Bitcoin’s recent price action has caught the attention of traders and investors alike. On May 12, the cryptocurrency reached an intraday high of $105,800, only to backtrack slightly, dipping 3% to $101,400 during the New York trading session. As the market digests this movement, the looming release of the US Consumer Price Index (CPI) data on May 13 adds an extra layer of intrigue and potential volatility.
Profit-Taking at Key Levels
Bitcoin’s volatile journey has been marked by a bearish breakout from an ascending channel, pushing it towards a critical juncture around the $106,000 mark. According to Joao Wedson, CEO of data analytics platform Alphractal, this level is significant as it represents the “Alpha Price” zone. “This is where long-term holders or whales might decide it’s time to cash in,” Wedson explained, highlighting the increased likelihood of profit-taking should Bitcoin breach this resistance.
The scenario is further complicated by the specter of a “long” squeeze. CoinGlass data reveals that over $3.4 billion in leveraged long positions are at risk of liquidation if prices slide to the $100,000 threshold. Such a move could create a gravitational pull, drawing prices back to this psychologically significant level. This aligns with the seasonal trend discussed in Bitcoin Traders Brace for ‘Sell in May and Go Away’ as Seasonality Favors Bears, where historical patterns often see a downturn during this period.
The CPI Conundrum
The market’s mood is also being shaped by economic indicators. With the US CPI data due, traders are positioning themselves, wary of the implications. In March, the CPI stood at 2.4%, slightly below forecasts, a trend that continued into April. If this pattern holds, signaling potential Federal Reserve rate cuts, it could inject fresh optimism into risk assets, including Bitcoin. This potential for a rate cut is explored in Bitcoin price about to ‘blast’ higher as Fed rate cut odds jump to 60%, highlighting the possible bullish momentum.
However, should the CPI exceed expectations, the dollar might strengthen, casting a shadow over Bitcoin’s prospects. “A stronger dollar typically doesn’t bode well for BTC,” noted an analyst from Cointelegraph, suggesting that inflation fears could dampen enthusiasm for cryptocurrencies.
Navigating the Charts
From a technical perspective, Bitcoin’s charts paint a complex picture. On lower time frames, the cryptocurrency has exhibited oscillations within an ascending channel, only to break out bearishly. If bearish pressure maintains its grip despite the CPI outcome, a key focus will be the fair value gap (FVG) between $100,500 and $99,700. An additional FVG, stretching from $98,680 to $97,363, signals further potential downside—a roughly 8% correction from recent highs.
These technical markers are crucial for traders as they navigate the current landscape. The interplay between economic data and chart patterns offers both challenges and opportunities. As market participants await the CPI release, questions linger about whether Bitcoin’s recent high will serve as a stepping stone or a stumbling block.
Looking Ahead
As of today, the cryptocurrency world watches with bated breath. The interplay between macroeconomic factors and market sentiment could dictate Bitcoin’s trajectory in the weeks to come. Will profit-taking at the $106,000 mark trigger a broader sell-off? Or could a favorable CPI reading reignite bullish momentum?
In the unpredictable world of crypto, the only certainty is uncertainty. As traders brace for the latest economic data, the market stands at a crossroads, with potential implications reverberating far beyond Bitcoin itself. Whether the upcoming CPI figures will be a catalyst for new all-time highs or a prelude to further consolidation remains to be seen. Either way, Bitcoin’s narrative continues to evolve, fascinating and confounding in equal measure.
Source
This article is based on: Bitcoin profit taking at $106K the first stop before new all-time BTC price highs
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
