Bitcoin Price Crash Looms as Bollinger Flags End of Rally Pattern

TLDR

Bitcoin price has dropped over 6 percent since May 23 and is trading just above the $104,000 support level. The daily chart shows a bearish Three Pushes to a High pattern according to Bollinger Bands analysis. A breakdown below the $102,900 support could shift the high-timeframe market structure to bearish. Bitcoin’s 30-day implied volatility has fallen to an 11-month low, signaling reduced price movement expectations. CME futures and options open interest have declined sharply, reflecting weak participation from sophisticated traders.

Bitcoin price is showing signs of weakening, as technical patterns and market data point to a possible sharp downturn. As of June 4, 2025, BTC’s price has dropped by over 6% since May 23 and is trading above $104,000. Momentum indicators, volatility data, and futures positioning suggest bearish pressure is building across multiple timeframes.

Technical Indicators Signal Bearish Shift in Bitcoin Price

The daily chart shows Bitcoin price touched the upper Bollinger Band three times, signaling a “Three Pushes to a High” pattern. This pattern often marks the end of a bullish phase and can precede a price reversal. Price rejection near the upper band highlights fading buying strength and failed breakout attempts.

Support at $104,000 has held for now, but the structure remains vulnerable as the trend shows three lower highs since the $112,000 peak. A break below the $102,900 level could shift the market structure bearish on the high timeframe. This setup opens the possibility for a drop to the $100,000 psychological support or even lower.

The short-term structure on the four-hour chart shows higher lows and a bounce from the $104,274 level. In the near term, Bitcoin’s price could attempt to rally towards the $107,782 resistance. However, failure to maintain this bullish pattern may lead to renewed selling pressure below key support levels.

Falling Implied Volatility and Futures Data Reflect Weak Sentiment

Bitcoin price outlook is further pressured by collapsing 30-day implied volatility, which hit an 11-month low on June 3. Lower implied volatility reflects limited expectations for price swings, signaling a lack of strong directional conviction. This drop aligns with reduced risk appetite among derivatives traders.

Open interest in CME Bitcoin futures fell from $17.51 billion to $15.69 billion between May 29 and June 3. CME options open interest also declined from $4.74 billion to $3.04 billion in the same period. This contraction suggests traders are unwinding positions and avoiding directional bets.

The annualized basis rate fell from 9.18% on May 2 to 6.29% on June 2, signaling less incentive to hold long futures. A lower basis indicates reduced profitability, often coinciding with declining market confidence. If this trend persists in the coming sessions, the Bitcoin price could remain under pressure.

Ethereum Gains as Bitcoin Shows Weakness

Ethereum is drawing attention after a series of high-value transfers and institutional moves. BlackRock reportedly shifted capital into ETH while exiting BTC holdings, signaling changing preferences among large firms. This shift coincides with BTC’s weakening metrics and reduced institutional engagement.

Abraxas Capital withdrew 13,771 ETH worth $36.4 million from Binance in the last 12 hours. Similar whale transactions show increased ETH accumulation, likely for cold storage, indicating long-term confidence. Meanwhile, Bitcoin price action lacks similar accumulation, highlighting diverging momentum.

ETH’s current price is $2,500, attracting new buyers amid institutional pivoting. These capital flows may explain declining BTC volatility and falling futures interest. Bitcoin’s price may face additional pressure as capital rotates into alternative digital assets.

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