Key Points
- Bitcoin price is stalling below $120,000 as the market awaits the FOMC’s rate decision this week.
- Short-term holders are major determinants of what happens next at the current price support of around $117K.
- A breakout past $120K could ignite a rally toward $141K, while a dip to $110K is very much in the cards
At press time, Bitcoin was hanging just below the $120,000 mark. It is now caught in a tug-of-war between bulls and bears. The Federal Open Market Committee (FOMC) policy decision is approaching this week. Also, traders are playing carefully.
BTC has approached a key inflection point in the coming days. It could either break into a new all-time high or pull back to retest lower support levels.
Bitcoin Awaits Breakout or Breakdown
Bitcoin price has remained mostly flat this week. The cryptocurrency now trades around $117,900. Investors are closely watching the outcome of the U.S. Federal Reserve’s July policy meeting.
Many traders are expecting interest rates to remain unchanged, but market volatility could come into play. This depends on Fed Chair Jerome Powell’s tone during the press conference.
According to Polymarket data, there’s a 97.5% chance that rates will stay between 4.25% and 4.50%. This means that only 2.3% of traders expect a cut.
Some investors feel that any immediate downside risk from the Fed’s decision is already priced into BTC. This is because of the high probability.
Still, fear of Powell’s comments has caused brief sell-offs in the past. According to crypto investor TedPillows, some traders have already panic-sold.
They are expecting to re-enter the market once the uncertainty clears. “They’ll probably end up FOMO buying back in at higher prices after the Fed speaks,” he said.
$120K Is the Line in the Sand for Bitcoin
Bitcoin bulls are eyeing the $120,000 resistance level. Breaking above this could open the path toward $125,000 and even $141,000. According to analysts at Glassnode, a push past $120K would shift market sentiment and attract new buyers.
Glassnode’s recent report pinpointed $141,000 as the next major zone of interest. This target is strongly in line with two standard deviations above the short-term holder (STH) cost basis.
In essence, reaching this level could trigger a wave of profit-taking, especially by investors who bought during recent dips.
However, traders should also be cautious. A breakout isn’t guaranteed and resistance at $120K has proved tough in recent weeks. Multiple attempts to break above this level have failed.
Short-Term Holders Now Dictate BTC Price Support
Short-term holders, or investors who bought within the last 155 days have become the dictators in the current price structure. The Glassnode analysis reported this. Many of them accumulated BTC between $117,000 and $122,000, and have created a strong cluster of support.
But there’s a risk. Below this zone lies what analysts call an “air-gap.” This area between $110,000 and $115,000 saw little trading activity during Bitcoin’s recent rally. As a result, there is limited price memory or cost basis support in that range.
If Bitcoin dips i,nto this zoneong support could lead to a dictators quick fall toward $110,000. “A gravity does exist there,” Glassnode noted, “and the market may want to re-confirm if support will step in.”
What Happens If Bitcoin Breaks Down?
If BTC breaks below $115,000, the next supports lie at $112,000 and $110,000. This scenario wouldn’t necessarily mean a bear market. Some analysts believe the market could sweep these lower levels to “fill” the liquidity gap before rallying again.
So can Bitcoin hit $141,000?
Despite the current pause, the long-term predictions for Bitcoin are still bullish. If BTC manages to break through $120,000 with strong volume, the next resistance levels could be tested quickly.
Glassnode believes the $141K level could become a natural profit-taking zone for short-term holders. This is because it works well with their cost basis models and their historical selling behavior during bull runs.
Of course, price discovery depends strongly on market sentiment, macro events and more. However, with the US economy showing mixed signals and geopolitical tensions rising, Bitcoin may become more sensitive to the news.
In all, if Powell leans dovish tone or hints at easing monetary policy, Bitcoin could gain strength quickly. On the flip side, if his message is more hawkish than expected, we may see short-term selling pressure.
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