Bitcoin Breaks Above $73,000 as Traders Fear a ‘Bull Trap’

Bitcoin’s return above $70,000 after a two-month absence marked a shift from a historic short squeeze toward demand from spot buyers and U.S. spot bitcoin ETFs. The move to its highest level since June also came as liquidity conditions improved and optimism grew around crypto legislation backed by Donald Trump, reinforcing bullish expectations among institutional investors.

Bitcoin initially cleared $72,000 before pushing past $75,000 and briefly reaching $75,500, while roughly $3 billion in short positions were liquidated during the rally. Analysts said continued spot demand suggested the advance was no longer driven solely by forced covering, though BTC must hold above $70,000 to confirm momentum. Peter Schiff called the move a “fake breakout,” while another analyst warned the rally was premature.

Bitcoin is widely viewed as a gauge of global risk appetite, while the area around $77,000 also overlaps with the cost basis of short-term holders. Whether it can sustain a breakout has implications for spot ETFs, derivatives and onchain positioning. Checkonchain said more than 15% of the circulating supply was acquired between $74,000 and $83,000, making pullback risk a particular concern around this dense zone of underwater holdings.

Bitcoin briefly approached $77,500 on May 1. Open interest in Deribit put options with a $76,000 strike and a June 26 expiry rose 22.5%. Santiment data also showed that more than $770 million in BTC flowed onto exchanges during the previous week. By May 25, weekly net inflows stood at about 18,000 BTC, leaving the rebound exposed to potential selling pressure.

Bitcoin has rebounded 17% after falling below $60,000, indicating stronger buying support at lower levels. Glassnode's on-chain data and demand in derivatives markets both point to a gradual return of buyers, but the broader price structure remains in a downtrend. That makes $78,000 a crucial threshold for determining whether bulls can genuinely turn the market around.

As of April 22, the market was focused on the $78,000–$79,200 resistance zone. Glassnode said BTC must reclaim its moving average at about $78,300 and that consolidation could continue for several weeks. Analysts said a break above $78,000 could confirm a reversal, though $79,200 could still serve either as a launchpad for further gains or as renewed resistance.

Bitcoin and global risk assets had recently come under pressure from the conflict involving Iran and concerns over shipping through the Strait of Hormuz. The strait is a vital artery for global crude oil shipments, and the risk of a blockade could drive up oil prices and inflation expectations. As tensions involving Iran eased, capital flowed back into crypto assets and technology stocks, making $76,000 a key dividing line between bullish and bearish sentiment.

After Iran announced the Strait of Hormuz would be fully open during the ceasefire, crude oil prices plunged. Bitcoin first reclaimed $75,000, then broke above $76,000 and briefly reached $78,000, while MicroStrategy shares (MSTR) jumped 12%. Around April 17, Bitcoin quietly set a new 10-week high as futures trading volume and open interest rose significantly. The market is testing resistance at $78,000, while traders are watching whether Bitcoin could reach $88,000 within weeks.

Bitcoin prices are often driven by a combination of U.S. equity-market risk appetite, geopolitical developments and leveraged positions. A blockade of the Strait of Hormuz, a vital route for global energy shipments, would ordinarily intensify demand for safe havens. Bitcoin instead rose after the blockade took effect, a move the market attributed to its correlation with U.S. stocks and trading on the view that the bad news had been fully priced in. However, extreme fear indicated that confidence remained fragile.

After the Strait of Hormuz blockade took effect, Bitcoin climbed as high as $76,063 before quickly retreating to around $74,000. CoinGlass data showed that about 180,000 traders were liquidated over the 24-hour period cited in the report, with roughly $434 million in short positions wiped out. Momentum from ceasefire hopes subsequently weakened as investors turned their attention to tangible results.

Bitcoin rebounded from its lows to a six-week high but repeatedly stalled near $76,000. A “bull trap” occurs when a brief breakout or sharp rally draws in momentum buyers before prices quickly reverse. CryptoQuant said liquidations and profit-taking could amplify a downturn if the rally is driven mainly by leveraged futures positions without sufficient spot demand.

On April 15, 2026, CryptoQuant recorded hourly exchange inflows of about 11,000 BTC, the highest since late December 2025, and identified $76,800 as key resistance. Bitcoin traded at about $75,440 on April 17, with roughly $450 million in sell orders between $75,900 and $76,300. Futures open interest rose more than 1.5% to $126.68 billion, indicating that the rally was driven largely by derivatives.

Bitcoin (BTC) is highly sensitive to inflation and interest-rate expectations. A smaller-than-expected increase in the U.S. Producer Price Index (PPI) signaled easing upstream price pressures and raised expectations of a shift toward looser monetary policy, lifting risk assets including cryptocurrencies. The $76,000 level has become a key test of whether the rebound can continue.

In the latest rally, BTC briefly broke above $76,000 after the U.S. PPI release, posting its strongest performance since mid-March, but it subsequently failed to hold that level. On-chain analytics firm CryptoQuant warned of mounting near-term selling pressure, while traders realized profits on roughly 63,000 BTC during the advance. The market is now watching whether Bitcoin can regain a firm foothold above $76,000.

Bitcoin’s recent performance has been shaped by both U.S. economic fundamentals and derivatives positioning. Strong economic data and an expansion in services lifted U.S. stocks, drawing capital back into risk assets. As Bitcoin broke through a key resistance zone, leveraged short sellers were forced to cover, further amplifying the rally and sharpening the market’s focus on support levels and pullback risks.

Bitcoin climbed as high as $74,400, breaking above $74,000 and reaching its highest level since February. Ether and other major cryptocurrencies gained as much as 7%. CoinGlass data showed that liquidations across the crypto market approached $600 million over the latest 24 hours, including about $430 million in short-position losses, indicating that a short squeeze and derivatives trading were important forces behind the rally’s acceleration.

Bitcoin is highly sensitive to geopolitical developments. Risk appetite improved after U.S. President Donald Trump announced a Middle East ceasefire agreement, pushing the cryptocurrency above $72,000. However, U.S. tariff policy continued to weigh on market sentiment, preventing the rally from holding and exposing leveraged positions to the risk of a rapid reversal.

Bitcoin climbed as high as $72,500 before retreating to about $70,600, close to the $70,000 threshold. In the 24 hours before the report was published, roughly 80,000 traders were liquidated, with total liquidations reaching $276 million. The market remained in the extreme-fear zone, while some capital shifted toward high-beta assets including ZEC and AI-themed tokens.

Bitcoin reclaimed the $70,000 level as institutional buying through U.S. spot Bitcoin ETFs picked up, bringing some ETF investors close to breakeven. The market views $68,000 as the key medium-term dividing line between bullish and bearish momentum. Whether Bitcoin can hold above it will help determine if the rebound extends into April.

Bitcoin recently traded above $70,000 at one point during the New York session, while U.S. spot Bitcoin ETFs recorded nearly $500 million in net inflows in a single day. Around March 11, analysts said that if the weekly close continued to hold above the $68,000 trendline, a break above $72,000 could quickly propel Bitcoin into the major short-liquidation zone at $80,000.