Key takeaways:Bitcoin dropped $103,500 as traders cut risk ahead of tomorrows FOMC decision.Technical data points to a Bitcoin price bounce between $102,000 and $104,000.Onchain data shows mid-term holders realizing significant profits over the past month.Bitcoin (BTC) price slipped to $103,300 after traders started cutting risk ahead of the upcoming Federal Open Market Committee (FOMC) meet and the following interest rate decision which will be made public on Wednesday.
The correction follows a bearish weekly candle close, suggesting a trend reversal, while geopolitical tensions particularly the Israel-Iran conflict add to the risk-off sentiment.
According to Bitcoin Vector, a Swissblock-backed market pulse aggregator, the decline is not just macro-driven.
It aligns with seasonal weakness and falling onchain network growth, pointing to a cool down in spot demand.
Over $434 million in BTC futures were liquidated in the past day, emphasizing that the current move is largely leverage-driven, with traders opting for caution rather than fresh exposure.Despite this, the Bitcoin Coinbase Premium Index a metric comparing BTC prices on Coinbase and Binance, has remained positive for most of June, signaling steady spot demand from US investors.
However, this demand has had a limited impact on price due to broader market caution.Bitcoin Coinbase Premium Index.
Source: CryptoQuantFurther pressure came from profit-taking activity among mid-cycle holders (six12 months), who realized $904 million in profits on Monday, according to Glassnode.
This cohort accounted for 83% of the total realized gains, a notable shift from the longer-term or more than 12-month holders, who had previously led profit realization.
The shift suggests a rotation in market dynamics, with more reactive participants securing gains during recent highs.Still, long-term investor behavior presents an optimistic outlook.
Bitcoin researcher Axel Adler Jr.
noted that long-term holders (LTHs) are still refraining from large-scale spending, a historically bullish pattern.
Bitcoin: long-term holder spending binary indicator.
Source: Axel Adler Jr/XA healthy MVRV Z-score indicating BTC remains fundamentally undervalued and positive Coin Days Destroyed (CDD) momentum hints at selective profit-taking rather than panic.
Similar setups in past cycles have preceded 1825% rallies within sixeight weeks, which implies a potential $130,000 price target by the end of Q2.
Related: Bitcoin threatens $104K 'rug pull' as trader says major move yet to comeFrom a technical perspective, Bitcoin may be approaching a short-term bottom between $102,000 and $104,000, where a dense liquidity pocket and a historical order block intersect.
Another reason for a potential mean reversion around the $102,000 is the Bollinger Bands.
As illustrated in the chart, a faster technical reaction from $102,000 is expected due to the proximity of the middle band, i.e., around $106,000 acting as dynamic resistance, reinforced by historical price respect at this level (e.g., early June consolidation).The Bollinger Bands are also compressing, signaling an imminent volatility spike, while the middle band, which is nearly $106,000, acts as a dynamic resistance.
A successful reclaim and close above $106,748 could validate a bullish mean reversion toward $112,000.
Conversely, a clean break below $100,000 may invalidate the setup and target $98,000.Bitcoin 4-hour chart.
Source: Cointelegraph/TradingViewData from Alphractal also frames $98,300 as the key support where short-term holders (STHs) remain in profit.
Breaching this threshold could tilt the structure toward a deeper correction.
As Alphractal noted:As long as Bitcoin stays above the STH Realized Price, we can still consider the market to be bullish.
The scenario would only change if BTC loses the $98K level aggressively, which could trigger a deeper drop.Related: Watch these Bitcoin price levels ahead of Fed Chair Powell's speechThis article does not contain investment advice or recommendations.
Every investment and trading move involves risk, and readers should conduct their own research when making a decision.