Pt1: The Bitcoin Bear Trap?Bitcoin FuturesCME_DL:BTC1!ROW_PartnersWhy the Bitcoin Head and Shoulders Might Fail A lot of traders are looking at the Bitcoin chart right now and panicking. The price has been carving out lower highs and lower lows inside a clear downward channel, marked by the two descending trendlines on the chart. To the untrained eye, it looks like a collapse is underway. But looking at the underlying data shows why the sellers might be walking straight into a major trap. While the price action looks heavy, the momentum underneath is telling a completely different story. If you look at the Relative Strength Index, or RSI, it is actually rising and making higher lows. Even better, our TTM momentum bars at the very bottom are shifting from bright red to a dark red color. This behavior shows that the downward selling pressure is rapidly losing its strength. When a market prints higher lows on momentum indicators while the actual price drops, it means a positive divergence is forming. Historically, when selling power dries up right as a market hits major historical support levels, a sharp trend reversal follows. We are not forcing any trades here. We are staying highly disciplined and waiting for the market to prove its strength. If this positive divergence holds, the trapped sellers could be forced to cover their positions, fueling a massive short squeeze. Keep a close eye on the tape.