Bitcoin’s (BTC) recent surge to $105,800 on May 12 was short-lived as the flagship cryptocurrency dipped 3% to $101,400 during the New York trading session. On the lower-time frame (LTF) chart, BTC exhibited a bearish breakout below the bottom range of an ascending channel pattern, indicating potential downside risks. Alphractal, a data analytics platform, highlighted that Bitcoin’s re-test near $106,000 could prompt profit-taking from long-term holders or whales, according to its CEO, Joao Wedson. With over $3.4 billion in leveraged long positions at risk of liquidation if BTC drops to $100,000, a “long” squeeze could exacerbate selling pressure, potentially pulling prices lower.
As BTC approaches $106K, the chances of profit-taking increase.
— Alphractal (@Alphractal) May 12, 2025
BTC is nearing a key level of the Alpha Price, which has historically acted as a strong resistance zone.https://t.co/MgcOqab771 https://t.co/D5MJrbrcRD pic.twitter.com/K0tYJCq9K0
CPI Data Release Looms Over Bitcoin Market
Bitcoin traders are de-risking ahead of the U.S. Consumer Price Index (CPI) data release on May 13, a pivotal macroeconomic event that could impact BTC’s price trajectory. March’s CPI, released on April 10, came in at 2.4%, down from February’s 2.8%, despite a forecast of 2.5%. April’s CPI is projected to remain at 2.4%, driven by stable energy prices and easing wage growth. A lower-than-expected CPI could signal potential Federal Reserve rate cuts in 2025, providing a bullish tailwind for risk assets like Bitcoin. Conversely, a higher CPI reading may strengthen the dollar, increasing bearish pressure on BTC as inflation fears rise.
Also Read: Is $1 DOGE Within Reach? Analysts See 180% Upside if Bitcoin Momentum Holds
Key Support Levels to Watch as Bitcoin’s Downside Risks Intensify
If Bitcoin fails to reclaim $105,800, traders should monitor key support levels, particularly the fair value gap (FVG) zone between $100,500 and $99,700 on the four-hour chart. A sustained breach of this range could expose BTC to further losses, targeting another FVG between $98,680 and $97,363 — representing an 8% correction from recent highs.
With heightened volatility expected around the CPI release, Bitcoin’s next directional move could be critical in determining whether the cryptocurrency stabilizes above $100,000 or plunges further into bearish territory.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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