Bitcoin bear trap? BTC slides below $78K, traders eye rebound

Bitcoin fell below $78,000 for the first time since early May, hitting two-week lows as selling pressure intensified. The move has sparked debate among traders about whether this is a genuine breakdown or a bear trap — a false signal that shakes out weak hands before a reversal higher.

The drop comes amid a broader risk-off mood in financial markets, with US equities under pressure and the US dollar index (DXY) strengthening. Historically, Bitcoin has shown sensitivity to liquidity conditions and risk appetite, and the current sell-off aligns with a period of reduced speculative activity. However, on-chain data reveals that exchange reserves continue to decline, suggesting that long-term holders are accumulating rather than distributing. This supply-side dynamic often precedes price recoveries, as fewer coins available for sale can support a bounce. Additionally, Bitcoin dominance remains elevated, indicating that capital is rotating within the crypto space rather than exiting entirely. Live crypto prices and charts on NowPrice show how the market is reacting in real time, with BTC attempting to stabilize near the $78,000 level.

Traders are now watching for a reclaim of the $80,000 psychological level as a first sign of strength. A sustained move above that mark could invalidate the bearish setup and trigger short covering. On the downside, a close below $75,000 would likely confirm further losses toward the next major support near $70,000. Key macro events this week, including US jobless claims and Fed commentary, could influence risk sentiment and determine whether the bear trap thesis plays out.