Bitcoin copying 2022 ‘bear market rally’ despite 21% BTC price gains

Bitcoin’s recent powerful upward momentum, which has seen the asset climb more than 21% from its recent local lows, is increasingly being viewed with caution by technical analysts who draw parallels to the intermediate rallies of the 2022 bear market. During the 2022 downtrend, BTC saw several sharp percentage rises that ultimately failed to break critical resistance levels, leading to subsequent steep declines and confirming the rallies as significant liquidity traps rather than trend reversals.

The current structure mirrors this pattern in several key aspects. Firstly, the run-up has been accompanied by a rapid increase in Open Interest (OI) and strongly positive funding rates, indicating that a significant portion of the rally is fueled by high leverage. This mirrors the overconfidence observed during the 2022 summer bounce, which created optimal conditions for a large-scale liquidation event when prices reversed.

Secondly, despite the impressive price gain, the underlying spot volume remains relatively suppressed compared to previous expansion phases. A lack of conviction buying from institutional or long-term holders suggests the recent movement is primarily driven by derivatives market dynamics and short-covering, rather than genuine structural accumulation.

Analysts warn that if BTC fails to definitively breach and hold major overhead resistance—particularly the established ceilings that previously marked the peak of 2022 bear market rallies—the current surge risks becoming a decisive rejection. Should this scenario play out, the market could anticipate a rapid reversal and a retest of lower support levels, validating the concern that the 21% gain is a temporary retracement mimicking previous failed upswings.

Source: Bitcoin copying 2022 ‘bear market rally’ despite 21% BTC price gains