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The crypto crowd is so convinced this rally is a fakeout, it might trigger short squeeze

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Potential bull trap or breakout? (TradingView)

Bitcoin pushed above $73,000 this week, reclaiming a key psychological level that had capped the market for weeks. Yet the breakout has been met with an unusual reaction across crypto markets: widespread skepticism.

Many traders are warning that the move could become a classic bull trap — a brief breakout that lures in late buyers before reversing lower. Analysts have pointed to heavy overhead supply and positioning in derivatives markets as potential risks, with some suggesting a rally into the $72,000–$76,000 range could attract sellers rather than confirm a sustained recovery.

The caution stems partly from recent history. Earlier this year, Bitcoin appeared to break out of a consolidation range, only to reverse violently. The move trapped momentum traders and triggered a cascade of liquidations as the price plunged from around $98,000 to roughly $60,000 within two weeks — a reminder of how quickly sentiment can flip in crypto.

Potential bull trap or breakout? (TradingView)
Potential bull trap or breakout? (TradingView)

But the current setup may present a paradox: the trade has become crowded on the bearish side.

Across crypto Twitter, analysts and chartists are widely calling for a bull trap. That consensus itself raises the possibility of the opposite outcome — a squeeze higher that forces short sellers to cover. In leveraged markets, strong directional agreement often creates the liquidity needed for moves in the other direction.

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Macro uncertainty could also complicate the outlook. Geopolitical tensions following the Iran conflict have already pushed gold higher and lifted oil price expectations, while some Asian equity markets have shown signs of stress. Radu Tunaru, professor of finance and risk management at Henley Business School, argues geopolitical shocks have historically played a role in major market sell-offs. He points to the 1987 Black Monday crash, which he believes was partly triggered by U.S.–Iran tensions that first rattled Asian markets before spreading globally.

For now, Bitcoin’s breakout above $73,000 has revived bullish momentum — but price action over the coming days will determine whether a bottom is truly in or if this is an accurately predicted bull trap.

To regain a bullish macro structure, bitcoin needs to trade back into the $98,000 region to snap the grueling lower high formed by the previous bull trap in January.

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Crypto World

Ansem Says Ethereum Is in a Worse Spot Than 2023 as Thesis Weakens

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Ethereum Price Prediction

Crypto analyst Ansem argues that Ethereum (ETH) is in a “worse spot” in 2026 than it was in 2023, pointing to a thesis he says has been eroding for years.

His bearish take drew rebuttals from some members of the community. Meanwhile, on-chain activity and technical indicators elsewhere on the network flash bullish signals.

Ansem Lists Cracks in the ETH Thesis

Ansem argues that Solana (SOL) has dominated retail activity this cycle. Hyperliquid has taken the lead in perpetual futures trading, while rollups have failed to gain traction.

He also noted that Vitalik Buterin “publicly abandoned” the general-use rollup thesis. The ongoing Aave (AAVE) situation around the KelpDAO rsETH exploit, Ansem said, is a mark on  Ethereum’s core value proposition of “safety + security of defi & insto interest.

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“ETH thesis has been weakening consistently for years,” the analyst wrote. ETH in 2026 is in a worse spot than it was in 2023, amplified by AI doing extremely well & tech stocks being much more favorable investments with real revenues / emerging narratives / increasing momentum, ETH is a $300B asset with a ton of overhang from Tom Lee topblasting + complacent ETH holders sitting idle in defi protocols.”

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Technically, the analyst noted that ETH remains in a sustained downtrend after failing to break multi-year resistance. He projected that the second-largest cryptocurrency could slip to 2025 lows near $1,300 and to the bear-market lows from 2022.

“Tight invalidation 2377 assuming problems worsen if you want to play it loose assuming other risk assets continues doing well & drags it up probably somewhere around 2700/2800 invalidation fundamentals wise would want to see breakout activity from some new vertical,” the post read.

Ethereum Price Prediction
Ethereum Price Prediction. Source: X/Ansem

Community Members Push Back

The take triggered notable pushback. Ryan Berckmans accused Ansem of not understanding fundamentals. Leo Lanza went further, sharply dismissing the analyst’s bearish case on X.

