Bitcoin Price Bounces Back Above $58K: Is this a Bear Trap?

Bitcoin has made a strong comeback, clawing back earlier losses and reigniting hopes for a push towards $60K.

After dipping to a low below $56,000, Bitcoin has bounced back, climbing above $58K with a sharp 3% gain in just four hours.

Earlier today, the market took a hit, shedding $100 billion from its total market cap as BTC fell to a monthly low.

Altcoins weren’t spared either, with ETH diving to $2,400 and BNB slipping toward $510.

However, the bulls have returned, recovering much of the lost ground. As of now, Bitcoin is trading at $58,000, nearly erasing the earlier losses.

Data from Coinglass shows that this rollercoaster of a day resulted in nearly $200 million in liquidations over the past 24 hours.

Some analysts suggest that the earlier dip may have been a trap for sellers who were expecting the decline to continue.

Bitcoin is back above 58k.

Today’s drop may have been a bear trap. pic.twitter.com/MxdfOofC6E

— Duo Nine ⚡ YCC (@DU09BTC) September 4, 2024

At the same time, data from IntoTheBlock indicates a significant number of buyers entered between $61,700 and $70,500, now sitting on losses.

According to the data firm, whenever a large portion of traders are in the red, Bitcoin tends to face consistent selling pressure as the price nears these levels.

Why Bitcoin is Struggling to Reach a New High👇

Nearly 7 million addresses acquired Bitcoin between $61.7k and $70.5k.

With a large number of traders in this range at a loss, $BTC faces consistent sell pressure whenever prices approach these levels, as many look to break even.… pic.twitter.com/mNp52UylwO

— IntoTheBlock (@intotheblock) September 2, 2024

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