Crypto markets turned sharply risk-off Thursday as a global equities shock washed into digital assets — and Bitcoin’s recent bounce looks increasingly like a classic bull trap.
What happened today
- South Korea’s KOSPI plunged more than 8% at the open, triggering a circuit breaker and rippling risk-off sentiment across markets before U.S. trading even warmed up.
- Bitcoin slipped to an early low of $62,684, briefly recovered, then stalled. Decrypt’s morning snapshot showed BTC around $63,400, down 2.7%; Ethereum $1,875 (-4.2%); Solana $73 (-4.4%).
- More than $670 million in crypto liquidations hit the books over 24 hours, with roughly $533 million wiped from long positions — the usual outcome when a rally that traders leaned on fails to hold.
- Traditional markets were weak too: oil down ~2%, gold down ~1%, Nasdaq futures turned red (memory chip weakness cited), while Dow futures were up 0.7% and Nasdaq futures down 0.9%.
Why the Fed is central
The Federal Open Market Committee meets today and tomorrow, with Fed Chair Kevin Warsh slated for a decision and press conference on July 29. Markets expect a hold at 3.50–3.75%, but investors remember Warsh’s hawkish June press conference — when odds of further hikes shot up and two-year Treasury yields rose 16 basis points. That memory is prompting deleveraging rather than holding through the meeting, leaving risk assets, including crypto, vulnerable to directionless chop until policy clarity arrives.
Bitcoin: a bounce that failed to stick
Earlier in the session, Bitcoin’s push toward $66,921 looked promising to some: the 200-day exponential moving average (EMA) had been respected, so bulls claimed the market was finding a floor. But technicals tell a grimmer story.
- Short-term losses wiped out gains from the previous week between Monday and Tuesday, effectively canceling the bullish trend and sending BTC back toward prior lows.
- On the daily chart going back to September 2025, price has spent months below the Ichimoku cloud and the 200-day average; the pattern has been intermittent green weeks that get sold into, then further decline.
- Three parallel bearish resistance lines (from Nov 2025–Apr, May–Jul, and the current formation) show a repeating rejection pattern.
- The EMA structure is decisively negative: the 50 EMA sits below the 200 EMA, price sits beneath both — a “death cross” that’s been in place for months.
- Momentum indicators are tepid: the RSI is 46.5 (below 50 indicates bearish bias but not oversold), and the Squeeze Momentum Indicator has been “on” for nine bars — a buildup that, historically, resolves in the direction of the prevailing trend, which here is down. The internal momentum reading around 0.25v is weak, not the kind of lift that signals an imminent breakout.
Market sentiment and odds
Prediction market Myriad (run by Decrypt’s parent company) reflects this caution: traders put 65.7% odds on Bitcoin hitting $55,000 before $84,000. That’s a dramatic flip from March, when sentiment favored the upside. Traders have been pricing in downside risk for months, and current technicals give them little reason to reverse that view.
What could change the setup?
A clear path higher isn’t impossible, but it would likely require an outside catalyst rather than on-chart strength. Two plausible rescues:
- A dramatically dovish Fed surprise — Warsh signaling patience and ruling out further hikes — which could spark a short squeeze through the $65,302 Fibonacci zone.
- Renewed political momentum on the Senate’s Clarity Act, which would be a regulatory tailwind for crypto.
Both are event-driven and external to the charts; absent them, the setup looks vulnerable.
Bottom line
The move into the mid-$60Ks bears the hallmark of a bull trap: a run into known resistance, a failed breakout, and a retreat that could set up another leg lower. Technical indicators, trading odds, and a jittery macro backdrop all tilt toward downside risk unless something unexpected breaks in crypto’s favor.
Disclaimer: This article is informational only and does not constitute financial, investment, or trading advice.
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