Bitcoin Seen Consolidating Between $120K and $130K

Bitcoin Breaks Records Above $123K, But May Pause in Tight Range

Bitcoin (BTC) hit a new record high above $123,000 on Monday, continuing its powerful surge that began with last week’s breakout in BlackRock’s IBIT. The next target for bulls is $140,000, with momentum supported by an unusually favorable macro backdrop.

A pro-crypto U.S. administration, dovish interest rate signals, and booming equity markets are combining to create a perfect storm for bitcoin’s rally. Technical indicators echo this bullish sentiment: key measures like the RSI and MACD show no warning signs of weakness, and the major moving averages remain stacked in a classic bullish formation.

Meanwhile, cumulative open interest in bitcoin perpetual futures on offshore exchanges keeps rising, signaling deeper participation from traders.

Despite all the excitement, analysts warn that bitcoin may consolidate for a time between $120,000 and $130,000. Three key factors could keep BTC stuck in this range:

1. Market Makers Hedging via Long Gamma

Options data from Deribit, tracked by Amberdata, shows market makers are significantly long gamma between strikes at $120,000 and $130,000, particularly for expirations on July 25, August 1, and August 29.

When market makers are long gamma, they adjust their positions to remain delta-neutral. That means selling as prices rise and buying as they fall, which naturally dampens volatility and “pins” the market within a range. A similar effect kept BTC locked between $108,000 and $110,000 earlier this month.

2. DVOL Hints at Possible Uptick

Bitcoin’s rally from $70,000 to $122,000 was marked by an unusual drop in the Deribit DVOL index, which tracks 30-day implied volatility. Typically, rising prices and volatility go hand-in-hand in crypto markets—but this time, DVOL dropped even as BTC soared.

However, DVOL appears to have bottomed out around 36% annualized volatility since late June. Technical signals such as the MACD suggest DVOL may soon start climbing again. Since DVOL and BTC spot prices have recently been moving inversely, a rise in implied volatility could trigger a price pullback.

3. Dollar Index Finds Its Feet

The U.S. Dollar Index (DXY) has rebounded sharply this month, climbing nearly 17% to 97.00 and breaking through its earlier downtrend. Geopolitical factors—including potential new U.S. sanctions targeting buyers of Russian oil—are adding fuel to the dollar’s strength.

A stronger dollar can weigh on dollar-denominated assets like bitcoin and gold. If the DXY rally continues, it could cap bitcoin’s near-term upside.

Key BTC Levels to Watch:

Resistance: $130,000, $140,000, $146,000
Support: $118,800, $116,650, $112,000

Ethereum Bumps Against Resistance

Despite a robust 22% gain so far in July, Ethereum (ETH) remains trapped within a widening channel, bounded by trendlines drawn from the highs and lows of May and June.

ETH is currently testing the upper boundary of this formation, but daily stochastic indicators suggest overbought conditions, implying that a pullback may be needed before any decisive breakout. If it does break through, traders will eye $3,400 as the next key target.

Resistance: $3,067 (61.8% Fib retracement), $3,500, $3,570, $4,000
Support: $2,905, $2,880, $2,739, $2,600

Solana Strengthens After Weekend Dip

Solana (SOL) continues to confirm its bullish breakout from Friday, fueled by an inverse head-and-shoulders pattern and a push above the Ichimoku cloud. Monday’s recovery after a minor weekend dip adds confidence that the breakout is genuine.

A decisive move beyond $168 would further strengthen the bullish outlook and clear the path toward $200.

Resistance: $180, $190, $200
Support: $150 (100-day SMA), $145, $125

XRP Turns Bullish on Weekly MACD

XRP (XRP) has flipped its weekly MACD histogram above zero, a bullish technical signal reminiscent of the pattern that sparked bitcoin’s rally from $70,000 last year. Combined with the strongest 14-day RSI reading since December, XRP is looking primed for a breakout above $3, potentially heading toward new all-time highs.

However, traders should keep an eye on intraday charts for any bearish RSI divergences, which could hint at short-term pullbacks.

Resistance: $3.00, $3.40
Support: $2.20, $1.90, $1.60

Bottom Line:

Bitcoin’s fundamentals remain undeniably strong, driven by favorable macro conditions, technical momentum, and institutional participation. Still, forces like options hedging, rising volatility, and dollar strength could keep BTC oscillating between $120,000 and $130,000 for now. Meanwhile, ETH, SOL, and XRP each show promising signals but still face technical hurdles that will determine their next big moves.

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