Why the Bitcoin Rally Seems More Like a Bull Trap
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- Bitcoin briefly rallied to $66,921 but failed at the golden zone and fell back to $63,422, erasing all gains from the prior week and returning to bear territory in a textbook bull-trap pattern.
- South Korea's KOSPI index fell more than 8% at the open and triggered a circuit breaker, sending a risk-off shockwave that pushed Bitcoin down to $62,684 in early trading.
- Crypto markets recorded over $670 million in liquidations over 24 hours, with $533 million coming from long positions—traders who bet on a rally that failed to materialize.
- Fed Chair Kevin Warsh's FOMC decision and press conference are due July 29, with markets pricing in a rate hold at 3.50–3.75%; his June presser sent rate-hike odds to 70% and 2-year yields surged 16 basis points.
- Myriad prediction market traders now give 65.7% odds that Bitcoin hits $55,000 before $84,000—a near-complete reversal from March, before Warsh's first press conference turned hawkish.
- Bitcoin's daily chart shows uniformly bearish signals: an active death cross (50 EMA below 200 EMA, price below both), RSI at 46.5, and a Squeeze Momentum Indicator that has been loading for nine consecutive bars with a reading of just 0.25.
Why it matters: Bitcoin longs paid the price for chasing the bounce—$533 million in long liquidations in 24 hours show the bull case is thin, and with a Fed decision pending under new Chair Warsh and the KOSPI shock triggering global deleveraging, the nine-bar squeeze with no real bullish momentum resolves in the direction of the prevailing downtrend, not against it.
