Bitcoin Nears a Fragile Bottom as CryptoQuant Warns of Bull Traps

Bitcoin (BTC) is entering another tense stretch, with CryptoQuant warning that the market’s supply-demand imbalance has sharpened in recent weeks and now looks less like a clean reset and more like the kind of messy deterioration that can trap late buyers. In its latest note, the analytics firm said the current setup is very different from the slower easing that followed earlier shocks in its Zone 1 and Zone 2 patterns.

It instead resembles the pressure seen when Bitcoin previously traded in the $80,000 to $90,000 area. CryptoQuant added that the ingredients for a possible bottom are beginning to appear, but liquidity is still too weak to support a convincing reversal, which means any short-term bounce could still end up being a bull trap. The backdrop matters because Bitcoin is still trading in a volatile range.

The latest market snapshot shows BTC around $71,790, after moving between an intraday low of $68,943 and a high of $71,950. That keeps the world’s largest cryptocurrency close to the psychologically important $70,000 zone, but far below the overheated enthusiasm that pushed it to record territory earlier in the cycle. For traders, that matters because Bitcoin is no longer in a clean trend. It is in a range where buyers and sellers are repeatedly fighting for control.

Recent news has done little to calm nerves. Bitcoin briefly slipped below $70,000 before rebounding, as markets digested a more hawkish Federal Reserve outlook and higher oil prices tied to geopolitical tensions. Data from SoSoValue revealed that spot Bitcoin ETFs posted $66.67 million outflows on Tuesday, even though March still showed net inflows overall, showing how quickly sentiment is shifting from day to day. In other words, institutional demand has not disappeared, but it has become less reliable as macro uncertainty rises.

Signs of Bottom Formation?

The chart shared by CryptoQuant tells a similar story. Bitcoin’s recent moves feel messy and uncertain. It keeps trying to push higher, but every time it does, the gains fade quickly and the price slips back down again. The latest highs just aren’t sticking, and the market keeps drifting back toward the same support area over and over. That usually points to a market that’s still searching for stability rather than one that’s ready to take off.

If you look closely at the chart, each bounce is a bit weaker than the last. The recoveries are shorter, less convincing, and don’t carry the same strength they did earlier. It’s the kind of slow loss of momentum that traders tend to notice early, a sign that buyers are becoming more cautious and that the market might need more time before any real upside move can happen. This is an inference from the chart, but it aligns closely with CryptoQuant’s warning that liquidity is still insufficient for a durable trend reversal.

For now, Bitcoin traders are left with a familiar but uncomfortable setup. Prices are high enough to attract dip buyers, but not strong enough to inspire full confidence. CryptoQuant’s message is not that a bottom is impossible, but that the market may not have done enough work yet to make any rebound trustworthy. Until liquidity improves and spot demand strengthens, Bitcoin could continue to swing sharply, with rallies drawing optimism before quickly running into resistance.