Bitcoin (BTC) price exhibits bearish breakout from ascending channel, risk of profit-taking near $106,000

Bitcoin exhibits a bearish breakout from an ascending channel, with the risk of profit-taking near $106,000. A lower-than-expected US Consumer Price Index (CPI) print could boost Bitcoin

Key Takeaways:

* Bitcoin (BTC) is exhibiting a bearish breakout from an ascending channel, with the risk of profit-taking evident as signaled by Alpha Point and heightened liquidation risks.

* As the U.S. Consumer Price Index (CPI) approaches, traders are de-risking, setting the stage for a potential price move. A lower-than-expected CPI could boost Bitcoin, while a higher reading may increase bearish pressure.

* Immediate key area of interest lies between $100,500 and $99,700, a fair value gap (FVG) on the four-hour chart.

Bitcoin (BTC) reached an intraday high of $105,800 on Friday, May 12, but later slid by 3% to $101,400 during the New York trading session.

On the lower-time frame (LTF) chart, BTC had been oscillating within an ascending channel pattern before exhibiting a bearish breakout below the bottom range of the pattern.

Chart of BTC price movement with analysis via Alphractal.

Credit: Joao Wedson, CEO of Alphractal

With respect to BTC’s stalling bullish momentum, data analytics platform Alphractal noted that BTC re-testing nearing $106,000 resistance levels increased the likelihood of profit-taking risks.

As illustrated in the chart above, Bitcoin is currently approaching the “Alpha Price” zone, where long-term holders or whales could take profits.

From a liquidation standpoint, the risk of a “long” squeeze is also elevated, with over $3.4 billion in leveraged long positions at risk of liquidation if prices drop to $100,000. This range could act as a magnet for price, leading to a retest near the psychological level.

U.S. CPI data looms as Bitcoin traders de-risk

The current BTC correction might reflect traders de-risking ahead of the U.S. Consumer Price Index (CPI) figures for April, which are due on Saturday.

Previously, March’s CPI, released April 10, came in at 2.4%, down from February’s 2.8%, despite a forecast of 2.5%. However, April’s CPI is forecast to remain at 2.4%, due to steady energy prices amid balanced oil production and moderating wage growth, easing pressure on price increases.

A lower-than-expected CPI (potentially third in a row) could be bullish for Bitcoin, as it may signal Federal Reserve rate cuts in 2025, boosting risk assets like equities and cryptocurrencies. Conversely, a higher-than-expected CPI could be bearish, as it would increase inflation fears and strengthen the dollar, putting pressure on BTC.

If bearish pressure persists on BTC charts even after the CPI print, then an immediate key area of interest remains between $100,500 and $99,700, a fair value gap (FVG) on the four-hour chart.

Another FVG remains between $98,680 and $97,363, which would represent an 8% correction from the recent highs.