Bitcoin (BTC) price sits on a slippery slope as tensions in the Middle East

Bitcoin (BTC) reached a weekly high of $110,653 on Monday, but it is currently down 3.5%, dropping to a low of $106,600 on Thursday.

Bitcoin (BTC) price dropped to a 24-hour low of $106,600 early Thursday as tensions in the Middle East escalated and triggered a risk-off sentiment among investors.

Bitcoin price is now testing the crucial support level of $100,000, a breach of which could open the door for further declines.

BTC reached a weekly high of $110,653 on Monday, but it is currently down 3.5%.

The recent increase in tensions between Iran and Israel, with reports that Israel is preparing military action against Iran, has triggered a risk-off sentiment, with BTC also posting a reaction.

From a technical standpoint, the current correction looks routine. BTC prices went up roughly 10% between June 6 and Tuesday, and a 3.5% can be considered normal.

Bitcoin researcher Axel Adler Jr outlined a similar sentiment, explaining that the current market faces a “soft reversal point.” Using the Bitcoin futures position dominance chart, the analyst explained that the price dip is potentially due to long positions taking profits at resistance, which is supported by aggressive short volume. Adler Jr said,

"The market is setting up for a deeper drawdown from here, which would make sense given the swift and sizable gains since March 2025."

While a consolidation near $108,000 should not break bullish momentum, fractal analysis outlines the possibility of a deeper drawdown.

Is Bitcoin falling into a bull trap?

Bitcoin’s recent rally to $110,000 from $100,500 represents a similar setup from January 2025, when BTC prices rebounded to $102,700 from $91,700. The current observation reveals a compelling fractal pattern with potentially bearish implications. A fractal pattern is a repeating trend that could lead to similar price action due to identical market conditions. As illustrated in the chart, the pattern can be summarised in three similar signals:

BTC price broke a descending trendline pattern after absorbing 3-4 weeks of trailing liquidity, and formed a bullish break of structure on the daily chart.

BTC failed to take the previous high, which, in both cases, was the all-time high level.

The relative strength index slipped below 50 before recovering and hit a rejection at 60.

Bitcoin could face a sharp rejection if this fractal holds, potentially plummeting to $100,000, where significant support lies, as indicated by the chart’s liquidity zone. Validation of this fractal analysis requires the price to continue declining below Monday’s lows of approximately $105,000.

This raises the concern of a potential bull trap for BTC, 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.