Bitcoin’s weekly RSI hits an all-time low – Is a bear trap brewing?

The market is showing divergence across multiple timeframes.

On the daily chart, Bitcoin [BTC] appears resilient. It’s continuing to chop within a defined range around the $65k level. This kind of consolidation aligns with a strong bid, which is seen as a bullish signal for investors.

However, looking at the weekly chart, things look a bit more concerning. BTC has closed lower for six consecutive weeks, forming a clear bearish structure.

On top of that, the RSI has dropped below 25, hitting an all-time low and signaling extreme oversold conditions.

Source: TradingView (BTC/USDT)

With this mixed setup, Bitcoin could be primed for a volatility trap. 

That’s why it’s worth keeping an eye on the order book to see which side is really in control.

On the bullish side, the Coinbase Premium Index (CPI) has swung back into green, reclaiming levels lost since the late Q4 rally.

Meanwhile, ETF flows are back in net inflows, with $257 million coming in. This aligns with the CPI jumping 125% to 0.01 and an oversold RSI, signaling that U.S.-based investors are treating the current Bitcoin chop as healthy consolidation rather than a sell-off.

According to AMBCrypto, timing is everything.

As BTC consolidates, liquidity clusters are naturally forming, creating zones where price could react sharply. The key question is: Are bulls positioning to set up a trap?

Bitcoin’s oversold RSI meets crowded shorts

An all-time low RSI is a clear signal that bears are firmly in control. 

Simply put, Bitcoin’s momentum has flipped hard.

As a result, the weekly Relative Strength Index (RSI) has dropped from neutral into oversold levels, mirroring BTC’s 35% correction from its mid-January $97k peak.

Consequently, short-side liquidity has started to stack up. In fact, analysts are now pointing to a 7x liquidity pocket around the $70k level, a zone packed with downside bets, signaling increasingly one-sided positioning.

Source: Coinglass

In this environment, Bitcoin starts to resemble a classic bear trap.

Technically, the weekly RSI sitting in extreme oversold territory suggests selling pressure may be nearing exhaustion.

Meanwhile, ETF inflows and a rebound in the CPI hint that buyers are quietly stepping back in, even as sentiment still feels cautious.

According to AMBCrypto, that’s where things get interesting. 

When sentiment leans bearish, positioning becomes crowded, and on-chain signals start to flip, the setup creates conditions that catch overexposed shorts offside, brewing a squeeze beneath BTC’s current chop.

Final Summary

• Bitcoin’s weekly RSI at record lows and stacked short liquidity around $70k suggest crowded bearish positioning.
• ETF inflows and a rebound in the Coinbase Premium Index indicate buyers are quietly stepping in, setting up a potential bear trap beneath Bitcoin’s current consolidation.