24.07.202512:05 Forex Analysis & Reviews: Bitcoin may drop. BTC traders may face price traps

At present, the crypto market is facing some turbulence, though many analysts expect it to worsen. They are cautioning traders about possible price traps in Bitcoin's behavior, fearing a significant downturn.

According to analysts and market participants, Bitcoin may retreat to the $114,000–$115,000 range in the coming days. The reason? A potential gap closure, after which the flagship asset could renew its highs. Crypto trader Ash Crypto points out a gap that has formed in that range, a price gap on the BTC futures chart. Such gaps often act as "magnets" for Bitcoin. Experts note that there is a high probability BTC will attempt to close this gap before resuming its rally.

On Thursday, July 24, Bitcoin was trading at $118,785, unaware that, according to several experts, storm clouds are gathering. Adding to the pressure are sellers locking in profits. Analyst Quentin Francos observed that the peak take-profit level was recorded on July 17 at $3.3 billion. Although this figure has slightly decreased since, it remains at an extremely high level.

Many in the crypto community are confident that profit-taking will be followed by another wave of BTC growth. One reason, experts say, is the rise in US liquidity. Historically, such periods are positive for the crypto market, as a significant portion of new dollars flows into the crypto industry.

Changes in US liquidity influence Bitcoin's price movements, experts emphasize. BTC's growth prospects are also backed by historical trends showing that the leading asset tends to appreciate in the third quarter. This seasonal pattern supports the rise of the top cryptocurrency.

Are traders falling into a BTC bull trap at $118,000 and above?

Bitcoin's recent price movements suggest a consolidation phase, analysts believe. After briefly peaking at $123,000 in early July, BTC gradually pulled back, trading slightly above $118,000 on Thursday, July 24.

This reflects a 1.1% drop over 24 hours and a 3.9% decline from the recent peak. Sentiment in the crypto space remains mixed. Some traders expect Bitcoin to resume its upward trend, while others anticipate a correction. Meanwhile, a surge in BTC long positions is raising concern among analysts and market players.

Currently, many traders are favoring long positions on Bitcoin. Technical indicators show a sharp increase in these positions within the $116,000 to $120,000 price range. Experts observed that during Bitcoin's previous consolidation phase between $100,000 and $110,000, investor sentiment leaned toward short positions right before an upward breakout and a wave of short liquidations.

However, sentiment has now shifted significantly toward long positions, which is troubling to analysts. Analysts note that the current range acts as a trap zone where traders' expectations are repeatedly tested. They warn market participants about such price traps—easy to fall into, hard to detect.

Given the current setup, some experts believe that growing bullish sentiment could lead to a temporary reversal in BTC if enough liquidity pressure builds up.

At the same time, another key on-chain indicator—Bitcoin Flow Pulse (IFP), which tracks BTC movements on centralized exchanges—tells a different story. According to the data, despite Bitcoin's recent rise above $120,000, there has not been a significant influx of funds. This suggests that investors are in no rush to take profits or exit the market.

This behavior contrasts with Bitcoin's historic cycles in 2017 and 2021, where price peaks were accompanied by strong capital inflows, followed by corrections. Against this backdrop, the IFP trend becomes an important signal, possibly indicating a sudden spike in BTC supply-side pressure.