Bitcoin’s holiday rally: Are BTC bulls setting up a classic bear trap?

Little question, This fall has formed as much as be the weakest quarter of 2025.

The pullback has worn out almost 63% of the beneficial properties from the Q2–Q3 run, pushing many HODLers underwater.

Nonetheless, there’s per week left earlier than the 12 months wraps up, and the market is heading right into a holiday-thin liquidity interval. Timing-wise, that issues. 

Bitcoin [BTC] remains to be buying and selling 25% under its $126k excessive, however regardless of the continued FUD, its market dominance hasn’t actually budged, hovering near 60%. That factors to capital staying parked somewhat than rotating out.

Supply: TradingView (BTC.D/USDT)

In different phrases, that dominance factors to underlying confidence.

Below regular situations, you’d count on some rotation into altcoins. As an alternative, altcoin dominance (excluding–high 10) has compressed to only 6.73%, a five-year low, reinforcing that threat urge for food stays concentrated in Bitcoin.

That units up the true query: What occurs if macro FUD cools and the market flips again risk-on? With the “vacation season” across the nook, do bulls step in, squeeze late shorts, triggering the textbook bear-trap setup?

Is a brief squeeze organising Bitcoin’s vacation bounce?

The vacation season couldn’t have come at a greater time.

Technically, it’s been over a month since Bitcoin reclaimed $90k, and naturally, a thick short-liquidity cluster has constructed up simply above that stage, as shorts have been enjoying the volatility.

Zooming in, there’s over $5.8 billion in leveraged shorts round $95k, making it a transparent goal for bulls. Will they step in? Notably, Bitcoin’s MVRV is flashing “undervaluation,” including additional incentive for a possible transfer.

Supply: Coinglass

In brief, the stage appears set for a textbook bear lure.

Supporting this, Bitcoin’s technicals are reinforcing the undervaluation. RSI is hanging round 35, and BTC has chopped underneath $90k for six straight weeks, probably organising that traditional resistance-to-support flip.

From right here, a breakout above this zone might hit stacked short-liquidity clusters, including upward stress and probably kicking off Bitcoin’s “vacation rally,” with $95k because the near-term resistance goal.

Last Ideas

• Bitcoin dominance stays robust regardless of the This fall pullback, signaling capital is staying put, whereas altcoin dominance hits a five-year low.
• Technicals trace at a possible bear-trap setup, with $5.8 billion in brief liquidity poised to gas Bitcoin’s vacation rally.