In the midst of a temporary market pause, Bitcoin's (BTC) price declined by 2% over the past 24 hours. The largest cryptocurrency by market capitalization is swinging between key resistance and support levels, with some analysts indicating that Bitcoin may face short-term volatility.
■ Bitcoin's price has stabilized near its all-time high
On Wednesday, Bitcoin, along with the rest of the cryptocurrency markets, saw a slight decline ahead of the Federal Open Market Committee (FOMC) meeting minutes scheduled for May 6 and 7.
The leading cryptocurrency declined by 2.7% from $110,000 at the daily open to a multi-day low of $107,107, indicating investor caution.
It is noteworthy that Bitcoin saw a notable increase of 15% over the past month, reaching an all-time high (ATH) of $111,953 about a week ago, recovering nearly 50% from its April lows.
Since reaching its all-time high, Bitcoin has moved sideways, trading between levels of $106,800 and $109,700.
Despite the slight decline, analyst Crypto Jelly believes that Bitcoin's price discovery trend remains "sound," noting that the price has been consolidating above its previous highs.
According to the chart, the cryptocurrency is currently forming a symmetrical triangle pattern in the lower time frames, with the upper limit between $109,000 and $110,000.
My generation sees that cryptocurrency "increases the pressure for the next upward wave," as it is driven by its breakout to another 30% rise.
The analyst previously pointed to a Power 3 (Po3) model in the Bitcoin chart, noting that its price expansion targets the level of $140,000-150,000 after reclaiming the new upper resistance level.
Ali Martinez stated that Bitcoin is still "trapped in a price range" despite its decline today, but added that the lower range is the key level to watch. He warned that breaking below the support level of $106,800 could lead to increased volatility, which may drive Bitcoin's price to lower levels.
■ Does Bitcoin's retest spark volatility?
The "Titan of Crypto" site also confirmed that Bitcoin is currently stabilizing at a key level. According to market watcher analysis, Bitcoin is still "hovering around the daily Tenkan level," which is the level to watch during potential fluctuations from the Federal Open Market Committee meeting minutes.
Breaking below this support area could push the cryptocurrency's price to the next major support level around $102,700. Conversely, stability at current levels could pave the way for a new retest of the upper range.
Meanwhile, "Dan Crypto Trades" pointed out that as Bitcoin stabilizes near its historical highs, Bitcoin-based exchange-traded funds (ETFs) have seen significant inflows over the past few weeks, recording their second-best performance last week.
He explained that one of the "best indicators" of the cycle to determine strength or weakness at local tops or bottoms is the flows of exchange-traded funds, clarifying that in general, large inflows after a significant rise, while Bitcoin's price does not continue to rise, indicate a local peak.
For traders, "it is important for bullish investors to accelerate this move, as getting billions of inflows without a proper price rise is usually not the optimal choice," adding that "given the effort made and breaking a high record, more is expected to be seen."
Dan believes that if the massive inflows stop and Bitcoin's price maintains its level, it is likely to continue its performance in the short term. However, if the price does not hold its current range, "we may need some fluctuation and panic first before a proper breakout occurs."
As of this writing, Bitcoin is trading at $107,700, down 1.6% on the weekly chart.