Bitcoin may be setting up a short-term rally that lures investors in before the broader downtrend resumes, according to on-chain analyst Willy Woo.

Woo wrote in an X post:

“Bull trap forming.”

He added that the move could run “out to [the] end of April,” and said his view is driven by liquidity conditions rather than specific price levels.

Woo said:

“If capital comes back in force with the right type of long-term investors, then I’ll happily change my views.”

Bear market context

Woo said that from a long-range liquidity perspective, Bitcoin is “solidly in the middle of its bear market.”

He said that after sharp downside “flushes,” bitcoin often trades sideways and then mounts a rally that tests resistance.

Bitcoin was down about 46.82% from its October all-time high near $126,000, trading around $67,012 at the time of publication.

Whale vs retail signals

Woo said the current level likely is not the cycle bottom and that further downside is possible.

Santiment also flagged a pattern of whales selling while retail buys below $70,000.

Santiment said:

“When retail buys while whales sell, it typically signals that the correction is not yet over.”

Flows recovering and sentiment turning

Woo said investor flows have been in “consistent recovery” since mid-February, even after bitcoin failed to hold the “mid-70s” following a move to $74,000 on Wednesday.

The shift in sentiment comes as the Bitcoin Fear and Greed Index fell back into “extreme fear” after a brief midweek recovery.

Other analysts have echoed the bear-market framing, including CryptoQuant and Benjamin Cowen.