Another user pointed to a 56% drop in the SOL/ETH pair this cycle.

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“Soleth is down 56% after being up 12x+ *this cycle* because one guy decided to buy 5% of the eth supply after it had underperformed all cycle. idk why you guys act like i dont also bearpost solana i havent posted anything bullish about sol in over a year,” Ansem replied.

Not everyone shares the bearish view on Ethereum. BeInCrypto recently highlighted that network activity remains strong, while technical indicators like the Rainbow Chart and MACD are also flashing bullish signals.

With macro and geopolitical uncertainty still in play, the question is whether ETH slides further this year or stages a renewed rally.

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The post Ansem Says Ethereum Is in a Worse Spot Than 2023 as Thesis Weakens appeared first on BeInCrypto.

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Aave’s TVL Falls $8B After $293M Kelp DAO Hack

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Aave’s TVL Falls $8B After $293M Kelp DAO Hack

Total value locked on decentralized lending protocol Aave dropped by nearly $8 billion over the weekend after hackers behind the $293 million Kelp DAO exploit borrowed funds on Aave, leaving roughly $195 million in “bad debt” on the protocol and triggering withdrawals.

Data from DeFiLlama shows that Aave’s TVL fell from about $26.4 billion to $18.6 billion by Sunday, losing the top spot as the largest DeFi protocol. 

Aave v3’s lending pools for USDt (USDT) and USDC (USDC) are now at 100% utilization, meaning that more than $5.1 billion worth of stablecoins cannot be withdrawn until new liquidity arrives or borrows are repaid. 

$2,540 is available to be withdrawn from the $2.87 billion USDT pool on Aave v3 at the time of writing. Source: Aave

Aave’s TVL fall shows how rapidly risk from a single security incident can spread throughout the broader, interconnected DeFi lending market, potentially leading to a severe liquidity crisis.

The incident began on Saturday when hackers stole 116,500 Kelp DAO Restaked ETH (rsETH) tokens worth about $293 million from Kelp DAO’s LayerZero-powered bridge and used them as collateral on Aave v3 to borrow wrapped Ether (wETH).

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Crypto analytics platform Lookonchain said the move created about $195 million in “bad debt” on Aave, which contributed to the Aave (AAVE) token tanking nearly 20% from $112 on Saturday at 6:00 pm UTC to $89.5 about 25 hours later. 

Lookonchain noted that some of the largest crypto whales to withdraw funds from Aave were the MEXC crypto exchange and Abraxas Capital at $431 million and $392 million, respectively.

Source: Grvt

Several crypto networks and protocols tied to rsETH or the LayerZero bridge have paused use of the bridge until the problem is resolved, including DeFi platform Curve Finance, stablecoin issuer Ethena and BitGo’s Wrapped Bitcoin (WBTC).

Aave has frozen several rsETH, wETH markets

Shortly after the Kelp DAO exploit, Aave said it froze the rsETH markets on both Aave v3 and v4 to prevent any suspicious borrowing and later stated that rsETH on Ethereum mainnet remains fully backed by underlying assets.

WETH reserves also remain frozen on Ethereum, Arbitrum, Base, Mantle and Linea, Aave said.

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This incident marks the first significant stress test of Aave’s “Umbrella” security model, which was introduced in June 2025 to provide automated protection against protocol bad debt while enabling users to earn rewards.

Related: Aave DAO backs V4 mainnet plan in near-unanimous vote

Earlier this month, the Bank of Canada found that Aave avoided bad debt in its v3 market by using overcollateralization, automated liquidations and other strategies that shifted risk to borrowers.

In comments to Cointelegraph, Aave defended its liquidation-based model, framing it as a core safety mechanism that protects lenders while limiting downside for borrowers.

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It comes as Aave parted ways with its longest-standing DeFi risk service provider, Chaos Labs, on April 6, following disagreements over the direction of Aave v4 and budget constraints.

Magazine: Are DeFi devs liable for the illegal activity of others on their platforms?