Are Traders Walking Into a Bitcoin Bull Trap at $118K? Here’s What the Data Shows

Bitcoin's recent price action suggests a consolidation phase rather than a decisive move in either direction. After reaching an all-time high of over $123,000, BTC has seen a gradual pullback, currently trading around $118,000. This represents a 1.1% drop in the last 24 hours and a 3.9% decline from its peak. According to CryptoQuant contributors, indicators present a split narrative, with some metrics suggesting rising optimism among traders and others indicating a more cautious environment. A surge in long positions on Binance has raised contrarian concerns, as a similar setup preceded a breakout to the upside in the past. However, the current environment has flipped, with sentiment skewed heavily toward longs, which could create a setup for a temporary reversal. On the other hand, Bitcoin exchange flow patterns reflect investor patience, with no corresponding spike in exchange inflows despite the recent high above $120,000. This behavior contrasts with historical cycles, where price peaks were accompanied by large exchange inflows and followed by corrections. The low flow to exchanges indicates confidence among holders, suggesting that many participants are expecting the uptrend to continue. However, a shift in the Bitcoin Flow Pulse indicator could act as an early warning for increased supply pressure.