Bitcoin whale opens $40mln short – Is BTC’s $79K recovery in trouble?

Market timing remains the key variable in this cycle, as investors face a true test of patience.

From a technical perspective, Bitcoin has pushed back into the $79k zone, reclaiming levels last seen in early February.

However, price still sits more than 10% below the January open at $87k, suggesting a large group of early Q1 buyers remains underwater, keeping the Bitcoin bottom debate very much alive.

Historically, Bitcoin bottoms tend to form after extended periods of downside pressure. In the 2017–18 cycle, BTC printed nine consecutive red monthly candles before finding a bottom, and the 2021–22 cycle followed a similar structure.

This time around, however, Bitcoin has only logged five red monthly candles so far, suggesting the market may still be early in its bottoming phase.

Interestingly, market patience hasn’t fully translated into capitulation yet. 

One analyst pointed out that Long-Term Holder (LTH) supply in loss is approaching levels last seen around Bitcoin’s 2018 bottom. However, the market may still need more loss realization to reach the stress levels seen during the 2022 bear market before confirming a bottom.

In essence, across both technical and on-chain signals, BTC still looks like it’s working through its bottoming process.

Against this backdrop, is Bitcoin’s [BTC] current chop below $80k just another bull trap in disguise?

Bitcoin chop below resistance fuels bull trap and short debate 

Apart from technical and on-chain signals, historical patterns also lean toward a bearish outlook for BTC.

From an investor perspective, March and April delivered a strong recovery, with 13.7% gains following January and February’s 25% correction.

However, within the broader market context, investors view May as a weaker month, as Bitcoin has rarely sustained three consecutive bullish months during bear phases.

Against this backdrop, a whale opened a 20x leveraged Bitcoin position worth nearly $40 million.

The trader’s last 10 trades have generated $1.7 million in unrealized gains, suggesting a strong ability to navigate volatility. Given BTC’s current positioning, the odds of another profitable move appear relatively high.

In this context, heavy long exposure near downside zones increases liquidation risk.

As the chart shows, Bitcoin liquidations cluster at over $230 million in long positions around the $77k level.

With historical patterns, technical indicators, and on-chain data still suggesting BTC may not have bottomed, the $40 million short position looks like a strategic play, potentially setting up a bull trap.

Final Summary

• Bitcoin continues to consolidate below $80k as technical, on-chain, and historical signals suggest the bottom may not be in yet.
• Heavy long positioning near $77k raises liquidation risk, supporting the case for a strategic short amid potential bull trap conditions.