Bitcoin started the week by regaining the $106,000 mark, forcing late short positions to liquidate after last week's 7% drop wiped out excessive leverage.
But this is not a new pattern. Since mid-May, BTC's daily chart has shown a repeating structure, where strong liquidity sweeps cause significant downward pressure, attracting value hunters, and then facing FUD (fear, uncertainty, doubt) news from macroeconomics that wipes out weekly profits and resets the trend.
Will this time be different? Can Bitcoin finally escape this volatility trap and establish a clear directional trend, or is it preparing for a repeating cycle? How Bitcoin resolves this setup could decide the next move.
Bitcoin attempts for the fourth time to gain clarity on direction.
At the time of writing, Bitcoin has recorded a 1.7% increase on the day, not only reclaiming $106,000 but also extending the wick to $107,263.
More importantly, Binance's order book shows that nearly 60% of perpetual BTC/USDT traders are leaning towards short positions, creating a clear liquidity zone above.
The bulls have set up, but until they push the price beyond, BTC remains stuck in this high-leverage volatility zone. If a squeeze begins, $110,000 is the level to watch, marking the fourth attempt to break through and explore new prices.
However, so far, each breakout has only lasted a short time, with macroeconomic concerns pulling everything back just before the structure could be confirmed.
Even so, the likelihood of another strong volatility event is even higher.
With just two days left before the crucial FOMC meeting in the U.S., the market is focusing on the possibility that the Federal Reserve will pause interest rate hikes, especially as May's economic data shows softer-than-expected signals. However, a surprising factor is casting a shadow over this optimistic picture: new geopolitical developments are making an already complex scenario even more unpredictable.
The conflict between the two major oil-producing countries has reignited inflation concerns, increasing pressure on risk assets.
Bitcoin is also not immune as the price fell 7% last week, retreating to $102,000.
Technically, BTC's current rally to $106,000 is occurring within the same structural pattern that appeared before three recent failed breakout attempts.
Thus, this weakens the bulls' ability to break the cycle and push Bitcoin into a price discovery phase, aiming for new all-time highs.
