Bitcoin Price Stagnates Near $104K as Inflation Worries Weigh on Momentum

Bitcoin (BTC) is hovering near key support levels around $104,000, but despite brief volatility and a wide trading range, the market shows signs of exhaustion. Weak trading volume, subdued on-chain activity, and persistent inflation have combined to stall any immediate upside.

Market Reset Underway as Leverage Flushes Out

The start of the week brought heightened volatility, culminating in a sharp liquidation event that rattled both bulls and bears. Data from Glassnode revealed that over $28.6 million in long positions and $25.2 million in shorts were wiped out in a single day. This dual-sided liquidation led to a 7% drop in BTC-denominated open interest, falling from 360,000 to 334,000 BTC.

Such a clean-out suggests that speculative excess has been temporarily removed from the market, triggering what analysts refer to as a “reset phase.”

Bitcoin futures long and short liquidations. Source: Glassnode

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Bitcoin's Technical Outlook: Descending Channel Dominates

BTC currently trades within a descending channel, indicating a lack of sustained momentum following the recent price shakeout. On the 4-hour chart, Bitcoin failed to break above the $109,000 liquidity zone and has since drifted lower.

Support between $103,400 and $104,600 has become a key area to watch. This zone aligns with a daily Fair Value Gap (FVG) and coincides with the 200-day EMA, providing a potential foundation for a short-term bounce.

Still, without renewed bullish demand or improving on-chain metrics, Bitcoin is more likely to continue consolidating than to break out aggressively.

On-Chain Metrics Show Cooling Demand

Glassnode's latest insights reinforce the cooling narrative. Bitcoin’s on-chain activity—including transfer volume and profitability metrics—has slowed significantly. While BTC remains locked in the $100K to $110K range, participation levels have dropped, suggesting that the market is in a holding pattern.

In Q2 alone, total spot volume grew by only $7.7 billion, while transfer volumes fell 36%, further signaling a decline in speculative trading urgency.

Bitcoin 4-hour chart. Source: TradingView

Sticky Inflation Dampens Fed Pivot Hopes

One of the biggest headwinds for Bitcoin right now comes from macroeconomic indicators—namely, inflation.

The Core PCE index, which the Federal Reserve closely monitors, rose to 2.7% in May, surpassing the expected 2.6%. This marks the first increase since February 2025, and it suggests that inflationary pressures remain sticky.

Although there’s been speculation about potential rate cuts later this year, the new data gives the Fed little reason to ease. With inflation still above target, the likelihood of continued tight monetary policy looms large—posing a challenge for risk-on assets like Bitcoin.

What Comes Next for BTC?

In the short term, traders are watching to see if Bitcoin can hold above the $103K–$104K support zone. If the price bounces from this area while collecting internal liquidity, a breakout from the descending channel remains possible. However, this would require a clear uptick in demand, both technically and on-chain.

Bitcoin Total Transfer Volume. Source: Glassnode

Until then, sideways movement or even a slight drift lower remains the more probable scenario.

Conclusion

Bitcoin is currently navigating a complex macro and technical landscape. With speculative interest cooling, inflation ticking higher, and the Fed unlikely to cut rates anytime soon, the crypto market finds itself in consolidation mode. For BTC to break out of this range convincingly, it will require a resurgence in investor demand, stronger on-chain activity, and more favorable economic signals. Until then, patience remains key for both traders and long-term holders..

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