Could a Bear Trap Spark Bitcoin’s Holiday Rally?
The final quarter of 2025 has turned out to be challenging for Bitcoin, with Q4 emerging as one of the weakest periods in the cryptocurrency’s recent history. Nearly 63% of the gains from the Q2–Q3 bullish run have been eradicated, leaving many investors in a precarious position. However, with just one week left in the year and the market shifting towards a holiday-thin liquidity period, there’s cautious optimism among crypto enthusiasts.
Bitcoin’s Current Market Standing
Despite trading 25% below its record $126,000 high, Bitcoin (BTC) continues to showcase dominance over the broader cryptocurrency market. Its market dominance is hovering close to 60%, signaling that capital remains parked in Bitcoin rather than rotating toward altcoins. Notably, altcoin dominance, excluding the top-10 tokens, has hit a five-year low of just 6.73%. This highlights a strong focus on Bitcoin amidst ongoing market uncertainty.
Are Bulls Prepping for a Short Squeeze?
Technically speaking, Bitcoin has been hovering below the $90,000 level for six consecutive weeks. This prolonged consolidation has created a thick short-liquidity cluster above $95,000, estimated at over $5.8 billion. With the “holiday season” around the corner and Bitcoin’s MVRV (Market Value to Realized Value) flashing undervaluation, the stage could be set for a classic bear trap.
Currently, Bitcoin’s RSI (Relative Strength Index) is sitting around 35, indicating a potential oversold condition. If Bitcoin manages to breach the $90,000 resistance and push through the liquidity cluster, bulls might initiate a short squeeze, driving prices higher. The immediate upside target would be $95,000, with further resistance levels potentially aligning with previous highs.
Why Bitcoin Could See a Holiday Rally
The timing couldn’t be better. A breakout at this juncture, coupled with low holiday trading volumes, could exacerbate price movements and amplify a rally. Historically, such conditions have provided fertile ground for bear traps, with late shorts getting squeezed as prices surge. For investors eyeing a potential entry point, now might be a compelling time to consider Bitcoin, particularly as industry analysts highlight its undervaluation metrics.
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Final Thoughts
While the broader macroeconomic landscape remains uncertain, Bitcoin’s technical setup and market behavior suggest the possibility of a holiday rally. Investors should stay cautious, conduct their research, and consider the risks involved in crypto trading. With its dominance intact and technical indicators pointing to undervaluation, Bitcoin might just wrap up the year with a festive bang.
