Bitcoin Hits $122,000 All-Time High, Traders See Further Gains

Bitcoin has recently hit a new all-time high, reaching $122,000. While this is a significant milestone, some traders and analysts believe that this rally is far from over. There are several reasons why they think the real bull run is just beginning.

One key reason is that Bitcoin is still trading in the lower half of its historical channel. This channel, often referred to as a "tunnel," represents the typical price range within which Bitcoin has moved during past bull markets. Even though $122,000 is a new record, it is still near the bottom part of this tunnel. Historically, when Bitcoin has moved to the top part of this tunnel, it has experienced significant gains. Therefore, there is still room for growth, and the current price may not be as high as it could go.

Another indicator that suggests the rally is not over is the Relative Strength Index (RSI). The RSI is a tool used to measure the momentum of an asset's price movements. Currently, Bitcoin's RSI is rising but has not yet reached an overbought level. This pattern mirrors previous bull runs, such as the one in 2021, where a slow and steady increase in the RSI preceded significant price gains. This suggests that the current rally still has momentum and could continue to rise.

Additionally, there is a significant amount of leverage being used by traders who are betting against Bitcoin. If the price of Bitcoin continues to rise, these traders could face liquidation, which would force them to close their positions. This liquidation could create a positive domino effect, as the forced buying of Bitcoin to offset the shortfall would drive the price even higher. According to a heatmap shared by a well-known trader, there are many traders with leveraged positions between $120,000 and $125,000. If Bitcoin continues to push above these levels, it could trigger a wave of liquidations, further fueling the rally.

In summary, the current price of Bitcoin, while at an all-time high, is still within the lower half of its historical channel. The RSI indicates that the rally has momentum and is not yet overbought. Additionally, the potential for liquidations of leveraged positions could create a positive feedback loop, driving the price even higher. These factors suggest that the Bitcoin price rally may not be over yet and that there is still room for growth.