Risk-Off Sentiment and Chart Patterns Point to Potential Multi-Week Correction
Bitcoin (BTC) is showing signs of a potential bull trap, as a combination of geopolitical uncertainty and a technical fractal pattern raise the risk of a drop below $100,000. The warning comes as rising tensions in the Middle East, coupled with profit-taking by traders, have sparked a wave of risk-off sentiment across financial markets.
BTC reached a weekly high of $110,653 on Monday but has since declined by 3.5%, touching a low of $106,600 on Thursday, according to CoinMarketCap.
Middle East Tensions Fuel Market Caution
Reports that Israel may be preparing military action against Iran have added pressure to global markets, prompting investors to scale back risk exposure. Bitcoin, often viewed as a risk-on asset, has responded in kind with heightened volatility.
While the current pullback appears technically routine, with BTC having surged 10% between June 6 and Tuesday, analysts are watching closely for signs that this correction could evolve into something more significant.
Technical View: “Soft Reversal Point” at Resistance
Bitcoin researcher Axel Adler Jr described the recent dip as a “soft reversal point,” where long positions are likely taking profits near resistance, aided by a surge in aggressive short volume. Using Bitcoin futures position dominance data, Adler explained:
“As long as funding remains positive but open interest is declining, you should expect a short-term correction or consolidation below $108K.”
In the current hour, there is a clear closing of long positions supported by aggressive short volume. This is a classic “soft reversal point” after an uptrend: as long as funding remains positive but open interest is declining, you should expect a short-term correction or… pic.twitter.com/oKIdwUb5mZ
— Axel 💎🙌 Adler Jr (@AxelAdlerJr) June 12, 2025
This setup suggests that the correction may not yet be over, even if the broader trend remains intact for now.
Fractal Pattern Echoes January Setup
Beyond short-term technicals, a fractal analysis — which compares current price behavior to historical patterns — is drawing attention. The current rally from $100,500 to $110,000 resembles Bitcoin’s price action in January 2025, when BTC rebounded from $91,700 to $102,700 before sharply correcting.
Fractals are repeating patterns that emerge in financial charts under similar market conditions. In this case, three critical signals suggest a similar trajectory may unfold:
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Breakout from a descending trendline following several weeks of trailing liquidity absorption.
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Failure to reclaim a previous all-time high, forming a potential double-top.
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Relative Strength Index (RSI) dropped below 50, recovered briefly, and then rejected at 60.
If this fractal holds true, Bitcoin could face a sharper rejection, potentially retesting the $100,000 support level, which has been identified as a major liquidity zone.
Bull Trap Risk in Focus
These technical signals raise the possibility that Bitcoin’s recent surge may be a bull trap — a pattern where prices rise, luring in bullish traders, only to reverse and trigger a multi-week decline.
“Validation of this fractal requires Bitcoin to continue declining below Monday’s low of around $105,000,” analysts noted.
Conversely, the pattern would be invalidated if BTC reclaims and sustains levels above $108,000, signaling strength and renewing bullish momentum.
Macro Risk Factors May Amplify Price Movements
With global markets already on edge due to geopolitical developments, traders are becoming more sensitive to price reversals in key risk assets like Bitcoin. Any additional escalation in the Middle East could accelerate selling pressure, even in the face of historically bullish onchain metrics.
Market sentiment, while broadly positive, remains vulnerable to shocks, especially in a climate where BTC is hovering near record highs and traders are closely watching for macro catalysts to confirm or challenge their positioning.
Liquidity and Long Position Dominance Add to Volatility
Current market conditions show signs of liquidity clustering just above and below the $105,000–$108,000 zone, with open interest declining and funding rates staying positive — a combination that often precedes short-term shakeouts.
Traders have increasingly adopted leveraged long positions in anticipation of a breakout, increasing the risk of liquidation cascades if BTC fails to hold key support.
Conclusion
Bitcoin’s recent rally has brought it within striking distance of its all-time high, but emerging fractal patterns, technical signals, and geopolitical tensions are raising the risk of a short-term reversal that could see BTC fall below the $100,000 mark.
While a brief consolidation or pullback is consistent with previous bull market behavior, confirmation of a bull trap could lead to deeper corrections — especially if Monday’s lows are breached.
For now, analysts say the next critical threshold is $108,000: a sustained move above it could reignite bullish sentiment, while continued weakness may validate the fractal and set the stage for a broader cooldown.
