Bitcoin, Bull Trap Warning...Uptrend Illusion Ends Without Massive Fund Inflow

▲ Bitcoin (BTC), Wall Street/ChatGPT generated image

An analysis has emerged stating that although Bitcoin (BTC) is holding key psychological price levels, a massive inflow of liquidity accompanied by funds from institutions, funds, and new individual investors is necessary to confirm entry into a full-fledged bull market.

According to NewsBTC on May 14 (local time), short-term price movements can be formed by leverage and speculative positions, but historically, a complete bull market has only been possible when deep and sustained liquidity flows into the market. Current on-chain indicators signal that bullish momentum is not yet sufficient, and it has been diagnosed that the intensity of fund inflows needs to become more apparent for Bitcoin to confirm a bull market expansion.

Joao Wedson, founder and CEO of Alphractal, stated via X (formerly Twitter) that the Realized Cap Impulse indicator is a key observation target. This indicator is currently moving below the neutral line of 0, and this zone is acting as a temporary resistance level, according to the analysis. If the Realized Cap Impulse fails to recover to 0 and maintain it, it can be interpreted as a sign that market inflow funds are weakening.

Wedson suggested that if the indicator clearly recovers above 0, it could signal that new funds are flowing back into the Bitcoin network. This could mark the beginning of a shorter, more compressed bearish cycle leading to upward momentum. However, as the indicator still remains below the key baseline, it is too early to conclude that a new bull market has begun.

Warning signs are also appearing in terms of market structure. Cryptocurrency trader CGT Trader analyzed that while Bitcoin rarely formed consecutive lower highs during the recent uptrend, it has now created three consecutive lower highs while consolidating within a major resistance zone. Although a lower low has not yet been confirmed, making it difficult to consider it a complete bearish structure, the trend of buying pressure failing to reclaim previous highs indicates that the strength of the uptrend is weakening.

The key observation point is whether a lower low forms after the lower highs. CGT Trader believes that if this structure is confirmed, the market trend will clearly shift, signaling the end of a bull trap and the beginning of a broader higher-timeframe downtrend. The Bitcoin market is currently in a phase where optimism, lack of liquidity, and technical resistance converge, and the presence of massive fund inflows has emerged as a key variable to determine the resumption of the bull market.

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