BTC breaks through the $120,000 threshold? The logic behind this wave of rise.

Recently, Bitcoin has become a hot topic again. Many analysts have set targets of $120k and even $200k, and market sentiment is indeed at a peak. But is this rise driven by speculation or is there real support behind it? Let's take a closer look.

Institutional entry has changed the game rules

A major event in 2024 is the approval of spot ETFs. Institutional funds are pouring in, and this is not a trivial matter — it means that BTC has upgraded from a “risk asset” to a “allocation asset.”

Data shows that institutional holdings are steadily increasing, which is fundamentally different from the short-term speculation of retail investors. More importantly, the liquidity improvement brought by institutional entry has reduced the volatility of coins, making it easier for prices to reach new highs.

Macroeconomic Background: Expectations of Dollar Depreciation

Global central banks continue to inject liquidity, and the Federal Reserve has entered a rate-cutting cycle. Against this backdrop, investors are looking for hedging assets. The narrative of BTC as “digital gold” is particularly appealing at this time - with a fixed supply (maximum of 21 million coins), it naturally resists inflation.

Compared to history, BTC has performed well during each easing cycle. Currently, global liquidity is easing, which indeed creates a breeding ground for risk assets.

How to view the technical aspect

From an on-chain perspective, several key points:

• Resistance Levels: $120k, $124k, $130k
• Support Levels: $107k, $102k
• RSI Indicator: Close to overbought territory, there may be short-term correction risks.
• Long-term Moving Average: The 200-day line is still in an upward channel, and the bullish structure is intact.

In simple terms, the rise is still ongoing, but we must be wary of overheating.

Risks That Cannot Be Ignored

Although the sentiment is optimistic, there are several hidden dangers to be aware of:

1. Regulatory Uncertainty: Changes in U.S. policy could affect the market at any time.
2. Liquidity Trap: A stable position held by institutions may actually mean that market depth could become shallower.
3. Macroeconomic Black Swan: Geopolitical events and economic data exceeding expectations may trigger a pullback.

The underlying logic is still there

The rise of BTC is not purely speculation. Institutional allocation demand, fixed supply (the 2024 halving has been completed, next in 2028), and macro liquidity easing - these factors all point in the same direction.

But don't be blinded by the $200k target. In the short term, $120k-$130k might be resistance, and only after breaking through can we say more. The current operational logic should be: have a positive outlook on the trend, but be more cautious at high levels.

Risk Warning: Cryptocurrency assets are highly volatile; proper stop-loss and position management is key.