Bitcoin has returned to the spotlight, climbing to $118,236 after briefly dropping to $112,600 earlier this week. This rise, supported by breaking through a long-term downtrend line, has boosted bullish sentiment. Traders are now asking the crucial question: Can Bitcoin finally break above $120,000 and pave the way for a new upward wave?
Bitcoin chart analysis: What is happening to BTC?
The chart of the Bitcoin/US Dollar (BTC/USD) pair over four hours shows a clear breakout of the descending resistance line that has been hindering the price since mid-July. This breakout coincided with the price surpassing both the 50-day simple moving average at $115,225 and the 200-day simple moving average at $116,673, which is a bullish technical signal indicating a shift in momentum towards the upside.
The Relative Strength Index (RSI) is currently at 62.97, indicating that Bitcoin has room to rise before entering the overbought territory. Nevertheless, the $118,616 level remains a strong resistance; a daily close above this level could open the door to reaching $120,000 and beyond.
BTC/USD four-hour chart - TradingView
Key support and resistance levels
Immediate resistance: $118,616
Main resistance level: $120,000
Immediate support: $116,673 (200 simple moving average)
Key support: $112,142 - $111,350
If Bitcoin fails to stay above $116,673, the price may drop to $112,000, where strong buying demand may return.
Bitcoin price forecast: Market predictions and future Bitcoin price
Breaking through the resistance trendline is a strong technical development. As long as Bitcoin maintains support above $116,000, the path of least resistance will remain upward. A confirmed close above $120,000 could pave the way for a rise to $123,500, and possibly $130,000 in the coming weeks.
Trading strategy considerations: How to trade Bitcoin today
Traders can look for buy positions on a retest of the breakout level ($116,700-$117,000) with targets near $120,000 and $123,500. Risk management remains crucial, as a rejection at $120,000 could lead to a pullback towards lower support levels.
Bitcoin's recent recovery has allowed bulls to regain control, but the battle around the $120,000 level will determine whether this is the beginning of a major rally or just a short-term rise. Currently, technical indicators suggest further upside.