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Bitcoin’s recent breakout signals a potential surge toward $160,000, with technical patterns and on-chain metrics supporting further upside.
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A short-term retracement to the $114,000–$115,000 zone may solidify key support levels before the next leg up.
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According to COINOTAG sources, the MVRV Z-Score indicates Bitcoin’s rally is far from overheated, suggesting sustained momentum ahead.
Bitcoin’s breakout and MVRV Z-Score analysis highlight a possible retest of $114K support before a rally toward $160K, signaling strong upside potential.
Inverted Head-and-Shoulders Pattern Validates Bitcoin’s Upside Momentum
The emergence of an inverted head-and-shoulders (IH&S) pattern on Bitcoin’s 3-day and weekly charts marks a significant technical milestone. This pattern, widely regarded by chartists as a reliable reversal indicator, has been confirmed by a decisive breakout above the neckline resistance near $113,000. Such a breakout typically forecasts a substantial upward price movement, with projections targeting at least $140,000 in the near term.
Market analysts, including Merlijn the Trader, emphasize that this breakout not only confirms the IH&S structure but also sets the stage for a sustained rally. The pattern’s measured move suggests Bitcoin could extend gains well beyond current levels, reinforcing bullish sentiment among traders and investors.
Short-Term Pullback to $114,000–$115,000 Zone Could Strengthen Support
Despite the bullish breakout, Bitcoin is currently experiencing a natural cooling phase following a recent peak near $123,250. This pullback, approximately 5.65%, aligns with typical market behavior after rapid gains and is supported by the daily relative strength index (RSI) crossing above 70, signaling temporary overbought conditions.
Technical analyst Hardy highlights the importance of the $114,000–$115,000 range, coinciding with the CME gap and the IH&S neckline. This zone is expected to act as a critical support level, where Bitcoin may retest prior resistance to confirm its role as new support. Such retests are common in breakout scenarios and serve to consolidate gains by shaking out weaker hands, ultimately providing a firmer foundation for subsequent upward moves.
MVRV Z-Score Indicates Bitcoin’s Rally Has Room to Grow
Beyond price action, on-chain metrics offer valuable insights into Bitcoin’s market health. The MVRV Z-Score, which compares Bitcoin’s market value to its realized value (the aggregate cost basis of all coins), remains significantly below historical peaks associated with market tops. This divergence suggests that Bitcoin’s current price levels do not reflect an overheated market.
Historically, when the MVRV Z-Score enters the red zone, it signals overvaluation and often precedes major corrections. The current moderate reading implies that Bitcoin’s rally could continue without immediate risk of a sharp reversal, supporting projections of a potential climb toward the $160,000 target within the coming months.
On-Chain Data Supports Sustainable Growth Outlook
Additional on-chain analysis reveals that large holders, including both long-term investors and short-term speculators, have been strategically taking profits amid recent price advances. This profit-taking contributes to short-term price volatility but also indicates healthy market dynamics rather than speculative excess.
Such behavior typically precedes further accumulation phases, where stronger hands consolidate positions, underpinning future price appreciation. This cyclical pattern reinforces the technical case for Bitcoin’s continued upward trajectory while mitigating the risk of abrupt downturns.
Conclusion
Bitcoin’s confirmed inverted head-and-shoulders breakout, coupled with supportive on-chain indicators like the MVRV Z-Score, underscores a robust bullish outlook. While a short-term retracement to the $114,000–$115,000 support zone appears likely, this correction is expected to strengthen the foundation for a sustained rally toward $160,000. Investors should monitor these key levels closely, as the current technical and fundamental landscape suggests significant upside potential in the coming months.
