Bitcoin's price teeters on a precarious edge as geopolitical instability in the Middle East and investors' risk aversion threaten a descent below the $100,000 mark. The flagship cryptocurrency rallied to a weekly high of $110,653 on Monday. Since then, it has fallen 3.5%, settling at $106,600 low on Thursday. Many observers now worry that we might be facing a bull trap, with Bitcoin perhaps giving the warning of a multi-week drawdown to come.
Bitcoin moved above a descending trendline pattern. After weeks of soaking up trailing liquidity, it finally formed a bullish break of structure on the daily chart. The recent surge to $110,000 from $100,500 mirrored a similar pattern observed in January 2025, when Bitcoin rebounded to $102,700 from $91,700. Unfortunately, this upward momentum is now being met with strong headwinds.
Bitcoin analyst Axel Adler Jr. warned that the overall market is at a “soft reversal point.”
This is a classic “soft reversal point” after an uptrend: as long as funding remains positive but open interest is declining, you should expect a short-term correction or consolidation below $108K." - Axel Adler Jr
After a recent analysis of Bitcoin futures positions, it’s apparent that this recent price drop was probably due to long positions taking profits at resistance levels. This trend is exacerbated by a recent spike in predatory short volume. Bitcoin’s RSI went below 50 for the first time in a long while before recovering. It got rejected at 60, showing a loss of strength on the bullish side.
Iran has threatened new attacks on Israeli targets as tensions soar. Fears of a potential Israeli military strike against Iran are fueling a war risk-off sentiment across the market that is hurting Bitcoin’s bullish case. This global governmental uncertainty only serves to worsen the already dark Bitcoin chart fractal, raising the probability of a drop to below $100,000.
Confirmation of this fractal analysis hinges on Bitcoin's price continuing its decline below Monday's lows of approximately $105,000. If not, then Bitcoin could be due for an abrupt abandonment. Otherwise, it might soon fall to the $100,000 round-number support level, which contains a lot of liquidity. A consolidation above $108,000 would be required to maintain a bullish impulse. The fractal analysis suggests otherwise—a larger, more painful drawdown looms.
Bitcoin prices enjoyed a dramatic rise of nearly 10% from June 6 to Tuesday. Today, the recent 3.5% decrease is simply a healthy market correction.
