Bitcoin is forming a big bullish flag targeting $125,000

It’s been a great week so far for Bitcoin as the cryptocurrency surged more than 8% since Monday. The bulk of the gains came after the symbolic Iran retaliation against US strikes as the market viewed it as the last attack before the de-escalation. Sure enough, Trump then confirmed the end of the conflict and the rally extended further.

The path of least resistance remains to the upside given the expansionary fiscal policies and impending rate cuts. A hawkish repricing in interest rates expectations could lead to a short-term pullback, but given that the Fed’s reaction function remains to either wait more or cut, the market should continue to climb.

On the daily chart, we can see that the month-long consolidation has formed a bullish flag. The target is generally a projection of the flag “pole” which in this case would be the rally since April 9 tariff pause. This would put the target around the $135,000 level, but a more conservative $125,000 would have higher probabilities.

On the 1 hour chart, we can see that the bullish momentum is waning around the key resistance at the $107,000 ish level. The buyers will need a break above the resistance to increase the bullish bets into the $109,000 level next where we have the upper bound of the flag. The sellers, on the other hand, will likely step in around these levels with a defined risk above the resistance to position for a drop back into the lower bound of the flag around the $100,000 level.

We have a minor upward trendline defining the bullish momentum for now and a break to the downside would give the sellers more conviction to pile in for a drop. The dip-buyers though, will still have a minor support around the swing low at $104,750.