Bitcoin Price Surpasses $120K for the First Time: What’s Next?

Last week, while analysing the potential for a new all-time high in Bitcoin’s price, we highlighted that the amount of BTC held on cryptocurrency exchanges had dropped to its lowest level in months. This dynamic creates the potential for accelerated price growth should a wave of buyers – including institutional participants – enter the market.

It appears this may help explain the sharp rally in BTC/USD, which surged by over 12% in the past seven days, breaking through the key psychological resistance level of $120K for the first time in history.

Market sentiment is being further bolstered by US Crypto Week, which kicks off today. How might the situation develop from here?

BTC/USD Technical Analysis

Over the past three months, Bitcoin’s price action has been forming an ascending channel (highlighted in blue), with the current BTC/USD rate sitting near its upper boundary. Most, if not all, oscillators added to the chart would now indicate strong overbought conditions.

Given this setup, it is reasonable to assume that the market is vulnerable to a potential pullback. However, such a correction is unlikely to lead to a fundamental shift in sentiment.

We may see a repeat of the price pattern observed in May–June:

1. Price consolidates near the midline of the channel;
2. Bulls break out, pushing the price toward the upper boundary and creating a zone of imbalance (Fair Value Gap in the Smart Money Concept) – highlighted with a purple rectangle;
3. Price retests the imbalance zone following a rejection from the upper channel boundary.

It is worth noting that the current zone is further supported from below by the $111.5K level, which previously acted as a significant resistance. As long as Bitcoin’s price remains above this threshold, any short-selling strategies may carry elevated risk.

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