Bitcoin Technical Outlook: Will Bitcoin’s Surge Above $125K Continue or Face a Pullback?

Key takeaways:

•  Bitcoin’s surge past $125K signals strong bullish conviction, but overbought RSI suggests short-term caution.
• Strong volume on any move above $123.5K confirms bullish continuation; weak volume on a dip signals a healthy breather.
• Macro Catalysts: Fed minutes, Powell’s speech, and jobs data could sway sentiment, pending government shutdown resolution.

Bitcoin’s strong breakout last week has carried it into a new phase of price discovery around the $125,000 zone. 

The broader setup remains bullish, but the charts are hinting at short-term turbulence ahead. Over the next week, traders will be watching closely to see if BTC can turn this new range into solid support, or if the market needs a quick cooldown before making another push higher.

Key levels to watch

• Major resistance: $125,000,  a big psychological and technical ceiling.
• Minor resistance: $123,500,  last week’s local high.
• Immediate support zone: $119,500–$120,000,  previous resistance that now needs to hold.
• Key corrective support: $118,500, aligns with the 0.382 Fibonacci retracement.
• Major support: $115,000, the consolidation base before last week’s breakout.

Technical breakdown

Price action

After a string of strong daily candles last week, Bitcoin is now printing smaller-bodied candles, a sign that the market is catching its breath. This kind of pause after a rally often turns into a launchpad, but it can also invite short-term shakeouts. A decisive close above $123,500 could clear the path toward $125,000+, while a dip under $120,000 might trigger a quick test of the lower supports.

Fibonacci levels

Measuring from the $112,000 base up to the $122,500 swing high, the 0.382 retracement at $118,500 is the sweet spot to watch if a pullback hits. A bounce from there would show real strength. The 0.5 level at $117,250 is still within healthy territory but would suggest momentum is cooling.

Momentum indicators

• RSI: The daily RSI is firmly overbought (above 70). That’s not a sell signal by itself; strong trends can live up here for a while, but it does flash a warning that the rally’s stretched. Watch for bearish divergence if the price hits new highs while RSI fails to follow.
• MACD: Momentum still looks solid. The MACD line sits comfortably above the signal line. If that crossover flips, it’ll be the first sign that bulls are losing steam.

Volume

Last week’s breakout came with real conviction. Volume spiked hard. The next move will need similar energy to stay valid. A push toward $125K on strong volume confirms buyers are in control. A pullback on weak volume? Probably just a breather.

Possible scenarios for the week

1. Bullish continuation

Bitcoin chops sideways between $120K–$123.5K, cooling off the RSI, then pops through $125K on strong volume. Next targets sit near $128K–$130K.

2. Healthy correction

Profit-taking pulls BTC back toward $118.5K (the 0.382 Fib). Buyers defend that zone, and the market rebounds later in the week, re-testing $122K–$123K.

3. Bearish pullback

Support at $120K gives way, sending BTC below $118.5K. That would hint the breakout was a “bull trap,” and a deeper drop toward $115K becomes likely.

Key events to watch this week

Here’s what to keep an eye on:

• Tuesday: NY Fed Inflation Expectations data
• Wednesday: FOMC meeting minutes
• Thursday: Fed Chair Powell’s speech
• September Jobs Report

Disclaimer: Timeline to hold if the government shutdown ends. 

Bottom line

Bitcoin’s overall trend remains up, but the market is running hot. A short pause or mild dip here wouldn’t hurt. In fact, it could reset the chart for another leg higher. The real battleground to watch this week sits between $119,500 and $120,000. If the bulls defend that range, the path to $125K and beyond stays wide open.

👉Want to learn more about technical analysis? Start here:  

1. Candlestick charts.

2. Exponential Moving Average (EMA) Explained

3. How to Use Moving Average Convergence/Divergence (MACD)

4. What are Higher Highs and Lower Lows?

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