Bitcoin Drops 3.5% Amid Geopolitical Tensions, Technical Indicators Suggest Further Decline

Bitcoin's price has experienced significant volatility recently, with technical indicators and geopolitical tensions suggesting a potential decline below $100,000. The cryptocurrency reached a weekly high of $110,653 on Monday but has since dropped by 3.5%, hitting a low of $106,600 on Thursday. This price correction coincides with escalating tensions in the Middle East, particularly between Iran and Israel, which have triggered a risk-off sentiment among investors.

From a technical standpoint, the current correction appears to be a routine market adjustment. Bitcoin prices surged roughly 10% between June 6 and Tuesday, making a 3.5% dip seem normal. Analyst Axel Adler Jr. described the current market situation as a "soft reversal point," where long positions are taking profits at resistance levels, supported by aggressive short volume. Adler Jr. explained that as long as funding remains positive but open interest is declining, a short-term correction or consolidation below $108,000 should be expected.

While a consolidation near $108,000 may not break the bullish momentum, fractal analysis suggests a deeper drawdown is possible. The recent rally from $100,500 to $110,000 mirrors a similar pattern from January 2025, when BTC prices rebounded from $91,700 to $102,700. This fractal pattern indicates three similar signals: a break of a descending trendline pattern, a failure to take the previous high, and a relative strength index slipping below 50 before recovering and hitting a rejection at 60.

If this fractal holds, Bitcoin could face a sharp rejection, potentially plummeting to $100,000, where significant support lies. Validation of this fractal analysis requires the price to continue declining below Monday’s lows of approximately $105,000. This raises concerns about a potential bull trap, where the crypto asset could signal the beginning of a multi-week drawdown. Invalidation would occur if Bitcoin reclaims and sustains above $108,000, negating the failed high and suggesting a bullish continuation.

The current market conditions, combined with the technical indicators, paint a picture of uncertainty for Bitcoin. Investors are advised to conduct their own research and consider the risks involved before making any investment decisions. The potential for a deeper drawdown highlights the need for caution, as the cryptocurrency market remains volatile and subject to various influencing factors.