Bitcoin (BTC) price prediction: breaking through key resistance, technical indicators and on-chain data suggest it will hit $128,000.

One day after the Fed's first interest rate cut in 2025, Bitcoin (BTC) is moving towards a high of $128,000 after breaking through the neckline of the inverse head and shoulders pattern. This bullish technical signal coincides with a golden cross and is further reinforced by potential short positions liquidation clusters in on-chain data. These factors collectively suggest that, in the context of loose macroeconomic policies, Bitcoin may be at the starting point of a new round of strong rebound, with the potential to reach its technical target and possibly trigger a larger pump.

Inverse Head and Shoulders pattern breakout, target directly points to 128,000 USD

(Source: TradingView)

The price of Bitcoin is rising, having previously shown signs of a head and shoulders breakout, and is moving towards $128,000 a day after the Fed's first rate cut in 2025.

This trend occurred when BTC/USD cleared the resistance level near $116,800, which is the neckline of a bullish reversal pattern. The inverted head and shoulders pattern typically consists of a deeper low flanked by two shallower lows, often seen as a signal that a downtrend has ended and a strong rebound is beginning. Based on its technical structure, this breakout points to a projected pump target close to $128,000.

This breakthrough coincides with a key macroeconomic shift. On September 17, the Fed lowered interest rates by 25 basis points, bringing the federal funds rate target range down to 4.00%–4.25%. This is the first rate cut by the central bank since last December, marking a clear shift in its policy stance towards easing after months of tightening. Historically, Bitcoin has benefited from a loose financial environment, as lower yields and cheaper borrowing costs boost demand for risk assets.

Golden Cross Reappears: Momentum Indicator Strengthens Bullish Signal

(Source: TradingView)

The momentum indicators further strengthened this bullish pattern. Bitcoin has just formed a golden cross between its 20-day (green) and 50-day (red) exponential moving averages, a signal that previously indicated a rebound of over 30% earlier this year.

At the same time, the trading price of BTC is far above these two exponential moving averages, while the daily Relative Strength Index (RSI) remains below its overbought threshold of 70, indicating that there is more room for a pump in price.

240 million USD short positions liquidation may accelerate pump

On-chain data indicates that the next round of pump may be driven by a short squeeze. According to data from Glassnode, one of the largest short positions liquidation clusters is located near $121,500, involving positions worth over 2,054 BTC (nominal value of approximately $240 million).

The current BTC trading price is close to 117,000 USD, just 3-4% away from testing this level. If the price rises to 121,500 USD, it could trigger the automatic liquidation of these large short positions. This would force sellers to buy back spot BTC, injecting hundreds of millions of dollars in net demand into the market.

Other large liquidation levels are piled up at higher positions, including $154,000 (2,696 BTC; nominal value approximately $316 million) and $151,500 (820 BTC; nominal value approximately $96 million). These short positions represent a total potential liquidation amount of nearly $700 million, situated above the current spot price.

This pattern provides a mechanical catalyst for Bitcoin's bullish outlook. If the price can push up to $121,500, it may trigger a series of liquidations, accelerating a rebound to the technical target of $128,000. If higher liquidation barriers are triggered, the rise could even surpass this target.

Conclusion

Bitcoin is experiencing a strong bullish signal convergence from both technical analysis and on-chain data against the backdrop of a shift in macroeconomic policy. The successful breakout of the head and shoulders pattern, the emergence of a golden cross, and the enormous potential for short positions liquidation above all combine to create a powerful bullish narrative. Although there is still uncertainty in the market, all signs indicate that the coin is ready for a strong rise, and the coming weeks will be a critical period to determine whether it can break through key resistance levels and pave the way for new highs.