Don’t Fall For The Bitcoin Trap: Analyst Explains Why Recovery To $76,000 Is Not A Good Thing

Bitcoin’s price action is struggling with bearish corrections, repeatedly failing to close daily trading sessions above $70,000. As it stands, Bitcoin is now moving in a tight range below $70,000, and crypto analysts are undecided on its next direction.

Some see the current structure as a base for another push higher, but others warn that any bounce could invite new selling. Crypto analyst Sherlock is among the cautious voices, arguing on X that a rally to between $72,000 and $76,000 may not be a recovery but a kill zone for Bitcoin bulls.

The $76,000 Breakeven Wall

Crypto analyst Sherlock is of the notion that any Bitcoin price recovery to $76,000 from here might not actually be a good thing. Sherlock’s argument is based on the Bitcoin holdings of Strategy. At the time of writing, the company holds 714,644 BTC at an average cost basis of $76,052. That stash represents roughly 3.4% of the total Bitcoin supply that will ever exist. 

Now that Bitcoin is trading around $68,000, Strategy’s position is significantly underwater, and the company is sitting at an estimated unrealized loss of about $5.7 billion at current prices. In the analyst’s view, every push to the $74,000 to $76,000 range brings this large concentration of supply closer to breakeven.

Breakeven levels often act as selling zones. Based on that perspective, the $76,000 area could be risky because it brings Strategy’s position back to its average entry price, and many large holders might consider reducing exposure.

That said, there is no indication that Strategy plans to sell. The company has repeatedly stated that it has no intention of offloading its Bitcoin and has even emphasized that its balance sheet could withstand a severe downturn, including a scenario where the Bitcoin price drops below $10,000.

ETF Pressure And Bitcoin Cost Basis

Sherlock also pointed to Spot Bitcoin ETFs as another source of pressure that might lead to a bull trap. As it stands, about 1.28 million BTC are currently held in these funds, with an estimated average entry price between $84,000 and $90,000.

Since late 2025, these ETFs have recorded more than $6 billion in net outflows, and the Bitcoin price might face another pressure even if it reaches the average entry price. He also noted that about 63% of invested Bitcoin wealth has a cost basis above $88,000, meaning a large share of buyers in 2025 are sitting on losses, and a rally to their entry levels could also be a bull trap.

Therefore, a climb into the $72,000 to $76,000 range could be a bull trap. If it doesn’t, then the next trap could be around $88,000. That said, if every breakeven level triggered selling, then Bitcoin might never form a bottom. At the time of writing, Bitcoin is trading at $66,980.