap, describing it as a setup to attract late buyers before a deep correction to $70,000, rather than a confirmation of a new bull leg that could squeeze to $100,000.

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