The market capitalization of cryptocurrencies records a new high of $3.96 trillion amidst U.S. regulatory clarity that boosts investor confidence.
Bitcoin is holding near $118,000; altcoins are rising by over 10% amid new institutional interest.
A weekly close above $119,000 could push Bitcoin towards $125,000, with $100,000 as major support.
The total market capitalization of cryptocurrencies jumped to a record $3.96 trillion this week, driven by the passage of a major regulatory bill in the United States. However, Bitcoin has struggled to stay above the $120,000 level, hovering around $118,000 for most of the week.
Bitcoin's price has moved within a tight range from $117,000 to $120,000 as strong demand met waves of profit-taking. Despite the short-term volatility, the broader market - excluding Bitcoin - has risen by over 10%, indicating increased interest in alternative cryptocurrencies.
The main driver behind this surge is the recently passed GENIUS Act in the U.S. House of Representatives. The bill provides clear and stable regulations for cryptocurrencies - especially regarding stablecoins - which could represent a turning point in investor confidence. With both retail and institutional capital seeking clarity, this legislation may help unleash the next wave of flows into the cryptocurrency space.
At the same time, more companies around the world are adding Bitcoin to their balance sheets, and investments in Bitcoin ETFs continue to grow. These developments are boosting overall confidence in the asset. However, it is likely that there will be periods of profit-taking along the way, which could lead to short-term price volatility - even within the broader upward trend.
Short-term outlook for Bitcoin
The long-term bullish trend for Bitcoin remains intact, although the first half of the year saw volatile price movements. Since early July, the price has resumed its upward movement and entered the Fibonacci expansion area between $114,000 and $125,000.
During this week, Bitcoin briefly rose above the $120,000 level but has not yet managed to break the Fibonacci resistance of 1.414 at the $119,000 level. The price action is now consolidating just below this key level. A weekly close above $119,000 may give buyers the momentum needed to target the next resistance at $125,400 in the near term.
On the daily chart, Bitcoin is holding above its short-term exponential moving averages, which are still trending upwards. As long as Bitcoin remains above the $117,500 level during any price pullbacks, the bullish outlook will remain intact. Meanwhile, the Stochastic Relative Strength Index (RSI) is still in overbought territory, indicating continued strong demand.
On the other hand, if Bitcoin experiences a pullback, a daily close below $117,500 could open the door for a decline towards $114,600. This level represents the lower bound of the Fibonacci expansion area (Fibonacci 1.272) and it will be important to monitor this level - and it is crucial to hold it to avoid a deeper correction.
Long-term targets for Bitcoin
Looking at Bitcoin from a broader perspective on the weekly chart, the positive momentum that began in 2023 appears to be continuing in a healthy manner. Since May, Bitcoin has stabilized above the key psychological level of $100,000 and is now approaching the midpoint of its long-term ascending channel.
If Bitcoin can close above $125,400 on a weekly basis, it may open the door for a move towards the $150,000 area. Beyond that, the next medium-term target lies between $200,000 and $230,000 - the upper limit of the channel. Based on previous bullish cycles, the long-term technical target over the next year or more could reach $310,000.
On the other hand, increased selling pressure near the short-term target of $125,000 could trigger downward momentum, potentially dragging Bitcoin back towards the key psychological level of $100,000. If this level holds, it may help strengthen the broader trend and support renewed momentum towards medium and long-term targets.
However, if the $100,000 level is lost, the risk of a deeper correction towards the $67,000 area will emerge. Such a decline would likely require a significant deterioration in macroeconomic conditions or the emergence of a major global risk event.
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