Bitcoin Forms Double Top at $106K, Analysts Warn of Potential Crash

Summary: Bitcoin has rebounded above $106,000 after a weekend dip below $100,000, but technical indicators suggest this rally could be short-lived. Analysts point to the formation of a double top and looming Fair Value Gaps (FVGs) as signs of a potential retracement below current levels.

Background: Bitcoin Reclaims Ground After Weekend Lows

Over the weekend, Bitcoin briefly dipped below the $100,000 mark, sparking concerns of a broader market correction. The flagship cryptocurrency has since bounced back by over 10%, trading above $106,000 and providing temporary relief for struggling altcoins. However, market technicals now suggest this upward movement may only be a temporary reprieve.

Double Top and FVG Signals Point Toward Downside

Crypto analyst Louigi has identified what appears to be a double top on the Bitcoin chart, a pattern often associated with bearish reversals. According to the analyst, this formation followed a buy-side liquidity sweep, indicating a possible shift in market direction as bullish momentum wanes.

Louigi also notes the emergence of several Fair Value Gaps (FVGs)—price imbalances between buyers and sellers that historically tend to get filled. These gaps currently stretch down toward $102,000, with the first appearing below $105,000, aligned with the 0.28 Fibonacci retracement level. If this area fails to hold, Bitcoin could slide toward the 0.5–0.618 Fib levels below $104,000. A further drop could lead the price to the critical 0.618–0.65 range at $102,000. A breach of this level might trigger a deeper retracement toward the 0.786 Fib zone near $101,000.

Market Reaction and Analyst Outlook

The outlook remains mixed. While the double top formation is typically bearish, Bitcoin briefly surged past the $106,600 resistance level—reaching as high as $108,000—before encountering rejection. This resilience suggests bulls may still be in control, at least in the short term.

Some analysts argue that the robust price recovery could leave FVGs below $106,000 untouched, particularly if Bitcoin continues its push toward a new all-time high. Given the proximity—less than 10%—analysts suggest that strong buying momentum could drive prices higher into Q3 2025.

Price Update

At the time of writing, Bitcoin is trading around $106,200. Market volatility remains elevated, with traders closely monitoring key technical levels between $102,000 and $108,000. Should support fail at $105,000 or $102,000, a deeper correction could follow. Conversely, sustained momentum above $106,600 may invalidate bearish patterns and pave the way for fresh all-time highs.