Bitcoin Just Flashed Its Favorite Bullish Signal. What Comes Next?

So here we are again, Bitcoin is climbing, and this time it’s not just hype driving the momentum. A classic chart pattern that traders have trusted for years is now flashing green, and it could mean a run to $160,000 is in play.

Elevate Your Investing Strategy:

Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.

The Setup Traders Love to See

Let’s keep it simple. This pattern is called an “inverted head and shoulders,” and it basically shows when a downtrend is about to turn around. It’s not just technical fluff, this setup has worked for Bitcoin multiple times in the past.

The key level was around $113,000. That’s the line Bitcoin needed to break above for the pattern to confirm. And last week, it did just that.

Now that the breakout is official, some chart watchers are throwing out big numbers. One analyst says $140,000 is next. Another is even more optimistic and sees a path all the way to $160,000 in the coming months.

A Quick Breather Might Be Healthy

Before we all start yelling “moon,” there might be a small step back first. Bitcoin ran all the way up to about $123,000 earlier this week and then pulled back a bit. That’s totally normal.

Some think it could dip back to around $114,000 or $115,000, not because the rally’s over, but because that’s where Bitcoin broke out. In trading, it’s common for price to return to that breakout level before taking off again. Think of it as catching your breath before sprinting.

On-Chain Data Still Backs the Bulls

Now here’s what’s interesting, on-chain metrics, the stuff that looks at how Bitcoin is actually being used and held, suggest we’re not even close to a market top.

There’s one in particular called the MVRV Z-Score. Without getting too deep into the weeds, it basically shows whether Bitcoin is overpriced based on investor behavior. Right now, that score is still way below levels we usually see when the market’s topping out.

In plain English? There’s still room for this thing to run. At the time of writing, Bitcoin is sitting at $119,257.67.