Bitcoin (BTC) reached a peak of $110,653 on Monday, but has since dropped by 3.5%, hitting a low of $106,600 on Thursday. This decline comes amid rising tensions between Iran and Israel, with concerns that Israel might take military action against Iran, leading to a cautious market reaction. From a technical perspective, the recent changes in BTC prices seem typical. Notably, prices surged around 10% from June 6 until Tuesday, so a dip of 3.5% appears to be within a normal range.
Bitcoin researcher Axel Adler Jr. shared similar views, indicating the market is at a “soft inversion point.” Analysts have pointed out that the price drop could be linked to long positions benefitting from resistance bolstered by significant short volume. Adler Jr. remarked, “This demonstrates a classic ‘soft reversal point’ following an uptrend. Provided that funding remains positive and open interest is decreasing, a short-term consolidation under $100,000 could be anticipated.”
While the consolidation around $108,000 is unlikely to break bullish momentum, fractal analysis suggests there might be a chance of a deeper decline. The recent surge in Bitcoin’s price from $100,500 to $110,000 resembles a previous pattern from January 2025, where prices bounced back from $91,700 to $102,700. Observations hint at recurring fractal patterns that might indicate bearish trends, which occur under similar market conditions.
As illustrated in the chart, BTC’s price broke the downtrend line after absorbing liquidity over several weeks, forming a bullish pattern on the daily chart. Although BTC hasn’t reached its previous highs, it’s notable that it remained at all-time peak levels. The relative strength index dipped below 50 before recovering, only to be rejected around 60.
If the fractal scenario materializes, Bitcoin could see a significant drop to $100,000, as indicated in the liquidity band from the chart. This analysis suggests that a move below Monday’s low of approximately $105,000 could raise alarms about potential bull traps in BTC, potentially signaling the onset of a multi-week downturn. Conversely, if Bitcoin holds above $108,000, it could bolster views of bullish continuity.
This discussion does not provide investment advice, and it’s essential for readers to conduct their own research when considering investment and trading decisions.
