Bitcoin has been massively bullish lately, after breaking above the $120,000 zone.
There are no signs of massive profit taking yet, as retail investors are still sidelined.
Despite this, there is always a risk of profit taking among whales as they lock in profits.
Bitcoin still has room for a run-up to around $135,000 or even $150,000 if the bullish momentum continues.
Bitcoin is making headlines once again, after soaring to new all-time highs and breaking past the $120,000 price level.
The cryptocurrency is now drawing in massively bullish predictions from top analysts, and one of them has even identified $135,000 as a realistic short-term target.
However, not everything is blue skies.
Let’s break down where Bitcoin could be headed and who’s driving the current momentum.
According to insights from Katie Stockton, founder of Fairlead Strategies in a recent interview with CNBC, Bitcoin could soon reach $135,000.
Stockton explained that this “intermediate-term objective” is based on measured move projections.
For context, this is a common technique used to estimate future prices after a breakout.
According to her, Bitcoin's recent breakout after two months of sideways consolidation shows that the upward momentum is fresh.
“We’re seeing positive action across the entire cryptocurrency space,” Stockton said, adding that crypto-related stocks like Coinbase are also expected to benefit from the rally.
Bitcoin recently broke out of a bull flag formation. This formation is a technical pattern that often points towards a continuation of a previous uptrend.
According to the charts, this pattern could support an incoming run to between $132,000 and $138,000 before any major slowdown.
Another factor supporting this bullish case is Bitcoin’s ability to break above a seven-year trendline that had served as long-term resistance since 2018.
Bitcoin’s break above the $120,000 zone | Source: TradingView
More on this, the rally has also been largely fueled by institutional capital, not retail investors.
The ETF market has pulled in billions for weeks on end, and institutional investors are massively outpacing retailers.
Historically, market rallies tend to weaken when retail investors start to outpace institutional ones.
Because of this, Bitcoin will likely not hit any significant profit taking until the cryptocurrency’s price hits a relatively round number and FOMO kicks in.
This means that the ongoing momentum could be in for some more growth, with institutions leading the charge and retail yet to arrive.
As a result of this week’s price surge, Bitcoin’s market cap hit $2.4 trillion.
This helped the cryptocurrency to briefly flip Amazon to become the world’s fifth-largest asset.
While this rally is impressive, analysts like James Lavish from the Bitcoin Opportunity Fund pointed out that Bitcoin is still small compared to asset classes like gold, real estate, equities and bonds.
This adds further credibility to the idea that the cryptocurrency has more room to grow.
Despite the optimism, there are signs that a correction may be on the horizon. On Tuesday, Bitcoin dropped 5% to around $116,850 after failing to hold its $120,000 daily close.
According to on-chain analytics firm CryptoQuant, whale activity on Binance has increased sharply while all of this was happening
Updates from CryptoQuant | Source: CryptoQuant
In particular, around 1,800 BTC were deposited into Binance on Monday alone. Interestingly, transactions worth over $1 million made up more than 35% of the total inflows.
This shows that large holders may be preparing to take profits after the recent run-up or to hedge their positions.
Another factor contributing to selling pressure is that long-term holders are finally cashing out.
According to Bitwise’s European head of research, André Dragosch, there has been a significant spike in realized profits.
When over 98% of Bitcoin supply is in profit, as it is now, it's not unusual to see investors secure gains, especially after a historic rally.
Overall, the facts remain that if Bitcoin can consolidate above $108,000 and retest its important resistance levels, the next leg up to $135,000, or even $150,000 remains well within reach.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.