Bitcoin's Critical Signal: Is the Bear Trap Being Set Up?

Bitcoin (BTC) has been flashing mixed signals this week, with the price currently hovering around $92.97K after a -2.10% pullback. The cryptocurrency initially broke above the $90,000 milestone at the start of the week, only to retreat sharply. However, market analysts are increasingly vocal about what they perceive as a classic bear trap setup, with several suggesting that January could mark the turning point for a major recovery.

The Historical Pattern: December Weakness, January Strength

According to prominent analyst James Bull, Bitcoin’s recent decline may follow a predictable seasonal trend that has repeated for the past four years. The data is compelling: between December 26-31, 2024, BTC experienced an 8.5% drawdown, but then surged 12.5% from January 1-6, 2025. Bull’s analysis suggests this represents more than a coincidence—it’s a cyclical bear trap.

To illustrate the magnitude of potential upside, Bull referenced April’s market dynamics. After ETF outflows were absorbed and momentum shifted, Bitcoin climbed to $112,000 by May 22nd, representing a 33% rally from the lows. The analyst emphasized, “This pattern offers a strong bullish signal, though we can’t guarantee new all-time highs will follow this time.”

Technical Setup: Symmetrical Triangle at Play

The daily chart reveals a symmetrical triangle formation, with the upper trendline resistance sitting at $90,000. If BTC sustains a daily close above this level and breaks higher, the next technical target comes into focus at $107,400. This setup, combined with historically strong January seasonality, creates what some analysts are calling the “biggest bear trap in history.”

Institutional Conviction: ETF Flows and Price Targets

The narrative strengthens when examining fund flows. ETF outflows have been shrinking and approaching zero, mirroring conditions seen in April before the explosive rally. This mechanical support suggests institutional buyers may be positioning for the next leg.

Adding weight to the bullish case, traditional finance analysts at Citi have issued a 12-month base case forecast of $143,000 for Bitcoin, driven primarily by renewed ETF demand. Their bull case scenario extends even further, targeting $189,000.

Another respected voice, known as “Bitcoin Therapist,” points to the breaking of the traditional four-year halving cycle pattern. This disruption opens the door for a new all-time high as early as Q1 2026, fundamentally reshaping expectations for this cycle.

The convergence of seasonal patterns, technical setup, fund flow dynamics, and institutional price targets presents a compelling case that current weakness could indeed be a bear trap rather than the start of a deeper correction.