Author: Jose Antonio Lanz, Guillermo Jimenez
Source: Decrypt
Translation and Compilation: BitpushNews
Bitcoin continues to break through key resistance strongly, standing above the historical high of $116,000, and this breakthrough is injecting new momentum into the market. The next price target has become a hot topic among traders, and this article will analyze it from a technical chart perspective.
Macro Background
As the S&P 500 and Nasdaq Composite Index reach historical highs for the third time in four trading days, and gold futures rise above $3,370 per ounce, with the Federal Reserve maintaining a patient monetary policy stance, risk assets are receiving broad-based buying support.
Bitcoin's upward momentum also resonates with the explosive US employment data - June non-farm employment increased by 147,000 (expected 110,000). Although the strong employment data initially caused Bitcoin to drop below $109,000 due to rate hike concerns, the market quickly digested the selling pressure and pushed it to a new local high.
Institutional adoption remains the core driving force. In July, Bitcoin ETF cumulative fund inflows have exceeded $50 billion. This continuous institutional buying provides key support for any pullback and validates Bitcoin's evolution from a speculative asset to a portfolio allocation asset.
The synergistic effect of technical breakthrough and institutional accumulation makes traders wonder: After crossing the final barrier to an unknown territory, where will Bitcoin go?
Bitcoin Chart: Double Breakthrough Targeting Final Resistance
Bitcoin recently surged to $113,000, marking the opening of a new historical high area, which is also a decisive technical breakthrough of two patterns that have suppressed the price for weeks.
The 4-hour chart shows Bitcoin cleanly breaking through a symmetrical triangle pattern, while the daily chart shows smaller fluctuations with slightly insufficient bullish momentum. In this type of pattern, this is expected, but such a long candlestick leaves almost no doubt. The breakthrough confirmation is clear - enough to turn almost all key indicators bullish on the intraday timeframe.
Source: TradingView
On the 4-hour chart, the Average Directional Index (ADX) is 27. This typically confirms a trending market. ADX measures trend strength without considering direction, and when it breaks 25, it signals momentum traders that a sustainable trend is forming, usually triggering systematic buying in trend-following strategies.
However, the Relative Strength Index (RSI) reaching 75 shows Bitcoin has entered the overbought zone. You can think of RSI as a market thermometer - when readings are too high, it often suggests a need for cooling. The current situation may hint at an imminent adjustment after a big rise. However, it's worth noting that Bitcoin has often maintained bullish momentum at even higher RSI levels.
The daily chart's squeeze momentum indicator shows a "closed" state, indicating that the volatility released by the recent compressed market movement aligns with previous analysis expectations. This suggests that the initial breakthrough has been realized, and traders should be prepared for continued upward movement or consolidation at current levels.
Overall, the price is releasing bullish signals. Although the probability of continued upward trend is high, given the small fluctuations in pullback candlesticks, an adjustment is unlikely to threaten the trend.
The daily chart also shows a bullish structure: Bitcoin has broken free from the descending bearish channel (yellow line in the chart) that has suppressed prices since the May high. It currently seems to be forming a bullish support line (white line in the chart), referencing the April pullback low and the late June low. If confirmed effective, Bitcoin may oscillate near this support line, maintaining bullish momentum and making $110,000 a new support by the end of the month.
The daily RSI at 67 shows healthy momentum and has not reached the overbought zone above 70 - suggesting further upside potential. This reading tells traders that buying pressure remains strong but has not yet reached the extreme level typically signaling an adjustment.
The daily ADX at 12 indicates that the trend is still developing and has not reached a clearly definable dominant pattern - short-term charts often contain a lot of noise. Although below the key threshold of 25 for confirming a strong directional movement, a low reading after a breakthrough often predicts calm before acceleration. Traders interpret this as an accumulation phase before the next impulsive upward move.
Moving average analysis shows that Bitcoin is steadily above the 50 and 200-period exponential moving averages (EMA) in multiple periods. The continuously widening gap between these moving averages (called moving average divergence) typically characterizes a strong trend state and serves as dynamic support during pullbacks.
Key Levels
- Immediate Support: $110,197 (Breakthrough retest level)
- Strong Support Range: $105,000-$108,700 (Support line)
- Expected Resistance: $115,000 (Based on triangle breakout target and Fibonacci extension level)
Bitcoin Market Outlook
The synergistic effect of technical breakthrough, institutional fund flow, and favorable macro environment is expected to help Bitcoin continue its bullish trend after breaking historical resistance. However, traders preferring technical analysis should monitor whether the daily ADX can break 25 to confirm trend strength, while also being wary of potential RSI divergence at new highs.
Looking at a broader dimension, July may still see significant volatility for Bitcoin: Policies like the Trump administration's "Great Beautiful Act" could expand the US deficit by $3.3 trillion - historically beneficial for scarce assets like BTC. Additionally, the White House's cryptocurrency executive order report deadline on July 22 may involve updates to the US strategic Bitcoin reserve, which could be a potential catalyst.
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