Bitcoin (BTC) Price Eyes $125k as Momentum Picks Up

The past week has been supportive for BTC, as the price has risen by 2%, pushing its yearly gains to 4.7%.

Bitcoin’s dominance has remained largely unchanged throughout the year at around 60%, meaning that most of the capital going into the crypto space is being sucked by BTC.

Data from CoinShares shows that, despite BTC’s latest drop from its January 20 all-time high, spot exchange-traded funds (ETFs) linked to this digital asset have received a staggering amount of $5.6 billion in net capital inflows.

This has probably helped cushion the blow that macroeconomic headwinds like the Federal Reserve’s neutral stance on interest rates and Donald Trump’s intentions to engage in a trade war have dealt to the crypto market.

Triangle Breakout Could Push BTC to $125,000

Bitcoin’s daily price chart shows that the token has been in consolidation mode since the beginning of February, as it found strong support at around $93,000.

Using the pre-election bottom as a starting point for a Fibonacci retracement analysis and the latest all-time high as the peak of what could be the first wave of bullish price action for BTC, we can see that the price is hovering right above the 23.6% retracement level.

The selling pressure that BTC took during this brief market correction did not push the token below the 50% retracement area, meaning that sentiment is still bullish.

A symmetrical triangle has emerged as a result of BTC’s recent daily movements. This is a consolidation pattern that could resolve in any direction. However, momentum indicators favor a bullish outcome, as the Relative Strength Index (RSI) just crossed above the signal line. This is commonly interpreted as a buy signal.

We also see that the MACD’s histogram has displayed a steady drop in negative momentum readings. This provides further support to a bullish scenario.

A decisive break above the $100,000 level would confirm that BTC could be ready to retest its all-time high in the next couple of weeks. Based on the triangle’s size, a first target could be set at $122,500, resulting in a 25% gain.

Meanwhile, if the stop price is set right below the 50% retracement level, that would give us a 1.9 risk-reward ratio.

BTC Open Interest Picks Up Again

Open interest in BTC futures is picking up again after hitting its lowest level in the past three months on February 8.

According to data from CoinGlass, the outstanding amount of futures contracts has jumped from $57.1 billion back then to $62.7 billion at the time of writing.

This implies that traders are once again positioning themselves for a big move in BTC prices in the near term, possibly as selling pressure has subsided.

It is worth noting that BTC is still trading 14.5% above its 200-day exponential moving average (EMA), meaning that the asset’s long term trend remains bullish.