Bitcoin Bear Trap Alert: Is a 2020-Style Rally Coming in 2025?
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Respected cryptocurrency analyst Shanaka Anslem Perera has presented an intriguing perspective on the latest Bitcoin price drop, suggesting that what many see as the start of a bear market may actually be a classic “Bitcoin bear trap.” According to Perera, the recent decline from $126,000 to $105,000 has led to widespread panic selling, but behind the scenes, savvy investors are quietly accumulating Bitcoin, just as they did before the monumental rally of 2020.
Signs That the Latest Decline Could Be a Bitcoin Bear Trap
Perera’s analysis, based on data from Glassnode, indicates that holders with Bitcoin balances between 1,000 and 10,000 coins have been in net accumulation since early October. Even as the price fell from $118,000 to $108,000, these large holders continued to buy. This is a significant signal that points toward a potential reversal rather than further declines.
One key metric supporting this thesis is Bitcoin’s MVRV Z-Score, currently at 2.15. Historically, when the Z-Score drops below 2, it indicates a period of pain and fear in the market—prime time for accumulation by experienced investors. Perera points to this as a strong indication that the market may be near a bottom, as the “smart money” tends to buy during these periods of maximum pessimism.
Adding to the bullish case, Perera notes that institutional demand—especially from ETFs—continues to outpace available Bitcoin supply, keeping upward pressure on prices. Analyst Axel Adler identifies the $106,000-$107,000 range as a vital support zone, while Matt Mena of 21Shares predicts a potential rise to $150,000 by year’s end.
Historical Parallels: Looking Back to Previous Bear Traps
Past cycles offer further evidence of potential upside. In 2020, Bitcoin was widely considered “dead” when it hovered around $12,000—only to surge by 170% in the months that followed. Similarly, after the 2018 U.S. government shutdown, Bitcoin dropped from $6,000 to $3,000, before staging a remarkable recovery.
Perera believes we may be witnessing a similar pattern now, with the current government shutdown potentially serving as a catalyst for another leg up. Analyst Joe Consorti even notes that Bitcoin often lags gold by about 100 days, while JPMorgan’s model sets a year-end fair value of $165,000.
“Every major Bitcoin bottom looks the same: despair, capitulation, and quiet buying by the smart money. $3,000 in 2018, $12,000 in 2020, now $105,000 in 2025.” – Shanaka Anslem Perera
Perera concludes that if Bitcoin can maintain support above $100,000, a rally to the $150,000-$165,000 range is plausible by the end of the year. He cautions, however, that these insights are not financial advice, but rather an interpretation of current on-chain and market trends.
For further context on Bitcoin’s price forecast from leading financial experts, see Forbes: Bitcoin Price Predictions from Top Experts.
What Does a Bitcoin Bear Trap Mean for Investors?
Understanding the concept of a “Bitcoin bear trap” is crucial for navigating volatile markets. A bear trap occurs when bearish sentiment is high, but prices soon reverse sharply upward, catching many investors off guard. Historically, such traps have offered significant buying opportunities for those who recognize them.
With institutional demand on the rise and historical cycles pointing to substantial rallies following periods of despair, the current climate may represent another pivotal accumulation phase. Investors should remain vigilant and consider these patterns when making decisions.
This analysis is for informational purposes only and does not constitute investment advice.
