Bitcoin Consolidates Above $107K: Derivatives Signal Renewed Bullish Momentum Toward $120K Target
Bitcoin maintains crucial support levels while technical indicators and derivatives data suggest a potential breakout to new heights despite
Quick overview
- Bitcoin is currently consolidating around $107,000, with technical indicators suggesting a potential breakout to $120,000.
- Futures market sentiment has shifted from bearish to bullish, with a notable increase in open interest and long positions among institutional traders.
- Global monetary expansion and rising trade tensions are creating favorable conditions for Bitcoin, making it an attractive asset amid economic uncertainty.
- Technical analysis indicates that breaking the $108,500 resistance level could lead to a rally towards $112,000 and beyond.
Bitcoin BTC/USD maintains crucial support levels while technical indicators and derivatives data suggest a potential breakout to new heights despite short-term consolidation pressures.
Futures Market Sentiment Shifts from Bearish to Bullish
Over the past week, the landscape for Bitcoin derivatives has changed a lot. Traders have stopped betting on the price going down and instead bet on it going up over the long term. The price of the cryptocurrency is currently over $107,000, which is down 1.4% in the last 24 hours. However, technical analysis says that this consolidation might be the start of a big rally.
Over the previous 30 days, futures open interest has gone up by 7%, which is the first time it has stayed up since the May-June downturn period. This increase in trading activity, along with a rise in net long position to $27.4 million, shows that institutional traders are becoming more confident. The Bitcoin Futures Market Power v2.0 indicator is now around 22,000, which is the first time since May that it has shown positive long-side pressure.
The put-to-call ratio on Deribit, which reached its highest point in more than a year on Saturday, has now returned to 0.8, which is good for call options. This change from being defensive to being bullish happens at the same time that the futures premium rises above the 5% neutral level, even though Bitcoin is trading below $108,000.
Global Monetary Policy Creates Favorable Conditions
Global monetary expansion is a key factor that could lead to a rise in Bitcoin’s value. The Global Money Supply is growing at a rare rate of 9% per year, and central banks are flooding markets with fiat cash. In the past, when the money supply grew like this, Bitcoin prices went up a lot. In fact, prices went up an average of 460% over the next twelve months.
There has been a clear link between the rise of the money supply and Bitcoin’s performance, especially in 2017 and 2020, when similar supply growth rates came before rallies of 663%, 136%, and 580%, respectively. This monetary situation, together with worries about a recession and trade-related tensions, is making Bitcoin even more appealing as a way to protect yourself from traditional financial systems.
BTC/USD Technical Analysis Points to $112K Near-Term Target
From a technical point of view, Bitcoin is having trouble right now near $108,500, which is the 50% Fibonacci retracement level. If this level is broken decisively, it might lead to a rally toward $110,000, with longer-term goals of $112,000 and maybe even $115,000.
But first, the cryptocurrency may have to deal with a possible “equal lows” situation, in which Bitcoin might go below $107,000 to test the fair value gap between $106,300 and $107,000. This liquidity sweep would be in line with how prices usually move before big breakouts, giving institutions the best chances to get in.
The Network Value to Transaction (NVT) Golden Cross indicator is currently at 1.98, close to but not yet over the 2.2 level that has historically marked local tops. This means that Bitcoin might be able to go up even further before it hits a lot of resistance.
Can Bitcoin Price Touch $120,000?
Even though Bitcoin has been volatile in the short term, the larger market structure still favors its upward trend. The fact that the Bitcoin can stay above $107,000 while traditional markets are uncertain shows that it is getting stronger. Bitcoin has usually done well when the S&P 500 drops 0.9% on Monday and 10-year Treasury yields go higher. This is because investors look for other assets.
The trade tensions between the US and Asian markets, especially the announced 25% tariff hikes on Japan and South Korea, have made people more worried about a recession while also making Bitcoin more appealing as an asset that doesn’t move with the market. The extra time until tariffs go into effect has given risk assets more room to breathe, which is good news for Bitcoin’s next big move.
Bitcoin Price Prediction and Risk Assessment
Bitcoin looks like it’s ready to rise to $120,000 over the next several weeks based on the present technical indications and market structure. There is a strong case for a positive market because of better derivatives sentiment, supporting monetary conditions, and strong technical support levels.
Traders should keep a close eye on the $106,500 support level, though, since if it breaks below this level, losses might get worse and go all the way down to $104,200. Bitcoin’s ability to break above $110,000 decisively will be the main reason why the target of $120,000 will be reached. This will likely lead to algorithmic purchasing and momentum-driven accumulation.
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