Bitcoin price sits precariously as escalating Middle East tensions and broadening risk aversion threaten to push BTC below $100,000.

Recent Price Action

Bitcoin (BTC) recently approached $110,653, a weekly high, but has subsequently fallen approximately 3.5%. The cryptocurrency has retreated from its recent peak to around $106,600. These corrections follow a roughly 10% price surge during the period from June 6 to this week.

Drivers of the Correction

Analysts point to several factors contributing to the current pullback. Heightened geopolitical uncertainty, particularly concerning potential military action between Iran and Israel, is driving a global risk-off sentiment, which often harms riskier assets like cryptocurrencies.

Technical Perspective: A “Soft Reversal Point”

From a technical standpoint, derivatives data suggests the correction may be in line with typical market dynamics. Bitcoin researcher Axel Adler Jr indicated it’s possible the move represents a “soft reversal point.” He observed that with positive funding rates but declining open interest, a temporary correction below $108,000 was predictable.

“This is a classic ‘soft reversal point’ after an uptrend,” Adler explained. “As long as funding remains positive but open interest is declining, you should expect a short-term correction or consolidation below $108K.”

Bull Trap Concerns: The Fractal Pattern

Fractal analysis, which studies repeating market patterns, presents a steeper bearish case. Current market conditions share similarities with a January 2025 price action around $100,000 to $110,000.

• BTC breached a descending trendline after a consolidatory period following significant price action
• The subsequent high was the previous all-time high
• Technical indicators briefly weakened below neutral territory

If the fractal pattern holds, Bitcoin’s recent consolidation near $108,000 might limit gains, but a deeper drawdown could extend towards $100,000, an area denoted by significant liquidity clustering.

For the fractal analysis to be validated, prices likely need to extend losses below $105,000 from Monday’s previous low. Otherwise, the setup could prove benign, indicating a pure consolidation.

Bull Trap Risk & Looking Ahead

The technical framing raises the possibility of a bull trap – where higher prices look promising initially but then fail, spooking bulls and triggering losses. While this doesn’t imply an impending market crash, it suggests investors should prepare for the possibility of extended consolidation or further downside from current levels.

Ultimately, the path forward hinges on price action relative to key psychological zones around $108,000 and $100,000.