Bitcoin (BTC) weekly Relative Strength Index has fallen to an all-time low below 25 even as the cryptocurrency consolidates around the $65,000 level, setting up what analysts at AMBCrypto describe as a potential bear trap fueled by crowded short positioning, returning ETF inflows and a rebounding Coinbase Premium Index.
What Happened: Record-Low RSI Meets Returning Buyers
On the daily chart, BTC continues to trade within a defined range near $65,000, a pattern consistent with strong underlying bid support. The weekly chart tells a different story.
Bitcoin has closed lower for six consecutive weeks, forming a bearish structure that pushed the RSI into extreme oversold territory.
The indicator dropped below 25, marking its lowest reading on record and reflecting a 35% correction from BTC's mid-January peak near $97,000.
Short-side liquidity has stacked up considerably. Analysts now point to a 7x liquidity pocket around the $70,000 level, a zone dense with downside bets that signals increasingly one-sided positioning.
At the same time, spot Bitcoin ETF flows have turned positive with $257 million in net inflows. The Coinbase Premium Index jumped 125% to 0.01, reclaiming levels lost since the late fourth quarter, suggesting U.S.-based investors view the current price action as healthy consolidation rather than the start of a deeper sell-off.
Why It Matters: Squeeze Setup Forming
When bearish sentiment becomes this crowded, the conditions for a short squeeze start to build. An all-time low RSI signals that selling pressure may be approaching exhaustion.
The combination of oversold technicals, stacking short liquidity and quietly returning institutional demand creates a setup that could catch overexposed short sellers offside. The $70,000 liquidity cluster is the key level to watch.
If buyers continue to step in through ETF channels while shorts remain packed into the same trade, any upside move could trigger cascading liquidations beneath BTC's current consolidation range.