Bitcoin (BTC) is showing strong bullish momentum after forming a classic double bottom pattern, with analysts targeting $112,000 as the next key level. The leading cryptocurrency has bounced back from its weekend dip to $106,600 and is now trading near $110,000, suggesting the recent correction may be over.
Technical Analysis Points to Major Breakout
According to CryptoQuant analyst ibrahimcosar, Bitcoin has completed a textbook double bottom formation on the hourly chart – one of the most reliable bullish reversal patterns in technical analysis. As Bitcoin continues defending crucial support at $109,000, this pattern suggests bears may be losing their grip on the market.
The double bottom formed with two distinct lows:
- First bottom: May 23 at $106,800
- Second bottom: May 25 at $106,600
- Neckline resistance: $109,000
What makes this setup particularly compelling is the surge in trading volume accompanying the breakout above the neckline. High volume during breakouts typically validates the pattern and increases the probability of follow-through.
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Institutional Interest Driving Recovery
The technical setup coincides with strong fundamental factors. Recent data shows record institutional inflows of $3.3 billion into crypto investment products, with Bitcoin leading the charge. This surge in institutional interest provides additional support for the bullish outlook.
Key Price Levels to Watch
For traders looking to capitalize on this setup, here are the critical levels to monitor:
- Current Support: $109,000 (neckline)
- First Target: $112,000
- Stop Loss: Below $106,500
Expert Insights
As noted by analyst Ali Martinez: “The double bottom pattern suggests exhausted selling pressure. With Bitcoin holding above $109,000, we could see a swift move to $112,000 if volume continues supporting the breakout.”
Risks to Consider
While the technical setup appears promising, traders should note that whale activity shows mixed signals. Some large holders are accumulating while others take profits at current levels. Additionally, the broader crypto market remains sensitive to macroeconomic factors that could impact Bitcoin’s trajectory.
Frequently Asked Questions
What is a double bottom pattern?
A double bottom is a bullish reversal pattern formed by two consecutive lows at approximately the same price level, indicating a potential trend change from bearish to bullish.
Why is the $109,000 level significant?
This price represents the neckline of the double bottom pattern and serves as crucial support. Holding above this level increases the probability of reaching the $112,000 target.
What could invalidate this bullish setup?
A decisive break below $106,500 would invalidate the double bottom pattern and potentially signal further downside.