Bitcoin Reaches Major Support: Bull Run or Bull Trap?

Bitcoin retests its 50-week SMA after sharp volatility. Traders see resistance at $111,000 as financing rates recover and market sentiment remains cautious.

Bitcoin has returned to a key technical level that has played a central role in previous rallies. The 50-week Simple Moving Average (SMA), often referred to by traders as the bull market baseline, has acted as a reliable support zone since early 2023.

At the time of writing, Bitcoin is trading around $111,200, showing modest daily gains while still holding lows over the past week.

Bitcoin retests long-term support

The chart shared by Merlijn The Trader shows that every time Bitcoin has retested the 50-week SMA since 2023, it has reached new highs. The moving average has become an important level for identifying trend changes. Bitcoin broke below in early 2022, marking the beginning of a broader correction.

Since then, however, the price has repeatedly returned to this line before continuing to rise. The latest touch to the SMA has once again caught the attention of traders watching for signs of new upward movement. Merlin stated:

Bitcoin just retested the bull market baseline.

The 50-week SMA marked every major launch since 2023.

Smart money buys the retest.
Retail is buying the outbreak.

This graph separates traders from tourists. pic.twitter.com/hw8hWmOKPJ

— Merlijn The Trader (@MerlijnTrader) October 20, 2025

Sentiment still unsettled after liquidation

Market confidence remains low after a major liquidation on October 10. Funding rates, which reflect the cost of holding long or short positions in the futures market, fell into negative territory on October 17. This suggests that many traders were leaning toward short positions and betting on further declines.

Since then, funding rates have recovered and are now back above 0.005. While this shift shows some return of buying interest, the caution in the derivatives market shows that traders are not yet fully convinced of the recovery. This kind of hesitation is common after a big setback, especially when the losses were sudden.

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Main prize levels in the game

Bitcoin is currently trading near a resistance area at $111,440. This level marked the start of a previous decline that took the price below $108,600. According to According to analyst Lennaert Snyder, breaking and holding above $111,440 could open the way for a move towards $115,800. If that level is also reached, the price could return to $120,800, where a quick sell-off occurred previously.

Bitcoinsensus reported that the weekly candle closed above the low of $107,200, a move that could support a continued rise. They also noted that the Bitcoin liquidity index has started to rise for the first time since July, a possible sign of new capital entering the market.

Broader trends and external pressures

EGRAG CRYPTO noted that Bitcoin appears to be following a recurring pattern. The analyst suggested that the market may be entering the final phase of an upward cycle. EGRAG suggests a sharp turnaround could follow after retail participation increases:

“Everyone will think we’re finally safe… but that’s where the real twist comes.”

Notably, the recent correction was partly driven by political news, as we reported. A drop late last week followed comments from former US President Donald Trump about new tariffs on China. This created uncertainty in the financial markets and added pressure on crypto assets.

As reported by CryptoPotato, data from prediction platform Polymarket showed some skepticism in the retail space. Their latest odds gave a 6% chance that aliens would be confirmed this year, compared to just 5% for Bitcoin reaching $200,000. While intended to entertain, it reflects how cautious traders have become in setting short-term expectations.