On May 12, Bitcoin (BTC) reached an intraday high of $105,800 before experiencing a 3% dip to $101,400 during the New York trading session. This fluctuation highlights the cryptocurrency’s current bearish breakout from an ascending channel, raising concerns about potential profit-taking as it nears the critical resistance level of $106,000.
Data analytics platform Alphractal has indicated that the likelihood of profit-taking increases as BTC approaches this resistance zone, often referred to as the “Alpha Price.” Joao Wedson, CEO of Alphractal, noted that long-term holders and market whales might seize the opportunity to realize gains at this juncture.
The looming release of the US Consumer Price Index (CPI) data on May 13 adds another layer of complexity to Bitcoin’s price dynamics. A lower-than-expected CPI could bolster Bitcoin’s performance, potentially signaling favorable conditions for risk assets. Conversely, a higher-than-expected CPI may intensify bearish sentiment, with the possibility of prices dropping below the psychological threshold of $100,000.
Currently, over $3.4 billion in leveraged long positions are at risk of liquidation should prices fall to $100,000, making this a critical area to watch. Analysts are particularly focused on the fair value gap between $100,500 and $99,700, as well as another gap between $98,680 and $97,363, which could represent significant corrections from recent highs.
As traders brace for the CPI release, the volatility surrounding Bitcoin underscores the delicate balance between profit-taking and market sentiment, making it an essential moment for investors to stay informed.
