A Bitcoin cooling period below $113,000 could be laying the groundwork for a breakout to the $120,000 region.
Highlights:
- Bitcoin has lost the $113,000 mark as leverage and speculative orders dwindle, opening up room for volatility to surge.
- A break above $113,650 would confirm an inverse Vai and Vai pattern, which could take BTC closer to $120,000.
The recent consolidation below $113,000 has forced traders to scale back their risk exposure, but this caution may be setting the stage for the next breakout. With leverage and speculative positions cooling, the market appears poised for a surge toward $120,000.
Data shows that Bitcoin’s price momentum has improved slightly, from −8% to −5% over the past week. While bears still have a small advantage, the downward pressure has weakened, suggesting that the market may be entering the final stages of a “recovery zone.”
Bitcoin researcher AXEL Adler Jr. noted that Futures Contract data suggests traders are temporarily “stepping back” rather than betting too hard in either direction. The Integrated Market Index, which Capital under pressure from persistent selling earlier, has now stabilized around the neutral 45–50 zone.
Open interest volume is flat, reflecting reduced leverage and a shift to defensive positions. In essence, the market is entering a phase of equilibrium, where neither buyers nor sellers have the initiative.
Historically, such cooling periods have often paved the way for stronger uptrends. With about a third of the current halving cycle behind it, Bitcoin appears to be forming an accumulation base, much like the one it did in Q2, when prices moved sideways around $80,000 after Dip at $74,000 before bouncing back.
The upside this time around is that the market is less over-extended with Longing positions, reducing the risk of forced liquidation. That creates room for a possible bullish move as new money flows back in, accelerating Bitcoin’s path back to new highs.
Bitcoin Heads for $120,000 as Key Breakout Pattern Forms
Bitcoin is forming an inverse Vai and Vai pattern on the 4-hour chart, with the neckline and major resistance at $113,650. If a breakout is confirmed above this area, the price could move towards testing key liquidation clusters, opening up a nearly 5.5% upside move to the $120,000 region.
Additionally, a daily candle close above $113,650 would also mark the first bullish structure breakout on the daily chart in Q3, indicating a strong trend change signal.
Momentum signals are turning bullish. The Relative Strength Index (RSI) has settled above 50, a level that typically marks a shift from neutral to bullish. Staying above this level suggests that buying pressure is regaining control, weakening the impact of short-term selling pressure.
Adding to the bullish picture, Bitcoin is approaching a key “technical flip,” as the 50-day, 100-day, and 200-day exponential moving Medium (EMAs) converge around the current price zone. If the price closes above these levels, the EMAs will turn into strong support, further solidifying the bullish reversal structure.
The analysis, data and information in the article are for informational and reference purposes only and should not be XEM investment advice. The cryptocurrency market always has high volatility and high risks, investors need to consider carefully before making a decision.
