The Crypto Bull Trap of September 2025: A Tough Lesson for Retail Traders.

Crypto Market Update: The Bull Trap Unwinds – A Follow-Up to September 17

Hey everyone, picking up from our analysis on September 17, where we warned about the dangers of the “obvious” rate cut trade turning into a massive bull trap—well, it’s unfolding just as we discussed. If you were one of the many retail traders who got caught in the excitement, my heart goes out to you. It’s tough watching hard-earned gains evaporate in what feels like a rigged game, but understanding the mechanics can help turn this painful lesson into future wins. Let’s break down what’s happened since Powell’s announcement and why it’s hitting retail folks so hard.

As we noted, the market was primed with 96% certainty around the Fed’s cut, creating artificial strength through leveraged longs and record $220 billion open interest. Bitcoin briefly jerked up to $117,000+ post-announcement, Ethereum touched $4,764, and Solana hit $249—classic bull trap behavior. But prices had already started stalling hours before confirmation, a telltale sign that institutional money was positioning for the reversal.

The unwind has been swift and brutal. By September 19, Bitcoin sits at $116,601 (down 0.6%), Ethereum at $4,522 (-1.6%), and Solana around $230. Total liquidations since the 17th have topped $2.5 billion, with a massive $2.2 billion wave on the 18th alone—mostly overleveraged longs getting crushed. Ethereum bore the brunt with $600 million wiped out, followed by Bitcoin at $500 million. Altcoins like XRP and ADA plunged 25%+, showing how retail-heavy positions amplify the pain.

This isn’t random chaos; it’s engineered. Powell’s 25 basis point cut was political surrender to Trump’s pressure—demands for easing, rushed appointments like Stephen Miran—but his warnings of “elevated uncertainty” killed the euphoria. Institutions, who’d been distributing via divergences like Ethereum’s dropping CMF (money flowing out while prices rose), used the hype as exit liquidity. Retail got played, chasing headlines while smart money harvested the

For those hurting right now, know this: you’re not alone, and this happens because the game favors the big players. But here’s the silver lining—these corrections create real opportunities. Watch for accumulation at Bitcoin $104K-$105K (200-day MA), Ethereum $3,800-$4,000, and Solana $200-$205. That’s where institutions likely flood back in.

The takeaway? Question “obvious” trades, track money flow over price hype, and remember: when consensus hits 96%, it’s often a setup. Stay smart out there—we’re all in this together.