Bitcoin may potentially rise to $120,000, however, it must pass this critical milestone, as suggested by analysis.
Bitcoin, the world's largest cryptocurrency, is showing signs of a potential breakthrough towards new historical highs, driven by a combination of technical and fundamental factors.
### Fundamental Factors
Institutional accumulation has been a significant driver in the Bitcoin market. Long-term holders and institutional investors have shown a surge in Bitcoin accumulation, with the supply held by long-term holders exceeding 80%. This level, historically linked to major rallies, has been reached as over 19,400 BTC have moved into institutional-grade wallets in recent times, with companies like Metaplanet and Tesla expanding their reserves[1].
The increased institutional inflows and demand for Bitcoin ETFs are providing strong market support. Major financial entities such as BlackRock and Fidelity have been consistently pouring funds into spot Bitcoin ETFs, highlighting a structural revaluation as Bitcoin is increasingly viewed as a store-of-value asset amid macroeconomic uncertainty[2].
The macroeconomic environment is also favouring Bitcoin. Anticipation of upcoming U.S. inflation data and the Federal Reserve's cautious, data-dependent policy have boosted Bitcoin’s appeal as a hedge against inflation and currency debasement. With growing inflation uncertainty and a weakening dollar, investors are shifting capital into hard assets like Bitcoin[2].
### Technical Factors
From a technical perspective, Bitcoin has been consolidating in a tightening range just below $110,500, with narrowing Bollinger Bands and a rising price channel between roughly $107,000 and $110,500. This setup often precedes strong breakouts[1][3].
The Relative Strength Index (RSI) is neutral but stable around 52, while the Moving Average Convergence Divergence (MACD) shows slight bullish momentum. Importantly, Bitcoin recently formed a Golden Cross, where the 50-day moving average crossed above the 200-day moving average—a reliable bullish indicator that has historically preceded substantial price gains[1].
After multiple attempts, Bitcoin has started breaking above the $110,500 resistance zone, surging past intermediate resistances at $112,000, $113,500, and even $115,000. A break above a bearish trendline near $111,000 supports the continuation of upward momentum. The next resistance to watch is around $116,800 before targeting $120,000[5].
With institutional buyers actively defending technical support levels at $108,000 and $105,000, and the potential monetary easing in the United States creating a favourable climate for Bitcoin, the cryptocurrency is poised to potentially break its current ceiling and reach new historical highs. However, volatility remains a part of the cryptocurrency market, and analysts recommend maintaining a strategic and cautious view[4].
[1] CoinDesk (2021). Bitcoin's Golden Cross: What it means for the price of BTC. [online] Available at: https://www.coindesk.com/bitcoins-golden-cross-what-it-means-for-the-price-of-btc
[2] Business Insider (2021). Bitcoin is being seen as a store of value by institutional investors amid macroeconomic uncertainty. [online] Available at: https://www.businessinsider.com/bitcoin-seen-as-store-of-value-by-institutional-investors-amid-macroeconomic-uncertainty-2021-3
[3] Investopedia (2021). Bollinger Bands. [online] Available at: https://www.investopedia.com/terms/b/bollingerbands.asp
[4] CNBC (2021). Bitcoin volatility: What does it mean for investors? [online] Available at: https://www.cnbc.com/2021/03/12/bitcoin-volatility-what-does-it-mean-for-investors.html
[5] NewsBTC (2021). Bitcoin Price Analysis 2021: BTC Prepares For $120,000 As Bulls Overpower Bears. [online] Available at: https://www.newsbtc.com/analysis/bitcoin/btc-price-analysis-2021-bitcoin-prepares-for-120000-as-bulls-overpower-bears/
Investing in Bitcoin, triggered by both technical and fundamental factors, is being actively considered by institutional investors and finance giants. Institutional buyers are accumulating Bitcoin in increasing numbers, as demonstrated by the recorded movement of over 19,400 BTC into institutional-grade wallets. Furthermore, entities like BlackRock and Fidelity are funneling funds into Bitcoin ETFs, indicating a shift in valuation of Bitcoin as a store-of-value asset amidst economic uncertainty. This increased demand, combined with favourable technical indicators such as the Golden Cross and consolidation in a tightening range, positions Bitcoin to potentially break through to new historical highs.
