Market Watchers Spot Bitcoin's Powerful Reversal Signal

Analysts are observing what appears to be one of Bitcoin's most reliable technical formations — an inverted head-and-shoulders pattern — suggesting the cryptocurrency could be gearing up for a significant upward move. The pattern's completion points toward potential targets between $140,000 and $160,000, though traders anticipate a brief pullback first.

Technical Setup Points to Major Breakout

The chart formation became visible on Bitcoin's three-day and weekly price charts, with the digital asset recently breaking through a crucial resistance level near $113,000. This breakout confirms the pattern's validity, according to technical analyst Merlijn the Trader. The measured move projection suggests Bitcoin could reach at least $140,000 in the coming months.

Trader Tardigrade presents a slightly more optimistic scenario, identifying a similar but more pronounced version of the pattern that points toward a $160,000 target. The analysis comes as Bitcoin cools from its recent all-time high near $123,250, currently experiencing a 5.65% pullback that many view as a healthy correction after extended gains.

Short-Term Correction Expected Before Next Leg Up

Market participants anticipate Bitcoin may retest the $114,000-$115,000 range, which previously served as resistance but now could act as support. This area aligns with what technical analysts call the "neckline" of the inverted head-and-shoulders pattern — a common retracement point after breakouts.

Hardy, another market observer, notes the importance of the CME gap between $114,300 and $115,600, suggesting this zone could provide the springboard for Bitcoin's next major move. Such pullbacks often strengthen the technical setup by shaking out weaker positions before the continuation of the primary trend.

On-Chain Metrics Suggest Room for Growth

Despite Bitcoin trading near record levels, the MVRV Z-Score — which compares market value to realized value — remains well below historical peaks associated with market tops. This divergence indicates the current rally might not yet be in its final stages.

【Key Data Point】The MVRV Z-Score currently sits at 3.2, significantly below the 7-8 range seen during previous cycle peaks. This metric suggests Bitcoin could have substantial upside potential before reaching overbought territory.

Timeline for Potential Price Targets

If the technical pattern plays out as anticipated, Bitcoin could reach the $140,000-$160,000 range by late summer or early fall. However, traders caution that cryptocurrency markets remain volatile, and proper risk management remains essential even in bullish scenarios.

——This developing technical setup comes as institutional interest in Bitcoin continues growing, with recent filings showing increased exposure from major investment firms——

The coming weeks will prove crucial for determining whether this reversal pattern fulfills its potential. Market participants will closely watch how Bitcoin behaves around the $114,000 support level, which could confirm or invalidate the current bullish thesis.