Is Bitcoin's Recent Pullback a Bear Trap? Multiple Experts Signal Potential Rally Ahead

Bitcoin kicked off the week near $90,000 but quickly retreated to the $87,000 range, raising questions about the token’s near-term direction. Despite the drawdown, prominent market watchers are flagging the dip as a classic bear trap setup—one that could precede a significant recovery phase in January 2026. According to the latest market data, BTC is currently trading around $90.69K with a modest 0.22% decline in the past 24 hours.

Historical Patterns Suggest A Reversal Cycle

Analyst James Bull has drawn attention to a recurring seasonal pattern in Bitcoin’s price action. He highlights that BTC experienced a 2.6% sell-off shortly after reclaiming the $90,000 threshold on Monday, mirroring what he describes as a “Christmas bear trap”—a phenomenon observed consistently over the past four years.

The pattern is striking: during the December 26-31, 2024 period, Bitcoin fell 8.5%, only to surge 12.5% between January 1-6, 2025. Bull argues this cyclical behavior suggests the current weakness is temporary, with a meaningful recovery phase likely materializing in January 2026.

“Bitcoin establishes a holiday-season pullback that tends to reverse when the new year begins, maintaining this cycle for at least four consecutive years.”

ETF Dynamics and Technical Setup

Bull further noted that ETF outflows have moderated significantly and are trending toward equilibrium. This mirrors an analogous situation that unfolded in April, after which Bitcoin rallied to $112,000 by May 22nd—representing a 33% jump from those depressed levels.

“While this pattern doesn’t guarantee Bitcoin will reach fresh all-time highs, it represents a formidable bullish indicator,” Bull commented.

From a technical perspective, the daily chart reveals Bitcoin forming a symmetrical triangle consolidation pattern. Should the price secure a daily close above the $90,000 resistance level and continue ascending, the next potential target could extend to $107,400.

Experts Debate the Magnitude of the Opportunity

Another prominent market observer, referred to as “Bitcoin Therapist,” suggests that with the traditional four-year halving cycle losing its predictive power, Bitcoin could potentially touch unprecedented levels during Q1 2026. This analyst frames the current bear trap as potentially “the most significant in history.”

Institutional analysis reinforces the bullish narrative. Citi Group’s research team has forecasted Bitcoin at $143,000 under their base case scenario for the next 12 months, citing renewed institutional demand through ETF vehicles. Their more optimistic projection targets $189,000.

The convergence of seasonal patterns, technical setup, institutional positioning, and historical cycles appears to be pointing toward a compelling risk-reward setup for Bitcoin as we enter 2026.