Rational Game After Bitcoin Breaks 120,000: Balancing Risks and Opportunities Near Previous Highs

1. Long and Short Trading Signals After the Break

• Long Strategy:

1. Volume-driven breakout at $121,516 (hourly closing price stabilizes) → bold traders may lightly enter long positions, stop loss immediately upon break (risk control is the premise);

2. False breakdown at $118,809, then recovers → lightly test long positions, stop loss reference is the false breakdown low or $118,057; give up if it does not recover;

3. Hourly stabilization at $121,789 → target upwards to $123,300 → $125,131, current momentum points directly to the previous high, be cautious of high-level fluctuations.

• Short Strategy:

1. Volume-driven breakdown at $120,000 → enter short positions, stop loss if the pullback fails to recover (the $120,000 round number is a psychological watershed);

2. False breakout at $123,300 (drops back after the breakout) → lightly test short positions, must stop loss if it stabilizes above $123,927 (do not fight against strong trends).

2. Conservative Layout: Refuse to Chase Highs Blindly, Wait for Pullback Opportunities

Bitcoin broke $120,000 before the US stock market opened; both the triangular pattern and the $120,000 resistance level were broken. The only clear resistance currently is the previous high of $123,300. However, it is important to recognize:

• Low cost-effectiveness of chasing highs: There is less than $2,000 space to the previous high, but it carries a potential risk of a $5,000 pullback. At this point, it is not advisable to go all-in; at most, lightly gamble on breaking the previous high (quick in and out);

• Better options: Either accept missing out or wait for a pullback that does not break below $118,000 to establish long positions on the left side (relying on key support). Before breaking the previous high, the overall view remains a rebound rather than a reversal, avoiding excessive optimism.

3. Key Levels and Trend Boundaries

• Upper Pressure Steps: $123,300 (previous high resistance) → $124,331 (short-term extension target) → $125,131 (trend acceleration point), each level needs volume verification for the breakout's effectiveness;

• Lower Support Baseline: $120,559 (defensive position after breakout pullback) → $119,563 (pullback buffer) → $118,008 (key support for rebound structure);

• 4-Hour Warning: Break below $120,557 → pullback established, looking down to $119,196 → $118,045, losing this level will disrupt the rebound rhythm.

Conclusion: Don't be greedy near the previous high, lay out more positions above the support level.

Although the momentum is strong after Bitcoin broke $120,000, the risk-reward ratio near the previous high is unbalanced.