Prominent on-chain analyst Willy Woo has issued a stark warning to cryptocurrency investors, suggesting that Bitcoin (BTC) is forming a "bull trap" and remains solidly in the middle of a bear market. Woo cautions that a short-term relief rally could materialize, potentially testing resistance levels near $80,000 to $85,000, but that this move would likely be deceptive before the broader downtrend resumes.
Woo's analysis, shared via social media, is based on liquidity conditions rather than specific price levels. He noted that despite a local rejection after Bitcoin briefly touched $74,000, investor capital flows have been in "consistent recovery" since mid-February. Coupled with hints of a switch to 'risk-on' sentiment in equity markets, these conditions are setting the stage for a potential rally that could last "out to [the] end of April."
However, Woo emphasizes this is not a signal that the market bottom is in. "BTC is solidly in the middle of its bear market through a lens of long range liquidity," he stated. He attributes the setup to the extreme velocity of the recent sell-off, arguing that such a fast downward flush often leads to a period of sideways consolidation followed by a rally to test resistance, which then fails.
Bitcoin has fallen approximately 46.82% since its all-time high of $126,000 in October, trading around $67,012 at the time of the reports. While up 3.74% over the past 30 days, Woo believes further downside is possible. His view finds support from other market observers. Analytics firm Santiment pointed to whales aggressively selling while retail investors buy below $70,000, a pattern that typically signals a correction is not yet over.
Similarly, analyst Benjamin Cowen has labeled 2026 a "bear market year" for Bitcoin, and on-chain analytics company CryptoQuant recently affirmed that "Bitcoin is still in a bear market despite the recent rally." The broader market sentiment, as measured by the Crypto Fear and Greed Index, has also fallen back to "extreme fear" levels.
Woo concluded by stating his views are contingent on liquidity, noting, "If capital comes back in force with the right type of long-term investors, then I'll happily change my views."
