Two weeks later, Bitcoin (BTC) has once again broken through the 120,000 mark with unstoppable momentum. A surge in the morning reached a peak of 122,335, but the momentum didn’t continue in the afternoon, and a large bearish candle caught some late buyers off guard. However, those who bought the top shouldn’t worry too much; this sharp drop is healthy. Remember Old Chen's words: Bull markets often have sharp drops, while bear markets often have spikes; once a trend is established, it cannot be stopped!
Yesterday, when the ETH/BTC exchange rate hit the resistance level, Old Chen decisively swapped Ether for Bitcoin. This morning, BTC directly broke through the key resistance level of 120,800 with increased volume, surging all the way to 122,000 and stabilizing. What does this indicate? This isn’t a false breakout to sweep liquidity, but rather a genuine buying interest with clear targets: to surpass the previous highs!
Market Signal Three-Piece Set:
1: Trend - Direction is more important than price levels
Key Point: Breaking through a key resistance level (like 120,800) and stabilizing is a signal for trend continuation, not 'false bullishness'.
Moving Average Arrangement: The 4-hour MA50 and MA200 are diverging upwards, as long as the short-term moving averages do not break, the trend remains intact.
Gap Theory: In a bull market, gaps (like 117,000) often are not filled immediately, but rather surge up before pulling back.
Case Study: Yesterday, BTC broke through 120,800 with increased volume, indicating that the market chose to go up instead of a 'fake breakout to sweep stop losses'. At this point, going long with the trend is more reliable than trying to guess the top.
2: Volume - Real money doesn’t lie
Key Point: When BTC broke through 120,800 this morning, the trading volume significantly increased, indicating that large funds are entering the market.
The decline in BTC reserves on exchanges (Glassnode data) means reduced selling pressure, making it easier for the market to rally.
Funding Rate Monitoring: If the rate is too high (e.g., >0.01%), a short-term pullback may occur, but the trend remains unchanged.
Case Study: In January 2024, when BTC broke through 42,000, it was also on increased volume, subsequently rising to 69,000. Breakouts accompanied by volume often signify the start of a new trend.
3: Emotion - Market consensus determines short-term volatility
Key Point: Yesterday, the ETH/BTC exchange rate hit a resistance level, and many old OGs switched to BTC, indicating that the market is more optimistic about Bitcoin, with funds concentrated in the leader.
Macroeconomic Sentiment: Expectations for interest rate cuts are rising, which is favorable for risk assets (BTC, gold, US stocks).
Social Media Heat: If Twitter and WeChat groups are discussing 'soon to hit 130,000', it may be overheating in the short term, be alert for a pullback.
Case Study: In March 2023, when Silicon Valley Bank collapsed, the market panicked, yet BTC rose against the trend, precisely because 'extreme fear = buying opportunity'.
Summary: When everyone is shouting bullish, a pullback is not far away; when everyone is panicking, opportunities arise. From the 4-hour chart, this break of BTC is supported by volume; 120,800 was originally a strong resistance area, now it has become support. The first support for the day is between 120,000 and 121,000; as long as it does not drop below this level, the trend continues to look bullish. There is also a gap at 117,000, but according to the current momentum, it is unlikely to be filled quickly—gaps in a bull market are often 'delayed gratification', and they tend to be filled when everyone has let their guard down.
Old Chen's Prediction: In the short term, if BTC can hold above 120,000, the next target will be the new high in the 125,000-128,000 range. Additionally, BTC reserves on exchanges have been declining recently (Glassnode data), indicating that large holders may be accumulating coins, which reduces supply and provides long-term support for the price. However, the contract funding rate is relatively high, and in the short term, there may be fluctuations to wash out leverage, but the trend remains unchanged.
The current question is: are you waiting for a pullback to enter, or are you afraid of missing out and chasing? There are no gods in the crypto space, only smart people who can read signals. Old Chen's articles do not brag or paint fantasies, but teach you practical survival skills. Follow Old Chen for daily entry strategies and know in advance.
