Bitcoin Drops 6% From Peak As Profit-Taking Begins

Bitcoin's price has taken a bearish turn after reaching a new all-time high above $111,000 in May. This shift was anticipated as the rally placed Bitcoin holders in significant profit, increasing the risk of profit-taking that could drive the price down. Currently, the price has decreased by 6% from its peak, trading at around $104,000. As bears gain control, the decline may not be over, with the cryptocurrency potentially falling below six figures again.

A pseudonymous analyst known as Youriverse on the TradingView website has analyzed Bitcoin's price movements over the past few weeks. According to the analyst, Bitcoin has been in a textbook accumulation phase since the uptrend began in the second week of May. This accumulation contributed to the cryptocurrency's rally to new all-time highs. The analyst noted that Bitcoin's price had seen more compression as it reached higher lows, with resistance remaining relatively flat. Additionally, the selling pressure caused by the Donald Trump tariff wars had waned, allowing buyers to take control of the price. This dynamic led to a possible ‘Power of 3’ scenario, which includes Accumulation, Manipulation, and Distribution.

These three factors collectively drove the Bitcoin price upward, initially pushing toward previous all-time high levels and then to a new all-time high above $111,000. However, the upward momentum waned before Bitcoin could break $112,000. As a result, the price reversed and declined toward previous support levels at $106,000. This support level has since broken, signaling a notable shift in market structure.

The analyst explained that the ‘Power of 3’ could be currently playing out, potentially leading to further price declines as larger investors sell to less-informed retail investors. As the Bitcoin price continues to trend below the $106,000 support level, the likelihood of further declines increases. The rejection above the all-time high and the subsequent breakdown below $106,000 have introduced significant overhead supply, which may act as resistance in the near term. Given this, the analyst expects that the Bitcoin price could fall back to $100,000 and even reach as low as the mid-$90,000s. However, this potential pullback should not be viewed solely as a sign of weakness. In many bull cycles, such corrections and shakeouts serve to flush out over-leveraged positions and reset sentiment, ultimately laying the groundwork for renewed upward momentum.