Bitcoin surges past 120,000 today and is closing in on new record. Market dynamics points to a powerful short squeeze as a large liquidity pool near current levels is forcing traders with bearish bets to buy back at higher prices, adding fuel to an already rapid climb. Short sellers appear increasingly vulnerable as momentum accelerates.
Behind the rally is a significant policy shift from Washington. Last Thursday, US President Donald Trump signed an executive order permitting cryptocurrencies and other alternative assets in 401(k) retirement accounts. The decision could, in theory, unlock trillions in retirement capital for Bitcoin and other digital assets, bolstering the longer-term demand outlook.
Technically, Bitcoin is on track to break through 123,231 and extend toward the 61.8% projection of 98,418 to 123,231 from 111,889 at 127,390.
However, the current advance from 111,889 could be the fifth wave of the entire rally from 74,373. In Elliott Wave theory, wave three is almost always the strongest and cannot be the shortest of the three upward waves. That places a logical cap on upside below 100% projection at 136,927.
Medium-term channel resistance near 131,580 reinforces this potential ceiling. The 130k zone will be a critical inflection point that could limit the current rally.
