Bitcoin's recent surge might not be as stable as it seems! After hitting a record high of $111,980 on May 22nd, the spotlight is shifting towards a looming pullback.

Despite an impressive trading volume in derivatives, the spot market is showing signs of weakness. This divergence raises alarms, particularly with liquidation levels piling up below the critical $100K mark.

The latest data reveals that while the Open Interest (OI) soared to an eye-popping $74 billion, the positive sentiment is waning. Trading metrics indicate a flattening OI trend post-record high, and a recent dip in the Funding Rate suggests that bullish momentum might be stalling.

CryptoQuant Insights highlighted concerns about falling spot demand, which could signal caution among investors. As Bitcoin flirts with the $94K-$96K resistance zone—previously a stronghold before breaching to nearly $112K—traders are left wondering if a pullback is imminent.

While speculative interest in futures remains robust, the reduction in spot trading volume is a cause for concern. A derivative-driven rally could be vulnerable to volatility, making this an opportune time for traders to reassess their strategies.

Looking at the broader picture over the past six months, Bitcoin's 1-day chart suggests a potential price range formation. Analysts warn of two possible paths in the coming weeks: a continuation of the uptrend or a reset to $100K or even $93K.

The build-up of liquidation levels around these key price points adds to the tension. The earlier retracement to $77.5K saw short liquidations at several levels, highlighting the precarious nature of this climb.

In summary, traders should keep a close eye on profit-taking behaviors and the ability of bulls to regain control. With the odds leaning towards a bearish retracement back to around $106K, the market is ripe for caution. Now is the time to prepare!