Bitcoin (BTC) has a first profit pullback point at $106,000 before reaching new highs.

Source: Cointelegraph Original text: "Before Bitcoin (BTC) hits a new high, $106,000 is the first profit-taking point"

Key points:

Bitcoin has broken down from the ascending channel, with profit-taking risks near $106,000.

The lower-than-expected US Consumer Price Index ( CPI ) data may boost Bitcoin, but a higher CPI could increase bearish pressure, causing the price to drop below $100,000.

The price of Bitcoin reached an intraday high of $105,800 on May 12, but fell 3% to $101,400 during the New York trading session. On the short time frame (LTF) chart, Bitcoin fluctuated within an ascending channel pattern and then broke below the bottom range of that pattern, showing a bearish breakout.

Bitcoin 1-hour chart. Source: Cointelegraph/TradingView

Regarding the stagnation of Bitcoin's bullish momentum, data analysis platform Alphractal points out that the re-testing of the resistance level close to $106,000 has increased the likelihood of profit-taking. As shown in the chart, Bitcoin is currently near the "Alpha Price" area, and Alphractal's CEO Joao Wedson indicates that long-term holders or whales may take profits in this area.

Bitcoin Alpha price level. Source: X.com

From a liquidation perspective, the risk of a "long squeeze" is also rising. If the price drops to $100,000, over $3.4 billion in leveraged long positions will face liquidation risks. This range may become a price attraction point, leading to a retest near the psychological barrier.

The current Bitcoin pullback may reflect traders reducing their risk exposure ahead of the release of the U.S. Consumer Price Index (CPI) on May 13, (. Previously, the CPI released in March was 2.4%, down from 2.8% in February, although the forecast was 2.5%. The CPI for April is expected to remain at 2.4%, due to stable energy prices amid balanced oil price production and a slowdown in wage growth, easing the pressure on price increases.

US Consumer Price Index data. Source: Investing.com

A lower-than-expected CPI (possibly for the third consecutive time) could be bullish for Bitcoin, potentially suggesting that the Federal Reserve will cut interest rates in 2025, boosting risk assets like stocks and cryptocurrencies. Conversely, a higher-than-expected CPI could be bearish, triggering inflation concerns and strengthening the dollar, putting pressure on Bitcoin.

If the bearish pressure on the Bitcoin chart persists after the CPI announcement, the fair value gap between $100,500 and $99,700 on the four-hour chart, )FVG(, will become a key area of immediate focus.

Another FVG is located between $98,680 and $97,363, which would represent an 8% pullback from the recent high.

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This article does not contain any investment advice or recommendations. Any investment and trading activities involve risks, and readers should conduct their own research before making decisions.