Key takeaways:
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Bitcoin has confirmed an inverted head-and-shoulders breakout.
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A short-term pullback toward $114K–$115K may retest former resistance as support.
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The MVRV Z-Score remains well below historical peak levels, signaling BTC’s rally still has room to run.
Bitcoin (BTC) has entered the breakout stage of what chartists call one of its “most reliable reversal patterns,” signaling an extended upside move toward $160,000.
Bitcoin may drop toward $114,000 first
An inverted head and shoulders (IH&S) pattern has appeared on the 3-day and weekly BTC/USD charts.
A recent breakout above neckline resistance near $113,000 confirms the structure and opens the door for a measured move toward at least $140,000, according to chartist Merlijn the Trader.
Meanwhile, popular analyst Trader Tardigrade sees even more upside while presenting a similar but slightly ascended IH&S pattern on a weekly chart.
He anticipates the BTC price to reach the reversal setup’s measured target around $160,000.
Bitcoin is cooling off after hitting a record high near $123,250 on Monday, slipping about 5.65% in a likely overbought correction.
The pullback follows days of strong gains, with BTC’s daily relative strength index (RSI) recently crossing 70, signaling short-term upside exhaustion among traders.
On-chain data also suggests profit-taking played a role. Large holders, including both long-term investors and short-term speculators, have been locking in gains, adding to the downside pressure.
Related: Satoshi-era whale moves $4.6B in Bitcoin after 14-year HODL
Analyst Hardy says Bitcoin may revisit the CME gap between $114,300 and $115,600 to confirm it as new support before pushing higher.
This region nearly aligns with the neckline of the IH&S pattern.
It is relatively common for price to return to the breakout zone—previous resistance turned support—before resuming its trend. Such behavior often helps flush out weak hands and build a stronger foundation for continuation.
A successful bounce from the neckline zone would likely strengthen Bitcoin’s rally case toward the $140,000-160,000 target by August or September.
Bitcoin rally not overheated, MVRV Z-Score shows
Bitcoin is trading near all-time highs, yet its MVRV Z-Score remains far below levels historically associated with market tops. That divergence suggests the current rally may still have room to run.
The MVRV Z-Score measures how far Bitcoin’s market value deviates from its realized value, a proxy for the capital actually invested into the network.
Historically, when market value vastly exceeds realized value, the score enters the red zone, signaling overvaluation and often preceding major tops.
This indicates that, from an onchain perspective, Bitcoin is not yet overheated and may continue climbing before entering a classic top formation, potentially hitting the IH&S’s $160,000 price target by August or September.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
