Bitcoin (BTC) has made history by securing its first-ever monthly close above $100,000, reaching $102,412 in January. However, analysts are cautioning investors about a potential bear trap that could drive BTC below $95,000 before resuming its upward trajectory.
Bitcoin Faces Potential Short-Term Correction
On Feb. 2, Bitcoin dipped below the $100,000 psychological threshold for the first time since Jan. 27, . The decline coincided with inflation concerns following former President Donald Trump’s announcement of new import tariffs on China, Canada, and Mexico.
Despite this dip, some analysts believe Bitcoin’s pullback is part of a larger market setup. Ryan Lee, chief analyst at Bitget Research, emphasized that the $95,000 range is a critical support level.
“The interplay between labor market trends, Fed policy expectations, and overall market sentiment will be the main catalysts to monitor in the coming weeks,” Lee told Cointelegraph.
Bear Trap or Market Reset?
A bear trap is a market phenomenon where controlled selling creates a temporary dip in price, misleading traders into thinking a bearish trend is forming when, in reality, the asset is in a long-term uptrend. Some analysts, including popular crypto trader Sensei, suggest that Bitcoin’s recent drop could be just that—a strategic move to shake out weak hands before pushing higher.
Huge Bear Trap.
— Sensei (@SenseiBR_btc) February 2, 2025
Be ready. pic.twitter.com/MDkqMrDNsG
Adding to the bullish argument, Bitcoin ETFs have surpassed $125 billion in assets under management, just over a year after their launch in the U.S. on Jan. 11, 2024. This surge in institutional adoption further strengthens Bitcoin’s long-term outlook.
What’s Next for Bitcoin?
The upcoming U.S. labor market report, set to be released on Feb. 7 by the Bureau of Labor Statistics, could play a crucial role in shaping Bitcoin’s next move. Weaker job market data may increase the likelihood of a Federal Reserve rate cut, potentially fueling renewed demand for BTC.
Despite near-term volatility, analysts maintain an optimistic outlook for 2025. Market forecasts place Bitcoin’s price between $160,000 and $180,000 for this cycle, with some speculating that political shifts, such as a potential second Trump presidency, could drive BTC as high as $1 million.
For now, all eyes remain on Bitcoin’s ability to hold key support levels and whether this correction is truly a bear trap or the beginning of a more prolonged downturn.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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