Key Points:
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Bitcoin fell by $103,500 as traders reduced risk ahead of the Federal Open Market Committee (FOMC) announcement.
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Technical indicators suggest Bitcoin may rebound between $102,000 and $104,000.
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On-chain metrics reveal mid-term holders have been locking in substantial profits recently.
The price of Bitcoin (BTC) dropped to $103,300 as traders began to minimize risks ahead of the anticipated FOMC meeting and interest rate announcement on Wednesday. The recent decline follows a bearish weekly closing candle, indicating a possible trend reversal, while growing geopolitical tensions, especially the Israel-Iran situation, contribute to a risk-averse climate.
According to Bitcoin Vector, a market pulse aggregator supported by Swissblock, the recent drop is influenced not only by macroeconomic factors but also by seasonal weakness and declining on-chain growth, suggesting reduced spot demand. Additionally, over $434 million in Bitcoin futures were liquidated in the last day, underscoring that this move is primarily leverage-driven as traders adopt a cautious approach.
Even so, the Coinbase Premium Index for Bitcoin, which compares prices on Coinbase and Binance, has remained positive throughout much of June, indicating consistent spot demand from U.S. investors. However, this demand has had little effect on prices due to the overall market caution.
Profit-taking from “mid-cycle holders” (those with a holding period of six to twelve months) exerted further strain, with this group reportedly realizing $904 million in profits on Monday, based on data from Glassnode. These holders accounted for 83% of the total profits realized, signaling a shift in market dynamics as more reactive participants opt to secure gains at recent highs.
Nonetheless, the behavior of long-term investors remains encouraging. Bitcoin analyst Axel Adler Jr. noted that long-term holders (LTHs) are still holding off on significant spending, which is traditionally a bullish sign. A favorable MVRV Z-score indicates that Bitcoin remains fundamentally undervalued, while positive Coin Days Destroyed (CDD) momentum suggests that profit-taking is selective rather than panicked. Historical patterns show that similar setups have foreshadowed 18–25% rallies in the following six to eight weeks, hinting at a potential price target of $130,000 by the end of Q2.
Potential Bitcoin Bottom at $102,000
From a technical standpoint, Bitcoin appears to be nearing a short-term bottom within the range of $102,000 to $104,000, aligning with dense liquidity zones and historical order blocks. The Bollinger Bands also indicate a potential mean reversion around $102,000, suggesting a swift technical response may occur as the middle band around $106,000 acts as dynamic resistance, supported by past price action.
The tightening of the Bollinger Bands points to an impending increase in volatility. A sustained close above $106,748 might validate a bullish mean reversion targeting $112,000. Conversely, a decisive break below $100,000 could negate this outlook and shift focus to a potential target of $98,000.
Data from Alphractal identifies $98,300 as a critical support level, where short-term holders remain in profit. Breaching this support could lead to a deeper market correction. As Alphractal reiterated, “As long as Bitcoin stays above the STH Realized Price, the market can still be considered bullish. The situation could only change if BTC dramatically falls below the $98K level, potentially prompting a substantial decline.”
This article does not contain investment advice or recommendations. Investments and trades carry risks, and readers should conduct their own research before making decisions.
