Bitcoin Price Drops Below $78K as Traders Debate Bear Trap Scenario

Bitcoin slipped below $78,000 yesterday for the first time since early May as rising geopolitical tensions and concerns around the US economy weighed heavily on risk assets. BTC touched a low near $77,600, wiping out most of the gains seen earlier this month.

Market pressure increased after fresh worries surrounding US government bonds and the ongoing US-Iran conflict. Traders are also closely watching developments around the Strait of Hormuz after Iran moved forward with a toll system for oil transit while restricting US-linked traffic. The situation pushed oil prices higher, with US WTI crude trading above $100 per barrel.

Analysts warned that rising energy costs, disrupted supply chains and large US budget deficits could create another inflation wave similar to conditions seen in 2022.

Traders Split on Bitcoin’s Next Move

Despite the decline, some crypto traders believe the market could be setting up for a bear trap. Open interest continued rising while funding rates turned negative, showing many traders are aggressively shorting Bitcoin before a confirmed breakdown.

Other analysts remain cautious. $75,000 as the next important support level, while $71,000 if selling pressure increases further.