Bitcoin Rebound — A Bull Trap or a Genuine Trend Reversal?

Current Bitcoin Price Trend Overview

Chart: https://www.gate.com/trade/BTC_USDT

As of January 12, 2026, Bitcoin (BTC) has been trading within the $90,000–$92,000 range. Compared to the previous sharp decline, the market now shows signs of stabilization and a modest rebound. Investor sentiment has improved from the earlier phase of extreme fear.

However, current trading volume and momentum indicate that this rebound has yet to establish a clear medium-term upward trend. While some data suggest the pullback slope is less steep than in previous bear markets, overall evidence does not confirm the beginning of a new bull market.

Key Technical Features of a Bull Trap

A bull trap refers to a brief price rebound within a downtrend, which attracts new capital but quickly reverses and resumes the previous decline. Typical features include:

• Prices briefly break through or test major resistance levels, then rapidly retreat;
• Trading volume does not expand significantly, lacking confirmation from large-scale inflows;
• Major technical indicators—such as MA, RSI, and MACD—fail to generate valid reversal signals.

Recently, BTC has repeatedly attempted to break above key round-number resistance levels, but has consistently failed to achieve a sustained breakout. Instead, it has retreated from higher levels, leaving bearish traders in control. This pattern, common during sharp trend corrections, is often seen as a false breakout or bull trap rally.

2022 Bear Flag Pattern: Comparative Analysis

Some technical analysts compare the current BTC structure to the Bear Flag formation seen during the 2021–2022 bear market.

This pattern typically includes:

• A sharp initial decline forming the “flagpole”;
• Price consolidation in a downward or sideways channel;
• A subsequent breakdown that resumes the downward trend.

Some observers believe similar formations may reappear in the 2026 cycle. Historically, when BTC displays this pattern, it often retests lower support levels and can set new interim lows. As a result, some market participants view the current rebound as having pronounced bull trap characteristics.

Bullish Viewpoint: Why the Rebound Is Not Necessarily a Bear Trap

While technical signals point to caution, not all analyses support the bull trap scenario. Main counterarguments include:

• Certain long-term on-chain indicators remain in bullish territory, with no signs of structural breakdown;
• Some price formations suggest a medium-term consolidation platform is developing, rather than simply continuing the decline;
• Macro factors—such as ETF inflows and expectations of improved global liquidity—may offer structural support for BTC.

Bullish analysts argue that, if BTC decisively breaks above the current trading range, it could be technically positioned to retest the six-figure price zone.

Moreover, compared to 2022, the current market features significantly increased institutional participation, deeper derivatives markets, and a different liquidity structure. Historical patterns may not repeat exactly.

Summary: Assessing the Current BTC Market Phase

• The current rebound is reasonable, but a definitive trend reversal is not yet confirmed;
• Bull Trap and Bear Flag remain key risk patterns that warrant close attention;
• Determining whether the rebound is genuine requires multi-factor analysis—price structure, trading volume, on-chain data, and macro variables;
• Until market direction becomes clear, investors should focus on key price levels and robust risk management strategies to avoid asymmetric risks from false breakouts.