Bitcoin (BTC) recently peaked just below $112,000 but then retreated to around $107,700, hinting at a possible loss of momentum. This shift followed a brief rebound from below $104,000, yet analysts caution that weak derivatives activity coupled with impending U.S. inflation data may signal further instability.

Temporary Surge Indicates Market Exhaustion

Initially, the rise from $106,000 to nearly $112,000 appeared optimistic. However, insights from analyst CryptoMe, shared on social media on October 21, indicate that crucial market indicators tell a contrary tale. Open Interest, which indicates the total number of outstanding derivatives contracts, saw minimal growth during Bitcoin’s price rise, suggesting a lack of interest in initiating new leveraged positions. Furthermore, the funding rate remained below the neutral threshold of 0.01, alongside low trading volumes in CME futures, suggesting traders were hesitant to invest additional funds in long positions.

“In short, there wasn’t the aggressive liquidity inflow or position-opening enthusiasm we were hoping for,” the analyst remarked.

This technical frailty comes at a crucial moment, as the U.S. Consumer Price Index (CPI) data is set for release on Friday, October 24. Historically, this report has significantly influenced price movements in cryptocurrency markets. A higher-than-anticipated CPI could exert downward pressure on Bitcoin, as analysis indicates buyer concentration predominantly between $97,500 and $104,000, with the $100,000 mark serving as an essential psychological barrier.

Additional Insights

CryptoMe cautioned, “There’s visible demand in this range. But don’t forget, psychological supports are not very strong supports.”

Meanwhile, CoinGecko data illustrates a 2.5% decrease in Bitcoin’s value over the last 24 hours and a 4.6% drop within the week, marking a 14.5% decline from its record high of over $126,000 on October 6. The current market cap is approximately $2.15 trillion, with daily trading volume hovering around $60 billion.

Analysts Divided on Future Trajectories

In light of recent events, experts are split on Bitcoin’s imminent direction. Dr. Profit posited ominously, “bulls will be proven wrong,” foreseeing a drop below $101,000 soon. In contrast, veteran trader Bob Loukas warned against complacency as Bitcoin approaches a critical juncture in its four-year cycle.

Contrarily, CryptoAmsterdam suggested today that Bitcoin has “reclaimed the range low” and may retain it as mid-term support. However, a deeper retracement could occur if this support level fails. Titan of Crypto noted that an unconfirmed monthly LMACD cross might indicate either a cycle peak or the commencement of a bear market phase.