Bitcoin Targets $125K as Macro Conditions and MVRV Model Signal Strong Breakout
Bitcoin (BTC) is still on a solid bullish path, staying well above $120,000 and gaining more than 1.2% in the last 24 hours to its highest
Quick overview
- Bitcoin is experiencing a bullish trend, currently above $120,000 and gaining over 1.2% in the last 24 hours.
- Positive macroeconomic factors, including rising expectations for US interest rate decreases and a significant short squeeze, are driving this upward movement.
- The Market Value to Realized Value (MVRV) model indicates that Bitcoin has broken key resistance levels, with immediate targets set at $125,000 and medium-term targets at $139,000.
- To maintain momentum, Bitcoin needs to stay above the critical support level of $116,700.
Bitcoin BTC/USD is still on a solid bullish path, staying well above $120,000 and gaining more than 1.2% in the last 24 hours to its highest level in seven weeks. This upward trend is being fueled by a strong combination of positive macroeconomic variables, such as rising expectations for US interest rate decreases, and a huge technical catalyst: a big squeeze of bearish leveraged positions.
Bitcoin’s Macroeconomic Tailwinds and Short Squeeze
The main things that are pushing Bitcoin’s rise are changes in the US economy. Recent US Personal Consumption Expenditures (PCE) data, which showed a 2.9% rise as expected, has eased worries about inflation. This has made it far more likely that the US Federal Reserve would decrease interest rates to 3.50% or less by January 2026. The chance has gone up from 18% in mid-August to 40% now. This idea of “easier money” makes other investments that don’t pay dividends, like Bitcoin, more appealing.
Also, Bitcoin is strongly linked to gold, which has risen 16% in six weeks. This shows that more investors are moving away from traditional bond and equities markets and into hedge instruments. A huge short squeeze in the derivatives market made this rise even bigger. Between Wednesday and Thursday, more than $313 million in leveraged short Bitcoin futures positions were closed. The forced closing of negative bets shows that the move above $120,000 took the market off guard and signals that there is a lot of purchasing pressure behind it.
BTC/USD Technical Analysis: MVRV Model Points to $139K
The Market Value to Realized Value (MVRV) Extreme Deviation Pricing Bands model says that Bitcoin has reached a major technical milestone. This on-chain model keeps track of the network’s average profit and loss and assesses price levels that are standard deviations (SDs) from the MVRV Ratio’s mean.
- Key Breakout: Bitcoin’s current rise has broken through the $116,700 mark, which is +0.5 SD.
- Next Target Band: According to this model, the next big resistance level is the +1 SD band, which is at $138,800. Bitcoin has reached its highest point quickly after crossing this +1 SD level in past breakouts during the current cycle. This suggests that it is a key spot for taking profits.
There is a small concern of correction in the BTC options market, since put (sell) options are selling at a premium. However, the MVRV band’s significant breach signals that the rally has enough technical support to keep going.
Bitcoin Price Prediction: Targeting $125,000 First
Bitcoin’s future is certainly bullish because of lower inflation risks, a huge short squeeze, and the break of the +0.5 SD MVRV barrier.
- Immediate Target ($125,000): Bitcoin is ready to go after the $125,000 level right away. This is slightly over its previous all-time high of about $124,000, which was reached in mid-August. If this level is broken, it would mean that the cycle has broken out to new highs.
- Medium-Term Target ($139,000): If the bullish momentum stays strong at $125,000, the next big objective is the on-chain-derived resistance at $138,800, which is the +1 SD MVRV band. Given the basic tailwinds, it’s possible that this level will be reached.
Support Risk: To keep the price from fizzling out, bulls need to keep it above the important psychological and technical support level of $116,700 (the broken +0.5 SD MVRV level). But the way the market is set up right now shows that demand is strong enough to handle little pullbacks.
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