Key Points:
Bitcoin (BTC) price has dropped to $103,300, with analysts noting that this is due to traders beginning to reduce risk exposure ahead of the upcoming Federal Open Market Committee (FOMC) meeting and the interest rate decision to be announced on Wednesday. This pullback follows a bearish weekly close, suggesting a potential trend reversal, while geopolitical tensions—especially the conflict between Israel and Iran—have heightened risk-averse sentiment.
The market pulse aggregator Bitcoin Vector, supported by Swissblock, indicates that this decline is not solely driven by macro factors. It coincides with seasonal weakness and a decrease in on-chain network growth, suggesting that spot demand is cooling. Over $434 million in Bitcoin futures were liquidated in the past day, emphasizing that the current market is primarily driven by leverage, with traders opting for a cautious approach rather than increasing new exposure.
Despite this, the Bitcoin Coinbase premium index—a metric comparing Bitcoin prices on Coinbase and Binance—has remained positive for most of June, indicating stable spot demand from U.S. investors. However, due to the overall cautious sentiment in the market, this demand has had a limited impact on prices.
Further pressure comes from profit-taking activities by "mid-cycle holders" (those holding for 6-12 months), who realized $904 million in profits on Monday, according to Glassnode. This group accounted for 83% of total realized gains, marking a significant shift compared to long-term holders (those holding for over 12 months) who previously led profit realization. This change suggests a rotation in market dynamics, with more responsive participants taking profits at recent highs.
However, the behavior of long-term investors presents an optimistic outlook. Bitcoin researcher Axel Adler Jr. points out that long-term holders (LTHs) still have not spent significantly, which is a historically bullish pattern.
A healthy MVRV Z-score indicator—suggesting that Bitcoin is still fundamentally undervalued—along with positive Coin Days Destroyed (CDD) momentum indicates that this is selective profit-taking rather than panic selling. Market experts emphasize that similar setups in past cycles have triggered rebounds of 18-25% within 6-8 weeks, suggesting that Bitcoin could reach a price target of $130,000 by the end of the second quarter.
From a technical analysis perspective, Bitcoin may be approaching a short-term bottoming area between $102,000 and $104,000, which coincides with a dense liquidity pool and historical order blocks.
Another important indicator for mean reversion near the $102,000 level is the Bollinger Bands technical aspect. As shown in market charts, the close proximity of the midline (around $106,000) acting as dynamic resistance suggests a quicker technical reaction at the $102,000 price level, a judgment further supported by historical price action at this level (e.g., the consolidation phase in early June).
Market experts note that the Bollinger Bands are currently contracting, which typically signals an impending significant increase in volatility, while the midline (near $106,000) continues to act as dynamic resistance. If the price can successfully break and close above $106,748, it may validate a bullish mean reversion trend towards $112,000. Conversely, a clear drop below the $100,000 mark could invalidate the current technical setup and set the next target price at $98,000.
Data analysis firm Alphractal has also identified $98,300 as a key support level, where short-term holders (STHs) remain in profit. A breach of this critical threshold could lead to a deeper market structure adjustment. Alphractal noted in its analysis: "As long as Bitcoin remains above the realization price for short-term holders, we can still consider the market to be in a bullish state. Only a significant drop below the $98,000 level would fundamentally change the market landscape, potentially triggering a deeper decline."
Related: JPMorgan Meets with SEC to Discuss On-Chain Issues in Capital Markets
This article does not contain any investment advice or recommendations. Any investment and trading activities involve risks, and readers should conduct their own research before making decisions.
Original article: “If History Repeats, Bitcoin (BTC) Price May See a 25% Rally Following Today’s Correction”
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