Crypto Traders Brace for Potential Fake Pump Before Decline

Greek.live researcher Adam reported on social media that the English-speaking crypto community is exhibiting bearish sentiment, anticipating a ‘fake pump’ in the market before a further decline.

This sentiment suggests traders are gearing up for shorting opportunities, impacting market dynamics and highlighting potential for significant Bitcoin and altcoin price adjustments.

Trade Strategies Shift Amid Anticipated Market Correction

Traders are preparing for a market downturn, focusing on shorting opportunities as they anticipate a temporary uptick or “fake pump.” This expectation was highlighted by an analysis from respected sources, including Greek.live and CryptoQuant. Institutional and retail traders are aligning strategies accordingly, emphasizing the need to monitor price resistance levels.

Funding rates for perpetual contracts have cooled, indicating a reduction in bullish speculation. Weak ETF and stablecoin inflows support a bearish outlook, as institutions remain hesitant to deploy fresh capital. The latest data points to declining trading activity, with altcoin dominance below 40%, further reflecting a cautious market stance.

Market analysts such as Axel Adler Jr. highlight the need for Bitcoin to maintain momentum above $112,000 to reverse current trends. Adler Jr. noted, “The trend for BTC this week is: after a failed attempt to break through $115,000, it quickly fell back, dropping below $114,000…sentiment is neutral to bearish.” Meanwhile, social media reflects a growing consensus among traders to bolster short positions as a hedge against potential declines. These insights are echoed by Cas Abbé, who anticipates a revisit to lower price levels.

Bitcoin Price Hurdles Amid Weak Institutional Inflows

Did you know? Bearish sentiment like this has previously led to “fake rallies,” often resulting in increased short positions, similar to events in 2022 and early 2024.

According to CoinMarketCap, Bitcoin (BTC) currently trades at $112,111.76 with a market cap of 2.23 trillion. Its 24-hour trading volume rose by 91.48% to $45.26 billion, despite a 0.25% price drop over the past week. With a circulating supply of 19,927,425 BTC and dominance at 57.83%, the coin faces resistance but holds potential for recovery if critical price levels are surpassed.

Insights from the Coincu research team suggest that should Bitcoin sustain levels above $112,000, it might attract renewed institutional interest. However, current liquidity and trading dynamics indicate caution, which may prolong bearish conditions unless significant market or regulatory shifts occur.