Bitcoin in Free Fall: Why a Bounce Could Turn Into a Trap

Bitcoin has fallen nearly 20% since the beginning of February, marking the worst performance since June 2022 and the fifth consecutive month of decline. This is the longest bearish streak since 2018.

Earlier today, the price dropped to around $62 810, digesting Trump's plans to introduce global tariffs of 15%. The decline led to a market capitalization reduction of more than $120 billion in just 24 hours. Bitcoin has not yet shown any clear signs of a rebound and is trying to hold above the $63 000 level.

Pressure on prices is worsened by the outflow of over $200 million from spot ETFs and forced sales by miners, as mining becomes unprofitable at current prices.

Bitcoin ETF

As shown by the BTC/USD analysis, the technical picture on the daily chart fully confirms the fundamental negativity.

Trading around $63 100, the main cryptocurrency remains trapped in a steep downtrend channel. Trend indicators leave no illusions: the price is deep below the Ichimoku Cloud, and the SuperTrend indicator acts as a strong resistance at the distant level of $72 500. Moreover, the ADX index, measuring trend strength, reached an extreme value of 56.79, indicating total control by sellers over the market and high inertia of the decline.

Oversold conditions on the Bollinger Bands and RSI/MACD divergence hint at a possible bounce, but in conditions of strong seller pressure, any rise risks turning into a classic “bull trap.”

Catching the bottom now is dangerous due to poor risk-reward ratio. A conservative strategy involves waiting for a correction to the resistance zone of $66 300—$68 600 to open short positions with targets below $60 000. A change in the global trend can only be confirmed if the price consolidates above $68 000.

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The best investments start with quality data. Listening to your intuition is important, but when gambling replaces intuition, it leads to costly mistakes or an inability to assess the situation soberly.