Bitcoin Eyes $120K Breakout, but Key Risks Remain
Bitcoin (BTC) may not have gone up on Friday because of bad jobs statistics that made the Federal Reserve's rate cuts stronger
Quick overview
- Bitcoin is forming a bullish inverse head-and-shoulders pattern, indicating potential price rise to $120,000.
- The neckline resistance is at $113,378, and a breakout above this level could strengthen the bullish outlook.
- Bitcoin's ability to maintain the $100,000 level is crucial for trader confidence and market stability.
- Upcoming U.S. inflation data may influence the Federal Reserve's interest rate decisions, impacting Bitcoin's appeal as a risky asset.
Technical charts reveal that Bitcoin is forming an inverse head-and-shoulders pattern that is bullish.But you should pay attention to these four key elements.
Bitcoin (BTC) may not have gone up on Friday because of bad jobs statistics that made the Federal Reserve’s rate cuts stronger, but all hope is not lost. A chart with a shorter time frame shows that BTC is developing a bullish inverse head-and-shoulders pattern, which is a famous reversal scenario. This could mean that the price could rise to $120,000.
An inverse Head and Shoulders (H&S) is a bullish reversal pattern with three troughs: a deeper central depression (the “head”) and two smaller but about equal troughs on either side (the “shoulders”). A neckline is a horizontal trendline that connects the tops of price recoveries between the troughs.
At the time of writing, BTC seemed to be making the right shoulder of the inverted H&S pattern. The neckline resistance was at $113,378. If it goes over there, the bullish breakout will happen, and the price might rise to around $120,000.
Bitcoin’s future depends on whether it can hold on to the $100,000 level, which traders consider as both a technical support level and a psychological floor. If it stays below it for a long time, it might make people less confident and cause further losses. If it stays above it, it could make the bullish perspective stronger.
Another important factor is U.S. inflation data. This week, the CPI and PPI numbers are both coming out, and they are likely to affect the Federal Reserve’s view on interest rates. If the numbers are higher than expected, the Fed may lean toward a hawkish approach, which would make people less interested in riskier assets like Bitcoin. On the other hand, if the figures are lower than predicted, it might make the case for more increases stronger.
The sentiments and the amount of money available in the market also have a big impact on the short-term trend. Large holders have started selling off some of their shares, which shows that they are being careful, which might stop momentum if it keeps going. At the same time, falling liquidity in Binance’s perpetual futures markets raises the risk of sudden price swings, making Bitcoin’s path highly sensitive to external shocks despite its promising technical setup.
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