#BitcoinHoldsFirmAbove80K
Why Bitcoin Price Rally of 20% Looks Bearish Beneath the Surface
Bitcoin price has risen more than 20% over the past month, but the underlying structure of this rally shows a different picture from the visible price movement.
Derivative traders are taking short positions. Whales are actually selling as the price rises. Momentum profiles indicate a counter-trend bounce, not the start of a new bullish trend. The price does show bullish signals, but the structure behind it tends to be bearish.
Derivative Data Reads Bearish Despite the Rally
Most rallies in recent quarters follow the same pattern. Long traders enter first, leverage increases in the perpetual futures market, funding rates turn highly positive, then the rally continues until a sharp wick forces over-leveraged long positions to exit, repeating the cycle. This pattern occurs so frequently that most rallies immediately raise doubts about how much of the crowd is waiting to be ‘cleared out.’
However, this Bitcoin rally does not follow that pattern. Over the past month during the 20% rally, long traders have been scarce.
Total Bitcoin open interest rose from US$30.88 billion on April 30 to US$34.26 billion on May 6, an increase of over 11% in just six trading sessions. But this new position direction is more important as a market condition indicator.
Funding rate was at -0.011% on April 30 and still at -0.006% on May 6. Such negative figures sustained throughout the 20% rally are very rare, confirming that this increase in open interest is dominated by new short positions, not new longs.
The 8-hour chart adds confirmation from the spot market. We use the 8-hour timeframe to read short-term trend behavior. The underlying volume profile of this rally is thinning. From April 14 to May 6, Bitcoin’s price steadily increased while volume continued to decline. This rally is not driven by spot demand but by market distrust and possibly ongoing short liquidations.
Since there is no crowd of over-leveraged longs being wiped out, the risk of sharp wicks that usually cap previous rallies does not appear. But the absence of euphoria-long positions also means no spot demand breaking resistance. Structurally, this rally is very fragile.
Whale Flows and RSI Divergence Confirm Bearish Signals
This lack of market confidence is clearly visible in two on-chain signals standing alone.
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Small-scale Bitcoin whales, wallets holding between 1,000 and 10,000 coins, held 4.27 million Bitcoin on April 18, 2026. But by May 6, that amount decreased to 4.19 million Bitcoin. An 80,000 BTC decline over 18 days aligns with this rally period. Whales are not buying during this phase; they are taking advantage of the price increase to sell.
The daily chart presents a third bearish signal. The Relative Strength Index (RSI) — a momentum indicator — shows a clear divergence. From January 5 to May 5, Bitcoin’s price formed a clear lower high, while RSI during the same period made a higher high.
This pattern is a hidden bearish divergence, where the price makes a lower high but momentum makes a higher high. In the context of a larger downtrend, hidden bearish divergence indicates continuation of the existing downtrend, not a reversal. The 20% rally from February lows is interpreted as a counter-trend bounce within a larger corrective structure. This bearish divergence would only not apply if BTC price manages to break above US$81,854.
Three signals consistently appear. Derivative positions suggest traders expect a correction. The 80,000 BTC decrease from the whale cluster indicates market confidence in the spot market remains weak. The hidden bearish divergence in RSI also signals the major trend is still downward. The 20% rally can technically still be sustained because there has been no accumulation of long positions that previously triggered rallies, but there is also no spot demand to support a trend reversal.
The market is not showing euphoria.
Bitcoin Price Levels Where Bearish Signals Could Be Confirmed
Bitcoin price
BTCUSD
is currently at US$81,326, with immediate resistance around US$81,810 to US$81,854. That area is a key point to determine whether the rally will continue or reverse.
If the daily close is above US$81,854, it indicates the rally is strong enough to go higher and opens the way to US$90,460 as the next important technical level. The US$90,460 zone coincides with a descending trendline that has held Bitcoin since the January peak. Breaking above US$90,460 would invalidate the major downtrend structure and signal a true trend reversal.
Lower levels are quite close. If Bitcoin is rejected at US$81,810 to US$81,854, the price could fall to US$76,656, the 0.236 Fibonacci level, which is the primary support and likely a retest area. Falling further below US$76,656 would target US$73,467 (Fib 0.382), US$70,891 (Fib 0.5), and US$68,314 (Fib 0.618). Breaking below US$64,645 would set the next long-term floor at US$59,972.
A negative funding rate setup means each rejection at resistance could have amplified effects. Since short positions dominate the perpetual book, failure to break out would not trigger large long liquidations that typically slow down declines. The path back to US$76,656 could happen quickly.
The logic of these levels is straightforward. If the daily candle confirms a close above US$81,854, the target opens to US$90,460. If resistance holds, Bitcoin will return to US$76,656.
