Bitcoin profit taking at $106K the first stop before new all-time BTC price highs

Bitcoin’s price action shows a bearish breakout from an ascending channel, raising concerns about profit-taking near the $106,000 resistance level. The upcoming US Consumer Price Index (CPI) announcement on May 13th is a key factor influencing Bitcoin’s short-term trajectory.

Currently, Bitcoin is experiencing a correction, potentially due to traders de-risking ahead of the CPI data. A lower-than-expected CPI, continuing the trend of decreasing inflation, could positively impact Bitcoin, signaling potential Federal Reserve rate cuts in 2025 and boosting risk assets. This scenario could lead to a bullish reversal for Bitcoin.

Conversely, a higher-than-expected CPI would likely exert bearish pressure on Bitcoin, increasing inflation fears and strengthening the dollar. This could push Bitcoin’s price below the crucial $100,000 psychological support level. Data analytics platform Alphractal highlights the risk of profit-taking near the $106,000 “Alpha Price” zone, where long-term holders might liquidate their positions.

Adding to the bearish pressure, over $3.4 billion in leveraged long positions are at risk of liquidation if the price drops to $100,000. This level acts as a strong support area, potentially leading to a retest. Should the bearish trend continue after the CPI release, key support areas lie between $100,500 and $99,700, and further down between $98,680 and $97,363, representing an 8% correction from recent highs. These represent fair value gaps (FVGs) on the four-hour chart.

The recent intraday high of $105,800 on May 12th was followed by a 3% dip to $101,400, indicating a shift in momentum. The lower-time frame chart shows Bitcoin oscillating within an ascending channel before breaking below it. While the CPI data holds significant weight, the overall technical picture suggests a cautious outlook for Bitcoin in the short term. This analysis is for informational purposes only and does not constitute investment advice. Readers should conduct their own research before making any investment decisions.