Bitcoin Just Recovered $11,000 in 24 Hours. Bull Trap or Bullish Continuation?

In Brief

• The $11,000 rebound followed a full leverage flush, not aggressive spot selling.
• Funding rates and open interest suggest positioning is reset, not overheated.
• Continuation depends on holding reclaimed levels and avoiding leverage re-crowding.

Bitcoin’s sudden $11,000 rebound in just one day has split the market. After collapsing toward the low $60,000s and erasing gains built over months, the price snapped back aggressively. Traders feel unsure whether this move is simply a bull trap or the start of a renewed bullish leg.

Although many investors and even analysts are hopeful this means a bullish continuation, the answer sits in the structure and not on emotions.

This rebound followed one of the most violent leverage flushes of the cycle. With over $1.5 billion in liquidations across crypto markets and a sharp reset in positioning.

Therefore, those conditions matter when judging what comes next.

A Full Leverage Reset Changed the Market Landscape

The selloff into the low $60,000s was driven less by spot selling and more by forced deleveraging. Indeed, liquidation heatmaps show dense leverage clusters getting cleared rapidly as price cascaded lower.

Once those zones were wiped out, downside liquidity thinned dramatically.

At the same time, funding rates across major exchanges flipped decisively negative. That shift signals that aggressive long positioning was purged and short interest began paying a premium to remain open.

In the past, sustained negative funding after a sharp drop often signaled exhaustion and not continuation.

Similarly, open interest initially collapsed during the selloff. However, it stabilized quickly during the rebound.

This could be a signal that the bounce happened due to a mix of spot demand and cautious positioning.

BTC/USD Daily Chart

How Can Bitcoin Push Higher?

First, price must hold above the reclaimed structural levels near the mid $60,000s. Indeed, this zone now acts as a pivot. Separating panic liquidation territory from constructive consolidation.

Second, funding rates should remain neutral to slightly negative. A rapid flip back to highly positive funding would suggest traders are chasing the move. Historically, this would be a warning for local tops.

Lastly, netflow data doesn’t show a sustained spike of BTC rushing back onto exchanges during the bounce. Therefore, the absence of distribution signals that sellers are not unloading into strength.

Not a Classic Bull Trap Yet

Bull traps typically form when price rebounds without a structural reset. However, this move came after leverage, funding, and positioning were flushed. Resetting the market’s internal pressure.

Importantly, active addresses data also remains elevated relative to past cycle corrections. Implying network usage hasn’t collapsed alongside price.

That said, continuation is not guaranteed. The market still needs consolidation and confirmation.

However, as it stands, as it stands, the ingredients that usually define bull traps are not Present. For now, Bitcoin appears to be breathing again.