Bitcoin Holds Above $106,000 Despite Profit-Taking Signals

Bitcoin's price has been holding above the key $106,000 support level, reaching an intraday high of $108,300. Despite persistent risks and headwinds, analysts remain optimistic about the rally's continuation. The recent fluctuations in Bitcoin's price, coupled with changes in open interest, suggest a need for caution among traders. According to a CryptoQuant on-chain analysis, Binance open interest hit 6% for the third time in two months, a pattern historically associated with profit-taking areas. This recurring pattern indicates that large inflows into leveraged positions often follow periods of short-term gains, potentially leading to price pullbacks or sideways movement.

Additionally, the Long-Term Holder (LTH) Net Position Realized Cap metric shows a significant decline in Bitcoin held by long-term investors, dropping from over $57 billion to just $3.5 billion. This suggests that long-term holders are taking profits. However, while these indicators point to heightened market activity, they do not necessarily confirm an imminent price drop for Bitcoin.

Over 139,000 BTC options contracts with a notional value of more than $15 billion are set to expire on Friday, marking one of the largest options expiry events this year. At the time of writing, the put-call ratio was 0.74, indicating a slightly bearish sentiment among traders. The max pain point is at $102,000, suggesting a high chance of correction in Bitcoin's price as traders adjust their positions, which could lead to increased volatility.

Bitcoin miners recently experienced their worst payday in a year, with daily revenue slipping to $34 million in June, the lowest since April. Low fees and the Bitcoin price drop are eroding margins, but miners have not yet sold their BTC holdings. However, capitulation and loss risks could prompt some miners to sell their Bitcoin.

The U.S. Bureau of Economic Analysis is set to release the U.S. Federal Reserve’s preferred inflation gauge, the US PCE inflation data, on Friday. Economists expect the headline PCE to come in at 2.3%, with the month-over-month PCE inflation forecasted to rise 0.1%. The annual core US PCE inflation is expected to come in hot at 2.6%, and the monthly core PCE is expected to rise 0.1%. Federal Reserve Chair Jerome Powell and other FOMC members have warned about an uptick in inflation to 3% by the end of the month, citing tariffs and recent geopolitical tensions as reasons for rising inflation. Powell has denied any plans for monetary policy changes or rate cuts early this year.

Renowned Bitcoin analyst PlanB noted that Bitcoin is approaching an RSI of 70, which traditional investors might view as overbought. However, Bitcoin investors consider an RSI range of 40-90 as normal. PlanB stated that an RSI of 70 is only slightly above the average of 65. Michael van de Poppe expected a breakout in Bitcoin's price, despite a 1% drop in the past 24 hours, with the price trading at $106,722. The 24-hour low and high were $106,680 and $108,305, respectively. The trading volume has decreased by 10% in the last 24 hours, indicating a decline in interest among traders.