Bitcoin: Is $120,000 in Sight? The Metrics Point to July 7

Why This Report Matters
Bitcoin’s recent performance offers crucial lessons for active allocators. A tactical pivot at $85,000 in mid-April generated a +16% return (here), while our broader market framework identified key resistance and support levels guiding call-spread strategies. This report unveils the interplay between technical breakouts, on-chain validation, and macro catalysts—such as Fed communications and tariff shocks—that have shaped the rally. We also evaluate secondary opportunities in select equities, assess volatility dynamics, and outline precise entry and hedging tactics for the summer run. If you trade crypto or manage allocation, these insights will help you stay ahead of shifting market regimes.

Our Liquidity Model timed the Bitcoin reversal perfectly.

Key Takeaways

1. Core View: Bitcoin’s break above realized price and trend-model flip at $85,000 signaled a durable bullish regime.

2. Key Driver: A confluence of stablecoin inflows, ETF accumulation, and a downtrend breakout fueled continued upside toward $100,000–$106,000.

3. Major Risk: Muted funding rates amid rising open interest reflect cautious positioning, risking a pullback if macro headwinds intensify.

4. Recommended Trade: Retain $100K/$100K upside call spreads, roll into $110K–$120K strikes with June expiry, and hedge via S&P 500 short positions.

Macro View

· Fed’s November FOMC minutes (Dec 7, 2024) trimmed expected rate cuts, boosting Treasury yields and foreign capital flows into Bitcoin.

· Tariff announcements in late March briefly weighed on risk sentiment but ultimately reinforced Bitcoin’s safe-haven narrative.

·  Heading into quieter summer months, macro uncertainty persists, necessitating nimble trade structures.

Technical View

· Trend-model flip: breach of downtrend and RSI surge at $85,000 on April 12–13 triggered a +16% rally.

· Realized price breakout: clearing the short-term realized price on April 22 unlocked further leverage from short-term holders.

· Resistance zones: $95,000 acted as technical friction; subsequent call-spread structures managed upside risk.

Risk View

· Funding rates near flat despite rising open interest suggest traders hesitated to chase, presenting both risk and opportunity.

· Implied volatility traded below realized volatility in late April, a rare setup that favored buying calls.

· Summer liquidity drain and potential tariff-driven data shocks remain key downside risks.

No Surprise: Bitcoin Hits $100,000 Again—Still Prefer Upside Call Spreads

We initially missed the absolute low on April 9, as price found support just above our larger support zone. However, by April 12–13, around $85,000, our trend model turned bullish: a downtrend break combined with an RSI surge signaled a regime shift. We detailed this pivot in a YouTube explainer (here) and across social channels, framing the key levels and expected behavior.

By April 22, Bitcoin surpassed its short-term realized price—a critical inflection demonstrating that short-term traders, now in profit, could confidently re-leverage. Our Trading Signals confirmed a bullish breakout (here) with a 60% hit rate and +20% average expected return (median +25.5%), projecting towards $111,000–$116,000. Meanwhile, on April 18, we flagged Bitdeer at $7.60 (here); by early May, it had rallied 78% to $13.57, underscoring the value of disciplined technical entries.

Bitcoin Open Interest (LHS, $ billions) vs. Funding Rate (RHS, %)

The rally unfolded against a backdrop of muted funding rates and expanding open interest—evidence that many traders were fading the move. We cautioned that stablecoin liquidity and ETF inflows would overpower fading sentiment, setting up a “smash move” once key thresholds fell. Indeed, implied volatility dipped below realized volatility, creating an asymmetrical payoff in upside calls—an uncommon but potent edge.

Considering the $95,000 resistance, we structured $100K/$110K call spreads to cap downside while retaining upside. With skew levels still below peak-rally norms, we opted to hedge systemic risk via short S&P 500 positions rather than trim Bitcoin. This balanced approach reflects the summer’s thinner order books and the Fed’s persistent hawkish stance.

Bitcoin above the short-term realized price is bullish.

We view Bitcoin’s evolving narrative—anchored in liquidity metrics like the Global Money Supply inflection—with skepticism and respect. Historical lags (about 13 weeks) have accurately timed previous highs, and we’re watching July 7 as a potential cycle top. While $120,000 by mid-summer may test consensus, the convergence of technical breakouts, macro catalysts, and on-chain validation bolsters our conviction. This level (by June) was also projected by our ‘Alpha Alert’ report (here).

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