Bitcoin reached nearly $100,000 as bulls surged during the Wall Street opening on February 21, despite facing volatility from U.S. sellers. This uptick marks a significant moment for Bitcoin, which last saw prices around this mark earlier in the month. Market analysts highlight a lingering uncertainty, noting recent liquidity dynamics and trading patterns. While some traders remain optimistic about a potential breakout, others caution against viewing it as a bull trap. Additionally, Bitcoin appears to be benefiting from a weakened U.S. dollar, suggesting potential support for the cryptocurrency and other risk assets. As the Market fluctuates, investors are advised to stay informed and proceed cautiously.
Bitcoin Bull Struggles to Surpass $100k Amid Market Volatility
On February 21, the excitement around Bitcoin kept the bulls fighting for the elusive $100,000 mark as Wall Street opened. As U.S. sellers entered the Market, the price of Bitcoin saw significant volatility. The digital currency reached a high of nearly $99,500 on Bitstamp, marking its first substantial jump since the start of the month. This surge contrasted sharply with a sell-off that typically accompanies Wall Street openings, showcasing the unique behavior of Bitcoin compared to earlier trading sessions in Asia and Europe.
Potential Breakout or Bull Trap?
Despite the recent climb, analysts believe Bitcoin still lacks a “bonafide breakout.” According to data from Cointelegraph Markets Pro and TradingView, Bitcoin’s upward movement faced challenges. Market data indicated complex liquidity dynamics at play, which could either signify a genuine bullish trend or a “bull trap.” Traders are advised to monitor liquidity around the $100,000 level closely.
Optimism in the Trading Range
Market watchers like CRG and Rekt Capital noted that Bitcoin traded around the midpoint of its multimonth trading range. Despite the imminent pressure from short sellers, many traders remain hopeful. Rekt Capital observed a bullish divergence in Bitcoin’s relative strength index (RSI), breaking a downtrend that had persisted since early January 2025.
U.S. Dollar Weakens, Supporting Bitcoin
Simultaneously, a decline in the U.S. dollar index (DXY) to 106.38, the lowest since mid-December 2024, contributed to favorable conditions for Bitcoin and other risk assets. David Burrows from Barometer Capital Management highlighted historical trends of strong performance in equities and commodities following similar dollar declines.
As the cryptocurrency Market remains dynamic, investors should stay vigilant, as movements in traditional markets can significantly impact Bitcoin’s trajectory.
Disclaimer: This article does not provide financial advice. Investments involve risks. Please conduct your research before making any investment decisions.
Main Keyword: Bitcoin
Secondary Keywords: BTC price, Market volatility, U.S. dollar
What is a bull trap in Bitcoin trading?
A bull trap happens when Bitcoin’s price seems to break out to the upside, but then it quickly drops back down. Traders might get tricked into thinking the price will keep rising, only to lose money when it falls.
How can I tell if a breakout is real or a bull trap?
To check if a breakout is real, look for strong trading volume. If many traders are buying and the price holds above a key level for a while, it may be a genuine breakout. If the rise is weak and the price falls back quickly, it could be a bull trap.
What factors cause bull traps in Bitcoin?
Bull traps can happen due to Market manipulation, news that changes sentiment quickly, or traders’ actions that create false signals. Changes in Market trends or trader emotions can also lead to sudden price drops.
Should I be worried about bull traps when trading Bitcoin?
Being aware of bull traps is important for traders. You can manage risks by setting stop-loss orders and doing thorough research before entering trades. This way, you can protect yourself from sudden losses.
What strategies can help avoid bull traps in Bitcoin?
To avoid bull traps, consider waiting for confirmation before buying. This means looking for strong volumes and a stable price after a breakout. Additionally, using technical analysis tools can help you make better decisions.
