During a brief market consolidation, Bitcoin (BTC) has dropped 2% in the last 24 hours. As the largest cryptocurrency by market capitalization, BTC has been hovering between key resistance and support levels, and some analysts believe that BTC may face volatility in the short term.
Bitcoin is consolidating near its all-time high.
On Wednesday, Bitcoin saw a slight pullback, similar to other parts of the cryptocurrency market, ahead of the release of the Federal Open Market Committee (FOMC) meeting minutes from May 6 and 7.
This flagship cryptocurrency fell 2.7% from a daily opening price of $110,000 to a daily low of $107,107, indicating a cautious stance among investors.
It is worth noting that Bitcoin has surged 15% in the past month, hitting an all-time high (ATH) of $111,953 nearly a week ago, and rebounding approximately 50% from its April lows.
Since reaching new all-time highs, Bitcoin has been consolidating, trading between $106,800 and $109,700.
Despite a slight pullback, analyst Crypto Jelle believes the price discovery trend for Bitcoin remains 'intact,' noting that the price has been consolidating above previous highs.
According to the chart, the cryptocurrency is currently forming a symmetrical triangle pattern on a lower time frame, with the upper limit between $109,000 and $110,000.
For Jelle, cryptocurrencies are 'building pressure for the next rally,' with a breakout potentially driving prices up another 30%.
The analyst previously highlighted the strength of the 3 (Po3) pattern in the BTC chart, indicating that after reclaiming the new ATH resistance level, its price expansion target is between $140,000 and $150,000.
Ali Martinez stated that despite today's price drop, BTC remains in a 'range-bound' state, but he added that the range low is a key level to watch. He warned that a break below the support level of $106,800 could trigger increased volatility, potentially leading to further declines in BTC price.
Will BTC retest trigger volatility?
Titan of Crypto also confirmed that Bitcoin is currently at a critical level. According to this market observer's analysis, BTC 'is still hovering around the daily Tenkan,' which is a level to watch during the potential volatility brought about by the FOMC meeting minutes.
A break below this support level could push the cryptocurrency price to the next key support level around $102,700. Conversely, holding the current level could lay the groundwork for a retest of the upper range.
Meanwhile, Daan Crypto Trades notes that as Bitcoin consolidates near its historical highs, BTC-based exchange-traded funds (ETFs) have seen significant capital inflows over the past few weeks, achieving the second-best performance last week.
As he explained, one of the better 'indicators' for judging the strength of local tops or bottoms is ETF flow, specifically, generally, a significant inflow of capital occurs after a large increase, and BTC's price does not continue to rise, indicating a local top.
For traders, it is crucial for the 'bulls to act quickly, as securing billions of dollars in capital inflows without a proper price increase is often not the best option,' adding, 'for the effort put in and breaking through historical highs, you would want to see more.'
Daan believes that if large-scale capital inflows stop and BTC price stabilizes, its short-term trend may continue. However, if the price cannot maintain the current range, 'we may need to go through some volatility and panic first before we can truly break out.'
As of the time of writing, Bitcoin is trading at $107,700, with a weekly chart showing a decline of 1.6%.
